Here we go again
Congress will again be debating the merits of tax-exempt financing for social P3 projects, after the bill planning $5bn of private activity bonds (PABs) for state-owned buildings P3s was re-introduced in both houses this week.
Two senators and two congressmen – comprising one Democrat and one Republican in each house, to demonstrate the bipartisan support for the proposals – have re-introduced the bill, after it failed to make it onto the statute book ahead of the end of the previous legislative session.
We understand that its failure last time was not due to any significant opposition to the plans, more that it simply did not get through the various stages before the session ran out and the process is therefore required to start again.
Indeed, those behind the bill seem pretty excited that this time really might be its best chance yet of becoming law. Last month, Samara Barend, founder of the Performance-based Building Coalition (PBBC) and senior vice president and development director of Aecom Capital, told P3 Bulletin that the proposals had “unprecedented backing” from the Ways and Means Committee. With that kind of support, it is hoped that getting the bill through will not be too arduous a process.
And of course, there is now a man in the White House who has made no secret of his determination to get America building. Donald Trump may be unpredictable, but it would be a surprise even by his standards were he and his supporters to offer any opposition to a bill designed to significantly ramp up social infrastructure investment.
Questions would certainly be asked about the future of social infrastructure in the P3 space if this bill did fail – after all, the PBBC has been pushing this strongly since at least 2014, and the bill was last re-introduced in the House in June 2016 and into the Senate in July.
Many in the market believe that the legislation, should it be passed, would provide a boost to social P3s that would put the sector on an equal footing with transportation. And if the past week is anything to go by, the transportation P3 sector in the US is certainly something to emulate.
There has been continued interest in the Harris County transit project in Texas, while in New York preparations are now beginning for a new project at LaGuardia airport. At a federal level, the US Department of Transportation has released a paper on how to stimulate innovations and generate value through the use of P3s.
And in LA, four unsolicited proposals for two transportation P3 projects were advanced by the authority late last week. This new approach being taken by LA Metro certainly seems to be a hit with the private sector at present, and is something we will be taking a closer look at in the upcoming edition of the magazine.
What is clear, though, is the continued progress being made in the transportation P3 pipeline. Whether the PBBC's PABs bill can spark a similar upsurge in the social sphere will be the next big question for the market if and when the proposals do become law.