Florida’s new public-private partnership (PPP or P3) legislation – effective July 1 – significantly expands the state’s ability to partner with private entities in a broad range of infrastructure works, previously limited to the transportation sector.
“There are inadequate resources to develop new educational facilities, transportation facilities, water or wastewater management facilities and infrastructure, technology infrastructure […], and other public infrastructure and government facilities,” the legislature found, explaining part of the reason why the enabling legislation was introduced.
It also concluded that “a public-private partnership has demonstrated that it can meet the needs by improving the schedule for delivery, lowering the cost, and providing other benefits to the public.”
The state legislature had tried to push through a similar bill last year, which made it through the House of Representatives but not the Senate.
“While the concept is similar, this version has a lot less red tape,” said Lee A. Weintraub, who is vice chair of construction law and litigation at Becker & Poliakoff and who helped draft Bill CS/CS/HB 85.
In addition to opening up a number of sectors to public-private partnership schemes, the new law also allows private entities to submit unsolicited proposals. While this is not unique to Florida, the absence of requirements for doing so is, Weintraub said.
“Another highlight of Florida’s legislation is the protection it affords lenders,” Weintraub explained. “Any portion of contractual appropriations will take precedence over non-contractual appropriations,” he said.
The P3 law does not call for the creation of a separate public-private partnership regulatory authority, but it does provide for the creation of a task force. “The purpose of the task force is to try to foster some uniformity and predictability in the [P3] process,” said Weintraub.
Seven members, representing local government and business, will make up the task force and must be appointed by July 31. The task force, whose members will not be compensated for their work, will have to formulate recommendations which they will then submit to the governor, the president of the Senate and the speaker of the House of Representatives by July 1, 2014. The group will be disbanded December 31, 2014.
The new enabling legislation also addresses the issue of sovereign immunity. “A county or municipality in which a qualifying project is located possesses sovereign immunity with respect to the project, including, but not limited to, its design, construction, and operation,” the law states.
Governor Rick Scott has been a champion of public-private partnerships having stated in the past his aim to make Florida the biggest P3 state in the country, according to Weintraub.
Projects such as the $900-million Port of Miami Tunnel and the $2-billion I-4 Ultimate project are currently underway, made possible by Florida’s existing state statutes.