Delaware General Assembly








BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE (three-fifths of all members elected to each house thereof concurring therein):

Section 1. Amend Title 2, Delaware Code, by adding thereto a new Chapter which Chapter shall read in its entirety as follows:

"Chapter 20. Public-Private Initiatives Program in

§2001. Findings and Declaration of Policy. The General Assembly hereby finds and declares that:

(a) It is essential for the economic, social and environmental well being of the State and the maintenance of a high quality of life that the citizens of the State of Delaware have an efficient transportation system.

(b) The State has limited resources to fund the maintenance and expansion of the State transportation system and therefore alternative funding sources should be developed to supplement public revenue sources.

(c) A significant alternative to public revenue sources is a public-private sector initiatives program permitting private entities to undertake all or a portion of the study, planning, design, development, financing, acquisition, installation, construction, improvement, expansion, repair, operation, and maintenance of public transportation projects for the citizens of Delaware in exchange for the right to lease or own the facilities for an agreed-upon period and earn a reasonable rate of return through tolls or user fees.

(d) In addition to alleviating the strain on the public treasury and allowing the State to use its limited resources for other needed projects, public-private initiative projects also do all of the following:

(I) Take advantage of private sector efficiencies in designing and building transportation projects and financial and development expertise;

(2) Allow for the rapid formation of capital necessary for funding transportation projects;

(3) More quickly reduce congestion in existing transportation corridors and provide the public with alternate route and mode selections;

(4) Provide the opportunity to link transportation investments with land use measures which further the States growth management and clean air policies;

(5) Provide sound investment opportunities for the private sector; and

(6) Require continued compliance with environmental requirements and applicable State and Federal laws that all publicly financed projects must address.

(e) The Department should be permitted and encouraged to test the feasibility of building privately-funded transportation systems and facilities through innovative agreements with the private sector by developing up to four demonstration projects, and the Secretary should be granted authority to entertain, solicit, evaluate, negotiate and administer such agreements.

(0 The Department should be encouraged to take advantage of new opportunities provided by Federal legislation under Section 1012 of the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA), which section establishes a new program authorizing Federal participation in the construction or improvement of publicly and privately owned toll roads, bridges, and tunnels and allows States to leverage available Federal funds as a means for attracting private sector capital.

(g) A Public-Private Initiatives Program Revolving Loan Fund, which would allow available Federal and State funds to be leveraged, should be established to provide a source of public funds for partial financing of Demonstration Projects.

§2002. Definitions. As used in this Chapter, unless the context indicates a different intent:

(a) "Agreement" means an agreement entered into by the Secretary and one or more Contracting Parties for a Demonstration Project.

(b) "Contracting Party" means any individual, corporation, partnership, company, trust, association, joint venture, pool, syndicate, sole proprietorship, unincorporated association, body politic, authority or any other form of entity not specifically listed herein entering into an Agreement with the Secretary for a Demonstration Project.

(c) "Demonstration Project" or "Project" means any public transportation project undertaken under this Chapter.

(a) "Department" means the Department of Transportation.

(d) "Metropolitan Planning Organization" means a metropolitan planning organization established and designated pursuant to 23 U.S.C. § 134 (1993).

(t) "Secretary" means the Secretary of Transportation.

(g) "Transportation System" means any capital-related improvement and addition to the States transportation infrastructure, including but not limited to highways, roads, bridges, vehicles and equipment, ports and marine-related facilities, park and ride lots, rail and other transit systems, facilities, stations and equipment, rest areas, tunnels, airports, transportation management systems, control/communications/information systems and other transportation-related investments, or any combination thereof.

§2003. Demonstration Projects.

(a) Number. The Secretary shall entertain and solicit proposals from, and may negotiate and enter into Agreements with, private entities, or consortia thereof, for up to four (4) Demonstration Projects using in whole or in part private sources of financing involving (i) all or a portion of the study, planning, design, construction, operation and maintenance of Transportation Systems, or (ii) the repair and/or expansion, operation and maintenance of existing Transportation Systems, or any combination of the foregoing, provided that the Secretary shall not enter into any Agreements regarding Transportation Systems in the area of New Castle County known as Churchmans Crossing (formerly known as Metroform) until such time as road improvements in such area which are: (i) included in the Capital Improvements Program as of the date of the enactment of this Act or (ii) under construction as of the date of the enactment of this Act, have been completed.

