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62 for Legislators.787 The report discusses the poten- tial benefits of, as well as concerns regarding, the use of PPPs and the respective federal and state roles in PPP projects. The appendices include one on state PPP-enabling statutes for transportation projects and another on state DB-enabling stat- utes for transportation projects, both as of October 2010. Case studies on highway PPPs are included in a 2010 report by Qingbin Cui and Jay K. Lindly entitled Evaluation of Public Private Partnership Proposals. The publication discusses the evalua- tion process for PPPs, legal issues presented by PPPs, and laws affecting the financing of PPPs.788 Although all projects listed on the Web site are not necessarily PPP projects, current information on planned light rail systems and projects under construction is provided on line by The Transport Politic.789 In regard to books and reports on international projects, the World Bankâs Public Private Infra- structure Advisory Facility published a report in 2010, Private Sector Participation in Light Railâ Light Metro Transit Initiatives.790 XV. CONCLUSION PPPs are not partnerships in the customary le- gal or tax sense but are contractual relationships between public agencies and private partners. Transit agencies are using PPPs to engage in al- ternative ways to deliver an infrastructure project and in innovative financing for their capital pro- jects. It is too soon to know whether MAP-21 will increase the use of PPPs for transit. However, be- cause of MAP-21, FTA is to take steps to stream- line its approval process for FTA grants, stream- line its environmental review and approval process, and reduce legal impediments confronted by PPPs for transit. 787 National Conference of State Legislatures, Public- Private Partnerships for Transportation, A Toolkit for Legislators (Oct. 2010), available at http://www.ncsl.org /documents/transportation/ppptoolkit.pdf. 788 Qingbin Cui & Jay K. Lindly, University Trans- portation Center for Alabama, Evaluation of Public Pri- vate Partnership Proposals (June 2010). 789 The Transport Politic, Planned Light Rail Sys- tems, available at http://www.thetransportpolitic.com/ under-consideration/planned-light-rail-systems/. 790 The World Bank, Public Private Infrastructure Advisory Facility, Private Sector Participation in Light Rail-Light Metro Transit Initiatives (2010), available at http://www.ppiaf.org/sites/ppiaf.org/files/publication/PS P-LightRail-CMandri-Perrott.pdf. Although this digest discusses myriad forms of alternative contracting and innovating financing, the DB, DBOM, and DBFOM approaches are the ones used most frequently by transit agencies for PPPs. However, transit agencies responding to the survey also selected the CMGC approach, A+B contracting, and other variations of DB contracts that include either management or maintenance responsibility. The evaluation of a PPP and the selection of a private partner are critical to the success of a PPP. Important to the process for establishing and using a PPP are a transit agencyâs control of the predevelopment process, exercise of due dili- gence, performance of VfM or similar analysis, and use of RFIs, RFQs, and RFPs to find the most responsive and qualified developer candidates. A PPP is a vehicle for transit agencies to trans- fer risks to the private sector; however, it appears that transit agencies tend to retain responsibility for certain matters, such as for permitting and environmental compliance. Although the digest discusses PPPs and potential land-use, environ- mental, taxation, bonding, and insurance issues, transit agenciesâ responses to the survey, as well as other research conducted for the digest, did not disclose any specific problems that transit agen- cies are encountering with PPPs. In several in- stances a private partner had assumed responsi- bility for the insurance. As for bonds, although FTA has some flexibility to approve of a granteeâs policy regarding performance and payment bonds, state law, nevertheless, may require that per- formance and payment bonds be issued for the full value of the contract. Funding a PPP for a transit project is made more difficult because transit operations usually are revenue-negative. Consequently, the digest discusses a wide range of credit programs and in- struments that are available to and have been used by transit agencies for PPPs. The sources of credit include bonds (private activity bonds, reve- nue bonds, COPs); notes (GANs); and the use of 63-20 nonprofit corporations for the issuance of bonds. Credit facilities exist at the federal and state level and have been shown to be important to the viability of a PPP for transit, including larger scale PPPs. Particularly significant in light of amendments by MAP-21 is the Federal TIFIA credit facility that may be used to fund a transit capital project. Likewise, SIBs also are important and provide credit and credit enhancements to transit agencies to support infrastructure pro- jects.
63 TOD and joint development are supported by federal law and policy and are important to PPPs for transit agencies. FTA is encouraging transit agencies and developers for development projects to preserve or increase the supply of affordable housing in areas close to transit. Federal tax cred- its that are available to private partners in PPPs may facilitate the federal policy of affordable housing near mass transit. Transit agencies are making successful use of TIF for PPPs, including for TOD and joint development, as well as of other sources of revenue from special assessment dis- tricts and development impact fees. An important feature of some PPPs is long- term leasing through which, for example, a tran- sit agency may transfer risk to the private sector. A private partner may benefit from the federal income tax laws depending on the term and other provisions of a long-term lease. The 30 PPPs analyzed in Appendix A, including FTAâs three demonstration projects, demonstrate the viability of PPPs for transit projects in the United States. Similarly, Appendix B explains the structure, funding, and success of the Canada Line in Vancouver. Appendix C includes copies of contracts and other documents provided by tran- sit agencies in response to the survey for the di- gest.