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Massachusetts Senate Bill S2222

Massachusetts 2025-2026 Regular Session

Massachusetts Senate Bill S2222 Compare Versions

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22 SENATE DOCKET, NO. 174 FILED ON: 1/9/2025
33 SENATE . . . . . . . . . . . . . . No. 2222
44 The Commonwealth of Massachusetts
55 _________________
66 PRESENTED BY:
77 Bruce E. Tarr
88 _________________
99 To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
1010 Court assembled:
1111 The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
1212 An Act providing for alternative delivery of infrastructure projects.
1313 _______________
1414 PETITION OF:
1515 NAME:DISTRICT/ADDRESS :Bruce E. TarrFirst Essex and Middlesex 1 of 14
1616 SENATE DOCKET, NO. 174 FILED ON: 1/9/2025
1717 SENATE . . . . . . . . . . . . . . No. 2222
1818 By Mr. Tarr, a petition (accompanied by bill, Senate, No. 2222) of Bruce E. Tarr for legislation
1919 to provide for alternative delivery of infrastructure projects. State Administration and
2020 Regulatory Oversight.
2121 [SIMILAR MATTER FILED IN PREVIOUS SESSION
2222 SEE SENATE, NO. 2069 OF 2023-2024.]
2323 The Commonwealth of Massachusetts
2424 _______________
2525 In the One Hundred and Ninety-Fourth General Court
2626 (2025-2026)
2727 _______________
2828 An Act providing for alternative delivery of infrastructure projects.
2929 Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
3030 of the same, as follows:
3131 1 SECTION 1. The General Laws are hereby amended by inserting after chapter 40W the
3232 2following chapter:-
3333 3 CHAPTER 40X. Public Private Partnerships
3434 4 Section 1. As used in this chapter the following words shall, unless the context clearly
3535 5indicates otherwise, have the following meanings: "Eligible project", a building or facility,
3636 6including associated collection and distribution infrastructure, used for public water supply or
3737 7treatment, storm water treatment and disposal, waste water treatment and disposal, or flood
3838 8control. 2 of 14
3939 9 "Material default", a default by the operator in the performance of its duties under a
4040 10public-private partnership agreement which jeopardizes delivery of adequate service to the
4141 11public from an eligible project and remains unsatisfied after a reasonable period of time after the
4242 12operator has received written notice from the public agency of the failure, or any other default
4343 13that has a material adverse financial impact on the public agency or the users of the eligible
4444 14project as determined by the public agency pursuant to procedures set forth in the public-private
4545 15partnership agreement.
4646 16 "Offeror", a private entity that submits a proposal under this chapter.
4747 17 "Operator", a private entity that has entered into a public-private partnership agreement
4848 18with a public agency under this chapter.
4949 19 "Private entity", an individual, corporation, limited liability company, general or limited
5050 20partnership, joint venture, business trust, public benefit corporation, non-profit entity or other
5151 21private business entity.
5252 22 "Public agency", a municipality or two or more municipalities acting together, a
5353 23redevelopment authority, or a fire, water, sewer, or water pollution abatement district, howsoever
5454 24named, formed for the purpose of carrying out any of the aforementioned functions, whether
5555 25established under general law or special act or otherwise authorized by law.
5656 26 "Public-private partnership agreement", an agreement between a public agency and a
5757 27private entity for the lease, operation and maintenance, repair or replacement, financing, design,
5858 28construction, modifications, or installation, or any combination thereof, of an eligible project
5959 29necessary to ensure adequate services and ensure the ability of the public agency to operate in 3 of 14
6060 30full compliance with all applicable requirements of federal, state and local law, as determined by
6161 31the public agency in its sole discretion.
6262 32 "Responsible offeror", an offeror that has submitted a responsive proposal that conforms
6363 33in all material respects to the public agency's solicitation for bids, as determined by the public
6464 34agency in its sole discretion, and that possesses the capability to fully perform the contract
6565 35requirements in all respects and the integrity and reliability to assure good faith performance.
6666 36 "Revenue", a user fee or service payment, or both, generated by an eligible project.
6767 37 "Service payment", a performance-based payment to the operator made by a public
6868 38agency, pursuant to a public-private partnership agreement.
6969 39 "User fee", a rate or other charge imposed by the operator or the public agency, as
7070 40applicable, pursuant to a public-private partnership agreement for use of the eligible project.