(b) Eligibility. The Secretary may entertain and solicit proposals from any source whatsoever; provided, however, that the Secretary shall only enter into Agreements regarding a Transportation System (i) for which construction funding has been authorized by the Delaware General Assembly in the applicable Bond and Capital Improvements Act (except that no Agreement may be entered into which contains (A) direct or indirect expenditures or loans on the part of the State in excess of the total sum appropriated by the Delaware General Assembly for said Transportation System or (B) credit enhancements which pledge the full faith and credit of the State); and/or (ii) for which the General Assembly has provided specific or categorical funding authorization for purposes of implementing this Chapter; and (iii) which is consistent with Section 8419(2)(a), Title 29, Delaware Code, applicable provisions of the Department's long range transportation plan, any applicable recommendations developed by the Cabinet Committee on State Planning pursuant to Chapter 91, Title 29, Delaware Code, and applicable provisions of the Federal Clean Air Act.

(c) Proposals.

(I) The Secretary shall solicit proposals through a Request for Proposals accompanied by material explaining the Public-Private Initiatives Program enacted hereunder and describing the selection process and criteria.

(2) Potential projects may be identified and proposed by any potential Contracting Party. However, the Secretary may identify in the Request for Proposals specific systems, corridors, or routes for improvement. Any provisions of the Delaware Code to the contrary notwithstanding, proposals may provide for the design-build mode of infrastructure development.

(3) Proprietary information contained in proposals not selected for Demonstration Projects and records of negotiations in progress shall be exempt from public disclosure.

(d) Fees Authorized. To offset a portion of the costs of initiating this program and reviewing proposals received for Demonstration Projects under this Chapter, the Department is authorized to assess a non-refundable Proposal Review Fee for each proposal not to exceed fifty thousand dollars ($50,000.00).

(e) Selection and Approval.

(I) The Demonstration Projects shall be selected by a Demonstration Project Committee, chaired by the Secretary, consisting of the Secretary, the Director of Financial Management and Budget, the Chief Engineer of the Department of Transportation, and up to four (4) other persons to be appointed by the Secretary. The Demonstration Projects shall be selected without regard to the provisions of Chapter 69, Title 29 of the Delaware Code.

Each proposal shall be weighed on its own merits and ranked according to the selection criteria stipulated in the Request for Proposals, provided that upon receipt of all proposals the Demonstration Project Committee may group similar types of project proposals together for purposes of evaluation and selection, and provided further that the proposals selected by such committee from any such group of proposals must be those with the highest ranking within that group, and provided further that such committee may elect not to select any proposals from an established group of proposals, and provided further that as to similar proposals or proposals that are mutually exclusive so that the undertaking of one would preclude the need, desirability, or ability of undertaking the other, only the proposal with the highest ranking among such proposals shall be selected, and, subject to approval as set forth above, proceed to negotiations. Each of the Agreements shall be negotiated individually as a stand-alone project.

(2) Each selected Project must be subsequently approved, within forty-five (45) days of its selection, by both (i) the directly affected Metropolitan Planning Organization(s) and (ii) the Council on Transportation established pursuant to § 8409 of Title 29 of the Delaware Code or its successor, in that order. If a directly affected Metropolitan Planning Organization approves a selected Project, it shall be deemed to have given its approval to amend the Transportation Improvement Program to include such Project. If the Council on Transportation approves a selected Project, it shall be deemed to have given its approval to amend the Capital Improvements Program to include such Project. Approval for each selected Project by the affected Metropolitan Planning Organization and the Council on Transportation shall be based solely upon the Project's compatibility with State and Regional transportation plans, compliance with applicable laws and regulations, and fiscal impact upon the State Capital Improvement Program or regional Transportation Improvement Program. If either organization disapproves a Project, it shall set forth in writing its reasons for doing so.

(3) The Secretary shall promptly notify the Joint Bond Bill Committee of the Delaware General Assembly when a Project has been duly selected by the Demonstration Project Committee. After the Joint Bond 13111 Committee's receipt of such notice, the Joint Bond Bill Committee shall convene and either approve or reject the selected Demonstration Project. Upon its approval of a Demonstration Project, the Joint Bond Bill Committee shall forward a notice of such approval to the Delaware General Assembly, which shall either approve or reject the recommended Demonstration Project.

(0 Compliance. Except as otherwise expressly provided in this Chapter, all Demonstration Projects must comply with all applicable rules and statutes in existence at the time the Agreement is entered into, including but not limited to this Title, §7I I of Title 19 of the Delaware Code, §§ 6912, 6914 and 6920 of Title 29 of the Delaware Code and 49 C.F.R. Part 21, provided that the provisions of Chapter 69 of Title 29 of the Delaware Code other than §§ 6912, 6914 and 6920 thereof shall not be applicable to the Demonstration Projects regardless of the use of State funds. Each Agreement may provide for protection for the Contracting Party from future discretionary regulatory changes which would substantially or materially change the terms and conditions or financial assumptions of the Agreement.

