Nearly 75 percent of states have enacted public-private partnership (P3) legislation. On April 8, 2016, Kentucky joined these states when Gov. Matt Bevin signed House Bill 309 into law. This legislation is effective immediately.

HB 309 provides a clear statutory framework for public-private partnerships in Kentucky, authorizing state and local governments to use P3 as an alternative method of procurement, construction and financing of capital projects, services and certain major transportation projects.

Previously, P3 agreements in Kentucky had to be structured using procurement laws that were difficult to navigate and were not specifically designed for P3.

What you need to know about Kentucky’s P3 law

  • On or before December 31, 2016, the Finance and Administration Cabinet Secretary is required to promulgate administrative regulations setting forth criteria to be used in determining when a public-private partnership may be used for a particular project.
  • Any state P3 project with a value of $25 million or more requires legislative approval.
  • Copies of Requests for Proposals for state P3 projects must be submitted to the Capital Projects and Bond Oversight Committee.
  • With one limited exception, all state P3 agreements must be submitted to the Government Contract Review Committee.
  • Businesses may submit unsolicited proposals for a P3 project to a state or local governmental body. If the governmental body determines it will consider further action on the proposal, the public will be given notice of the proposal as well as proposal details; the notice will provide a 90-day period for the submission of competing proposals.
  • All P3 deals with local governments must be approved by the legislative body of the local government at a public meeting.
  • P3 agreements with local governments must contain certain provisions, including review and approval of the project’s plans and specification by the local government, and the delivery of periodic financial statements by the private partner.
  • The law establishes the Kentucky Local Government Public-Private Partnership Board within the Finance and Administration Cabinet. This 11-member Board will evaluate and approve all P3 agreements with local governments that have a contractual value of 30% or more of the local government’s general fund revenues during the preceding fiscal year.
  • Kentucky's Auditor of Public Accounts may review P3 agreements executed by local governments and any actions undertaken by their private partners pursuant to such agreements.
  • P3 deals with colleges or universities involving a lease must be approved by that institution’s governing board.
  • The law prohibits the imposition of tolls on any transportation project that would link Kentucky and Ohio.

Kentucky’s P3 law provides a legal framework for innovative new partnerships and alternative financing arrangements between government and the private sector.