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Executive Order
12803
April
30, 1992
George Herbert
Walker Bushwhacker
Ex. Ord. No.
12803. Infrastructure Privatization
Ex. Ord. No. 12803, Apr. 30, 1992, 57 F.R. 19063,
provided:
By the authority vested in me as President by the
Constitution and the laws of the United States of
America, and in order to ensure that the United
States achieves the most beneficial economic use
of its resources, it is hereby ordered as follows:
Section 1. Definitions. For purposes of this
order:
(a) ³Privatization² means the disposition or
transfer of an infrastructure asset, such as by
sale or by long-term lease, from a State or local
government to a private party.
(b) ³Infrastructure asset² means any asset
financed in whole or in part by the Federal
Government and needed for the functioning of the
economy. Examples of such assets include, but are
not limited to: roads, tunnels, bridges,
electricity supply facilities, mass transit, rail
transportation, airports, ports, waterways, water
supply facilities, recycling and wastewater
treatment facilities, solid waste disposal
facilities, housing, schools, prisons, and
hospitals.
(c) ³Originally authorized purposes² means the
general objectives of the original grant program;
however, the term is not intended to include every
condition required for a grantee to have obtained
the original grant.
(d) ³Transfer price² means: (i) the amount paid or
to be paid by a private party for an
infrastructure asset, if the asset is transferred
as a result of competitive bidding; or (ii) the
appraised value of an infrastructure asset, as
determined by the head of the executive department
or agency and the Director of the Office of
Management and Budget, if the asset is not
transferred as a result of competitive bidding.
(e) ³State and local governments² means the
government of any State of the United States, the
District of Columbia, any commonwealth, territory,
or possession of the United States, and any
county, municipality, city, town, township, local
public authority, school district, special
district, intrastate district, regional or
interstate governmental entity, council of
governments, and any agency or instrumentality of
a local government, and any federally recognized
Indian Tribe.
Sec. 2. Fundamental Principles. Executive
departments and agencies shall be guided by the
following objectives and principles: (a) Adequate
and well-maintained infrastructure is critical to
economic growth. Consistent with the principles of
federalism enumerated in Executive Order No. 12612
[formerly set out under section 601 of Title 5,
Government Organization and Employees], and in
order to allow the private sector to provide for
infrastructure modernization and expansion, State
and local governments should have greater freedom
to privatize infrastructure assets.
(b) Private enterprise and competitively driven
improvements are the foundation of our Nation¹s
economy and economic growth. Federal financing of
infrastructure assets should not act as a barrier
to the achievement of economic efficiencies
through additional private market financing or
competitive practices, or both.
(c) State and local governments are in the best
position to assess and respond to local needs.
State and local governments should, subject to
assuring continued compliance with Federal
requirements that public use be on reasonable and
nondiscriminatory terms, have maximum possible
freedom to make decisions concerning the
maintenance and disposition of their federally
financed infrastructure assets.
(d) User fees are generally more efficient than
general taxes as a means to support infrastructure
assets. Privatization transactions should be
structured so as not to result in unreasonable
increases in charges to users.
Sec. 3. Privatization Initiative. To the extent
permitted by law, the head of each executive
department and agency shall undertake the
following actions:
(a) Review those procedures affecting the
management and disposition of federally financed
infrastructure assets owned by State and local
governments and modify those procedures to
encourage appropriate privatization of such assets
consistent with this order;
(b) Assist State and local governments in their
efforts to advance the objectives of this order;
and
(c) Approve State and local governments¹ requests
to privatize infrastructure assets, consistent
with the criteria in section 4 of this order and,
where necessary, grant exceptions to the
disposition requirements of the ³Uniform
Administrative Requirements for Grants and
Cooperative Agreements to State and Local
Governments² common rule, or other relevant rules
or regulations, for infrastructure assets;
provided that the transfer price shall be
distributed, as paid, in the following manner: (i)
State and local governments shall first recoup in
full the unadjusted dollar amount of their portion
of total project costs (including any transaction
and fix-up costs they incur) associated with the
infrastructure asset involved; (ii) if proceeds
remain, then the Federal Government shall recoup
in full the amount of Federal grant awards
associated with the infrastructure asset, less the
applicable share of accumulated depreciation on
such asset (calculated using the Internal Revenue
Service accelerated depreciation schedule for the
categories of assets in question); and (iii)
finally, the State and local governments shall
keep any remaining proceeds.
Sec. 4. Criteria. To the extent permitted by law,
the head of an executive department or agency
shall approve a request in accordance with section
3(c) of this order only if the grantee: (a) Agrees
to use the proceeds described in section 3(c)(iii)
of this order only for investment in additional
infrastructure assets (after public notice of the
proposed investment), or for debt or tax
reduction; and
(b) Demonstrates that a market mechanism, legally
enforceable agreement, or regulatory mechanism
will ensure that: (i) the infrastructure asset or
assets will continue to be used for their
originally authorized purposes, as long as needed
for those purposes, even if the purchaser becomes
insolvent or is otherwise hindered from fulfilling
the originally authorized purposes; and (ii) user
charges will be consistent with any current
Federal conditions that protect users and the
public by limiting the charges.
Sec. 5. Government-wide Coordination and Review.
In implementing Executive Order Nos. 12291 and
12498 [formerly set out under section 601 of Title
5, Government Organization and Employees] and OMB
Circular No. A19, the Office of Management and
Budget, to the extent permitted by law and
consistent with the provisions of those
authorities, shall take action to ensure that the
policies of the executive department and agencies
are consistent with the principles, criteria, and
requirements of this order. The Office of
Management and Budget shall review the results of
implementing this order and report thereon to the
President 1 year after the date of this order.
Sec. 6. Preservation of Existing Authority.
Nothing in this order is in any way intended to
limit any existing authority of the heads of
executive departments and agencies to approve
privatization proposals that are otherwise
consistent with law.
Sec. 7. Judicial Review. This order is intended
only to improve the internal management of the
executive branch, and is not intended to create
any right or benefit, substantive or procedural,
enforceable by a party against the United States,
its agencies or instrumentalities, its officers or
employees, or any other person.
George Bush. |