7171 41 Section 2. Notwithstanding any general or special law to the contrary, a public agency
7272 42may solicit proposals and enter into a public-private partnership agreement for an eligible project
7373 43in accordance with this chapter; provided, however, that the public-private partnership agreement
7474 44shall not be subject to sections 14 to 21, inclusive, of chapter 149A and the competitive bid
7575 45requirements set forth in sections 44 to 57, inclusive, of chapter 7C, section 39M of chapter 30,
7676 46or sections 44A to 44J, inclusive, of chapter 149; and provided further, that each such public-
7777 47private partnership agreement shall be awarded pursuant to this chapter and chapter 30B of the
7878 48General Laws, except for clause (3) of paragraph (b) of section 6, clause (3) of paragraph (e) of
7979 49said section 6, paragraph (g) of said section 6, and sections 13 and 16 of said chapter 30B. 4 of 14
8080 50 Section 3. A public agency that receives an unsolicited proposal for a public-private
8181 51partnership agreement may, in its sole discretion, reject the unsolicited proposal. A public agency
8282 52shall not approve an unsolicited proposal or enter into a public-private partnership agreement
8383 53with the entity submitting the unsolicited proposal, unless the public agency follows the
8484 54procedures set forth in sections 4 and 5 of this chapter.
8585 55 Section 4. (a) No public agency shall enter into a public-private partnership agreement for
8686 56an eligible project without first soliciting proposals as set forth in this section. The request for
8787 57proposals for an eligible project shall specify the method for comparing proposals to determine
8888 58which offerors are responsible offerors and which proposal from a responsible offeror best meets
8989 59the factors listed in subsection (a) of section 5. If the public agency awards the public-private
9090 60partnership agreement to a responsible offeror who did not submit the proposal with the lowest
9191 61overall cost, including but not limited to all capital financing, operating and maintenance and
9292 62life-cycle costs, the public agency shall explain the reason for the award in writing as provided in
9393 63paragraph (h) of section 6 of chapter 30B. The request for proposals shall set forth mandatory
9494 64performance guarantees, which the selected responsible offeror will be required to meet in
9595 65operating the eligible project as constructed or improved. The public-private partnership
9696 66agreement that is negotiated with the selected offeror based on the request for proposals shall
9797 67obligate the selected responsible offeror to meet such mandatory performance guarantees, in
9898 68addition to any other terms required by section 6, and shall set forth the minimum design
9999 69requirements for such construction or improvements and the acceptance tests to be conducted
100100 70upon the completion of the construction or improvements in order to demonstrate that the
101101 71eligible project is capable of meeting the performance guarantees. 5 of 14
102102 72 (b) The chief procurement officer or other designated official of the public agency shall
103103 73solicit proposals through a request for proposals which shall include, at a minimum, the items in
104104 74subsection (a) of section 4 of this chapter, the items in paragraphs (1) and (2) of subsection (b) of
105105 75section 6 of chapter 30B, and the proposed key contractual terms and conditions for the public-
106106 76private partnership agreement, some of which may be mandatory or non-negotiable. The request
107107 77for proposals may also request proposals to address other contractual terms and other matters as
108108 78may be determined by the public agency. The request for proposals shall provide for the
109109 79submission of a separate price proposals and shall indicate when and how the offerors shall
110110 80submit the price proposal.
111111 81 (c) A public agency may establish procedures for the distribution of a request for
112112 82proposals, and may charge a reasonable fee to cover the costs of processing, reviewing and
113113 83evaluating the proposal, including reasonable attorney fees and fees for financial and other
114114 84reasonably necessary advisers or consultants.
115115 85 (d) Offerors shall submit their sealed proposals to ensure that they are received prior to
116116 86the time and date established for receipt of the proposals. Sealed proposals shall be submitted in
117117 87the format required by the public agency. All sealed proposals shall be opened at the time, and
118118 88date designated in the request for proposals.
119119 89 Section 5. (a) A public agency shall evaluate each proposal to make a preliminary
120120 90determination as to which one, if any, is the most advantageous proposal for the public agency.
