HB 1626-FN – AS INTRODUCED
2008 SESSION
06/09
HOUSE BILL 1626-FN
AN ACT relative to a new bridge over the Merrimack River.
SPONSORS: Rep. Campbell, Hills 24; Rep. Jasper, Hills 27; Rep. Lasky, Hills 26; Rep. Renzullo, Hills 27; Rep. L. Ober, Hills 27; Sen. Clegg, Dist 14; Sen. Gottesman, Dist 12
COMMITTEE: Public Works and Highways
This bill authorizes the department of transportation to enter into a long-term lease and concession agreement with a private entity for the design, development, regulatory permitting, financing, construction, operation, and management of a roadway servicing, and bridge across, the Merrimack River.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
08-2249
06/09
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Eight
AN ACT relative to a new bridge over the Merrimack River.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Chapter; Comprehensive Development Agreement. Amend RSA by inserting after chapter 240 the following new chapter:
CHAPTER 241
COMPREHENSIVE DEVELOPMENT AUTHORITY
241:1 Definitions. In this chapter:
I. “Affected jurisdiction” means the city of Nashua and towns of Hudson and Litchfield, or any other public entity directly affected by the north bridge project.
II. “Commissioner” means the commissioner of the department of transportation.
III. “Comprehensive development agreement” or “agreement” means the long-term lease and concession agreement between the developer and the department relating to the design, development, permitting, financing, construction, operation, and maintenance of the north bridge project.
IV. “Department” means the New Hampshire department of transportation.
V. “Develop” or “development” means any action relating to the planning, property acquisition, permitting, financing, development, design, construction, reconstruction, expansion, replacement, or improvement of any or all of the north bridge project. Such development shall include actions relating but not limited to the following:
(a) Improvement of the F.E. Everett Turnpike in the area of exit 6 and exit 7.
(b) Widening the Henri Burque Highway to 4 lanes from the current 2 lanes within the existing, or a to-be-acquired department right-of-way.
(c) Reconfiguration, deletions, or additions of intersections along the Henri Burque Highway and a new roadway between exit 7 in Nashua and Route 102 in Litchfield.
(d) Construction of approximately 2.7 miles of a new 4 lane roadway, with bridge crossings at the B&M railroad and the Merrimack River.
(e) Connection of a new roadway at Route 3A and 102 in the Hudson and Litchfield area.
(f) Installation of a toll plaza on the roadway.
VI. “Developer” means a private entity that has entered into the agreement with the department.
VII. “Development costs” mean expenses and fees incurred on behalf of or paid by the developer with respect to the development of the north bridge project.
VIII. “Electronic toll collection system” shall have the same meaning as in RSA 237:16-a, III, with respect to the north bridge project.
IX. “Escrow account” means an account established by the trustee for the deposit of toll revenue and payment of development costs, and operation and maintenance costs under RSA 241:8, and all other payments as required by the agreement.
X. “Maintenance” means ordinary maintenance, repair, rehabilitation, capital maintenance, maintenance replacement, and any other categories of maintenance that may be designated by the department.
XI. “Material default” means any failure of the developer to perform any duties under the agreement, which jeopardizes delivery of adequate service to the public and remains unsatisfied after a reasonable period of time and after the developer has received written notice from the department of the failure.
XII. “North bridge project” means the highways, roadways, bridge crossings, intersections, and toll plaza that will connect the F.E. Everett Turnpike (Route 3) in the Nashua area to Route 3A and Route 102 in Litchfield. The north bridge project shall constitute an “eligible facility” as defined in RSA 162-1:2, V, relating to business finance authority revenue bonds.
XIII. “Operation and maintenance costs” means costs incurred for ongoing operation and long-term maintenance of the north bridge project after development.
XIV. “Private entity” means any natural person, corporation, general partnership, limited liability company, limited partnership, joint venture, business trust, public benefit corporation, non-profit entity, or other business organization.
XV. “Subcontractor” means any private entity with which the developer enters into a contract to develop the north bridge project.
XVI. “Private contribution” means resources supplied by the developer to accomplish all or any part of the work on the north bridge project, including funds, financing, income, revenue, cost sharing, technology, staff, materials, equipment, expertise, data, or engineering, construction, or maintenance services, or other items of value.
