Governor Signs Amended PPP Legislation in Florida
Tuesday, July 2, 2013
Florida HB 85 authorizes counties, municipalities, school board or other local governmental entities to enter into public-private partnerships (PPPs) for qualifying projects. The new law requires that the comprehensive agreement establishing a PPP must provide for the delivery of performance and payment bonds, letters of credit, parent company guarantees, or other security acceptable to the public contracting entity in the form and amount satisfactory to the public contracting entity. The new law further provides that for the components of the qualifying project involving construction, the bond the form and amount of the bonds must comply with the Little Miller Act. Another provision in the new law requires the public contracting entity to ensure that the performance and payment bonds required for the construction component of the PPP are subject to recordation, notice, suit limitation and other requirements of the State’s Little Miller Act. Another provision in the legislation requires the public entity to ensure the most efficient pricing of the security package that provides for the performance by the contractor and payment of subcontractors.
SFAA worked with the Florida Surety Association last year to amend a PPP bill for public buildings so that the construction portion of the PPP would require bonding. While last year’s bill failed to pass, this year’s bill started with the bonding provisions from the previous bill. We were able to promote the value of bonding despite the fact that Florida’s existing PPP law does not specifically require the construction portion of the PPP to be bonded. Surety bonds are one alternative that can be used for payment and performance security.
For purposes of the new law, a "qualifying project” that can be let as a PPP is 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 or 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.
The new law creates the Partnership for Public Facilities and Infrastructure Guidelines Task Force to recommend to the Legislature a uniform process for establishing a PPP. The Task Force members must be appointed by July 31, 2013, and must submit a final report on July 1, 2014.
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