121121 91 In making this determination, a public agency may consider any of the following:
122122 92 (1) price; 6 of 14
123123 93 (2) estimated life-cycle costs;
124124 94 (3) lower user charges proposed over the term of the agreement;
125125 95 (4) form and reliability of the performance guarantee proposed;
126126 96 (5) financial commitment;
127127 97 (6) innovative financing;
128128 98 (7) bonding capacity;
129129 99 (8) technical, scientific, technological or socioeconomic merit and innovation;
130130 100 (9) proposed design, operation and feasibility of the eligible project;
131131 101 (10) public reputation, qualifications, industry experience, and financial strength of the
132132 102private entity;
133133 103 (11) compatibility of the proposal with existing and future land use plans of the public
134134 104agency;
135135 105 (12) compatibility of the proposal with applicable statutory, regulatory, and planning
136136 106requirements; and
137137 107 (13) any other factors deemed appropriate by the public agency and identified in the
138138 108request for proposals.
139139 109 (b) The relative importance of each evaluation factor shall be ranked prior to issuing the
140140 110request for proposals. 7 of 14
141141 111 (c) The request for proposals shall provide an opportunity for the public agency to engage
142142 112in negotiations with responsible offerors for the purpose of clarifying bid responses and
143143 113obtaining best and final offers. Responsible offerors shall be accorded fair and equal treatment
144144 114with respect to any opportunity for negotiation and revision of proposals. In conducting such
145145 115negotiations, the public agency shall not disclose any information derived from proposals
146146 116submitted by competing offerors.
147147 117 (d) The responsible offeror whose proposal is preliminarily determined under subsection
148148 118 (a) to be the most advantageous for the public agency, taking into consideration all
149149 119relevant evaluation factors, shall be selected for negotiation of the public-private partnership
150150 120agreement.
151151 121 The public agency may negotiate all terms of the agreement not deemed mandatory or
152152 122non- negotiable with such offeror. If after negotiation with such offeror, the public agency
153153 123determines that it is in the best interests of the public agency, the public agency may determine
154154 124the proposal which is the next most advantageous proposal from a responsible offeror taking into
155155 125consideration the evaluation criteria set forth in the request for proposals, and initiate
156156 126negotiations regarding the terms of a public-private partnership agreement with such offeror. The
157157 127public agency shall award the contract to the most advantageous proposal from a responsible
158158 128offeror taking into consideration price, the evaluation criteria set forth in the request for
159159 129proposals, and the terms of the negotiated contract.
160160 130 (e) A request for proposals may be canceled or modified when it is in the best interests of
161161 131the public agency, as determined by the agency at its sole discretion, at any time prior to the time
162162 132a public private partnership agreement is executed by all parties. Subject to the provisions of 8 of 14
163163 133subsection (c), the public agency may also terminate negotiations with any offeror over the terms
164164 134of a public-private partnership agreement, at any time prior to execution of such agreement.
165165 135 Section 6. (a) Prior to delivering applicable services for an eligible project, the selected
166166 136responsible offeror shall enter into a comprehensive public-private partnership agreement with
167167 137the public agency in accordance with this section. A public agency may enter into a private-
168168 138partnership agreement if authorized by a simple majority vote of its governing body and, in the
169169 139case of a public agency that is one or more municipalities, if authorized by a simple majority
170170 140vote of each municipality's governing body. The public-private partnership agreement shall
171171 141provide for all of the following:
172172 142 (1) delivery of maintenance, performance and payment bonds or letters of credit, or other
173173 143security for the selected offeror's obligations under the public-private partnership agreement for
174174 144the eligible project, in the forms and amounts satisfactory to the public agency;
175175 145 (2) obligation of the selected offeror to meet mandatory performance guarantees,
176176 146including the minimum design requirements for any construction or improvements and the
177177 147acceptance tests to be conducted upon the completion of the construction or improvements in
178178 148order to demonstrate that the eligible project is capable of meeting the performance guarantees;
179179 149 (3) review of plans and specifications for the eligible project by the public agency and
180180 150approval by the public agency if the plans and specifications conform to standards acceptable to
181181 151the public agency;
182182 152 (4) inspection and auditing of the eligible project by the public agency to ensure that the
183183 153operator's activities are acceptable to the public agency in accordance with the public-private 9 of 14
184184 154partnership agreement, including all performance guarantees set forth in the request for
185185 155proposals;
186186 156 (5) maintenance of policies of liability insurance, copies of which shall be filed with the
187187 157public agency accompanied by proofs of coverage, self-insurance, in form and amount
188188 158satisfactory to the public agency and reasonably sufficient to insure coverage of tort liability to
189189 159the public and employees and to enable the continued operation of the eligible project;
190190 160 (6) monitoring of the practices of the operator by the public agency to ensure that the
191191 161eligible project is properly maintained;
192192 162 (7) reimbursement to be paid to the public agency for services provided by the public
193193 163agency;
194194 164 (8) filing of appropriate financial statements on a periodic basis; and
195195 165 (9) policies and procedures governing the rights and responsibilities of the public agency
196196 166and the operator in the event the public-private partnership agreement is terminated or there is a
197197 167material default by the operator, including conditions governing assumption of the duties and
198198 168responsibilities of the operator by the public agency and the transfer of property or other interests
199199 169of the operator by the public agency.