XVII. “Toll fees” means the rate, toll, fee, or other charges imposed by the developer under the terms of the agreement for use of all or part of the north bridge project.
XVIII. “State treasurer” means the state treasurer of New Hampshire.
XIX. “Trustee” means any bank, trust company, or any other financial institution selected by the developer with the reasonable approval of the state treasurer, which has the power to act as a trustee and depository institution and that will maintain the escrow account.
XX. “Utility” means a privately, publicly, or cooperatively owned line, facility, or system for producing transmitting, or distributing communications, cable television, power, electricity, light, heat, gas, oil, crude products, water, steam, waste, storm water not connected with highway drainage, or any other similar commodity, including fire or police signal system or street lighting system, which directly or indirectly serves the public.
241:2 Authority to Develop North Bridge Project. The commissioner, with the approval of the governor and council, may take or provide for the following actions to develop the north bridge project:
I. Acquire in the name of the state by purchase or by exercise of the right of condemnation such lands, property, rights, easements, and interests as may be deemed necessary for carrying out the provisions of this chapter. In all such condemnation proceedings, the general court has determined that the acquisition is for a public use and is reasonably necessary. Any necessary condemnation proceeding shall proceed under RSA 498-A.
II. Designate the locations and establish, limit, and control such points of ingress to and egress from the toll road as may be necessary or desirable to ensure the proper operation of the toll road and to prohibit ingress to or egress from the toll road at any points not so designated.
III. Permit toll-free use of certain sections of the toll road for emergency, safety, police, and state and county registered vehicles if it is for the public good, subject to RSA 241:12.
IV. Provide for the construction at-grade of intersections of the toll road with public roads and change and adjust the lines and grades of such roads and ways to accommodate the design of the toll road.
V. Provide for the development of the north bridge project as defined in RSA 241:1.
VI. Provide for the operation and maintenance of the north bridge project.
VII. Provide for periodic traffic and economic studies to be made of the operation of the north bridge project.
VIII. Provide for periodic studies to be made of possible extensions and additions to the north bridge project.
IX. Employ or contract for services of consulting engineers, attorneys, or other experts as are necessary in its judgment to carry out its powers and duties under this section.
241:3 Authority to Enter Into Comprehensive Development Agreement.
I. The commissioner of the department, with the approval of the governor and council, is authorized to enter into an agreement with a developer or configuration of the developer and other private entities to implement its authority under RSA 241:2. The state treasurer shall assist the commissioner in negotiating the terms of the state’s compensation under the agreement.
II. The terms of the agreement must comply with RSA 241:4.
241:4 Terms of Comprehensive Development Agreement The agreement shall include the following terms:
I. The state shall retain ownership of the north bridge project.
II. The state shall grant to the developer the following:
(a) A long-term lease and concession of the north bridge project for a term not to exceed 60 years, free and clear of encumbrances other than those permitted in the agreement.
(b) An exclusive right to develop, operate, manage, maintain, and rehabilitate the north bridge project for a term not to exceed 60 years in accordance with the terms of the agreement.
(c) An exclusive right to toll the north bridge project subject to this chapter for a term not to exceed 60 years.
(d) All rights, titles, entitlements, and interests in all revenues charged by or on behalf of the developer as toll fees for a term not to exceed 60 years, subject to the provisions of the agreement.
III. In exchange for such lease and concession, the developer shall pay to the state a negotiated concession fee, the terms of which shall be set forth in the agreement.
IV. The department may enter into an agreement with the developer for the department to perform the operation, maintenance, and toll collection responsibility on behalf of the developer. The terms and conditions of such agreement shall be included in the agreement.
V. The developer may contract with subcontractors to develop the north bridge project. Such subcontractors shall be subject to the same requirements imposed on the developer by this chapter. Any such contract shall not relieve developer of its responsibilities and liabilities under this chapter.
VI. The department has the right to final review and approval, which approval shall not be unreasonably withheld, of the developer’s plans for the development of the north bridge project prior to implementation. The department may require of the developer specific information, and to set deadlines for submission of the information and timelines for approval. The terms of the department’s right of review and approval shall be provided for in the agreement.
