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| January 2009 |
subject Areas: IA planning and Administration;
IC Transportation Law
Legal Research Digest 51
Major Legal Issues For Highway Public-Private Partnerships
This report was prepared under NCHRP Project 20-6, "Legal Problems Arising Out of Highway Programs," for which the Transportation Research Board is the agency coordinating the research. The report was prepared by Edward Fishman, Esquire, Kirkpatrick & Lockhart Preston Gates Ellis LLP. James B. McDaniel, TRB Counsel for Legal Research Projects, was the principal investigator and content editor.
The problem and Its solution
State highway departments and transportation agencies have a continuing need to keep abreast of operating practices and legal elements of specific problems in highway law. This report is a new paper, which continues NCHRP's policy of keeping departments up-to-date on laws that will affect their operations.
Applications
The amount of public funding available to state and local transportation agencies has failed to keep up with the increasing need to invest in highway construction, operation, and maintenance projects. Governmental agencies are constantly searching for ways to fund or facilitate highway construction projects. Public-private partnerships are viewed as one way to increase the availability of funds.
Congress has established a number of programs that authorize the use of tolling, pricing, and public-private partnerships on Federal-aid highways. Moreover, the U.S. Department of Transportation (USDOT) has promoted public-private partnerships as a significant tool avail-able to state and local highway agencies for supplementing public funding for infrastructure and reducing traffic congestion. In light of the foregoing, there is a widespread expectation that the use of public-private partnerships in the U.S. highway sector will increase substantially in the next few years.
Common legal issues are associated with the implementation of public-private highways. As of July 2008, 23 states have legislation authorizing public-private partnerships. Many states do not have legislation authorizing the use of non-traditional project delivery methods for highway projects. Although the use of toll and other pricing revenues is a common way to finance private participation in highway projects, there remain significant restrictions under federal and state law on the ability to implement such direct user fees in particular circumstances. Other potential legal issues arise out of limitations on public and private financing methods, environmental review requirements, labor and employment laws, and public procurement standards. Project risks must also be allocated between the public and private sectors in the public-private partnership agreement.
This digest is designed to provide a broad overview of the major legal issues that are likely to arise in the implementation of public-private partnerships in the U.S. highway sector. It should be helpful to transportation administrators, attorneys, planners, financial officials, and the private transportation investment community.
TRANSPORTATION RESEARCH BOARD
OF THE NATIONAL ACADEMIES
MAJOR LEGAL ISSUES FOR HIGHWAY PUBLIC-PRIVATE PARTNERSHIPS
By Edward Fishman, Esquire
Kirkpatrick & Lockhart Preston Gates Ellis LLP