Massachusetts Governor Charlie Baker and Lieutenant Governor Karyn Polito have introduced comprehensive legislation (H.4318) to address much needed investments in climate change preparedness, water infrastructure, and other public facilities. Entitled an “An Promoting Climate Change Adaptation, Environmental and Natural Resource Protection, and Investment in Recreational Assets and Opportunity,” the bill codifies key principles of the Baker-Polito Administration’s Executive Order No. 569 (Establishing an Integrated Climate Change Strategy for the Commonwealth) and funds over $1.4 billion in capital projects for the state’s coastal and inland water infrastructure, water and wastewater systems, environmental protection programs, recreational lands and facilities, climate change initiatives, and various climate vulnerability and preparedness programs.
In addition to funding these capital projects, environmental programs, and climate change initiatives, the Baker-Polito Administration has included language in the bill (Section 31) that would authorize the use of public-private partnership (P3) delivery methods for water, wastewater, stormwater, and flood control projects in the Commonwealth. This legislation is similar to prior efforts to expand the use of P3s for development of water infrastructure projects. The current legislation is modeled after recently enacted legislation in other states granting P3 authority for water infrastructure projects, as well as prior special legislation enacted routinely in Massachusetts over the past 30 years granting similar authority to municipalities on a project-by-project basis. The current bill is also similar to H.1722 which failed to pass in the final days of the 2015-16 legislative session.
If enacted, the P3 provisions of H.4138 will eliminate the requirement for municipalities and fire, water, sewer, or water pollution abatement districts to petition the legislature for special legislation before proceeding with an alternative form of project delivery beyond what is currently authorized under state law. Removing regulatory risk and streamlining the project development process will encourage both public and private partners to consider P3 delivery for certain projects.
The P3 provisions of this bill will authorize eligible awarding authorities to solicit proposals for P3 projects as well as consider unsolicited proposals for a wide range of design-build-finance-operate-maintain project structures. Under the new law, the O&M phase of a project could be as long as 40 years. P3 projects would be exempt from traditional public bidding requirements but prevailing wage, bonding requirements, and other state laws and regulations would continue to apply. Awarding authorities evaluating proposals for a P3 project would be required to determine the most advantageous proposal based on a series of technical and economic factors outlined in the bill that include initial cost, life-cycle cost, purposed user fees, nature of performance guarantees, qualifications and financial capacity of proposing firms, and general merit and innovation of the proposal.
If enacted, the P3 provisions of H.4138 will bring Massachusetts closer in line with a majority of states that have authorized the use of public private partnerships for the delivery of water infrastructure projects and operation of water and wastewater facilities. The bill has been assigned to the Joint Committee on Natural Resources and a hearing should be scheduled soon.