200200 170 (b) The public-private partnership agreement may provide for a user fee or service
201201 171payment, or both. When negotiating a user fee under this section, the parties shall establish
202202 172payments or fees that are the same for a person using the facility under like conditions and that
203203 173will not materially discourage use of the eligible project. A user fee established in the public- 10 of 14
204204 174private partnership agreement as a source of revenue may be in addition to or in lieu of a service
205205 175payment.
206206 176 (c) In the public-private partnership agreement, the public agency may agree to make a
207207 177grant or loan or otherwise direct funds to the operator from an amount received pursuant to a
208208 178grant or loan from the federal or state government or a political subdivision or agency thereof, if
209209 179the terms of the grant or loan so allow.
210210 180 (d) For the purpose of providing funds to carry out this chapter with respect to the
211211 181development, financing or operation of an eligible project or the refunding of any bonds or notes,
212212 182together with any costs associated with the transaction: (1) a public agency may authorize, issue
213213 183and sell general obligations bonds or notes, to the extent and in the manner otherwise provided
214214 184by law; or (2) a public agency may authorize, issue and sell revenue bonds or notes in the
215215 185manner provided in section 4 of chapter 40Q. For the purpose of financing an eligible project, the
216216 186public agency may apply for, obtain, issue and use private activity bonds available under any
217217 187federal law or program. Any bonds, debt, other securities or other financing issued for the
218218 188purposes of this chapter shall not be considered a debt of the commonwealth or a pledge of the
219219 189full faith and credit of the commonwealth.
220220 190 (e) The public-private partnership agreement shall incorporate the duties of the operator
221221 191under this chapter and may contain other terms and conditions that the public agency determines
222222 192serve the public purpose.
223223 193 (f) The public agency shall establish a date for the commencement of activities under the
224224 194public-private partnership agreement related to the eligible project. The public agency may 11 of 14
225225 195extend the date, pursuant to the applicable provisions in the public-private partnership
226226 196agreement.
227227 197 (g) A public-private partnership agreement entered into under this chapter shall not
228228 198enlarge, diminish or affect the authority otherwise possessed by the public agency to take action
229229 199that would impact the debt capacity of the commonwealth or any of its political subdivisions and
230230 200this chapter shall not be construed to authorize indebtedness in an amount exceeding the limits
231231 201established by section 10 of chapter 44.
232232 202 Section 7. (a) Notwithstanding any general or special law to the contrary, public-private
233233 203partnership agreements awarded under this chapter may provide for a term, not exceeding 20
234234 204years, and an option for renewal or extension of operations and maintenance services for 2
235235 205additional terms, not exceeding 10 years each. The renewal or extension shall be at the sole
236236 206discretion of the public agency in accordance with the original contract terms and conditions or
237237 207with contract terms and conditions which are more favorable to and acceptable to the public
238238 208agency.
239239 209 (b) Upon the end of the term of the public-private partnership agreement or in the event
240240 210of termination of the public-private partnership agreement, the duties of the parties thereto shall
241241 211cease, except for any duties and obligations that extend beyond the termination as provided in the
242242 212public-private partnership agreement, and all the rights and interests associated with such eligible
243243 213project shall revert to the public agency and shall be dedicated to the agency for public use.
244244 214 Section 8. (a) The operator shall have the authority to conduct the activities identified in
245245 215the public-private partnership agreement and to impose and collect a user fee or a service
246246 216payment, or both, as set forth in such agreement. 12 of 14
247247 217 (b) (1) Notwithstanding paragraph (2), any financing of the eligible project may be in an
248248 218amount and upon terms and conditions as may be determined by the operator consistent with the
249249 219public-private partnership agreement.
