Arkansas Administrative Code › Agency 168 - Arkansas Economic Development Commission › Rule 168.00.17-010 - Partnership for Public Facilities and Infrastructure Act Program

Current through Register Vol. 49, No. 6, June, 2024
I.
Partnership for Public Facilities and Infrastructure Act
A.
Overview
The
Partnership for Public Facilities and Infrastructure
			 Act (PPFIA)
, created by Act 813 of
2017
1, provides a framework by
			 which public-private partnerships may be formed to expedite the timely and
			 cost-efficient "development of"2 private projects
			 for public infrastructure and government facilities. Specific legislative
			 intent of the PPFIA is that:
* There is a public need for the timely acquisition, design,
			 construction, improvement, renovation, expansion, equipping, maintenance,
			 operation, implementation, and installation of public infrastructure and
			 government facilities within the state that serve a public purpose;
* The public need for government facilities and public
			 infrastructure may not be satisfied by existing methods of procurement or
			 funding available to the state;
* There are inadequate resources to develop public infrastructure
			 and government facilities for the benefit of citizens of the state, and there
			 is demonstrated evidence that public-private partnerships can:
* promote the timely and cost-efficient development of public
			 infrastructure and governmental facilities;
* provide alternative and innovative funding sources to
			 governmental entities; and
* allow governmental entities to leverage and supplement the
			 developmental cost of public infrastructure and governmental facilities through
			 private funding and participation by the private sector in governmental
			 incentive and tax programs that are not otherwise available to governmental
			 entities; and
* The formation of public-private partnerships may result in the
			 ability to develop private projects for public infrastructure and government
			 facilities in a more cost-efficient and timely manner, resulting in increased
			 benefits to the public safety and welfare of the citizens of the state and
			 substantial cost benefits to the governmental entities and the public.
Only "responsible public entities (RPE)" 3 as designated by the
			 Arkansas Economic Development Commission (AEDC) and the Arkansas Development
			 Finance Authority (ADFA), may solicit "requests for proposals
			 (RFP)"4 from "private entities" 5 for bids to
			 develop "qualifying projects" 6 under the PPFIA. Unsolicited proposals will not
			 be accepted for consideration under the PPFIA.
B.
PPFIA Process
The summary below delineates the process (through execution of
			 comprehensive agreements) that participants in the PPFIA shall follow as
			 defined throughout these guidelines.
1. A "public entity" 7 is encouraged to seek
		  the advice of AEDC and ADFA regarding potential PPFIA projects as early as
		  possible, preferably prior to or during development of the Partnership for
		  Public Facilities and Infrastructure Act (PPFIA) Application (Application)-see
		  Attachment A. Public entities, however, are
required
to seek the
		  advice and consent of AEDC and ADFA prior to issuing an RFP.
2. A public entity shall submit two (2)
		  copies of the signed, completed Application and all required attachments to
		  AEDC.
3. The AEDC and ADFA will
		  concurrently review the Application for completeness and adherence to the PPFIA
		  and all promulgated guidelines and rules.
a.
		  Unapproved applicants will be notified in writing by AEDC.
b. AEDC and ADFA will designate the RPE for
		  approved applications and will provide instruction on how they shall develop
		  the qualifying project.
4. (Optional) A public entity may issue a
		  Request for Information (RFI), or a "Request for Qualifications
		  (RFQ)"8, or both, prior to issuing an RFP. The RFI,
		  which may also include an Industry Forum, is a process by which industry
		  feedback and perspective is sought prior to issuing an RFP regarding a
		  potential public-private partnership project. Information received in an RFI
		  may be utilized by public entities to gauge interest in the project and develop
		  more detailed, and technically specific, RFQs and RFPs. An RFI is not a
		  commitment to issue an RFQ or an RFP and responses are not required for future
		  procurements. Responses are voluntary and do not create any preferential
		  treatment or other advantage or disadvantage in any subsequent procurement
		  process. An RFQ is a step sometimes used in the formal process of procuring a
		  product or service as a screening step to establish a pool of vendors
		  (businesses or individuals to provide a product or service) that are then
		  qualified, and thus eligible to submit responses to an RFP. If the RFQ is
		  conducted separately from an RFP, then RFQ responses shall describe the company
		  or individual's general qualifications to perform a service or supply a
		  product. The time required to complete the RFI or RFQ process, or both, is not
		  contingent upon the time frames specified throughout these guidelines but
		  should be completed within six months to ensure timely development of the
		  project.
5. Prior to issuing an RFP
		  for the qualifying project, the RPE shall:
a.
		  Adopt and make publically available 9 these guidelines and the PPFIA
		  application.
b. Notify each
		  "affected local jurisdiction"10 and other public
		  entities with shared responsibilities and/or concurrent
		  authority11 of the qualifying project in writing at
		  least sixty (60) calendar days prior to issuing an RFP.
c. Prepare an RFP and submit to AEDC at least
		  sixty (60) calendar days prior to publication.
