Commentary

State PPP Enabling Legislation

Subsection of Annual Privatization Report 2013: Surface Transportation

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According to an October 2012 review by the National Conference of State Legislatures, 36 states and Puerto Rico have some form of transportation PPP enabling legislation. However, many of these are rather limited or are project-specific. (For example, California’s sunsets on January 1, 2014, and Nevada’s authorizes only a single project.) While a number of PPP bills were introduced and debated in legislatures during the past year, only two new enabling laws (as opposed to fine-tuning of pre-existing PPP measures) were enacted: Connecticut and Pennsylvania.

Connecticut’s General Assembly passed HB 6801 in October 2011 with bipartisan, near-unanimous support. It authorizes the state and other government entities to enter into up to five PPP projects in transportation and/or social infrastructure. The state can provide up to 25% of a project’s budget, with the balance being financed based on the project’s revenue stream. However, toll projects are not allowed unless the legislature approves tolling for the specific project.

And after several years of debate, the Pennsylvania legislature finally enacted a version of Rep. Rick Geist’s transportation PPP measure in June 2012. HB 3 allows the state DOT (and other government entities) to enter into long-term agreements with the private sector to develop new transportation infrastructure projects. (The Pennsylvania Turnpike is specifically excluded, unless the legislature decides to authorize such a project.) It creates a PPP board, which must approve such projects, chaired by the transportation secretary. Both solicited and unsolicited proposals are allowed, and concessions may be up to 99 years in duration.

Of states without transportation PPP legislation, one of those thought most likely to enact such a measure in 2013 is New York. The Port Authority of New York & New Jersey already has PPP authority, but other key agencies-the state DOT, the New York Thruway, and MTA Bridges & Tunnels-do not. The $5.2 billion project to replace the aging Tappan Zee Bridge, for which a financing plan has not been worked out, despite the high priority attached to this project, is the focus of potential PPP legislation. State Sen. Greg Ball (R, Patterson) announced in September 2012 that he will introduce PPP legislation in the 2013 session of the legislature.

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Robert Poole is director of transportation policy and Searle Freedom Trust Transportation Fellow at Reason Foundation. Poole, an MIT-trained engineer, has advised the Ronald Reagan, the George H.W. Bush, the Clinton, and the George W. Bush administrations.

Surface Transportation

In the field of surface transportation, Poole has advised the Federal Highway Administration, the Federal Transit Administration, the White House Office of Policy Development, National Economic Council, Government Accountability Office, and state DOTs in numerous states.

Poole's 1988 policy paper proposing privately financed toll lanes to relieve congestion directly inspired California's landmark private tollway law (AB 680), which authorized four pilot toll projects including the successful 91 Express Lanes in Orange County. More than 20 other states and the federal government have since enacted similar public-private partnership legislation. In 1993, Poole oversaw a study that coined the term HOT (high-occupancy toll) Lanes, a term which has become widely accepted since.

California Gov. Pete Wilson appointed Poole to the California's Commission on Transportation Investment and he also served on the Caltrans Privatization Advisory Steering Committee, where he helped oversee the implementation of AB 680.

From 2003 to 2005, he was a member of the Transportation Research Board's special committee on the long-term viability of the fuel tax for highway finance. In 2008 he served as a member of the Texas Study Committee on Private Participation in Toll Roads, appointed by Gov. Rick Perry. In 2009, he was a member of an Expert Review Panel for Washington State DOT, advising on a $1.5 billion toll mega-project. In 2010, he was a member of the transportation transition team for Florida's Governor-elect Rick Scott. He is a member of two TRB standing committees: Congestion Pricing and Managed Lanes.

Aviation

Poole is a member of the Government Accountability Office's National Aviation Studies Advisory Panel and he has testified before the House and Senate's aviation subcommittees on numerous occasions. Following the terrorist attacks of Sept. 11, 2001, Poole consulted the White House Domestic Policy Council and the leadership of the House Transportation & Infrastructure Committee.

He has also advised the Federal Aviation Administration, Office of the Secretary of Transportation, White House Office of Policy Development, National Performance Review, National Economic Council, and the National Civil Aviation Review Commission on aviation issues. Poole is a member of the Critical Infrastructure Council of the Los Angeles Economic Development Corporation and of the Air Traffic Control Association.

Poole was among the first to propose the commercialization of the U.S. air traffic control system, and his work in this field has helped shape proposals for a U.S. air traffic control corporation. A version of his corporation concept was implemented in Canada in 1996 and was more recently endorsed by several former top FAA administrators.

Poole's studies also launched a national debate on airport privatization in the United States. He advised both the FAA and local officials during the 1989-90 controversy over the proposed privatization of Albany (NY) Airport. His policy research on this issue helped inspire Congress' 1996 enactment of the Airport Privatization Pilot Program and the privatization of Indianapolis' airport management under Mayor Steve Goldsmith.

General Background

Robert Poole co-founded the Reason Foundation with Manny Klausner and Tibor Machan in 1978, and served as its president and CEO from then until the end of 2000. He was a member of the Bush-Cheney transition team in 2000. Over the years, he has advised the Reagan, George H.W. Bush, Clinton, and George W. Bush administrations on privatization and transportation policy.

Poole is credited as the first person to use the term "privatization" to refer to the contracting-out of public services and is the author of the first-ever book on privatization, Cutting Back City Hall, published by Universe Books in 1980. He is also editor of the books Instead of Regulation: Alternatives to Federal Regulatory Agencies (Lexington Books, 1981), Defending a Free Society (Lexington Books, 1984), and Unnatural Monopolies (Lexington Books, 1985). He also co-edited the book Free Minds & Free Markets: 25 Years of Reason (Pacific Research Institute, 1993).

Poole has written hundreds of articles, papers, and policy studies on privatization and transportation issues. His popular writings have appeared in national newspapers, including The New York Times, The Wall Street Journal, USA Today, Forbes, and numerous other publications. He has also been a guest on network television programs such as Good Morning America, NBC's Nightly News, ABC's World News Tonight, and the CBS Evening News. Poole writes a monthly column on transportation issues for Public Works Financing.

Poole earned his B.S. and M.S. in mechanical engineering at Massachusetts Institute of Technology (MIT) and did graduate work in operations research at New York University.