EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*hb0956*
HOUSE BILL 956
P2, P1 4lr3082
HB 1201/23 – ENT & APP
By: Delegate Solomon
Introduced and read first time: February 2, 2024
Assigned to: Environment and Transportation and Appropriations
A BILL ENTITLED
AN ACT concerning 1
Public–Private Partnership (P3) Oversight and Accountability Act 2
FOR the purpose of establishing the Public–Private Partnership Oversight Review Board; 3
requiring the Public–Private Partnership Oversight Review Board to study and 4
make recommendations regarding certain matters; authorizing the Public–Private 5
Partnership Oversight Review Board to request technical assistance from certain 6
persons, when appropriate; requiring a reporting agency to submit certain 7
presolicitation reports to the Public–Private Partnership Oversight Review Board; 8
requiring a reporting agency to submit a separate presolicitation report for each 9
phase of a project that will develop in phases; providing that the total value of a 10
public–private partnership developed in phases is equal to the sum of the total value 11
of each phase of the project; requiring a certain reporting agency to include in 12
presolicitation reports for certain public–private partnerships presolicitation reports 13
of certain contracts; requiring the Public–Private Partnership Oversight Review 14
Board, within a certain number of days after receiving a presolicitation report, to 15
report and make certain recommendations to the Board of Public Works and certain 16
budget committees; requiring that before the Board of Public Works may make a 17
certain designation certain budget committees have a certain number of days to 18
review and comment on a certain report; requiring certain proposed public–private 19
partnership agreements to be submitted to the Legislative Policy Committee and the 20
Public–Private Partnership Oversight Review Board; prohibiting the Board of Public 21
Works from approving a proposed agreement until the Legislative Policy Committee 22
has reviewed and commented on the public–private partnership if a certain review 23
and comment period is during a certain time and until certain independent 24
assessments of the impact on the State’s credit rating and certain risk analyses are 25
completed under certain circumstances; requiring a certain risk analysis to include 26
certain information; requiring the proposed agreement to include certain financial 27
information; requiring approval of the General Assembly for certain public–private 28
partnership agreements; requiring a reporting agency to notify the Legislative Policy 29
Committee on receiving a certain unsolicited proposal; requiring a reporting agency 30
to consult with the Public–Private Partnership Oversight Review Board in reviewing 31 2 HOUSE BILL 956
a certain unsolicited proposal; requiring certain terms in a public–private 1
partnership agreement; requiring, under certain circumstances, the terms of a 2
public–private partnership to contain certain provisions; extending a certain 3
prohibition on noncompete clauses in certain public–private partnership agreements 4
to all transit or road maintenance projects regardless of funding source; and 5
generally relating to public–private partnerships. 6
