SB 752 Authorizes the Missouri Highways and Transportation Commission to form a Public-Private Partnership by contract with private partners to finance, develop and operate Interstate 70 as a toll facility
Sponsor: Kehoe Co-Sponsor(s)
LR Number: 4707S.02I Fiscal Note available
Committee: Transportation
Last Action: 3/7/2012 - Hearing Conducted S Transportation Committee Journal Page:
Title: Calendar Position:
Effective Date: August 28, 2012

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Current Bill Summary


SB 752 - This act authorizes the Missouri Highways and Transportation Commission to form a Public-Private Partnership by contract with a private partner to finance, develop and operate I-70 as a toll facility.

PROPOSALS - A potential private partner may submit to the commission an request for approval to finance, develop or operate I-70 as a public private partnership (Section 227.206). The commission must publish a public notice of the commission's request for proposals, including any deadline for submission of such proposals. The notice shall be published once a week for two consecutive weeks in:

(1) A newspaper of general circulation in the city where the proposed project is located;

(2) At least one construction industry trade publication that is nationally distributed; and

(3) Such other publications or manner as the commission may determine (Section 227.709).

PROJECT PROPOSAL REVIEW - The commission shall establish a process for the receipt and review of a request for approval or request for proposal. The commission must establish, prior to the receipt and review of any request for approval or response to a request for proposal, a policy that prohibits a private partner from being eligible to enter into an interim or comprehensive agreement with the commission to finance, develop, or operate the project if such private partner is known to sponsor terrorism or aid the government of countries that are known to sponsor terrorism (Section 227.712).

PROJECT APPROVAL - The commission may by commission minute approve the project if the commission determines the project will improve and is a necessary or desirable addition to the state highway system (Section 227.715).

SELECTION CRITERIA - The commission is not required to award a project based on the lowest price, but may also consider design, financing plan and the private partner's qualifications, industry experience and financial capacity to determine if the project is the best value for the state.

The commission may execute an interim agreement with the tentatively approved private partner to authorize it to commence specific compensable activities to further the development of the project (Section 227.718).

COMPREHENSIVE AGREEMENT REQUIRED - As a condition to granting its final approval of the private partner, the commission shall execute a comprehensive agreement with the private partner with certain provisions to be included, such as: (1) review and approval of private partner plans and specifications; (2) a detailed financing plan; (3) any other provisions the commission and private partner deem appropriate (Section 227.721).

TERMINATION OF NEGOTIATIONS - The commission may terminate negotiations with a potential private partner during the interim or comprehensive agreement phase as well as reject any and all requests for approval and responses to a request for proposal (Section 227.724).

CLOSED RECORDS - Any information submitted to the commission by potential private partners in requests for approval or responses to a request for proposal shall be a closed record under the state open records law. After execution of a comprehensive agreement, the agreement and other materials submitted to the commission by the private partner are open records (Section 227.727).

PRIVATE PARTNER GENERAL POWERS - Under the terms of the act, several powers may be exercised by the private partner, including: (1) contract with any public or private entity; (2) lease or operate the project for any term as provided in the comprehensive agreement; (3) collect and enforce tolls for the use of the project; and (4) any other powers delegated to the private partner by the commission in the comprehensive agreement (Section 227.730).

FINANCIAL STABILITY AND INTEGRITY OF THE PRIVATE PARTNER - Under the terms of the act, private partners are required to provide to the commission's satisfaction and approval: (1) securities and warranties; (2) annual audited financial statements; (3) evidence of sufficient commercial general liability insurance and workers' compensation insurance; and (4) performance and payment bonds (Section 227.733).

COMMISSION GENERAL POWERS - Under the terms of the act, the commission may exercise several powers, including: (1) delegating any of its powers under the act to the department of transportation; (2) promulgating administrative rules to implement the provisions of the act; and (3) making all final determinations regarding the performance and acceptance of the work (Section 227.736).

