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Annual Privatization Report 2013

State PPP Enabling Legislation

Subsection of Annual Privatization Report 2013: Surface Transportation

Robert Poole
April 8, 2013

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According to an October 2012 review by the National Conference of State Legislatures, 36 states and Puerto Rico have some form of transportation PPP enabling legislation. However, many of these are rather limited or are project-specific. (For example, California’s sunsets on January 1, 2014, and Nevada’s authorizes only a single project.) While a number of PPP bills were introduced and debated in legislatures during the past year, only two new enabling laws (as opposed to fine-tuning of pre-existing PPP measures) were enacted: Connecticut and Pennsylvania.

Connecticut’s General Assembly passed HB 6801 in October 2011 with bipartisan, near-unanimous support. It authorizes the state and other government entities to enter into up to five PPP projects in transportation and/or social infrastructure. The state can provide up to 25% of a project’s budget, with the balance being financed based on the project’s revenue stream. However, toll projects are not allowed unless the legislature approves tolling for the specific project.

And after several years of debate, the Pennsylvania legislature finally enacted a version of Rep. Rick Geist’s transportation PPP measure in June 2012. HB 3 allows the state DOT (and other government entities) to enter into long-term agreements with the private sector to develop new transportation infrastructure projects. (The Pennsylvania Turnpike is specifically excluded, unless the legislature decides to authorize such a project.) It creates a PPP board, which must approve such projects, chaired by the transportation secretary. Both solicited and unsolicited proposals are allowed, and concessions may be up to 99 years in duration.

Of states without transportation PPP legislation, one of those thought most likely to enact such a measure in 2013 is New York. The Port Authority of New York & New Jersey already has PPP authority, but other key agencies—the state DOT, the New York Thruway, and MTA Bridges & Tunnels—do not. The $5.2 billion project to replace the aging Tappan Zee Bridge, for which a financing plan has not been worked out, despite the high priority attached to this project, is the focus of potential PPP legislation. State Sen. Greg Ball (R, Patterson) announced in September 2012 that he will introduce PPP legislation in the 2013 session of the legislature.

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Robert Poole is Searle Freedom Trust Transportation Fellow and Director of Transportation Policy


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