250250 220 (2) The operator may issue debt, equity or other securities or obligations, enter into sale
251251 221and leaseback transactions and secure any financing with a pledge of, security interest in or lien
252252 222on any or all of its property, including any property interests in the eligible project.
253253 223 (c) In operating the eligible project, the operator may do any of the following, to the
254254 224extent permitted by the public-private partnership agreement:
255255 225 (1) make classifications according to reasonable categories for assessment of user fees;
256256 226 (2) with the consent of the public agency, make and enforce reasonable rules to the same
257257 227extent that the public agency may make and enforce rules with respect to similar facilities;
258258 228 (d) In operating the eligible project, the operator shall:
259259 229 (1) design, construct, improve, renovate, expand, equip, maintain, operate or finance the
260260 230eligible project in accordance with the public-private partnership agreement;
261261 231 (2) keep the eligible project open for use by members of the public as appropriate based
262262 232upon the use of the facility after its initial opening upon payment of the applicable user fee or
263263 233service payment; provided, however, that the operator may temporarily close the eligible project,
264264 234because of emergencies or with the consent of the public agency, to protect the safety of the
265265 235public or for reasonable construction or maintenance procedures as set forth under the public-
266266 236private partnership agreement; 13 of 14
267267 237 (3) maintain or provide by contract for the maintenance of the eligible project, if required
268268 238by the public-private partnership agreement;
269269 239 (4) cooperate with the public agency in making best efforts to establish any
270270 240interconnection with the eligible project requested by the public agency; and
271271 241 (5) comply with the public private-partnership agreement and any service contract.
272272 242 (e) This section does not prohibit an operator of an eligible project from providing
273273 243additional services for the eligible project to private entities or local agencies other than the
274274 244public agency that is party to the public-private partnership agreement, if the provision of
275275 245additional service does not impair the operator's ability to meet its commitments to the public
276276 246agency under the public-private partnership agreement.
277277 247 Section 9. (a) Upon the occurrence of a material default by the operator not caused by an
278278 248event of force majeure, the public agency may exercise all rights and remedies available to it
279279 249pursuant to the public private partnership agreement, including without limitation the termination
280280 250of the public private partnership agreement. In addition to such rights and remedies, if the public
281281 251agency determines that the operator has failed or will fail to provide adequate and reasonable
282282 252service to the persons served by the eligible project, the public agency may, by written notice to
283283 253the operator, temporarily assume some or all of the responsibilities and duties of the operator, at
284284 254the sole expense of the operator. If a public agency shall temporarily assume the responsibilities
285285 255of the operator pursuant to this subsection (a), the public agency may design, construct, improve,
286286 256renovate, operate, expand, equip or maintain the eligible project, impose user fees, collect
287287 257revenue and comply with service contracts as if it were the operator. Revenue subject to a pre-
288288 258existing lien shall be collected for the benefit of and paid to secured parties, as their interests may 14 of 14
289289 259appear, to the extent necessary to satisfy the operator's obligations to secured parties, including
290290 260the maintenance of reserves; provided, however, that revenue shall first be allocated to pay
291291 261current operation and maintenance costs of the eligible project, including compensation to the
292292 262public agency for its services in operating and maintaining the eligible project. Assumption of
293293 263operation of the eligible project shall not obligate the public agency to pay any obligation of the
294294 264operator from sources other than revenue from such eligible project.
295295 265 (b) A public agency which is a party to a public-private partnership agreement, and which
296296 266has the power of condemnation under state law, may exercise the power of condemnation to
297297 267acquire the operator's rights and interests in the eligible project as may be needed to cure a
298298 268material default or otherwise to advance a public purpose. Upon such taking, the public entity
299299 269shall succeed to the operator's rights and interests in the eligible project, subject to any liens on
300300 270revenue previously granted by the operator to any person providing financing. The operator and
301301 271any person who has a lien on the revenue generated by the eligible project shall have standing to
302302 272intervene in the condemnation proceedings.
303303 273 (c) The public agency may make or cause to be made, at any time, any appropriate claims
304304 274under maintenance, performance or payment bonds, lines of credit or other forms of security
305305 275required under this chapter.
306306 276 Section 10. This chapter shall not be construed or deemed to constitute a waiver of the
307307 277governmental immunity of a public agency.