(g) Financing.

(1) The Department may (i) enter into Agreements using Federal, State and local financing in connection with the Demonstration Projects, including without limitation grants, direct

loans, credit enhancements which do not pledge the full faith and credit of the State, loans from the Public-Private Initiatives Program Revolving Loan Fund established in § 2012 hereof, and other measures authorized by § 1012 of ISTEA, provided that the Projects meet all applicable financing eligibility criteria, and (ii) do such things as necessary and desirable to maximize the funding and financing of such Projects, provided that private capital shall constitute not less than 51% of the total projected capital cost for each Demonstration Project.

(2) The Department may apply for, receive, and accept, from any Federal agency or any other governmental body, grants for or in aid of the design, construction, reconstruction, resurfacing, restoring, rehabilitation, replacement, maintenance or operation of toll and non-toll highways, bridges and tunnels and other eligible Transportation Systems, or study of the feasibility of such activities, and enter into any contracts with the granting body or any other governmental body and with private entities as may be required to qualify for such grant. The Department may transfer or lend the proceeds of any such grant, or utilize such proceeds available for credit enhancement, to public agencies or Contracting Parties, on terms and conditions complying with applicable Federal and State law.

§2004. Ownership and Lease of Demonstration Project Transportation Systems.

Each Agreement shall provide for private ownership of the Demonstration Project during the construction period. Each Agreement shall provide for State ownership or control of the underlying real property at all times. After completion and final acceptance of each Project, or discrete segment thereof, the Agreement shall provide for State ownership of the Project and lease to the Contracting Party, unless the State elects to provide for ownership of the Project or portion thereof by the Contracting Party during the term of the Agreement in which case the Agreement shall provide for the transfer of the Project to the State at no charge at the expiration of the term of the Agreement. The State shall lease each of tbc Demonstration Projects, or applicable Project segments, to the Contracting Parties for up to fifty (50) years after completion of such Projects. An Agreement may provide for lease payments to consist of royalties.

§2005. Exercise of Department's Powers.

For purposes of facilitating these Demonstration Projects and to assist the Contracting Parties in the financing, development, construction, maintenance and operation of such projects, the Agreements may include provisions for the Department to exercise any powers conferred upon it by law, including but not limited to the lease of rights of way and airspace, granting of necessary easements and rights of access, power of eminent domain, granting of development rights and opportunities, issuance of permits or other authorizations, protection from competition, remedies in the event of default of either of the parties, granting of contractual and re& property rights, liability during construction and the term of the lease, and the authority to negotiate acquisition of rights of way in excess of appraised value. Amounts paid by a Contracting Party for any right-of-way in excess of the appraised value thereof may be considered a contribution to the project only to the same extent that such excess amounts could be paid by the Department to acquire the right-of-way under applicable law.

§2006. Authorization of Tolls and User Fees; Limitations on Toll and User Fee Revenues.

(a) Authorization of Tolls and User Fees Each Agreement shall authorize the Contracting Party to impose tolls or user fees for use of the Transportation System constructed and/or leased by it to allow a reasonable rate of return on investment. The Agreement may authorize the Contracting Party to collect tolls or user fees through both conventional methods and non-conventional methods including, but not limited to, Automatic Vehicle Identification Systems, electronic toll collection systems and, to the extent permitted by law, video-based toll collection enforcement. The Agreement may authorize the collection of tolls and user fees by a third party.

(a) Classification of Tolls and User Fees. A Contracting Party may establish different toll rates or user fees based on categories such as vehicle class or vehicle weight and may further vary toll rates by time of day or year.

(b) Maximum Rate of Return. A maximum rate of return on investment shall be negotiated by the parties and stated in the Agreement. A Contracting Party may establish and modify toll rates and user fees as long as the maximum rate of return on investment is not exceeded.

(c) Uses of Revenues. Each Agreement shall require that over the term of the lease toll or user fee revenues be applied to payment of the Contracting Party's capital outlay costs for the Project, including interest expense, the Project's operations costs, costs of toll collections, administration of the Project, any reimbursement to the State for the costs of project review and oversight, maintenance and police services, establishment and funding of a fund to ensure the adequacy of maintenance expenditures, a reasonable return on investment to the Contracting Party, and any other use mutually agreed upon by the parties and specifically set forth in the Agreement, regardless of any contrary provisions of Delaware law.