6. The RPE shall
		  "publish"12 the RFP one (1) time per week for three
		  (3) consecutive weeks in a newspaper of statewide circulation. The period of
		  time between the date of initial RFP publication and the RFP response deadline
		  must be at least forty-five (45) calendar days but no more than 120 calendar
		  days. The timeframe between the date of initial RFP publication and the RFP
		  response deadline may be extended by the RPE up to an additional 120 days with
		  the consent of AEDC.
7. The RPE
		  shall receive proposals from private entities in response to the RFP and
		  evaluate each in accordance with established criteria. See Section II.B. of
		  these guidelines for further information.
8. After review, the RPE selects the
		  "qualified respondent"13 and begins
		  negotiations.
9. The RPE, in
		  consultation with AEDC and ADFA, shall begin development of the qualified
		  project via formal agreement(s) with the qualified respondent. "Comprehensive
		  agreements"14 are mandatory. "Interim
		  agreements"15 are not required but are encouraged.
		  If the most qualified private entity and RPE fail to execute required written
		  agreements within the specified time period, the RPE may begin negotiations
		  with the next most-qualified RFP respondent. If so, then the negotiation period
		  may be extended, upon AEDC approval, up to an additional 180 days.
10. The RPE shall submit the proposed interim
		  or proposed comprehensive agreement to the Chief Fiscal Officer (CFO) of the
		  State of Arkansas and the AEDC.
11.
		  If approval by the CFO of the State of Arkansas is received for an interim
		  agreement, the RPE and private entity may proceed with further development of
		  the qualified project, leading up to development of a draft comprehensive
		  agreement. RPEs must repeat steps 9 and 10 for comprehensive agreements prior
		  to proceeding further. If approval is received from the CFO for a comprehensive
		  agreement, the governing body of the RPE or a delegate thereof, shall conduct a
		  public hearing on the comprehensive agreement. At least ten (10) days before
		  the hearing, notice of the hearing must be published in a newspaper of general
		  circulation in the locality to be affected. The notice shall contain the date,
		  time, and location of the public hearing, a general description of the project,
		  the identification of the parties to the comprehensive agreement and the roles
		  that each have in the project. The notice shall also provide a website on which
		  the proposed comprehensive agreement can be reviewed by interested parties. If
		  bonds are proposed to be issued by the RPE, the maximum principal amount of the
		  bonds shall be included in the notice. The hearing shall be held within the
		  locality to be affected. 
		  16
12. If the comprehensive agreement is
		  approved by the CFO, the RPE shall submit it to the Governor after the public
		  hearing has been conducted.
13. The
		  Governor shall review the comprehensive agreement and approve or
		  disapprove.
14. If approved, the
		  RPE authorizes execution of the comprehensive agreement by order, ordinance, or
		  resolution at a public meeting that complies with ACA § 25-19-106. 
		  17
C.
Guidelines Development and
		  Amendments
These guidelines have been developed to help public entities
			 implement certain requirements of the PPFIA. The intent was to provide
			 structure to the PPFIA without overly dictating process. In developing these
			 guidelines, as required by § 22-10-50218, the
			 AEDC relied extensively on legislative intent specified in Act 813 of 2017, and
			 best practices of other states which have implemented public-private
			 partnership programs similar in nature to Arkansas's. Subsequent development of
			 detailed rules, as required by § 22-10-50319,
			 which will implement application submittal, review, and approval procedures,
			 will build upon these guidelines.
In the event that the PPFIA is amended in a manner that either
			 conflicts with these guidelines or concerns material matters not addressed
			 herein, the PPFIA shall solely govern. Projects initiated under these guideline
			 must adhere to all current laws, rules, and guidelines.
The AEDC and ADFA may amend these guidelines, as necessary, under
			 provisions of the Administrative Procedures Act, § 25-15-201 et
			 seq.
D.
Review
		  Fees
Proposals which have technical, complex, or specialized
			 information may require expert evaluation and review by third-party independent
			 advisors and consultants to the RPE. The RPE may charge reasonable,
			 nonrefundable fees to private entities to cover the costs of processing,
			 reviewing, and evaluating any proposal under the PPFIA, including without
			 limitation, reasonable attorney's fees and fees for financial, technical, or
			 other advisors or consultants. RPEs shall ensure that advisors and consultants
			 are licensed and certified to practice in good standing in Arkansas and have no
			 fiduciary affiliation with the qualified project proposal submitted for review
			 as evidenced by signed disclosure certifications.
Fees charged should not exceed the actual cost incurred by the
			 RPE to conduct the necessary review of the proposal. RPEs must identify the fee
			 or fee schedule to be applied, including methodologies used, in the PPFIA
			 application and RFP solicitation to ensure that private entities considering an
			 RFP response are aware of the fees associated with the review.
