EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*hb1201*
HOUSE BILL 1201
P2, P1 3lr2839
HB 485/21 – ENT & APP
By: Delegate Solomon
Introduced and read first time: February 10, 2023
Assigned to: Environment and Transportation and Appropriations
A BILL ENTITLED
AN ACT concerning 1
Public–Private Partnerships 2
FOR the purpose of establishing the Public–Private Partnership Oversight Review Board; 3
requiring the Board to study and make recommendations regarding certain matters; 4
authorizing the Board to request technical assistance from certain persons, when 5
appropriate; requiring a reporting agency to submit certain presolicitation reports to 6
the Board; requiring a reporting agency to submit a separate presolicitation report 7
for each phase of a project that will develop in phases; providing that the total value 8
of a public–private partnership developed in phases is equal to the sum of the total 9
value of each phase of the project; requiring a certain reporting agency to include in 10
presolicitation reports for certain public–private partnerships presolicitation reports 11
of certain contracts; requiring the Board, within a certain number of days after 12
receiving a presolicitation report, to report and make certain recommendations to 13
the Board of Public Works and certain budget committees; requiring that before the 14
Board of Public Works may make a certain designation certain budget committees 15
have a certain number of days to review and comment on a certain report; requiring 16
certain proposed public–private partnership agreements to be submitted to the 17
Legislative Policy Committee and the Public–Private Partnership Oversight Review 18
Board; prohibiting the Board of Public Works from approving a proposed agreement 19
until the Legislative Policy Committee has reviewed and commented on the 20
public–private partnership if a certain review and comment period is during a 21
certain time and until certain independent assessments of the impact on the State’s 22
credit rating and certain risk analyses are completed under certain circumstances; 23
requiring a certain risk analysis to include certain information; requiring the 24
proposed agreement to include certain financial information; requiring approval of 25
the General Assembly for certain public–private partnership agreements; requiring 26
a reporting agency to notify the Legislative Policy Committee on receiving a certain 27
unsolicited proposal; requiring a reporting agency to consult with the Public–Private 28
Partnership Oversight Review Board in reviewing a certain unsolicited proposal; 29
requiring certain terms in a public–private partnership agreement; requiring, under 30
certain circumstances, the terms of a public–private partnership to contain certain 31 2 HOUSE BILL 1201
provisions; extending a certain prohibition on noncompete clauses in certain 1
public–private partnership agreements to all transit or road maintenance projects 2
regardless of funding source; and generally relating to public–private partnerships. 3
BY repealing and reenacting, without amendments, 4
Article – State Finance and Procurement 5
Section 10A–101(a) 6
Annotated Code of Maryland 7
