Whether a state or local transit agency can procure a project utilizing a PPP approach is in the first instance governed by state law and in the second instance by local law, since transit agencies are generally the product of local or regional initiative.5 While a review of state laws governing transit agencies is outside the scope of this report, as noted above about half of the states have adopted general statutes authorizing use of PPPs for public infrastructure projects.6 The laws of these states allow varying levels of participation by the private sector in varying types of transportation projects.
It should be noted that authorization in certain states is limited to specific agencies and therefore might not be available to transit agencies. Transit agencies in many states are governed by separate statutes or local ordinances. As a result there are still many state and local transit agencies with no current legal capacity to take advantage of private capital and innovation to help address their transportation infrastructure needs.
The Federal Highway Administration (FHWA) has published a study of the state PPP enabling statutes identifying key elements and sample provisions for highway projects.7 Most of the same elements would apply to transit projects. In addition, USDOT developed model language for states to consider in writing PPP legislation to suit their needs, if PPPs are not permitted under state laws.8 These documents can be a useful resource for states considering either adopting comprehensive PPP legislation or amending their existing enabling statutes.
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5 Section 3011(c)(4) of SAFETEA-LU provides that the Secretary may approve the application for the designation of a project as a Pilot Project if, among other things, "State and local laws permit public-private agreements for all phases of project development, construction, and operation of the project. . . ."
6 United States Department of Transportation, Report to Congress on Public-Private Partnerships, December 2004, Section 4.A.ii and Appendices F and G. http://www.fhwa.dot.gov/reports/pppdec2004/index.htm.
7 http://www.fhwa.dot.gov/ppp/legis_key_elements.pdf.
8 http://www.fhwa.dot.gov/ppp/legis_model.pdf. It should be noted that FHWA's web page specifically advises that the model legislation is provided for informational purposes only and that it should not be construed as the policy of USDOT or FHWA.