Public Private Partnership = P 3

LEXINGTON--Three attorneys from different state government agencies gave lawmakers a look today at how Kentucky's new public-private partnership law will be put to use.

The attorneys--one from the Tourism, Arts and Heritage Cabinet, one from the Finance and Administration Cabinet and one from the Transportation Cabinet--explained that long-term partnerships allowed under 2016 House Bill 309 will combine private investment and public resources to meet state and local government needs. Other states have used P3s to improve schools, water systems, bridges, state parks and more.

The testimony was offered today at the Kentucky Horse Park during a meeting of the General Assembly's Labor and Industry Committee, the Economic Development and Tourism Committee, and the Special Committee on Tourism Development.

With over $100-plus million in maintenance needs at Kentucky's state parks, public-private partnerships, known as P3s, are expected to help reduce the parks' deferred maintenance while employing a strict system of check and balances built into HB 309, said Tourism, Arts and Heritage Cabinet General Counsel Leigh Powers.

"We're not selling off state parks. We're finding ways to make them better," said Powers. The framework for P3s proposals, both solicited by agencies and unsolicited, will ensure that "the Commonwealth gets what it bargained for," she told lawmakers.

A handout provided by all three attorneys explained when P3s should be used and what considerations should be taken into account before approval for a P3 is given. Some of those considerations include benefits gained or not gained, timeliness and risk. McLain explained additional considerations for transportation P3s includes, but is not limited to, compliance with federal requirements and investment-grade credit ratings.

The attorneys also explained that approved P3s must be part of competitive negotiation--meaning the contract will be awarded to a "responsible and responsive" party, per the handout. The handling of unsolicited proposals--P3 proposals that are not sought by the state or local government agency and instead independently generated, for example--will also include a 30-day waiting period for the proposal and 90 days of public notice before further action can be taken, with procedures differing slightly for transportation projects.

Neither Powers or Finance and Administration Cabinet General Counsel Gwen Pinson shared details on P3s that may be pending in their respective agencies, although both said proposals have been received. Assistant General Counsel Megan McLain also did not offer info on any specific proposals.

Rep. Leslie Combs, D-Pikeville, who cosponsored HB 309 with House Majority Caucus Chair Sannie Overly, D-Paris, said the framework the new law provides is considered "the most transparent in the country." She said HB 309 makes Kentucky one of around only seven states with such comprehensive P3 legislation that can be used for a wide range of public needs, said Combs.

"I do believe that as we said earlier, this is an opportunity for us to acquire infrastructure services across the Commonwealth. This is a new vehicle, a new financing tool," she said.

The joint meeting of the committees also included an overview of what's happening at the Kentucky Horse Park from park director Laura Prewitt and an update from AT&T Kentucky on infrastructure and investments made following the passage of 2015 HB 152. That was the telephone deregulation measure sponsored by House budget chairman Rep. Rick Rand, D-Bedford, which AT&T says has spurred telecom modernization in the state.

Sen. Paul Hornback, R-Shelbyville, who had proposed telephone deregulation legislation in prior sessions, said HB 152 has accomplished much of what it was designed to do. Hornback said the legislation is designed to move Kentucky forward by "making sure we didn't have outdated regulations in place."