Colorado Pending Legislation SB-123
Recently introduced legislation in Colorado would prohibit CDOT/HPTE from requiring the purchase of transponders. It is said that this was implemented due to cost issues. Senator Kevin Lundberg is the bill's sponsor. There are other issues at play with the introduction of these amendments. 
Here's everything you need to know:
OVERVIEW

Governor John Hickenlooper recently spoke at The P3 Conference in Dallas, commenting on Colorado's business friendly environment and support for P3s and infrastructure development. He has been a supporter of P3s and the positive effects they've had on economic growth in the Rocky Mountain State. Colorado maintains that it is 'open for business' and seeks to attract industry to compete on its many projects. The legislature, however, is sending different signals through its introduction of SB-123. The state might not be as friendly as originally thought.

As written, the bill looks to amend an existing contract through legislation. AIAI is not alone in its opinion that it is never good policy to reopen exisiting, long-term P3 contracts that are under the management of state agencies. In this case CDOT, the Colorado Department of Transportation, is the responsible government entity.

While at first blush it may look that this issue is contract specific - the potential implications of the proposed bill can and will be far-reaching. AIAI's concern is the real cost on future programs. Changing contract terms after the fact through legislation creates a precedent and challenges the future for the business climate in general, and the P3 model specifically.

From a programmatic point of view, AIAI believes that any effort to reopen or revisit long-term P3 contractual terms after the fact will hinder future procurement decisions. Indeed, that appears to be a very harmful result of this proposal which could impact all P3 agreements in the state, now and in the future. In addition to the transponder issue, this year's proposal also includes an amendment which changes the date of implementation of HOV+2 to HOV+3. This is a prime example of how the bill would directly impact the financial performance of an existing contractual relationship between the state and its private partner, and most importantly, why AIAI opposes it from a programmatic point of view.

SB-123 would directly amend an existing contract - a deal that is already done. The result, if they are successful, would be a tremendous cost impact to the state: a compensation event that would ultimately harm the taxpayers.  

AIAI's Government Affairs committee and Board of Directors are urging Colorado state legislators to oppose this bill and are encouraging all AIAI members to express their opposition to this bill as well.
AIAI'S RESPONSE
 
Working with stakeholders in Colorado, the AIAI team has written to key Colorado state legislators in a first step to express our strong opposition to this legislation. We anticipate providing testimony and employing boots on the ground where necessary.
 
The proposed legislation made it through the republican-controlled Senate with a 25-9 vote and is now moving to the democratic-controlled House.
 
To date, opposition to the bill has been growing, but more voices must be heard. There is still support for the Senate bill in the House, which means the Colorado House will need many stakeholders to express their opposition to ensure legislators know the damaging results of this proposal. There has been a large outcry from industry on effects on the business environment if this makes it through. Many regional leaders, most importantly, have also been vocal in their opposition to the proposed bill. Their support was instrumental in getting the legislature to pass the P3-enabling legislation, and they are not interested in seeing the State's P3 program take a step backward.
DOWNLOAD:  AIAI's Letters (.pdf)
WHAT CAN YOU DO?

Send your own letter citing your opposition to SB-123. Colorado is a robust market. Introducing this type of legislation will impede the willingness of companies to do business in the state. The integrity of a contractual relationship is important, as large amounts of money are spent bidding on these jobsAllowing the legislature to amend agreed-upon terms is disastrous. AIAI advisors are available to assist you in drafting your letters.
DEFEAT SENATE BILL-123 

Make a difference. Ensure that your voice is heard. Follow through with the resources identified above.  
 

The Association for the Improvement of American Infrastructure (AIAI) is a non-profit
organization formed in the District of Columbia to help shape the direction of the national
Public Private Partnership marketplace.
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For more information, please contact Lisa Buglione at 516.277.2950
or email lbuglione@aiai-infra.org
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