Enabling legislation is a necessary step for any PPP implementation and it can be provided on a project-by-project or program basis. PPP legislation in seven states limits PPPs to selected "pilot" or "demonstration" projects.
Project-by-project-enabling legislation allows public representatives to consider the details of each project. However, the competitive nature of PPP procurements in one instance apparently led to withholding proprietary technical information from elected officials, even as they voted to approve a project. In the case of The Canada Line, an extension of the Vancouver urban rail line, local elected officials responsible for approving the PPP responded to public criticism by claiming that they did not know the extent of the controversial cut-and-cover tunneling method to be used on the project. Because the amount of cut-and-cover tunneling was a proprietary part of the contractor's bid information regarding its use that was appropriately withheld-this did prevent the elected officials from not getting a complete picture of the project that they approved (Siemiatycki 2007).
If more than one project is anticipated, however, project-by-project legislation is time and cost intensive for both the public and private sector, and standardization of PPP procedures can streamline the procurement process. The United Kingdom developed a standardized Private Finance Initiative contract to simplify negotiations, enable consistent pricing of projects, and promote common understanding of risks among PPP projects (Abdel-Aziz 2007).
Ghavamifar and Touran (2008) conducted a comprehensive survey of the codes of all 50 states within the United States to identify enabling legislation for alternative project delivery systems: design-build, construction management-at-risk, and PPP project. They found that an increasing number of states are moving toward more fully authorizing alternative delivery systems.
According to a study prepared for the FHWA, state enabling legislation should, at a minimum, provide an operating environment that allows a state DOT to enter into partnerships and to approve specific activities associated with that partnership. To be effective, it could designate a lead agency, such as the state DOT or a toll authority to implement highway partnerships. The lead agency should have the authority to act on behalf of the state and should have certain statutory powers including the power to procure projects through negotiation, to acquire right-of-way through eminent domain (or otherwise) and transfer use of it to a private partner, to acquire and confer environmental permits, to confer exclusive franchises, to establish a geographic non-compete zone, to enter into binding concession agreements and lease arrangements, to regulate tolls or rates of return, to accept unsolicited proposals, and to blend or lend state and federal funds to a project (Apogee Research, Inc. 1995; U.S.DOT 2004). Enabling legislation may also include provisions that define the maximum repayment term for debt (e.g., 30 years) and surety/performance bond requirements. Bloomfield (2006) warns against relaxing procurement laws too much, citing an example of local enabling laws that waived the need for competitive procurement for a long-term lease of a new correctional facility in Plymouth, Massachusetts. On the other hand, some terms provided by enabling legislation may discourage the private sector from investing in transportation infrastructure. For instance, the PPP legislation in Washington State requires post-legislative approval of proposed PPPs after a private partner has been selected, which some observers say appears to have discouraged private investors from submitting unsolicited proposals, because there is no guarantee that the negotiations will be closed even after a PPP project has been selected and approved by the DOT.