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An Act Relating To Public Projects; Enacting The Public-private Partnerships Act; Allowing The State And Certain Local Governments To Enter Into Long-term Partnerships With Private Sector Partners To Facilitate Public Projects; Providing Powers And Duties; Allowing For The Issuance Of Revenue Bonds; Exempting Public-private Partnerships From The Procurement Code; Prescribing Penalties; Making Appropriations.

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MOD HB 405

Legislative URL:
HB 405 on
Emergency Clause:
[14] HJC/HTRC/HAFC-HJC [36] DNP-CS/w/o rec-HTRC- HAFC ref w/drn- ref HTRC/HJC-HTRC [39] DNP-CS/DP-HJC- w/o rec [50] PASSED/H (50-19) [44] SCORC/SJC/SFC-SCORC API.

Related Legislators

Bill Sponsor:

Related Documents

HJC Committee Report
HJC Committee Substitute
HTRC Committee Report
HTRC Committee Substitute
HJC Committee Report 2
Final House Vote
Fiscal Impact Report

House Bill 405 enacts the Public-Private Partnerships Act that allows the State (specifically, the General Services Department) and certain local governments to enter into long-term partnerships with private sector partners to facilitate public projects. The Attorney General and State Board of Finance must approve any proposed public-private partnership for it to become effective. The bill sets forth extensive detail regarding the partnerships. It also exempts public-private partnerships from the State’s Procurement Code.

The legislation defines a public-private partnership as an agreement among at least one public partner and at least one private partner “for the development, financing, maintenance or operation of a public project,” (for example, a lease, franchise, easement, or permit) “that transfers rights for the use or control, in whole or in part, of a public project by the public partner to the private partner.”

“Public projects” include, in part, utility and telecommunications infrastructure; dams and reservoirs; sewerage or water treatment facilities; power generating plants, pump stations, natural gas compressing stations or similar facilities; sewer, water, gas or other pipelines; transmission lines; improvements necessary or desirable to any unimproved state- or locally owned real estate; or, recycling facilities or solid waste management facilities that produce electric energy derived from solid waste.

Other salient features of the bill include:

  • The public partner will have the power of eminent domain “even if the property will be leased to the private partner to use, lease or operate for its business purposes in connection with the public-private partnership.”
  • The public partner is authorized to issue revenue bonds and refunding revenue bonds.
  • The public partner may borrow money to purchase, lease, acquire or develop certain things to support the public project with prior approval of the State Board of Finance. The items include water rights, a water system, a wastewater collection and treatment system, a natural gas distribution system, an electrical distribution system or other infrastructure needed.
  • The project will revert to the public partner and will be dedicated for public use if the partnership terminate.


It appears that the bill may be a positive step towards completing public projects that could not be done by the State alone due to a lack of funding. On the other hand, the bill may raise concerns about the extent of a private partner’s control of a project and what that control might mean. Another concern might be over the power of eminent domain that is authorized for the public partner and that the power might be used even when the private partner may use the project for its own business purposes.

The HJC Committee Substitute adopted on March 4, 2013 contains several differences from the original bill. Among other things, it creates a “public-private partnerships board” consisting of the Attorney General, the Secretary of Finance, the Secretary of General Services, the Secretary of Economic Development, the private-sector members and two representatives from the Council of State Government. The board is charged with developing a long-term vision and plan for the development of public projects through public- private partnerships. Another significant difference is that the substitute does not contain the bonding provisions that the earlier version did.

There are several bills before the Legislature addressing public-private partnerships. They each differ in some details but common concerns may include the potential for private control and ownership of facilities that are historically owned by public entities.

Outcome: HB 405 passed the House (50-19) but died in the Senate Corporations and Transportation Committee.

Date of Summary:  2/5/13; Updated 3/6/13; Updated 5/21/13