The NCSL Blog


By James B. Reed

Though 23 states considered 99 bills to enact public-private partnerships (P3s or PPPs) or tweak existing P3 statutes during the 2104 legislative sessions, few of them passed.

Few of the 99 bills relating to public-private partnerships considered by state legislatures passed during the 2014 session.One exception was SB 255 in Indiana, expanding the state’s P3 authority. However, a heavily debated bill in Colorado (SB 197) to require legislative approval for P3s contracts that exceed 35 years was vetoed by the governor and a comprehensive framework for P3s in Kentucky (HB 407) also was vetoed because of a dispute over the appropriate use of tolling. A comprehensive bill in Georgia (SB 255) passed the Senate but not the House.

PPPs are authorized in 33 states and Puerto Rico for transportation projects and in 39 states for either transportation or so-called “vertical” or “social” P3s, referring primarily to public facilities such as housing, government office buildings and school facilities. States that will likely consider P3 legislation in the remainder of 2014 and in 2015 include Arkansas, Georgia, Kentucky, Michigan, Missouri, New Hampshire, New Mexico, New York, North Carolina and Tennessee, as well as the District of Columbia.

This information was shared during a July 2104 Denver gathering of the National Council of Public-Private Partnerships, which educates government and businesses on how P3s can provide better public services and facilities.

In a panel updating state and federal policy developments, I conveyed the principles developed by the NCSL PPP Working Group for state legislatures that are evaluating the use of P3s for their state transportation programs. These include:

  • Principle 1: Be informed. Decision makers need access to fact-based information that supports sound decisions.
  • Principle 2: Separate the debates. Debates about the PPP approach should be conceptually distinct from issues such as tolling, taxes or specific deals.
  • Principle 3: Consider the public interest for all stakeholders. Legislators should consider how to protect the public interest throughout the PPP process.
  • Principle 4: Involve and educate stakeholders. Stakeholder involvement—early and often—helps protect the public interest, improve buy-in and mitigate political risk.
  • Principle 5: Take a long-term perspective because P3s are long-term. Legislators should approach PPP decisions with the long-term impacts in mind, looking beyond short-term considerations
  • Principle 6: Let the transportation program drive PPP projects—not the other way around. PPPs should be pursued to support a state’s transportation strategy, not just to raise short-term revenue.
  • Principle 7: Support comprehensive project analyses. Before pursuing a PPP, it should be shown to be a better option than traditional project delivery in terms of procurement and cost.
  • Principle 8: Be clear and transparent about the financial issues. States must carefully assess financial goals, an asset’s value and how to spend any proceeds.
  • Principle 9: Set good ground rules for bidding and negotiations. Legislation should promote fairness, clarity and transparency in the procurement process.

See NCSL's full report on P3s.

Another panel member, Ben Brubeck of the Associated Builders and Contractors, mentioned some key P3 developments at the federal level, in particular President Obama’s Presidential Memo issued on July 17 launching the Build America Investment Initiative.  Among other provisions, it creates the Build America Transportation Investment Center, to be housed at the U.S. Department of Transportation, and sets up a Build America Interagency Working Group with P3 stakeholders. An Infrastructure Investment Summit is scheduled for Sept. 9, 2014.

NCSL will address the financing of infrastructure and capital improvements during a session at the Legislative Summit in Minneapolis. Limited money and mounting needs have dramatically altered the ability of states to invest in buildings, roads and water systems. This session, at 11:30 a.m. on Thursday, Aug. 21. will explore how public-private partnerships, tax increment financing, transit-oriented development and state infrastructure banks may help provide these critical infrastructure projects.

James Reed is group director of NCSL's Environment, Energy and Transportation program.

Posted in: NCSL, Public Policy
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This blog offers updates on the National Conference of State Legislatures' research and training, the latest on federalism and the state legislative institution, and posts about state legislators and legislative staff. The blog is edited by NCSL staff and written primarily by NCSL's experts on public policy and the state legislative institution.