Arizona enacts PPP legislation(3)

Governor Jan Brewer has given the state’s department of transportation the green light to pursue PPPs by signing HB 2396 into law. The bill is regarded by some as model enabling legislation for PPPs.

Arizona Governor Jan Brewer has signed into law a bill enabling the state to pursue public-private partnership (PPP) agreements for transportation projects, including toll roads.

The law, HB 2396, gives the Arizona Department of Transportation (ADOT) broad authority to purse PPPs using a variety of project delivery methods and forms of agreement.

ADOT may consider both solicited and unsolicited proposals, permit private sector partners to collect user fees on PPP projects and accept private capital in pursuing projects, among other key provisions.

The move comes as a record 17 states, including Arizona, have pending PPP legislation, according to data from the National Conference of State Legislatures.

But industry observers have kept a close eye on Arizona in particular because of the quality of the PPP legislation it was crafting.

Shirley Ybarra, senior transportation analyst at the Reason Foundation, a free market think-tank, said in a recent interview for Infrastructure Investor magazine that the bill had the potential to become “the new gold standard” in enabling legislation for PPPs.

A similar bill that she helped craft for the Commonwealth of Virginia, the Public-Private Transportation Act, has widely been regarded by industry observers as the norm for such legislation until now.

Arizona’s PPP law follows similar steps taken by California in February, when the state passed state statute SB 4. The bill gave state-wide and regional transportation agencies broad authority to pursue PPPs without limit to location or number.

There have also been some setbacks on the legislative agenda for PPPs. In Texas, the second most populous state in the US, lawmakers recently ended a special session without extending the state’s authority to pursue PPPs.