Out of Control Policy Blog

Puerto Rico's New Infrastructure Public-Private Partnership Law

The law firm Allen & Overy offers a useful summary of Puerto Rico's new public-private partnership (PPP) law here, and it's well worth a read. Some of the quick highlights:

  • The enabling legislation, SB 469, centralized PPP procurement and implementation authority in the new Public-Private Partnership Authority, a public corporation and affiliate of Puerto Rico's Government Development Bank.
  • It facilitates a broad range of PPPs—really, any contract that separates or combines project design, building, financing, operation or maintenance in some form or fashion.
  • Most state PPP enabling legislation covers only transportation facilities (Virginia being a notable exception). Puerto Rico's legislation goes much further, authorizing PPP procurements in ten classes of infrastructure, including energy, transportation, telecom, IT and water. Policymakers also have discretion to expand the menu to include any other priority projects. Hence, it's broad-ranging.
  • The legislation exempts PPPs from property taxes and caps the income tax rate on corporate income derived from PPP projects at 10 percent (not for alien and non-resident individuals or corporations, though).
  • The legislation does not require legislative approval of contracts and caps contract terms to no more than 50 years.

To see how Puerto Rico's new PPP law compare with those adopted this year in Arizona and Massachusetts, see here.

» Reason Foundation's Transportation Research and Commentary

Leonard Gilroy is Director of Government Reform


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Comments to "Puerto Rico's New Infrastructure Public-Private Partnership Law":

Nick Y. | October 16, 2009, 4:42am | #

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