(2021 Replacement Volume and 2022 Supplement) 8
BY repealing and reenacting, with amendments, 9
Article – State Finance and Procurement 10
Section 10A–101(b), 10A–201(a), 10A–203(a), 10A–301, and 10A–401(a) and (c) 11
Annotated Code of Maryland 12
(2021 Replacement Volume and 2022 Supplement) 13
BY adding to 14
Article – State Finance and Procurement 15
Section 10A–101(i), 10A–106, and 10A–203(c) 16
Annotated Code of Maryland 17
(2021 Replacement Volume and 2022 Supplement) 18
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 19
That the Laws of Maryland read as follows: 20
Article – State Finance and Procurement 21
10A–101. 22
(a) In this title the following words have the meanings indicated. 23
(b) “Budget committees” means the Senate Budget and Taxation Committee, the 24
House [Committee on Ways and Means ] ENVIRONMENT AND TRANSPORTATION 25
COMMITTEE, and the House Appropriations Committee. 26
(I) “TRANSPORTATION FACILI TIES PROJECT” HAS THE MEANING STATED 27
IN § 4–101 OF THE TRANSPORTATION ARTICLE. 28
10A–106. 29
(A) THERE IS A PUBLIC–PRIVATE PARTNERSHIP OVERSIGHT REVIEW 30
BOARD. 31
(B) THE BOARD CONSISTS OF THE FOLLOWING MEMBERS : 32
(1) TWO MEMBERS OF THE SENATE OF MARYLAND, APPOINTED BY 33 HOUSE BILL 1201 3
THE PRESIDENT OF TH E SENATE; 1
(2) TWO MEMBERS OF THE HOUSE OF DELEGATES, APPOINTED BY 2
THE SPEAKER OF THE HOUSE; AND 3
(3) THREE MEMBERS , APPOINTED BY THE GOVERNOR, WHO SHALL 4
HAVE EXPERIENCE IN T HE FIELDS OF TRANSPO RTATION LAW , PUBLIC POLICY , 5
FINANCE, OR MANAGEMENT CONSUL TING. 6
(C) THE PRESIDENT OF THE SENATE AND THE SPEAKER OF THE HOUSE 7
SHALL JOINTLY DESIGN ATE THE CHAIR OF THE BOARD. 8
(D) THE DEPARTMENT OF LEGISLATIVE SERVICES SHALL PROVIDE STAFF 9
FOR THE BOARD. 10
(E) THE BOARD SHALL: 11
(1) REVIEW PUBLIC –PRIVATE PARTNERSHIP PRESOLIC ITATION 12
REPORTS; 13
(2) MAKE RECOMMENDATIONS REGARDING THE DESIGN ATION OF A 14
PUBLIC INFRASTRUCTUR E ASSET AS A PUBLIC–PRIVATE PARTNERSHIP ; 15
(3) CONSULT WITH A REPOR TING AGENCY IN REVIE WING ANY 16
UNSOLICITED PROPOSAL S FOR A PUBLIC–PRIVATE PARTNERSHIP ; 17
(4) REVIEW BEST PRACTICE S REGARDING PUBLIC –PRIVATE 18
PARTNERSHIPS FROM OT HER STATES AND INTER NATIONALLY; AND 19
(5) MONITOR THE IMPLEMEN TATION AND OPERATION OF EXISTING 20
PUBLIC–PRIVATE PARTNERSHIPS . 21
(F) THE BOARD MAY REQUEST TEC HNICAL ASSISTANCE FR OM THE STATE 22
TREASURER, THE COMPTROLLER , OR THE APPROPRIATE ADMINIST RATIVE 23
AGENCY, WHEN APPROPRIATE . 24
10A–201. 25
(a) (1) (i) Except as provided in subparagraph (ii) of this paragraph AND 26
SUBJECT TO SUBPARAGR APH (III) OF THIS PARAGRAPH AN D PARAGRAPH (3) OF 27
THIS SUBSECTION , a reporting agency may not issue a public notice of solicitation for a 28
public–private partnership until a presolicitation report concerning the proposed 29
public–private partnership is submitted to the Comptroller, the State Treasurer, the 30
budget committees, and the Department of Legislative Services, in accordance with § 31
2–1257 of the State Government Article. 32 4 HOUSE BILL 1201
(ii) 1. A reporting agency may not issue a public notice of 1
solicitation for a public–private partnership for a transportation facilities project[, as 2
