House committee hears testimony on shepherding P3 projects

craneTo jumpstart public-private infrastructure projects under a 2011 law, Texas should establish an “excellence center” to advise public officials on structuring the projects, industry representatives said at a recent hearing of the House Committee on Economic and Small Business Development. The committee on April 10 heard testimony on its interim charge to review statutes and state agency rules on public-private partnerships, also known as P3, including whether a single state entity should administer the program.

Excellence center

The 82nd Legislature in 2011 enacted SB 1048 by Jackson, authorizing government entities to enter into comprehensive agreements to build qualifying non-transportation projects. Witnesses at the hearing said an excellence center, which was not established in the bill, is needed to advise public officials on how to request proposals and evaluate submissions. They estimated costs for setting up a center to be $2 million to $4 million per biennium and said it could eventually become self-sustaining through project fees. They said a center could be housed within an existing state office or established as a quasi-governmental agency.

Supporters of establishing an excellence center say Texas should do more to facilitate public-private partnerships to meet infrastructure needs for a growing population. They say a center would provide valuable resources for local public officials considering P3 projects and assure businesses submitting proposals that projects were likely to move forward.

Opponents of establishing an excellence center say Texas should not use tax dollars to set up a center that would facilitate projects that largely would benefit private developers and could result in government entities relinquishing control of valuable public assets and jobs through long-term lease agreements.

Recent legislation

Most recently, the 83rd Legislature in 2013 enacted SB 894 by Whitmire, which requires legislative approval for any P3 projects in the Capitol complex. The Legislature also added new requirements for P3 projects in SB 211 by Nichols, the Texas Facilities Commission Sunset bill. These include reviews of and public hearings on projects proposed by the state and other government entities, as well as prohibitions on conflicts of interest between employees of government entities and those individuals with whom they have entered into comprehensive agreements.

by Janet Elliott

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