Legislator pushes public-private partnership plan

story by Roby Brock, a TCW content partner and owner of Talk Business
roby@talkbusiness.net

Freshman State Rep. Warwick Sabin, D-Little Rock, has made an early name for himself in the 2013 legislative session.

Sabin was chosen by the 41 freshmen in the Arkansas House of Representatives as chairman of the Freshman Caucus. He’s also at the epicenter of a bipartisan effort to broker a “good government” measure to reform ethics and term limits through a proposed constitutional amendment.

Additionally, Sabin is the lead sponsor of HB 1251, a bill that seeks to strengthen opportunities for public-private partnerships in major infrastructure projects.

“The main thing it does it clarifies the way that public entities can interact with private enterprise on public infrastructure projects,” Sabin said in the latest Talk Business Arkansas video update.

The “Partnership for Public Facilities and Infrastructure Act,” also known as P3 legislation (Public-Private Partnerships), is an 18-page bill. It would:
• Provide a statutory framework for government entities to solicit private capital and investment;
• Provide clear statutory authority for P3 projects to encourage competition; and,
• Provide a mechanism for government to capture the value it creates in increased real estate values and economic activity through a revenue sharing arrangement with developers.

What type of projects could these public-private partnerships engage in? The bill spells out a litany of ideas including:
• Mass transit facilities;
• Vehicle parking;
• Port facilities;
• Power generation, fuel supplies, and oil and gas pipelines;
• Hospitals, schools, and public buildings; and,
• Technology infrastructure.

According to legislative research, 34 states have already enacted similar laws and several states are considering measures like the one in Arkansas. HB 1251 has already cleared a House committee and is awaiting consideration by the full House.

It has been supported by the Arkansas Highway Department, Entergy and various higher education institutions – entities that see value in potential public-private partnerships. The Arkansas Department of Finance and Administration has issued a fiscal impact statement on the bill showing that it has no revenue impact to the state or taxpayers.

“Maybe the most revolutionary part of it is it simply allows private entities to put forth unsolicited bids for proposals for what they think may be in the public interest,” Sabin said.

He sees the bill as a new tool to advance high-cost projects where public institutions are struggling to find funding. He said it does not privatize government functions.

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“It helps divert some of the finance and risk burden from the public entity to a private entity,” he said.  ”I think once people understand it, once they study it, once they see it how it has worked in other place, they’ll understand how it can be a good thing for Arkansas.”

Link here to see the video interview with Sabin.

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