BY repealing and reenacting, without amendments, 7
Article – State Finance and Procurement 8
Section 10A–101(a) 9
Annotated Code of Maryland 10
(2021 Replacement Volume and 2023 Supplement) 11
BY repealing and reenacting, with amendments, 12
Article – State Finance and Procurement 13
Section 10A–101(b), 10A–201(a), 10A–203(a), 10A–301, and 10A–401(a) and (c) 14
Annotated Code of Maryland 15
(2021 Replacement Volume and 2023 Supplement) 16
BY adding to 17
Article – State Finance and Procurement 18
Section 10A–101(i), 10A–106, and 10A–203(c) 19
Annotated Code of Maryland 20
(2021 Replacement Volume and 2023 Supplement) 21
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 22
That the Laws of Maryland read as follows: 23
Article – State Finance and Procurement 24
10A–101. 25
(a) In this title the following words have the meanings indicated. 26
(b) “Budget committees” means the Senate Budget and Taxation Committee, the 27
House [Committee on Ways and Means ] ENVIRONMENT AND TRANSPORTATION 28
COMMITTEE, and the House Appropriations Committee. 29
(I) “TRANSPORTATION FACILI TIES PROJECT” HAS THE MEANING STAT ED 30
IN § 4–101 OF THE TRANSPORTATION ARTICLE. 31
10A–106. 32
(A) IN THIS SECTION, “BOARD” MEANS THE PUBLIC–PRIVATE 33
PARTNERSHIP OVERSIGHT REVIEW BOARD. 34
HOUSE BILL 956 3
(B) THERE IS A PUBLIC–PRIVATE PARTNERSHIP OVERSIGHT REVIEW 1
BOARD. 2
(C) THE BOARD CONSISTS OF THE FOLLOWING MEMBERS: 3
(1) TWO MEMBERS OF THE SENATE OF MARYLAND, APPOINTED BY 4
THE PRESIDENT OF THE SENATE; 5
(2) TWO MEMBERS OF THE HOUSE OF DELEGATES, APPOINTED BY 6
THE SPEAKER OF THE HOUSE; AND 7
(3) THREE MEMBERS , APPOINTED BY THE GOVERNOR, WHO SHALL 8
HAVE EXPERI ENCE IN THE FIELDS O F TRANSPORTATION LAW , PUBLIC POLICY , 9
FINANCE, OR MANAGEMENT CONSUL TING. 10
(D) THE PRESIDENT OF THE SENATE AND THE SPEAKER OF THE HOUSE 11
SHALL JOINTLY DESIGN ATE THE CHAIR OF THE BOARD. 12
(E) THE DEPARTMENT OF LEGISLATIVE SERVICES SHALL PROVIDE STAFF 13
FOR THE BOARD. 14
(F) THE BOARD SHALL: 15
(1) REVIEW PUBLIC –PRIVATE PARTNERSHIP PRESOLICITATION 16
REPORTS; 17
(2) MAKE RECOMMENDATIONS REGARDING THE DESIGN ATION OF A 18
PUBLIC INFRASTRUCTUR E ASSET AS A PUBLIC–PRIVATE PARTNERSHIP ; 19
(3) CONSULT WITH A REPORTING AGENCY I N REVIEWING ANY 20
UNSOLICITED PROPOSAL S FOR A PUBLIC–PRIVATE PARTNERSHIP ; 21
(4) REVIEW BEST PRACTICE S REGARDING PUBLIC –PRIVATE 22
PARTNERSHIPS FROM OT HER STATES AND INTER NATIONALLY; AND 23
(5) MONITOR THE IMPLEMEN TATION AND OPERATION OF EXISTING 24
PUBLIC–PRIVATE PARTNERSHIPS . 25
(G) THE BOARD MAY REQUEST TEC HNICAL ASSISTANCE FR OM THE STATE 26
TREASURER, THE COMPTROLLER , OR THE APPROPRIATE A DMINISTRATIVE 27
AGENCY, WHEN APPROPRIATE . 28
10A–201. 29
(a) (1) (i) Except as provided in subparagraph (ii) of this paragraph AND 30 4 HOUSE BILL 956
SUBJECT TO SUBPARAGR APH (III) OF THIS PARAGRAPH AN D PARAGRAPH (3) OF 1
THIS SUBSECTION , a reporting agency may not issue a public notice of solicitation for a 2
public–private partnership until a presolicitation report concerning the proposed 3
public–private partnership is submitted to the Comptroller, the State Treasurer, the 4
budget committees, and the Department of Legislative Services, in accordance with § 5
2–1257 of the State Government Article. 6