TOLL AUTHORITY - The commission or the private partner may impose tolls on I-70 and authorize the private partner to collect and enforce the tolls. The rate of the tolls will be set in the comprehensive agreement between the commission and the private partner, and all revenue from tolls will be deposited into the State Road Fund or into a trust account as provided under the comprehensive agreement (Section 227.739).

STATE OR FEDERAL ASSISTANCE - Under the act, the commission may take any action to obtain federal, state, or local government or private sector assistance for the project and may enter into any contracts required for such assistance. In the comprehensive agreement, the commission may agree to loan moneys received from any federal, state, or local government or the private sector to the private partner to finance, develop or operate the project.

INDEBTEDNESS, BONDS AND FINANCING - The private partner may incur debts and issue bonds to finance the project. All private partner bonds issued to finance the project shall be exempt from state taxes, except the state estate tax. Bonds issued by the private partner will not be a liability of the commission or the state of Missouri. The commission may also issue state road bonds and loan the proceeds to the private partner (Section 227.745).

EXEMPTION FROM CERTAIN TAXES- Any revenues received under the act shall be exempt from state income tax. Purchases made by a private partner for use in completing the toll project shall be exempt from various sales taxes. Property financed, developed, or operated by a private partner shall be exempt from all state and political subdivision ad valorem and property taxes (Section 227.746).

PROJECT DELIVERY - The private partner may use any project procurement method for the efficient financing, development or operation of I-70. The state limitation on the number of design-build contracts authorized to be let by the commission shall not apply to the I-70 project. Any interim or comprehensive agreement entered into by commission and a private partner may exempt the project from the state's general procurement laws in Chapter 34 (Section 227.748).

DBE PLAN - Under the act, the private partner must have a disadvantaged business enterprise (DBE) participation plan (Section 227.751).

AUTHORITY TO LEASE RIGHT-OF-WAYS AND EASEMENTS - The commission may lease the project and any interest it has in real property to the private partner (Section 227.754).

CONDEMNATION POWERS - The commission may condemn lands for the project in the name of the state of Missouri. If condemnation becomes necessary, the commission shall act under state law and may condemn a fee simple or other interest in land. Any amounts to be paid in such condemnation proceeding shall be paid by the private partner under the comprehensive agreement. The private partner may, after prior notice to the owner to enter upon the private property subject to the taking, survey, and determine the most advantageous route and design. The private partner shall be liable for all damages to the property resulting from such inspection (Section 227.757).

TOLL COLLECTION AND ENFORCEMENT - The private partner may use any method for collecting and enforcing tolls, including toll barrier facilities and electronic recording devices (Section 227.760). Motor vehicle owners who fail to pay a required toll are guilty of infractions. The fines for such infractions shall not exceed $200. The act also provides that certain written reports, telephone calls and photo monitoring system evidence indicating that tolls have not been paid shall be admissible in evidence. The act establishes other procedures for the enforcement of toll collections and the issuance of traffic citations (Section 227.760).

TORT LIABILITY - Under the act, specific tort liability caps are established for the private partners and the named insureds in coverage and amounts equal to the sovereign immunity per person (now $392,734) and per occurrence (now $2,618,230) cap limitations. Commercial general liability insurance policies purchased by the private partner shall not be used to expand the coverage and amount of the tort liability caps imposed by the act (Section 227.763).

MATERIAL DEFAULT - If the private partner defaults on the comprehensive agreement, the commission may terminate the agreement and seek whatever legal or equitable remedies are available, make a claim under the performance bonds, condemn any real property interest the private partner has in the project or collect and enforce the tolls for the use of the project (Section 227.766).

ANNUAL STATUS REPORT - Under the act, the commission is required to make an annual status report on the project as part of the annual report submitted to the Joint Committee on Transportation Oversight. The annual report shall assess the advantages and disadvantages of the public-private partnership method of financing, developing, or operating the project (Section 227.769).

STEPHEN WITTE