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31 project are to ensure that contractors extend a hiring preference to the extent practicable to vet- erans (as defined in 5 U.S.C. § 2108) who have the requisite skills and abilities to perform the con- struction work required under the contract. The statute is not to be âunderstood, construed or en- forced in any manner that would require an em- ployer to give a preference to any veteran over any equally qualified applicant who is a member of any racial or ethnic minority, [a] female, an in- dividual with a disability, or a former em- ployee.â370 6. Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 Section 5323, as amended by MAP-21, provides that the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 shall apply to financial assistance for capital projects.371 VII. PPPS AND COMPLIANCE WITH STATE LAWS A. State Enabling Legislation for PPPs This digest is not intended to be a review of state and local laws affecting the use of PPPs; nevertheless, one of the âkey prerequisitesâ for a PPP is a state enabling law that authorizes the use of a PPP in the manner envisioned by pro- spective public and private partners for a pro- ject.372 The digest includes a brief discussion of state enabling legislation for PPPs and alerts readers to some of the possible obstacles to PPPs in some states. First and foremost, a PPP for the delivery of a facility or a service is a contract between a transit agency and the private sector.373 The parties to a PPP must consider the legal capacity of the PPP under state law; the ability under applicable state law for a public transit agency to transfer its re- sponsibilities in whole or in part by contract to a private party; and whether the private sector may be involved in developing, financing, or operating a transit facility. Furthermore, although PPPs are based on innovative contracting and a value ap- proach, in most states, public transit and other âgovernment agencies must segment their pro- 370 Estell & Washington, supra note 14, at 45. 371 Id. at 41. 372 Geddes & Wagner, supra note 4, at 2. 373 See FHWA, Innovative Project Delivery, FAQs, available at http://www.fhwa.dot.gov/ipd/p3/faqs/#1. curements and award contracts on the basis of the âlowest responsible price.ââ374 Although state enabling legislation is essential for PPPs, the laws currently differ concerning whether and to what extent they permit the kind of PPP, project, contract, or financing envisioned by the partners.375 Whether existing laws provide explicit authority for a PPP project is important, because governments generally do not have âim- plicit powers.â376 Many public transit agencies still lack the legal capacity under state law to use PPPs as an alternative to traditional approaches to public procurement.377 In contrast, Virginiaâs Public-Private Transportation Act of 1995 is âfre- quently cited as a model for other jurisdictionsâ interested in the use of PPPs.378 The threshold question thus is âwhether there exists sufficient legal authority and flexibility to use alternative PPP approaches to deliver surface transportation projects.â379 There has been some progress with respect to state authorization of the use of PPPs. As of 2007, 42 states, the District of Columbia, Puerto Rico, and the Virgin Islands already had authorized transportation agencies to use the DB form of contracting,380 but only 15 states had made âextensive use of the DB ap- proach to expedite projects and control costs.â381 Moreover, the states that tend to use alternative, innovative approaches to project delivery are states with enabling legislation for PPPs and ex- perience with DB procurement for transportation projects that also are participating actively in the Value Pricing Pilot Program.382 374 H.R. REP. NO. 110-24, Hearings on PPPs, supra note 9, at 85 (citation omitted). 375 FHWA User Guidebook on Implementing PPPs, supra note 23, at 5â6. 376 David L. Winstead, Raising Capital to Finance Public Transit and Intermodal Projects, at 21, hereinaf- ter referred to as âWinstead,â available at http://www.docstoc.com/docs/48669541/Raising-Capital- to-Finance-Public-Transit-Intermodal-Projects. 377 FHWA User Guidebook on Implementing PPPs, supra note 23, at 34 and B-5 (summary of statutory authority for state transportation PPP projects). 378 Akintoye & Beck, supra note 2, at 200. 379 FHWA User Guidebook on Implementing PPPs, supra note 23, at 31. 380 Id. at 25. 381 Id. 382 Id. at 28. See FTA, Transit Research Updateâ December 2008, at 7 (discussing Value Pricing Pilot Program: Lessons Learned), download available at http://www.google.com/search?q=Value+Pricing+Pilot+ Program+and+FTA&rls=com.microsoft:en-us:IE-
