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Florida's P3 Legislation Creates Process for Increased Private Sector Participation in Public Building, Infrastructure Projects




by:
Ira Gonzalez
Karen K. MacFarland
H. Lee Moffitt
Adams and Reese LLP - New Orleans Office

 
July 29, 2013

Previously published on July 24, 2013

Florida's expanded Public-Private Partnership legislation (commonly known as P3s) became law on June 27, 2013.

P3s are contractual agreements formed between a Florida public agency and a private sector entity. The law creates a process for greater private sector participation in the delivery and financing of public building and infrastructure projects. P3 agreements will provide for shared skills, assets, resources, risks, and rewards by both private and public sectors for the delivery of a service or to create a facility for public use. "The signing of this legislation further ensures that Florida is a pro-business state, and that we will not stop until every Florida family has the opportunity to live their version of the American dream," said Florida Governor Rick Scott.

Key to participating in such an arrangement is to understand what is meant by a "qualifying project" in this innovative legislation. Under the law a "qualifying project" is defined as:

  • A facility or project that serves a public purpose, including, but not limited to, any ferry or mass transit facility, vehicle parking facility, airport or seaport facility, rail facility or project, fuel supply facility, oil and gas pipeline, medical or nursing care facility, recreational facility, sporting or cultural facility, or educational facility or other building or facility that is used or will be used by a public educational institution, or any other public facility or infrastructure that is used or will be used by the public at large or in support of an accepted public purpose or activity;

  • An improvement, including equipment, of a building that will be principally used by a public entity or the public at large or that supports a service delivery system in the public sector;

  • A water, wastewater, or surface water management facility or other related infrastructure; or

  • For projects that involve a facility owned or operated by the governing board of a county, district, or municipal hospital or health care system, or projects that involve a facility owned or operated by a municipal electric utility, only those projects that the governing board designates as qualifying projects.

Prior to project approval, among other things, a responsible public entity must determine that the proposed project is in the public's best interest.

Florida's P3 legislation generally provides:

  • Legislative findings and intent relating to the construction or improvement by private entities of facilities used predominantly for a public purpose.

  • The creation of a task force to provide guidelines for public entities on the types of factors public entities should review and consider when processing requests for P3s.

  • For notice to affected local jurisdictions as well as for comprehensive agreements between a public and private entity.

  • Requirements for such a partnership.

  • Financing provisions allowing public entities to lend funds to private enterprises and to use federal loans and commercial loans for a particular project.

  • For the applicability of sovereign immunity for public entities with respect to qualified projects.

All public entities should take note of Florida's P3 legislation for various beneficial reasons whether or not the public entity will seek out private partners. One reason is the ramifications for local jurisdictions affected by a proposed P3 that fail to respond to a responsible public entity's notice of a proposed qualifying project within the time provided in the legislation. This is important because a non-response is deemed as an acknowledgement by the affected local jurisdiction that the qualifying project is compatible with the local comprehensive plan, the local infrastructure development plan, the capital improvements budget, or other governmental spending plan.

The P3 legislation does not waive the sovereign immunity of the responsible public entity with respect to participation in, or approval of, any part of the qualifying project or its operation.

In recent years, the economic downturn and collateral effects of the 'Great Recession' have left state and local governments across the nation in an economic development bind. To attempt to provide relief, the Florida Legislature passed HB 85 creating the Public-Private Partnerships' legislation to assist the financing and development of public projects -- without draining state funds. Florida Representative Greg Steube said, "The signing of this bill will create jobs, encourage economic development and provide infrastructure to taxpayers at little or no taxpayer expense." "It's a win-win situation for commercial contractors and local governments," added Carlos Ardavin, Chairman of the Board of Associated Builders and Contractors of Florida.

Florida previously joined 32 other states in previously enacting legislation to enable the use of various public partnership approaches for the development of transportation infrastructure, this expanded legislation now provides a much broader impact and has the potential to benefit many Florida public entities.



 

The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.
 

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