VII. The department may inspect the construction of or improvements to any portion of the north bridge project during development. The terms of the department’s right of inspection shall be provided for in the agreement.
VIII. The developer shall maintain a policy of liability insurance or self-insurance with terms reasonably acceptable to the department.
IX. The developer shall file with the department on an annual basis appropriate financial statements for the north bridge project in a form acceptable to the department.
X. In order to facilitate the financing of the north bridge project, the agreement shall:
(a) Include the right of the developer to impose toll fees and shall set forth the parameters for determining and adjusting the fees.
(b) Permit the issuance and refinancing of bonds by a state agency on behalf of the developer, under RSA 241:8.
(c) Include a non-compete agreement with the department to prohibit the development of a highway that would compete with the north bridge project and negatively affect its toll revenues.
(d) Permit the ability to use other revenue sources, including the use of federal funding, under RSA 241:7.
(e) Incorporate the requirements for financing and security documents and bonds under RSA 162-I:6, RSA 162-I:7, and RSA 162-I:8.
XI. The agreement shall specify the actions the department may take to ensure proper operation and maintenance of the north bridge project.
XII. The agreement shall require the developer to comply with all applicable federal, state, and local laws.
XIII. The agreement shall specify the provisions for amendment and termination of the agreement.
XIV. The agreement shall provide appropriate terms and conditions for indemnification of the developer by the department, and of the department by the developer.
XV. The obligations set forth in the agreement as authorized by this section and as applied to the developer shall supercede the user obligations set forth in RSA 162-1:6, I(b).
241:5 Proposal Requirements.
I. The department may enter into an agreement for the north bridge project with a prospective developer based upon a submitted proposal without subjecting such agreement to public bid as otherwise would be required under RSA 228:4 and 228:4-a.
II. The developer shall submit such detail and information as the department may reasonably require to assist it in its evaluation of the proposal.
241:6 Notice to Affected Jurisdictions. Each affected local jurisdiction shall, within 60 days after receiving a request for comments from the department, submit any comments it may have in writing on the proposal submitted in accordance with RSA 241:5 to the department and indicate whether the project will address the needs identified by improving safety, reducing congestion, increasing capacity or enhancing economic efficiency.
241:7 Funds Provided.
I. The department may accept from the United States or any of its agencies, funds that are available to the state for carrying out this chapter, whether the funds are made available by grant, loan, or other financial assistance.
II. The state assents to any federal requirements, conditions, or terms of any federal funding accepted by the department under RSA 241:7.
III. The department may enter into agreements or other arrangements with the United States or any of its agencies as may be necessary for carrying out this chapter.
IV. The department may accept from any source any grant, donation, gift, or other form of conveyance of land, money, other real or personal property, or other item of value made to the state or the department for carrying out this chapter.
V. The north bridge project may be financed in whole or in part by contribution of any funds or property made by any private entity that is party to the agreement under this chapter.
VI. The department may combine federal, state, local, and private funds to finance the north bridge project under this chapter, so long as it does not affect the developer’s right or ability to finance the north bridge project with the use of private activity bonds.
241:8 Bond Offering.
I. For the purpose of financing all or a portion of the development of the north bridge project, the developer is authorized to apply for, obtain, and use private activity bonds available under any federal law or program.
II. The developer shall apply for issuance of such bonds to the business finance authority.
III. The business finance authority may issue bonds on behalf of the developer as the obligor for the purposes of funding, in whole or in part, the development of the north bridge project, in accordance with RSA 162-I:3, I(b).
IV. The bonds shall have a term not to exceed 45 years.
V. All other terms of the bonds shall be specified in the agreement.
VI. Proceeds from the bonds shall be used exclusively for the north bridge project, as follows:
(a) To pay the financing costs of the bond issuance.
(b) To fund the development, right-of-way acquisition, and construction costs of the north bridge project.
(c) To fund the operation and maintenance costs of the north bridge project.
(d) To pay the concession and lease payments owed in accordance with the agreement.