32 FHWAâs Office of Innovative Program Delivery provides an online overview of state PPP legisla- tion.383 The DOT has identified 28 key elements in state legislation of particular importance to PPPs for transit agencies.384 Among other things, state legislation should allow a transit agency to de- velop criteria that will result in the selection of the best developer and provide a framework that ensures âthe integrity of the process [while] leav- ing the details of the process toâ¦the sponsoring transit agency.â385 Legislative provisions that are significant for transit agencies and PPPs include provisions that authorize the bundling of design, financing, con- struction, operation, and maintenance responsi- bilities to the extent desired in one procurement contract; to enter into multiyear contracts and leases;386 and to solicit proposals from the private sector for projects, as well as to accept unsolicited private proposals. For example, Caltrans and re- gional transportation agencies may âenter into comprehensive development lease agree- mentsâ¦with private or public entities to procure design, construction, and other development and related services for various types of transporta- tion projects.â387 In Florida, the state âmay receive or solicit proposals andâ¦enter into agreements with private entities, or consortia thereof, for the building, operation, ownership, or financing of transportation facilities.â388 The Florida statute SearchBox&ie=UTF-8&oe=UTF- 8&sourceid=ie7&rlz=1I7DKUS_en. 383 FHWA, State P3 Legislation, available at http://www.fhwa.dot.gov/ipd/p3/state_legislation/. 384 Erhardt, supra note 301, at 936 (citing USDOT- FHWA, PPP Legislation). See FTA Report to Congress on PPPs, supra note 5, at 26. 385 FTA Report to Congress on PPPs, supra note 5, at 28. 386 Kathryn Pett, Statutory and Regulatory Re- quirements: A National Perspective (July 2009) (un- numbered) (see text under caption âauthority to enter PPP contractâ), hereinafter referred to as âPett.â See FHWA User Guidebook on Implementing PPPs, supra note 23, at 32. 387 Nancy C. Smith & Isidro A. Jiménez, California Public Contracting Laws: Design-Build Authority for Transportation Projects, at 5 (2011) (citing CAL. STS. & HIGH. CODE § 143) (interior quotation marks omitted), available at https://sacramento.apwa.net/chapters/ sacramento/documents/DesignBuildHandouts_ October2011.pdf. 388 OâSteen & Jenkins, supra note 6, at 267 (citing FLA. STAT. §§ 334.01, 334.30(1) (interior quotation marks omitted). deals with various aspects of PPPs, including the use of innovative financing,389 as well as other is- sues that PPP agreements must address.390 Some state statutes authorize qualifications- based procurement, such as two-stage âbest valueâ procurements, and permit the use of criteria that will allow for the selection of a developer best able to provide the greatest value to a transit agency. Such statutes may allow negotiations to proceed with a private partner during the early planning stages of a project and the use of alternative forms of financial security.391 Some state laws permit prequalification/short-listing; performance-based payments, availability payments, on-time incen- tives; and the aggregation of federal, state, and local funds with private funds.392 Finally, enabling legislation may authorize or encourage TOD or joint development and even permit investment by foreign entities.393 FTA recommends that public transit agencies that are considering the use of PPPs review their applicable state laws to determine whether addi- tional procurement and contracting authority is needed.394 Provided that there is adequate legal authority for the use of PPPs, one source con- cludes that the outlook in the United States is âvery brightâ for the use of PPPs for surface transportation projects.395 B. Barriers to PPPs in State Legislation Although at least 23 states and Puerto Rico have some form of enabling legislation allowing the use of PPPs for transportation projects,396 the âsingle most significant barrierâ to PPPs contin- ues to be the absence of adequate enabling legis- lation at the state level.397 Some of the state stat- 389 Id. (citing FLA. STAT. § 334.30(8)). 390 Id. (citing FLA. STAT. § 334.30(9), (12)). 391 FHWA User Guidebook on Implementing PPPs, supra note 23, at 32. 392 Pett, supra note 386 (unnumbered) (see text under caption âadditional procurement issuesâ). 393 Id. See FHWA User Guidebook on Implementing PPPs, supra note 23, exhibit 20, for a list of statutorily- based legal issues that are associated with transporta- tion PPPs. 394 FTA Report to Congress on PPPs, supra note 5, at 42. 395 FHWA User Guidebook on Implementing PPPs, supra note 23, at 69. 396 Id. at 28; FISHMAN, supra note 11, at 1; Public- Private Partnerships for Transportation Projects, supra note 42, at 3. 397 Geddes & Wagner, supra note 4, at 7.