(ii) 1. A reporting agency may not issue a public notice of 7
solicitation for a public–private partnership for a transportation facilities project[, as 8
defined in § 4–101(h) of the Transportation Article,] until a presolicitation report 9
concerning the proposed public–private partnership is submitted to the budget committees 10
and the Department of Legislative Services, in accordance with § 2–1257 of the State 11
Government Article. 12
2. FOR A TRANSPORTATION FACILITIES PROJECT WI TH 13
A TOTAL VALUE THAT E XCEEDS $500,000,000, THE REPORTING AGENCY SHALL 14
SUBMIT, IN ACCORDANCE WITH § 2–1257 OF THE STATE GOVERNMENT ARTICLE, 15
THE PRESOLICITATION REPORT TO THE PUBLIC–PRIVATE PARTNERSHIP 16
OVERSIGHT REVIEW BOARD. 17
(III) 1. IF A REPORTING AGENCY HAS DETERMINED THAT A 18
PROJECT THAT IS SUBJ ECT TO A PUBLIC –PRIVATE PARTNERSHIP WILL BE 19
DEVELOPED IN SEPARAT E PHASES, THE REPORTING AGENCY SHALL SUBMIT A 20
SEPARATE PRESOLICITA TION REPORT IN ACCOR DANCE WITH THIS SECT ION FOR 21
EACH PHASE O F THE PROJECT. 22
2. FOR THE PURPOSES OF D ETERMINING THE TOTAL 23
VALUE OF A PUBLIC –PRIVATE PARTNERSHIP FOR A PROJECT THAT W ILL BE 24
DEVELOPED IN PHASES , THE TOTAL VALUE OF T HE PUBLIC–PRIVATE PARTNERSHIP 25
SHALL BE EQUAL TO TH E SUM OF THE TOTAL V ALUE OF EACH PH ASE OF THE 26
PROJECT. 27
(2) (i) [The] EXCEPT AS PROVIDED IN PARAGRAPH (4) OF THIS 28
SUBSECTION, THE budget committees may not have more than 45 days to review and 29
comment on the presolicitation report submitted in accordance with paragraph (1) of this 30
subsection. 31
(ii) 1. If the total value of a proposed public–private partnership 32
reported in the presolicitation report under paragraph (b)(1) of this subsection exceeds 33
$500,000,000, the budget committees [may request] SHALL, AFTER MAKING A REQUE ST 34
SUBJECT TO SUBSUBPAR AGRAPH 2 OF THIS SUBPARAGRAPH , BE GRANTED an 35
additional 15 days to review and comment on the presolicitation report. 36
2. The request for additional time under this subparagraph 37
shall: 38 HOUSE BILL 956 5
A. be made in writing to the Governor, the Department of 1
Budget and Management, and the reporting agency; and 2
B. include the reason for the request and any preliminary 3
issues the budget committees have. 4
(3) FOR A PUBLIC –PRIVATE PARTNERSHIP WITH A TOTAL VALUE 5
THAT EXCEEDS $500,000,000, THE REPORTING AGENCY SHALL INCLUDE IN THE 6
PRESOLICITATION REPO RT REQUIRED UNDER PA RAGRAPH (1) OF THIS SUBSECTION 7
A PRESOLICITATION RE PORT OF EACH CONTRAC T UNDER THE PUBLIC–PRIVATE 8
PARTNERSHIP . 9
(4) (I) WITHIN 60 DAYS AFTER RECEIVING A PRESOLIC ITATION 10
REPORT UNDER PARAGRA PH (1) OF THIS SUBSECTION , THE PUBLIC–PRIVATE 11
PARTNERSHIP OVERSIGHT REVIEW BOARD SHALL REPORT AN D MAKE 12
RECOMMENDATIONS ON T HE PRESOLICITATION R EPORT TO THE BOARD OF PUBLIC 13
WORKS AND, IN ACCORDANCE WITH § 2–1257 OF THE STATE GOVERNMENT 14
ARTICLE, THE BUDGET COMMITTEE S OF THE GENERAL ASSEMBLY. 15
(II) THE BUDGET COMMITTEES , IN CONSULTATION WITH THE 16
APPROPRIATE POLICY C OMMITTEES, SHALL HAVE 60 DAYS TO REVIEW AND 17
COMMENT ON THE REPOR T AND RECOMMENDATION S OF THE PUBLIC–PRIVATE 18
PARTNERSHIP OVERSIGHT REVIEW BOARD BEFORE THE BOARD OF PUBLIC 19
WORKS MAY DESIGNATE T HE PUBLIC INFRASTRUC TURE ASSET AS A 20