VII. Payment on the bonds upon maturity shall be secured with and repaid by toll and other operating and non-operating revenues related to the north bridge project.
VIII. Notwithstanding any guarantee of bonds in RSA 162 to the contrary, any bond debt, other securities, or other financing issued for the purpose of this chapter shall not be considered to be a debt of the state or any political subdivision of the state or a pledge of the full faith and credit of the state or any political subdivision of the state.
IX. Such bonds shall contain an express guarantee which shall be deemed a contract on the part of the developer and the department that toll revenues collected from the north bridge project shall, at a minimum, continue until the date of maturity of said bonds or until sufficient money shall have accumulated to pay said bonds and the interest thereon at or prior to dates of maturity.
X. The administration and procedures for issuance of the bonds under this chapter will be in accordance with the provisions of RSA 162-I relating to business finance authority revenue bonds and regulations promulgated thereunder, unless otherwise provided for in this chapter. The business finance authority may promulgate additional regulations as necessary in order to implement this chapter.
XI. The business finance authority shall issue bonds with respect to the north bridge project only with the approval of the governor and council as required pursuant to RSA 162-I:9.
XII. The state treasurer, or other state official designated by the treasurer, shall have oversight over the terms and conditions of any bond issuance under this chapter to assure that the developer exercises fiscal prudence in the issuance of said bonds.
241:9 Tolls; Rate Setting Authority.
I. The agreement shall authorize the developer to establish and increase tolls, including setting variable toll rates based upon the time of day, and to collect and enforce payment of toll fees of any vehicle or class of vehicle for use of the north bridge project, except as otherwise provided in RSA 241:12.
II. If the developer desires to change the toll rates, it shall provide notice to the department no later than 90 days prior to the implementation of such change and shall provide notice to the public no later than 60 days prior to such change. The department may adopt rules, pursuant to RSA 541-A, relative to the provision of notice to the public with respect to such change.
III. Toll rates shall be established and revised from time to time to levels that are, at a minimum, at least sufficient to meet operation and maintenance costs of the north bridge project and to generate sufficient coverage to pay the principal and interest on bonds issued to finance the project and to remain in compliance with all bond covenants. The agreement shall set forth the parameters and restrictions for toll rate adjustments.
241:10 Tolls; Regional Electronic Toll Collection System. The north bridge project toll collection system shall become part of the regional electronic toll collection system or E-Z Pass as set forth in the New Hampshire turnpike system provisions of RSA 237:16-a through RSA 237:16-g. The commissioner is authorized to execute all documents and perform all other acts necessary to make the north bridge project toll system part of said system.
241:11 Tolls; Use of Toll Revenues.
I. The toll fees collected shall be deposited into the escrow account held by the trustee exclusively for the north bridge project.
II. The toll revenues shall be used for payment of scheduled debt service related to the north bridge project, the costs necessary for the proper development, operation, and maintenance of the north bridge project, the lease and concession payments due, and all other payments owed under the agreement.
III. At least 90 days prior to the time any interest or principal is payable on any bond issued to finance the north bridge project, the trustee shall determine if the balance in the escrow fund is sufficient to make the scheduled payment. The trustee shall promptly notify the state treasurer, the department, and the developer if the trustee determines that there are or will be insufficient funds to make the scheduled bond payment.
241:12 Tolls; Exemption.
I. The following motor vehicles shall be granted toll-free use of any section of the north bridge project:
(a) Motor vehicles bearing plates with the state seal under RSA 261:90.
(b) All vehicles with permanent plates under RSA 261:92.
(c) Military vehicles of the state and federal governments.
(d) Emergency vehicles going to and returning from their duties.
II. The commissioner of the department of safety may request electronic toll collection equipment from the department for unmarked vehicles of the New Hampshire state police and undercover vehicles of the department of justice not displaying permanent plates. Accounting procedures for such electronic toll collection equipment shall be established by the commissioner.
III. The commissioner shall issue appropriate identification for north bridge project turnpike employees and employees of state liquor stores on the turnpike, when said employees have to use the turnpike to get to their places of employment. Such identification shall permit toll-free use of the north bridge project only to the extent required by such employee to get to and from his place of employment.
