BRADENTON, Fla. - The Kentucky House has passed a bill that would authorize the state to use public-private partnerships.
House Bill 443, sponsored by Rep. Leslie Combs, D-Pikeville, passed 84-13 after being amended on Feb. 25.
The enabling legislation would allow state government to partner with private companies to complete public infrastructure, transportation, and other needs.
A similar bill passed during the 2014 session. However, it was vetoed by Gov. Steve Beshear because it prohibited the use of tolls on the Brent Spence bridge project between Cincinnati and northern Kentucky.
Beshear and Ohio Gov. John Kasich recently ordered consultants to find design changes to lower the $2.6 billion construction cost of the new bridge and renovation project, for which they plan to use a P3. With financing, interest, operations, and maintenance the total project cost is currently estimated at $3.57 billion.
Combs said that HB 443 does not mandate use of tolls on any project. However, she acknowledged that the issue of tolls has concerned some lawmakers, particularly those in northern Kentucky where many residents oppose tolls on the Brent Spence project.
The bill says that a "state authority shall not enter into a public-private partnership related to a project connecting the Commonwealth with the state of Ohio unless the General Assembly expressly authorizes it by passing a joint resolution."
"This bill is about creating public private partnerships in Kentucky," Combs said. "It is not about a particular project. It's not about doing a project in Northern Kentucky. It's not about doing tolls."
Lawmakers accepted several amendments to HB 443 proposed by State Rep. Arnold Simpson, D-Covington, who opposes tolling the Brent Spence.
Simpson filed the amendment in last year's P3 bill that prohibited tolls on the Brent Spence. He told lawmakers during consideration of this year's bill that he still hates tolls.
One of his amendments to HB 443 would require that tolls imposed as part of a transportation project using a P3, and which costs more than $100 million, be discontinued when the initial construction debt is paid.
Such a measure could make it difficult to manage large projects with private partners that are structured with availability payments for operations and maintenance duties long after construction is over.
Kentucky Transportation Cabinet spokesman Chuck Wolfe said the agency is analyzing the amended bill to determine its effect.
"Large projects typically entail costs that continue well past construction," he told The Bond Buyer. "Those costs would have to be paid from some other public source, and at the expense of some other public need."
HB 443 now goes to the Senate for consideration. It includes a clause declaring an emergency that would allow the bill to take effect immediately if it is signed into law by the governor.
