June 17, 2019

June 14, 2019

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White House Initiative to Expand Public-Private Partnerships

On July 17, 2014, President Obama announced a new infrastructure investment initiative, the “Build America Investment Initiative.” Among other things, this program is designed to foster increased use of federal credit programs and public-private partnerships (P3s) by state and local governments. This Alert provides an overview of the Build America Investment initiative and its implications for P3s going forward.

Status of Transportation Funding Bill

With an Aug. 1, 2014 deadline quickly approaching for the projected shortfall in the Highway Trust Fund, the House of Representatives enacted a short-term, $11 billion transportation bill on July 15. The Senate is also anticipated to consider this temporary solution in the near future, which would provide funding for surface transportation projects through May 2015. In the face of diminished prospects for a multi-year transportation program being enacted this summer and no expectation of Congressional action on other programmatic changes, the Obama administration has launched this initiative to promote P3s and to attempt to stimulate the growth of these projects through executive branch actions.

Overview of the Presidential Memorandum

In a formal memorandum to the heads of Federal departments and agencies, President Obama directed a series of actions that are designed to enhance the use of P3s and to encourage awareness of a variety of federal financing tools. The memorandum states that it is the “policy of the Federal Government” to “facilitate, as appropriate, greater public and private partnership and collaboration, including with international investors and companies” for infrastructure projects. In order to promote the heightened use of P3s, the memorandum directs the following specific actions:

  • The creation of a new center for innovative transportation finance, the “Build America Transportation Investment Center” (the Center), at the United States Department of Transportation (USDOT). The Center, which must be in place within 120 days, will provide assistance to state, local, and tribal governments and private developers and investors on innovative financing options for transportation infrastructure projects.

    • The Center will develop and make public case studies, best practices, tools, and other resources to assist P3 proponents.

    • USDOT will create a website to serve as a single point of access for project sponsors requiring assistance or information on transportation financing programs, including the Transportation Infrastructure Finance and Innovation Act (TIFIA) program, the Private Activity Bond (PAB) program, and the Railroad Rehabilitation and Improvement Financing Program (RRIF).

    • The Center will provide technical assistance to ensure that project sponsors are aware of the necessary environmental reviews and implications for project planning and delivery.

  • The establishment of an Interagency Infrastructure Working Group (the Working Group) that will be co-chaired by the Secretaries of Treasury and Transportation and work closely with state and local governments, project developers, and investors.

    • The Working Group will analyze the barriers to success for P3s and focus on accelerating financing and completion of regional and interstate projects. Based on this review, within 120 days, the Working Group will report to the president with recommendations on how to promote awareness regarding P3s and infrastructure financing programs and provide an action plan with a timeline and goals, including how to best engage the private sector on an ongoing basis, regarding P3s.

Potential Impact of this Memorandum

While the administration’s initiative does not solve the more comprehensive challenges and considerable uncertainty facing infrastructure investment and the Highway Trust Fund, its promotion of P3s is a significant step forward. The specific measures in the memorandum are unlikely to yield immediate results, however, the heightened emphasis on and support for P3s bodes well for their growing use in national infrastructure projects. In addition, as it currently appears that a long-term transportation funding bill will not be enacted until May 2015, at the earliest, this action only increases the prospect that new P3 tools, funding mechanisms, and other support could be included in a transportation bill in the coming years as the market and interest in P3s expands.

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Greenberg Traurig’s Government Law & Policy Practice combines the capabilities of our Federal Practice in Washington D.C. with our state and local practices across the country. Our national team of governmental affairs professionals spans major political and commercial capitals throughout the United States, including: Albany, Austin, Boston, Chicago, Denver, New York City, Sacramento, Tallahassee and Washington, D.C.

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