241:13 Highway Patrol.
I. The department of safety, division of state police, shall provide law enforcement and public safety services on the north bridge project. Payment of the costs of these services shall be provided for in the agreement.
II. All law enforcement officers of the state and of an affected local jurisdiction shall have the same powers and jurisdiction within the limits of the north bridge project as they have in their respective areas of jurisdiction and shall have access to the north bridge project at any time for the purposes of reasonably exercising such powers and jurisdiction.
III. The traffic and motor vehicle laws of the state or, if applicable, any affected local jurisdiction, shall be the same on the transportation facility as those laws applied to conduct on similar transportation facilities in the state or local jurisdiction.
IV. Penalties for violations of traffic and motor vehicle laws of the state or, if applicable, any affected local jurisdiction on the transportation facility shall be as prescribed by law for conduct occurring on similar transportation facilities in the state or local jurisdiction.
241:14 Operation and Maintenance Contracts. Unless the developer contracts with the department for operation and maintenance of the north bridge project, all third party contracts for the development, operation, and maintenance of the north bridge project shall be awarded through a competitive bidding process reasonably acceptable to the department.
241:15 Utility Crossings.
I. The developer and any utility whose facility is to be crossed or relocated by the development of the north bridge project shall cooperate fully in planning and arranging the manner of the crossing or relocation of the utility facility.
II. The commissioner, with the approval of the governor and council, shall grant permits or licenses to any corporation or person to place and maintain along, on, under or within the toll road ducts, pipes, pipelines, poles, wires, or other structures of the north bridge project, to be so located as not to be unsightly and not to interfere with the safe and convenient operation and maintenance, of the north bridge project, and may contract with any such corporation or person for such permits or licenses on such terms and conditions as may be deemed necessary for carrying out the provisions of this chapter. The appearance, construction, maintenance, and repairs of any such ducts, pipes, pipelines, poles, wires, or other structures shall be subject to such directions and regulations as may be imposed.
241:16 Termination of Agreement.
I. In the event of the termination of the agreement, whether by default or expiration of the lease concession term, the authority, duties, and rights of the developer cease, except for any duties and obligations that extend beyond the termination as provided in the agreement.
II. After termination of the agreement, the department may continue to charge toll fees for the use of the north bridge project. The department may also delegate such authority to continue to collect toll 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 department to be excess must be paid by such third party to the state’s transportation fund.
241:17 Material Default; Remedies.
I. The agreement shall provide for the definition of material default and the terms and conditions related thereto, including provisions for a reasonable opportunity for the developer to cure any such default upon the occurrence and during the continuation of material default by a developer, not related to a force of nature event, the department may:
(a) Elect to take over the development of the north bridge project, including the succession of all right, title, and interest in the toll revenue, subject to any liens on revenues previously granted by the developer.
(b) Terminate the agreement and exercise any other rights and remedies that may be available.
II. In the event that the department elects to assume the responsibilities for development of the north bridge project under paragraph I, the department:
(a) Shall collect and pay any revenues that are subject to lien to satisfy any obligation, including the interest and principal on bonds issued to finance the north bridge project.
(b) May develop, operate and maintain the north bridge project, may impose toll fees for use of the north bridge project, and comply with any service contracts.
(c) May solicit proposals for the maintenance and operation by a private entity of the north bridge project.
241:18 Tax Exemption.
I. Property listed under paragraph II owned by the state or department, whether or not subject to a lease and concession as contemplated in this chapter, is declared to be public property and shall be exempt from all taxes and special assessments of the state or any political subdivision of the state. The property tax exemption provisions of RSA 72:23, I and the tax exemption and payment for services in lieu of taxes provisions in RSA 162-I:15 shall not apply.
II. Property to which paragraph I applies is as follows:
(a) The north bridge project.
(b) Any tangible personal property used exclusively in connection with the north bridge project that is:
(1) Owned by the department and leased, licensed, financed or otherwise conveyed to a developer; or
(2) Acquired, constructed, or otherwise provided by or on behalf of the department.