(c) Fxcess Revenues. As agreed upon by the parties the Agreement may require that any revenues in excess of the maximum rate of return allowed in the Agreement either be applied to any indebtedness incurred by the Contracting Party in connection with the Project and/or be paid to one or more other entities or funds including, but not limited to, the Revolving Loan Fund established in § 2012 hereof, the State's Transportation Trust Fund established under §1404, Title 2 of the Delaware Code, the Department, or the State. For the purpose of determining whether there are revenues in excess of the maximum rate of return (or in excess of any incentive rate of return authorized by the Agreement pursuant to subsection (f) of this Section), the Agreement shall expressly provide for an annual audit to be performed (at the expense of the Contracting Party) by the same auditor chosen to perform the annual audit of the Transportation Trust Fund pursuant to § 1323, Title 2. Delaware Cole. and the certification of the rate of return which the Contracting Party has realized during the audited period. The Contracting Party shall maintain its books and corporate records in the State of Delaware.

(0 Incentive Rates of Return. Notwithstanding subsection 2006(c) above, each Agreement or an amendment to each Agreement may provide for incentive rates of return in excess of the maximum rate of return established in the Agreement for the attainment of specific safety, performance, transportation demand management or other goals set forth in the Agreement or amendment.

(g) Continuation of Tolls. After expiration of the lease or ownership period of a Project to or by a Contracting Party, the Department may continue to charge tolls or user fees for the use of the Project. The Department may delegate such authority to continue to collect tolls or user fees for the use of the Project to a third party, provided that such revenues must first be used for operations and maintenance of the Project and, subsequently, any revenues determined by the Secretary to be excess must be paid by such third party to the State's Transportation Trust Fund, the Department or the State.

§2007. Reimbursement for Services Rendered by Department or Other State Agencies.

(a) Police Services. Each Project is deemed to be part of the State Transportation System. The Delaware State Police shall have primary jurisdiction over each Project except with respect to all or any portion of a Project located in a jurisdiction where primary law enforcement responsibility is delegated to another law enforcement agency by law or by applicable status of forces agreements or otherwise. Each law enforcement agency rendering services pursuant to the above shall receive reimbursement for such services in accordance with an agreement that the Contracting Party shall enter into with such agency.

(a) Maintenance Services Agreements for maintenance services may be entered into under this Chapter with the Department or other State agencies, provided that such Agreements shall provide for full reimbursement for services rendered by the Department or such other agencies.

(b) Coordination of Permits and Licenses.. The Department shall, with the mandatory assistance of all applicable State agencies and departments, establish a unified permitting and licensing process in the Department for the processing and issuance of all necessary permits and licenses for Demonstration Projects under this Chapter, including, but not limited to, all environmental permits, businesses and tax licenses and transportation permits. The Department shall seek the cooperation of Federal and local agencies to expedite all necessary Federal and local permits, licenses and approvals necessary for the Demonstration Projects, provided, however, that the Agreements shall provide for full reimbursement for services rendered by the Department or other agencies.

(c) ether. The Department may provide services for which it is reimbursed including, but not limited to, preliminary planning, environmental certification (including the procurement of all necessary environmental permits). and preliminary design of the Demonstration Projects.

§2008. Liability Coverage; Indemnification.

Eaeh Agreement must require that liability insurance coverage of an amount appropriate to protect the Demonstration Project's viability is secured and maintained by the Contracting Party. Each Agreement may provide for State indemnification of the Contracting Party for design and construction liability where the State has approved relevant design and construction plans.

§2009. Other Agreement Provisions.

(a) Grant of Rights to Contracting Party. An Agreement may include provisions authorizing the State to grant necessary easements and lease to a Contracting Party existing rights of way or rights of way subsequently acquired. An Agreement may also include provisions to lease the airspace above or below the right of way associated with the Demonstration Project to the Contracting Party at less than fair market value during the term of the Contracting Party's lease of the Demonstration Project, provided that if the Department continues to lease the airspace rights to the Contracting Party after the expiration of such lease term, it must do so only at fair market value. The Agreement may also grant the Contracting Party the right of first refusal to undertake projects utilizing real estate and airspace owned by the Department within or contiguous to the right of way, provided that in the judgment of the Secretary such projects must contribute to the public use and benefit of the Demonstration Project, and provided further that nothing herein shall derogate from the Department's power to declare real estate or airspace owned by the Department surplus to the needs of the Department pursuant to § I37, Title 17 of the Delaware Code or any successor provision.

