Florida close to having PPP law, but it may be too complex

Florida is nearing the enactment of formal public-private partnership legislation. But industry observers are warning that the law is overly complex and may scare investors away.

Florida could prove to be the next US state that enacts public-private partnership (PPP) legislation. Senate Bill 576 (SB 576) and a companion House Bill have been sailing through various legislative committees, albeit with amendments. 

But while policymakers appear to be cheering the pending legislation, industry participants are expressing reservations on the potential PPP framework.

“There doesn’t appear to be political opposition to the idea of a PPP bill. The issue in Florida is that our bill is overly complicated,” explained Lee Weintraub, Construction Attorney at law firm Becker & Poliakoff.

That means that while PPP legislation is likely to be enacted in 2012, according to Weintraub it may not stand the test of time, with follow-up legislation expected to be drawn in 2013. 

“Although there is support for a PPP bill, nobody loves the complexity, and in some instances, perceived impracticality of this bill,” explained Weintraub. 

He added: “Some question why it was written in the first place, instead of just piggy-backing the PPP concept onto an already existing Department of Transportation PPP statute. But it appears that there is going to be a bill and it looks like this one is going through.” 

One issue in the proposed bill that is displeasing industry observers is tied to the handling of unsolicited bids for projects. Once an unsolicited proposal is submitted by a private entity, the offer then goes out for competitive bid, which gives industry rivals a chance to muscle their way in. There also are other concerns. 

“Under the proposed legislation, any PPP job at the state level will need legislative approval,” said Weintraub. “We really appreciate the legislature's willingness to help spur the PPP concept, but want legislation whereby the government would get out of the way. [Investors] gravitate to states with less onerous statutes. Florida needs to fix the complexities of the pending bill or [it will] find that the money is going out of state and not coming here.” 

Outside of transport, Florida is in the infancy stages of PPP use and any formal policy is likely, at the very least, to spur the model's use. “The statute has a lot of utility in the form of waking people up and getting the message out,” contends Weintraub.