defined in § 4–101(h) of the Transportation Article,] until a presolicitation report 3
concerning the proposed public–private partnership is submitted to the budget committees 4
and the Department of Legislative Services, in accordance with § 2–1257 of the State 5
Government Article. 6
2. FOR A TRANSPORTATION FACILITIES PROJECT W ITH 7
A TOTAL VALUE THAT E XCEEDS $500,000,000, THE REPORTING AGENCY SHALL 8
SUBMIT, IN ACCORDANCE WITH § 2–1257 OF THE STATE GOVERNMENT ARTICLE, 9
THE PRESOLICITATION REPORT TO THE PUBLIC–PRIVATE PARTNERSHIP 10
OVERSIGHT REVIEW BOARD. 11
(III) 1. IF A REPORTING AGENCY HAS DETERMINED THAT A 12
PROJECT THAT IS SUBJ ECT TO A PUBLIC –PRIVATE PARTNERSHIP WILL BE 13
DEVELOPED IN SEPARAT E PHASES, THE REPORTING AGENCY SHALL SUBMIT A 14
SEPARATE PRESOLICITA TION REPORT IN ACCOR DANCE WITH THIS SECT ION FOR 15
EACH PHASE OF THE PR OJECT. 16
2. FOR THE PURPOSES OF D ETERMINING THE TOTAL 17
VALUE OF A PUBLIC –PRIVATE PARTNERSHIP FOR A PROJECT THAT W ILL BE 18
DEVELOPED IN PHASES , THE TOTAL VALUE OF T HE PUBLIC–PRIVATE PARTNERSHIP 19
SHALL BE EQUAL TO TH E SUM OF THE TOTAL V ALUE OF EACH PHASE O F THE 20
PROJECT. 21
(2) (i) [The] EXCEPT AS PROVIDED IN PARAGRAPH (4) OF THIS 22
SUBSECTION, THE budget committees may not have more than 45 days to review and 23
comment on the presolicitation report submitted in accordance with paragraph (1) of this 24
subsection. 25
(ii) 1. If the total value of a proposed public–private partnership 26
reported in the presolicitation report under paragraph (b)(1) of this subsection exceeds 27
$500,000,000, the budget committees [may request] SHALL, AFTER MAKING A REQUE ST 28
SUBJECT TO SUBSUBPAR AGRAPH 2 OF THIS SUBPARAGRAPH , BE GRANTED an 29
additional 15 days to review and comment on the presolicitation report. 30
2. The request for additional time under this subparagraph 31
shall: 32
A. be made in writing to the Governor, the Department of 33
Budget and Management, and the reporting agency; and 34
B. include the reason for the request and any preliminary 35
issues the budget committees have. 36 HOUSE BILL 1201 5
(3) FOR A PUBLIC –PRIVATE PARTNERSHIP WITH A TOTAL VALUE 1
THAT EXCEEDS $500,000,000, THE REPORTING AGENCY SHALL INCLU DE IN THE 2
PRESOLICITATION REPO RT REQUIRED UNDER PA RAGRAPH (1) OF THIS SUBSECTION 3
A PRESOLICITATION RE PORT OF EACH CONTRAC T UNDER THE PUBLIC–PRIVATE 4
PARTNERSHIP . 5
(4) (I) WITHIN 60 DAYS AFTER RECEIVING A PRESOLICITATION 6
REPORT UNDER PARAGRA PH (1) OF THIS SUBSECTION, THE PUBLIC–PRIVATE 7
PARTNERSHIP OVERSIGHT REVIEW BOARD SHALL REPORT AN D MAKE 8
RECOMMENDATIONS ON T HE PRESOLICITATION R EPORT TO THE BOARD OF PUBLIC 9
WORKS AND, IN ACCORDANCE WITH § 2–1257 OF THE STATE GOVERNMENT 10
ARTICLE, THE BUDGET COMMITTEE S OF THE GENERAL ASSEMBLY. 11
(II) THE BUDGET COMMITTEES , IN CONSULTATION WITH THE 12
APPROPRIATE POLICY C OMMITTEES, SHALL HAVE 60 DAYS TO REVIEW AND 13
COMMENT ON THE REPOR T AND RECOMMENDATION S OF THE 14
PUBLIC–PRIVATE PARTNERSHIP OVERSIGHT REVIEW BOARD BEFORE THE BOARD 15
OF PUBLIC WORKS MAY DESIGNATE T HE PUBLIC INFRASTRUC TURE ASSET AS A 16
PUBLIC–PRIVATE PARTNERSHIP UNDER SUBSECTION (C) OF THIS SECTION. 17
10A–203. 18
(a) (1) Except as provided in [paragraph (2)] PARAGRAPHS (2) AND (5) of 19
