State laws regarding PPP highway projects vary considerably. Twenty-seven states currently do not have legislation enabling PPPs (AECOM Consult 2007). Of those that do, only fifteen have made significant use of PPP schemes (AECOM Consult 2007). Fewer still have pursued aggressive toll-financed projects, such as high-occupancy toll (HOT) lanes, which are characteristic of the more-privatized PPP models. Texas leads the way with 24 transportation (both transit and highway) concession projects as of 2006; no other state has more than 10, and most have only one or two, if any (AECOM Consult 2007). As such, first-hand experience with PPP projects in the United States, particularly private finance-driven ones, is low, though many state governments are now expressing interest in experimenting with new legislation.
Of the states that do allow some form of highway PPPs, many have done so only on a trial basis with a limited number of projects, and in some cases only one project. Table 4-1 compares the status of PPP laws in states with enabling legislation, and we examined several factors that demonstrate the extent to which each state has embraced aggressive PPP finance schemes.2
State legislatures have taken many different paths in creating PPP programs, as detailed in Section 3. Some states, such as Virginia, have laid out explicit regulations and standards for PPP facilities. Other states, like Minnesota, have only minimal statutes or provide for only a few types of projects, leaving a lot of discretion to the parties crafting the agreement between the public and private entities.
Statutes governing PPPs fall into five main categories:
1. Project Selection and Approval
2. Procurement and Project Management
4. Funding Requirements and Restrictions
The following sections describe provisions include in each of these categories include the following provisions.3
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2 For a summary of California's current PPP legislation and past legislative actions, please see Appendix I.
3 These elements were originally developed by the law firm of Nossaman, Guthner, Knox, & Elliott, LLP. Sample statutes addressing these points are available at http://www.fhwa.dot.gov/ppp/pdf/legis_key_elements.pdf (last accessed on June 19, 2009), in the Nossaman document entitled "Overview of Key Elements and Sample Provisions." Additional information for state-by-state information can be found at http://www.ppptoolkit.fhwa.dot.gov/statestory.aspx (last accessed on June 19, 2009), unless otherwise noted.