III. All bonds and the interest thereon shall be exempt from taxation in this state.
241:19 Limited Access. The north bridge project shall be a limited access highway as defined in RSA 230:44, except that RSA 230:52 shall not apply to ducts, pipes, pipelines, poles, wires, or other structures permitted under RSA 237:5, II(g), or to pre-existing facilities on highways, not previously restricted as to access, used as toll-free sections of the system.
241: 20 Confidential and Proprietary Information. The department or responsible public entity shall take appropriate action in accordance with RSA 91-A:3, II, to protect confidential and proprietary information provided by the developer pursuant to a proposal filed with it or in connection with the negotiation of the north bridge project agreement.
241:21 Rules and Regulations. The department and any other state agency may adopt rules and regulations as necessary to carry out the provisions of this chapter, including but not limited to the business finance authority with respect to its issuance of bonds.
2 New Paragraph; Authority of Business Finance Authority; New Purpose. Amend RSA 162-I:1 by inserting after paragraph VIII the following new paragraph:
IX. It is hereby declared that there is a need for the development and construction of highway or surface freight transfer facilities in the state in order to maintain or improve the transportation infrastructure, alleviate congestion, and reduce the effect such congestion has on the quality of life of our citizens and the natural environment.
3 New Paragraph; Definitions. Amend RSA 162-I:2 by inserting after paragraph XIV the following new paragraph:
XV. “Highway or surface freight transfer facility” means such facility as defined in section 142 of the Internal Revenue Code.
4 Bond Term Extended. Amend RSA 162-I:8, I(c) to read as follows:
(c) Payable in serial installments or as term bonds, and any series may consist of both types of bond, provided that all of the bonds of every series shall mature no later than 40 years after their dates, except as to bonds issued for highway or surface freight transfer facilities defined in RSA 162-1:2, VII-a, wherein all of the bonds of every series shall mature no later than 45 years after their dates.
5 New Subparagraph; Approval of Governor and Council. Amend RSA 162-I:9, II(a) by inserting after subparagraph (10) the following new subparagraph:
(11) If the facility is a highway or surface transfer facility, the governor and council shall find that the development and establishment of the facility will improve or preserve the transportation infrastructure in the state.
6 Effective Date. This act shall take effect upon its passage.
LBAO
08-2249
Revised 01/09/08
HB 1626 FISCAL NOTE
AN ACT relative to a new bridge over the Merrimack River.
FISCAL IMPACT:
The Department of Transportation and Treasury state this bill will increase state revenue and expenditures by an indeterminable amount in FY 2008 and each fiscal year thereafter. There will be no fiscal impact on county and local revenues or expenditures.
METHODOLOGY:
The Department of Transportation (DOT) states this bill authorizes DOT to enter into a long-term lease and concession agreement under a public-private partnership to build a bridge across the Merrimack River. In exchange for such lease and concession, the private entity will pay the State a negotiated concession fee. The negotiation of this concession fee and the determination of operation, maintenance, and toll collection responsibilities are yet to be determined. Since the agreement has not been negotiated, the associated fiscal impacts are unknown. DOT assumes the negotiated agreement will be structured to ensure that any expenditure for the operation and maintenance of the bridge would be offset by the associated concession fee. DOT indicates that no Department resources will be committed to this project until the successful determination of the associated agreement and fees to limit the state’s risk and financial commitment. DOT states state revenue and expenditures will increase, but the amount is indeterminable.
The table below shows the DOT estimate of the cost of the bridge project proposed in this bill:
Project Cost Estimate: | |
Engineering |
$ 9,750,000 |
Right of Way |
7,000,000 |
Construction |
100,500,000 |
$117,250,000 | |
The Treasury Department states this bill will increase state expenditures for costs related to negotiating the state compensation (concession fee) under the terms of the contract with the developer, to provide oversight over the terms and conditions of any bond issuance, and to provide ongoing administration of the escrow fund. The Treasury assumes that state revenues will increase from the developer to offset these costs in accordance with the terms of the negotiated comprehensive development agreement. The increase in state revenues and expenditures is indeterminable.
The Business Finance Authority states this bill will have no state, county or local bond related impacts since the bonds issued to build the bridge will be private activity bonds issued but not backed by the State.