PUBLIC–PRIVATE PARTNERSHIP UNDER SUBSECTION (C) OF THIS SECTION. 21
10A–203. 22
(a) (1) Except as provided in [paragraph (2)] PARAGRAPHS (2) AND (5) of 23
this subsection, the Board of Public Works may not approve a public–private partnership 24
agreement until: 25
(i) a copy of the proposed agreement is submitted simultaneously 26
to: 27
1. the Comptroller, the State Treasurer, the budget 28
committees, and the Department of Legislative Services, in accordance with § 2–1257 of 29
the State Government Article; AND 30
2. FOR A PUBLIC–PRIVATE PARTNERSHIP WITH A TOTAL 31
VALUE THAT EXCEEDS $500,000,000, THE LEGISLATIVE POLICY COMMITTEE, IN 32
ACCORDANCE WITH § 2–1257 OF THE STATE GOVERNMENT ARTICLE, AND THE 33
PUBLIC–PRIVATE PARTNERSHIP OVERSIGHT REVIEW BOARD; 34
6 HOUSE BILL 956
(ii) the State Treasurer, in coordination with the Comptroller, 1
analyzes the impact on the State’s capital debt affordability limits of the proposed 2
public–private partnership agreement; 3
(iii) the State Treasurer submits the analysis to the budget 4
committees and the Department of Legislative Services, in accordance with § 2–1257 of the 5
State Government Article; [and] 6
(iv) the budget committees have reviewed and commented on the 7
agreement in accordance with paragraph (3) of this subsection; AND 8
(V) FOR A PUBLIC –PRIVATE PARTNERSHIP WITH A TOTAL 9
VALUE THAT EXCEEDS $500,000,000: 10
1. IF THE REVIEW AND CO MMENT PERIOD FOR THE 11
BUDGET COMMITTEES IS DURING A PERIOD WHEN THE GENERAL ASSEMBLY IS NOT 12
IN SESSION, THE LEGISLATIVE POLICY COMMITTEE HAS REVIEWE D AND 13
COMMENTED ON THE PUB LIC–PRIVATE PARTNERSHIP ; 14
2. INDEPENDENT ASSESSME NTS OF THE IMPACT ON THE 15
STATE’S CREDIT RATING ARE COMPLETED FOR EACH C ONTRACT UNDER THE 16
PUBLIC–PRIVATE PARTNERSHIP BY A FINANCIAL ADVISO R CHOSEN BY THE STATE 17
TREASURER; AND 18
3. IN ACCORDANCE WITH P ARAGRAPH (4) OF THIS 19
SUBSECTION, A RISK ANALYSIS IS C OMPLETED FOR EACH CO NTRACT UNDER THE 20
PUBLIC–PRIVATE PARTNERSHIP BY A FINANCIAL ADVIS OR CHOSEN BY THE STATE 21
TREASURER. 22
(2) The Board of Public Works may not approve a public –private 23
partnership agreement for a transportation facilities project[, as defined in § 4–101(h) of 24
the Transportation Article,] until the proposed agreement is submitted to the budget 25
committees and the Department of Legislative Services, in accordance with § 2–1257 of the 26
State Government Article. 27
(3) (i) The period for review, analysis, and comment under paragraphs 28
(1) and (2) of this subsection may not exceed a total of 30 days from the date the proposed 29
public–private partnership agreement is submitted simultaneously to the State Treasurer, 30
the Comptroller, the budget committees, and the Department of Legislative Services. 31
(ii) The budget committees may facilitate a faster review and 32
comment period by sending a letter to the Board of Public Works supporting a proposed 33
public–private partnership agreement in advance of the expiration of the 30–day review 34
period. 35
HOUSE BILL 956 7
(4) THE RISK ANALYSIS REQUIRED UNDER PARAG RAPH (1) OF THIS 1
SUBSECTION SHALL INC LUDE: 2
(I) AN ASSESSMENT OF THE RISKS TO THE STATE POSED BY THE 3
PROPOSED AGREEMENT , INCLUDING ECONOMIC , LEGAL, AND TECHNOLOGICAL 4