(b) Miscellaneous. An Agreement may include any contractual provision that is necessary to protect the Demonstration Project revenues required to repay the costs incurred to study, plan, design, finance, acquire, build, install, operate, enforce laws, and maintain the Transportation System including, but not limited to, a traffic guarantee, an equity guarantee or insurance provided that such provision will not unreasonably prohibit the development of essential public transportation systems and facilities.

§2010. Operation of Toll Facility.

At the request of a Contracting Party operating a toll facility hereunder, the Department may adopt and enforce reasonable regulations consistent with State law which (i) set maximum and minimum speeds, (ii) exclude undesirable vehicles, cargoes, or materials from the use of the facility, (iii) establish high occupancy or express lanes for use during all or any part of a day and limit the use of such lanes to certain traffic, (iv) determine points of access, (v) determine truck/trailer multiples, (vi) determine truck weight stations, and (vii) determine truck weight limits.

§2011. Plans and Specifications.

The plans and specifications for each Demonstration Project constructed pursuant to this Chapter shall comply with the Department's standards for State projects and any applicable Federal standards. Each Demonstration Project is deemed to be part of the State highway system for purposes of identification, maintenance standards, and enforcement of traffic laws and for the purposes of applicable sections of this Title.

§2012. Public-Private Initiatives Program Revolving Loan Fund.

(a) Establishment of Fund. There is hereby established a Public-Private Initiatives Program Revolving Loan Fund which shall be maintained and administered by the Department in accordance with the provisions of this Chapter and such rules as the Department may from time to time prescribe. The Fund shall be available for the purpose of providing financial assistance in accordance with the provisions of this Section. Subject to the provisions of any applicable bond resolution governing the investment of bond proceeds deposited in the Fund, the Fund shall be invested and reinvested in the same manner as other State funds. The Fund shall retain any investment earnings. Subject to the provisions of any applicable bond covenants or resolutions or any other applicable laws or regulations governing the Fund, the Department may, with the approval of the Delaware General Assembly, transfer monies from the Fund to the Transportation Trust Fund.

(b) Fund Deposits The following shall be deposited in the Fund:

(1) Federal grants and awards or other Federal assistance received by the State for the purpose of deposit therein and eligible for deposit therein under applicable Federal law;

(2) State funds appropriated for deposit to the Fund;

(1) Payments received from any public or private agency in repayment of a loan previously made from the Fund or pursuant to 23 U.S.C. 129(a)(7) or successor legislation;

(3) Net proceeds of bonds approved by the Delaware General Assembly which have been designated by the Delaware General Assembly for deposit in the Fund;

(4) Interest or other income earned on the investment of moneys in the Fund; and

(6) Any additional moneys made available to the Fund by the Secretary from any sources, public or private, including excess toll revenues, for the purposes for which the Fund has been established.

(c) Accounting of Deposits. In order to facilitate the determination of the amount of funds available for financing Projects which meet either Federal eligibility criteria or State eligibility criteria but not both, deposited funds commingled in the Fund shall also be accounted for separately based on whether their source is Federal or State.

(d) permitted Uses of Funds. Amounts in the Fund may be used only:

(I) To make loans for the construction, reconstruction, resurfacing, restoring, rehabilitation or replacement of public or private toll transportation facilities or other Transportation Systems within the State, or the study of the feasibility thereof;

(2) To guarantee, or purchase insurance for, bonds, notes, or other evidences of obligation issued by the Contracting Party developing a public or private toll facility or other Transportation System for the purpose of financing all or a portion of the cost of such toll facility or system, if such action would improve the credit market access of the Contracting Party or reduce interest rates payable by such party;

(3) To earn interest on Fund accounts; and

(4) For the reasonable costs of administering the Fund.

(c) Terms of Loan Agreements. The following terms shall apply to all loans made from the Fund:

(I) Loans shall bear interest at the average rate of interest earned by the State's pooled investment fund for the period beginning with the first month following the date that the loan is funded and ending on the last day of the month preceding the start of repayment; provided, however, that in the event the Department funds a loan with the proceeds of a bond issue, the rate of interest charged shall be no less than the cost the Department incurrs to borrow such funds irrespective of the average rate of interest earned by the State's pooled investment funds;

(2) Loan repayment shall begin no later than live (5) years from the date that the facility or system is opened to toll- traffic and shall be completed by no later than thirty (30) years from the time the loan was obligated;

(3) The loan may be subordinated to other debt financing except for loans made by any other public agency; and

(4) Reasonable origination or processing fees may be charged.

Approved July 26, 1995