this subsection, the Board of Public Works may not approve a public–private partnership 20
agreement until: 21
(i) a copy of the proposed agreement is submitted simultaneously 22
to: 23
1. the Comptroller, the State Treasurer, the budget 24
committees, and the Department of Legislative Services, in accordance with § 2–1257 of 25
the State Government Article; AND 26
2. FOR A PUBLIC–PRIVATE PARTNERSHIP WITH A TOTAL 27
VALUE THAT EXCEEDS $500,000,000, THE LEGISLATIVE POLICY COMMITTEE, IN 28
ACCORDANCE WITH § 2–1257 OF THE STATE GOVERNMENT ARTICLE, AND THE 29
PUBLIC–PRIVATE PARTNERSHIP OVERSIGHT REVIEW BOARD; 30
(ii) the State Treasurer, in coordination with the Comptroller, 31
analyzes the impact on the State’s capital debt affordability limits of the proposed 32
public–private partnership agreement; 33
(iii) the State Treasurer submits the analysis to the budget 34
committees and the Department of Legislative Services, in accordance with § 2–1257 of the 35 6 HOUSE BILL 1201
State Government Article; [and] 1
(iv) the budget committees have reviewed and commented on the 2
agreement in accordance with paragraph (3) of this subsection; AND 3
(V) FOR A PUBLIC –PRIVATE PARTNERSHIP WITH A TOTAL 4
VALUE THAT EXCEEDS $500,000,000: 5
1. IF THE REVIEW AND CO MMENT PERIOD FOR THE 6
BUDGET COMMITTEES IS DURING A PERIOD WHEN THE GENERAL ASSEMBLY IS NOT 7
IN SESSION, THE LEGISLATIVE POLICY COMMITTEE HAS REVIEWE D AND 8
COMMENTED ON THE PUB LIC–PRIVATE PARTNERSHIP ; 9
2. INDEPENDENT ASSESSME NTS OF THE IMPACT ON THE 10
STATE’S CREDIT RATING ARE COMPLETED FOR EACH C ONTRACT UNDER THE 11
PUBLIC–PRIVATE PARTNERSHIP BY A FINANCIAL ADVISO R CHOSEN BY THE STATE 12
TREASURER; AND 13
3. IN ACCORDANCE WITH P ARAGRAPH (4) OF THIS 14
SUBSECTION, A RISK ANALYSIS IS C OMPLETED FOR EACH CO NTRACT UNDER THE 15
PUBLIC–PRIVATE PARTNERSHIP BY A FINANCIAL ADVIS OR CHOSEN BY THE STATE 16
TREASURER. 17
(2) The Board of Public Works may not approve a public –private 18
partnership agreement for a transportation facilities project[, as defined in § 4–101(h) of 19
the Transportation Article,] until the proposed agreement is submitted to the budget 20
committees and the Department of Legislative Services, in accordance with § 2–1257 of the 21
State Government Article. 22
(3) (i) The period for review, analysis, and comment under paragraphs 23
(1) and (2) of this subsection may not exceed a total of 30 days from the date the proposed 24
public–private partnership agreement is submitted simultaneously to the State Treasurer, 25
the Comptroller, the budget committees, and the Department of Legislative Services. 26
(ii) The budget committees may facilitate a faster review and 27
comment period by sending a letter to the Board of Public Works supporting a proposed 28
public–private partnership agreement in advance of the expiration of the 30–day review 29
period. 30
(4) THE RISK ANALYSIS REQUIRED UNDER PARAG RAPH (1) OF THIS 31
SUBSECTION SHALL INCLUDE: 32
(I) AN ASSESSMENT OF THE RISKS TO THE STATE POSED BY THE 33
PROPOSED AGREEMENT , INCLUDING ECONOMIC , LEGAL, AND TECHNOLOGICAL 34
RISKS; AND 35 HOUSE BILL 1201 7
(II) AN EVALUATION OF THE SECURITY PACKAGE PRO VIDED BY 1