RISKS; AND 5
(II) AN EVALUATION OF THE SECURITY PACKAGE PROVIDED BY 6
THE PRIVATE ENTITY A ND PRIVATE FUNDING S OURCE, INCLUDING ANY PAYMEN T 7
AND PERFORMANCE BOND S, LETTERS OF CREDIT , PARENT COMPANY GUARA NTEES, 8
AND LENDER OR EQUITY PARTNER GUARANTEES . 9
(5) (I) A PUBLIC–PRIVATE PARTNERSHIP AGREEMENT WITH A 10
TOTAL VALUE THAT EXCE EDS $1,000,000,000 REQUIRES AN AFFIRMAT IVE VOTE OF 11
THE GENERAL ASSEMBLY BEFORE THE BOARD OF PUBLIC WORKS MAY ACT TO 12
APPROVE THE AGREEMEN T. 13
(II) A VOTE OF THE GENERAL ASSEMBLY TO APPROVE A 14
PUBLIC–PRIVATE PARTNERSHIP WITH A TOTAL VALUE THAT EXCEEDS 15
$1,000,000,000 SHALL OCCUR AFTER CO MPLETION OF THE PERI OD FOR REVIEW , 16
ANALYSIS, AND COMMENT REQUIRED UNDER PARAGRAPHS (1) AND (2) OF THIS 17
SUBSECTION. 18
(C) THE PROPOSED PUBLIC –PRIVATE PARTNERSHIP AGREEMENT SHALL 19
INCLUDE FINANCIAL IN FORMATION REGARDING EACH CONTRACTOR AND ANY 20
SUBCONTRACTOR THAT W ILL PROVIDE PRODUCTS OR SERVICES UNDER TH E 21
PUBLIC–PRIVATE PARTNERSHIP AGREEMENT . 22
10A–301. 23
(a) A reporting agency may accept, reject, or evaluate an unsolicited proposal for 24
a public–private partnership that will assist the reporting agency in implementing its 25
functions in a manner consistent with State policy. 26
(b) A REPORTING AGENCY SHA LL NOTIFY THE LEGISLATIVE POLICY 27
COMMITTEE ON RECEIVIN G AN UNSOLICITED PRO POSAL. 28
(C) (1) A reporting agency shall establish the process for determining whether 29
an unsolicited proposal meets a need of the reporting agency or is otherwise advantageous 30
to the reporting agency. 31
(2) NOTWITHSTANDING PARAG RAPH (1) OF THIS SUBSECTION , A 32
REPORTING AGENCY SHA LL CONSULT WITH THE PUBLIC–PRIVATE PARTNERSHIP 33
OVERSIGHT REVIEW BOARD IN REVIEWING AN UNSOLICITED PROPOSAL . 34 8 HOUSE BILL 956
[(c)] (D) (1) A reporting agency may establish by regulation an application 1
fee for submitting an unsolicited proposal. 2
(2) For an unsolicited proposal that does not address a project already in 3
the State’s Capital Improvement Program or Consolidated Transportation Program 4
planning documents, a reporting agency may require a higher application fee. 5
[(d)] (E) If a reporting agency determines that an unsolicited proposal meets a 6
need of the reporting agency or is otherwise advantageous to the reporting agency, the 7
reporting agency shall: 8
(1) conduct a competitive solicitation process as described under Subtitle 2 9
of this title; 10
(2) protect proprietary information included in the unsolicited proposal to 11
the same extent proprietary information is protected under § 10A–203(b) of this title; and 12
(3) comply with all of the other procedural requirements set forth in this 13
title. 14
[(e)] (F) An individual or firm that has submitted an unsolicited proposal under 15
this title may participate in any subsequent competitive solicitation process. 16
10A–401. 17
(a) (1) Whenever applicable, a public–private partnership agreement shall 18
include the following provisions: 19
[(1)] (I) the method and terms for approval of any assignment, 20
reassignment, or other transfer of interest related to the public–private partnership 21
agreement; 22
[(2)] (II) the methods and terms for setting and adjusting tolls, fares, fees, 23
