A bipartisan House bill would allow state and local governments to issue up to $5 billion in private activity bonds to finance the construction and upkeep of some publically owned buildings. The Public Buildings Renewal Act (H.R. 5361), introduced by Rep. Mike Kelly, R-Pa., would create a new category of private activity bonds for governments to join with private parties to help finance schools, medical facilities, police stations and other social infrastructure.

Kelly, a member of the House Ways and Means Committee, said his legislation, which would amend the federal tax code to provide another layer of tax-exempt financing encouraging the use of public-private partnerships, would also help resolve an "ongoing infrastructure crisis" that exists in public schools.

Linda Schakel, a partner at Ballard Spahr in Washington, supports Kelly's bill, but said it remains to be seen if the partnerships would be based on a lease or a management contract.

"I think it's a great idea to get private parties to come in and do particularly renovations that are needed," Schakel said.

Still, Schakel said some private entities may have hesitations about entering into these agreements because they would not receive depreciation on the government-owned facilities.

"It may narrow the number of private parties interested in participating in the program," she said. "Or it may end up being mainly private parties want to enter into long-term management contracts."