THE PRIVATE ENTITY A ND PRIVATE FUNDING S OURCE, INCLUDING ANY PAYMEN T 2
AND PERFORMANCE BOND S, LETTERS OF CREDIT , PARENT COMPANY GUARA NTEES, 3
AND LENDER OR EQUITY PARTNER GUARANTEES . 4
(5) (I) A PUBLIC–PRIVATE PARTNERSHIP AGREEMENT WITH A 5
TOTAL VALUE THAT EXC EEDS $1,000,000,000 REQUIRES AN AFFIRMAT IVE VOTE OF 6
THE GENERAL ASSEMBLY BEFORE THE BOARD OF PUBLIC WORKS MAY ACT TO 7
APPROVE THE AGREEMEN T. 8
(II) A VOTE OF THE GENERAL ASSEMBLY TO APPROVE A 9
PUBLIC–PRIVATE PARTNERSHIP WITH A TOTAL VALUE T HAT EXCEEDS 10
$1,000,000,000 SHALL OCCUR AFTER COMPLETION OF THE PERIOD FOR REVIEW, 11
ANALYSIS, AND COMMENT REQUIRED UNDER PARAGRAPHS (1) AND (2) OF THIS 12
SUBSECTION. 13
(C) THE PROPOSED PUBLIC –PRIVATE PARTNERSHIP AGREEMENT SHALL 14
INCLUDE FINANCIAL IN FORMATION REGARDING EACH CONTRACTOR AND ANY 15
SUBCONTRACTOR THAT W ILL PROVID E PRODUCTS OR SERVIC ES UNDER THE 16
PUBLIC–PRIVATE PARTNERSHIP AGREEMENT . 17
10A–301. 18
(a) A reporting agency may accept, reject, or evaluate an unsolicited proposal for 19
a public–private partnership that will assist the reporting agency in implementing its 20
functions in a manner consistent with State policy. 21
(b) A REPORTING AGENCY SHA LL NOTIFY THE LEGISLATIVE POLICY 22
COMMITTEE ON RECEIVIN G AN UNSOLICITED PRO POSAL. 23
(C) (1) A reporting agency shall establish the process for determining whether 24
an unsolicited proposal meets a need of the reporting agency or is otherwise advantageous 25
to the reporting agency. 26
(2) NOTWITHSTANDING PARAG RAPH (1) OF THIS SUBSECTION , A 27
REPORTING AGENCY SHA LL CONSULT WITH THE PUBLIC–PRIVATE PARTNERSHIP 28
OVERSIGHT REVIEW BOARD IN REVIEWING AN UNSOLICITE D PROPOSAL. 29
[(c)] (D) (1) A reporting agency may establish by regulation an application 30
fee for submitting an unsolicited proposal. 31
(2) For an unsolicited proposal that does not address a project already in 32
the State’s Capital Improvement Program or Consolidated Transportation Program 33
planning documents, a reporting agency may require a higher application fee. 34 8 HOUSE BILL 1201
[(d)] (E) If a reporting agency determines that an unsolicited proposal meets a 1
need of the reporting agency or is otherwise advantageous to the reporting agency, the 2
reporting agency shall: 3
(1) conduct a competitive solicitation process as described under Subtitle 2 4
of this title; 5
(2) protect proprietary information included in the unsolicited proposal to 6
the same extent proprietary information is protected under § 10A–203(b) of this title; and 7
(3) comply with all of the other procedural requirements set forth in this 8
title. 9
[(e)] (F) An individual or firm that has submitted an unsolicited proposal under 10
this title may participate in any subsequent competitive solicitation process. 11
10A–401. 12
(a) (1) Whenever applicable, a public–private partnership agreement shall 13
include the following provisions: 14
[(1)] (I) the method and terms for approval of any assignment, 15
reassignment, or other transfer of interest related to the public–private partnership 16
agreement; 17
[(2)] (II) the methods and terms for setting and adjusting tolls, fares, fees, 18
and other charges related to the public infrastructure asset; 19