and other charges related to the public infrastructure asset; 24
[(3)] (III) the method and terms for revenue–sharing or other sharing in 25
fees or charges, in which the public participates in the financial upside of asset performance 26
of the public infrastructure asset; 27
[(4)] (IV) minimum quality standards, performance criteria, incentives, 28
and disincentives; 29
[(5)] (V) operations and maintenance standards; 30
[(6)] (VI) the rights for inspection by the State; 31 HOUSE BILL 956 9
[(7)] (VII) the terms and conditions under which the reporting agency may 1
provide services for a fee sufficient to cover both direct and indirect costs; 2
[(8)] (VIII) provisions for oversight and remedies and penalties for default; 3
[(9)] (IX) the terms and conditions under which the reporting agency 4
originating the public–private partnership shall be responsible for ongoing oversight; 5
[(10)] (X) the terms and conditions for audits by the State, including the 6
Office of Legislative Audits, related to the agreement’s financial records and performance; 7
[(11)] (XI) the terms and conditions under which the public infrastructure 8
assets shall be returned to the State at the expiration or termination of the agreement; 9
[and] 10
[(12)] (XII) requirements for the private entity to provide performance 11
security and payment security in a form and in an amount determined by the responsible 12
public entity, except that: 13
[(i)] 1. requirements for the payment security for construction 14
contracts shall be in accordance with Title 17, Subtitle 1 of this article; and 15
[(ii)] 2. requirements for the amount of the payment security and 16
any performance security in the form of a performance bond for a construction contract 17
shall be based on the value of the respective construction elements of the public–private 18
partnership agreement and not on the total value of the public–private partnership 19
agreement; AND 20
(XIII) IF NEGOTIATED AS AN ELEMENT OF THE PUBLI C–PRIVATE 21
PARTNERSHIP , THE TERMS ESTABLISHI NG A GUARANTEED RATE OF RETURN FOR 22
THE PRIVATE ENTITY . 23
(2) IF THE PUBLIC–PRIVATE PARTNERSHIP AGREEMENT REQUIRES 24
THE STATE OR A SUCCESSOR ENTITY TO TAKE OVER OPERATIONS AND 25
MAINTENANCE OF A PRO JECT, THE TERMS FOR APPROV AL OF ANY ASSIGNMENT , 26
REASSIGNMENT , OR OTHER TRANSFER OF INTERESTS IN THE PRO JECT SHALL 27
INCLUDE A REQUIREMEN T THAT ALL TOLL REVENU E OR OTHER CHARGES R ELATED 28
TO THE PROJECT BE AS SIGNED TO THE STATE OR A SUCCESSOR ENTITY TO APPLY 29
TO THE OPERATIONS AN D MAINTENANCE OF THE PROJECT. 30
(3) THE TERMS OF THE PUBL IC–PRIVATE PARTNERSHIP AGREEMENT 31
PROVIDING FOR REVENU E–SHARING OR OTHER SHARING IN FEES OR CHARGES I N 32
WHICH THE PUBLIC PAR TICIPATES IN THE FIN ANCIAL UPSIDE OF ASS ET 33
PERFORMANCE OF THE P UBLIC INFRASTRUCTURE ASSET SHALL REQUIRE THE 34 10 HOUSE BILL 956
REIMBURSEMENT OF THE STATE FOR ADVANCED PR OJECT EXPENSES . 1
(c) A public–private partnership agreement for a project involving road, highway, 2
or bridge assets may not include a noncompete clause that would inhibit the planning, 3
construction, or implementation of [State–funded] transit OR ROAD MAINTENANCE 4
projects. 5
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 6
1, 2024. 7