The RPE should perform a periodic cost review of their review
			 fees and methodologies to ensure that they are accurate and reasonable. Data
			 from public-private partnership projects in Arkansas and elsewhere in the
			 United States may be utilized. Although specific costs to review individual
			 PPFIA proposals will vary by project type, using a fee schedule based on
			 quantitative data from historic projects should provide reliable
			 guidance.
A private entity assumes all risks in submission of a proposal.
			 An RPE shall not incur any obligation to reimburse a private entity for any
			 costs, damages, or loss of property incurred in the creation, development, or
			 submission of a proposal for a qualifying project.
E.
PPFIA Legal Stipulations
The PPFIA specifically addresses certain legal issues that may
			 arise during the development of a qualifying project. RPEs should consult with
			 their legal counsel to confirm compliance with any legal issues arising during
			 the development of PPFIA qualifying projects. Below are specific PPFIA
			 references to some of these major issues.
1.
Eminent Domain
A public entity may exercise its right of eminent domain under
			 applicable law in connection with the development of a qualifying project. The
			 power of eminent domain shall not be delegated to a private entity with respect
			 to a qualifying project commenced or proposed under the PPFIA. Damages awarded
			 to a third party in an eminent domain action may be included in the development
			 budget for the qualifying project.
An RPE may dedicate any real or personal property interest,
			 including land, improvements, and tangible personal property, through lease,
			 sale, or otherwise, to the qualified respondent to facilitate a qualifying
			 project if so doing will serve the public purpose of the PPFIA.
2.
Sovereign Immunity
The PPFIA does not waive the sovereign immunity of a public
			 entity or the officers or employees of the public entity under state law; or
			 extend a public entity's sovereign immunity to any private entity.
3.
Freedom of
		  Information
This PPFIA does not abrogate the obligation of an RPE to comply
			 with the Freedom of Information Act of 1967, ACA § 25-19-101 et seq.
			 However, records that would otherwise be exempt from disclosure under the
			 Freedom of Information Act, including without limitation confidential and
			 proprietary information, remain exempt when in the custody or control of a
			 public entity, the Chief Fiscal Officer (CFO) of Arkansas, or the
			 Governor.
Records related to a qualifying project that are provided to or
			 compiled or developed by a public entity, the CFO of Arkansas, or the Governor
			 in furtherance of the entity's or officer's powers, duties, or obligations
			 under the PPFIA are exempt under ACA § 25-19-105(b)(9)(A) as files that
			 would give an advantage to competitors or bidders.
4.
Financing the Qualifying
		  Project
Private entities and RPEs may utilize any funding sources legally
			 available to them including without limitation issuing debt, equity, or other
			 securities or obligations, entering into leases, tax credits, operating
			 revenues, accessing designated trust funds, and borrowing or accepting grants
			 from any state, federal, or private source. However, any bonds issued by an RPE
			 under the PPFIA:
a. Shall state
		  plainly on the face of the bonds that they are issued under the
		  PPFIA;
b. Are obligations only of
		  the RPE;
c. Do not constitute an
		  indebtedness of the state or a pledge of the full faith and credit of the
		  state;
d. Shall not be secured by a
		  lien or security interest in any property of the state;
e. May be secured by a pledge of the project
		  revenues; and
f. May be secured by
		  a security interest in, or lien on, real or personal property of the qualified
		  respondent, including any property interests in the qualifying project.
The expenditure of state funds in support of an interim or
			 comprehensive agreement requires legal appropriations prior to expenditure of
			 funds.
5.
Procurement
Any comprehensive agreement entered into by an RPE may include
			 terms and conditions specific to the procurement of services or materials
			 related to the qualifying project. In selecting a qualified respondent, ACA
			 § 19-11-801 et seq.20 applies. Competitive
			 bidding shall not be used. Procurements related to the development of a
			 qualifying project are exempt from any procurement laws that are not contained
			 in the PPFIA or any rules promulgated under the PPFIA that would otherwise
			 apply to the responsible public entity.
6.
Legal Actions Under the PPFIA
Any legal uncertainty or challenge to any aspect of the
			 authorization and implementation of a public-private partnership seriously
			 undermines the ability to attract private sector participation and impairs the
			 timely implementation of public projects. A lawsuit brought concerning the
			 validity of the PPFIA, bonds issued under the PPFIA, or the execution and
			 delivery of an interim agreement or comprehensive agreement is of public
			 interest and shall be advanced by the court and heard as a preferred cause of
			 action. An appeal from a judgment or decree rendered in such a case shall be
			 taken within thirty (30) calendar days after the judgment or decree is
			 rendered.
The PPFIA is supplemental to all other powers conferred by law
			 and does not restrict or limit any powers that a public entity has under any
			 other law.
F.
Contact Information
For more information, please contact:
Mike Preston, Executive Director
Arkansas Economic Development Commission
900 West Capitol, Suite 400
Little Rock, AR 72201
(501) 682-1121