[(3)] (III) the method and terms for revenue–sharing or other sharing in 20
fees or charges, in which the public participates in the financial upside of asset performance 21
of the public infrastructure asset; 22
[(4)] (IV) minimum quality standards, performance criteria, incentives, 23
and disincentives; 24
[(5)] (V) operations and maintenance standards; 25
[(6)] (VI) the rights for inspection by the State; 26
[(7)] (VII) the terms and conditions under which the reporting agency may 27
provide services for a fee sufficient to cover both direct and indirect costs; 28
[(8)] (VIII) provisions for oversight and remedies and penalties for default; 29
[(9)] (IX) the terms and conditions under which the reporting agency 30 HOUSE BILL 1201 9
originating the public–private partnership shall be responsible for ongoing oversight; 1
[(10)] (X) the terms and conditions for audits by the State, including the 2
Office of Legislative Audits, related to the agreement’s financial records and performance; 3
[(11)] (XI) the terms and conditions under which the public infrastructure 4
assets shall be returned to the State at the expiration or termination of the agreement; and 5
[(12)] (XII) requirements for the private entity to provide performance 6
security and payment security in a form and in an amount determined by the responsible 7
public entity, except that: 8
[(i)] 1. requirements for the payment security for construction 9
contracts shall be in accordance with Title 17, Subtitle 1 of this article; and 10
[(ii)] 2. requirements for the amount of the payment security and 11
any performance security in the form of a performance bond for a construction contract 12
shall be based on the value of the respective construction elements of the public–private 13
partnership agreement and not on the total value of the public–private partnership 14
agreement; AND 15
(XIII) IF NEGOTIATED AS AN ELEMENT OF THE PU BLIC–PRIVATE 16
PARTNERSHIP , THE TERMS ESTABLISHI NG A GUARANTEED RATE OF R ETURN FOR 17
THE PRIVATE ENTITY . 18
(2) IF THE PUBLIC–PRIVATE PARTNERSHIP AGREEMENT REQUIRES 19
THE STATE OR A SUCCESSOR ENTITY TO TAKE OVER OPERATIONS AND 20
MAINTENANCE OF A PRO JECT, THE TERMS FOR APPROV AL OF ANY ASSIGNMENT , 21
REASSIGNMENT , OR OTHER TRANSFER OF INTERESTS IN THE PRO JECT SHALL 22
INCLUDE A REQUIREMEN T THAT ALL TOLL REVE NUE OR OTHER CHARGES RELATED 23
TO THE PROJECT BE ASSIGNED TO THE STATE OR A SUCCESSOR ENTITY TO APPLY 24
TO THE OPERATIONS AN D MAINTENANCE OF THE PROJECT. 25
(3) THE TERMS OF THE PUBL IC–PRIVATE PARTNERSHIP AGREEMENT 26
PROVIDING FOR REVENU E–SHARING OR OTHER SHA RING IN FEES OR CHAR GES IN 27
WHICH THE PUBLIC PAR TICIPATES IN THE FINANC IAL UPSIDE OF ASSET 28
PERFORMANCE OF THE P UBLIC INFRASTRUCTURE ASSET SHALL REQUIRE THE 29
REIMBURSEMENT OF THE STATE FOR ADVANCED PR OJECT EXPENSES . 30
(c) A public–private partnership agreement for a project involving road, highway, 31
or bridge assets may not include a noncompete clause that would inhibit the planning, 32
construction, or implementation of [State–funded] transit OR ROAD MAINTENANCE 33
projects. 34
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 35 10 HOUSE BILL 1201
1, 2023. 1