HB 67
Department of Legislative Services
Maryland General Assembly
2021 Session
FISCAL AND POLICY NOTE
Third Reader - Revised
House Bill 67 (Delegate Korman)
Environment and Transportation and Budget and Taxation and Finance
Appropriations
I-495 and I-270 Public-Private Partnership - Partnership Agreement -
Requirements (Maryland Department of Transportation Promises Act of 2021)
This emergency bill establishes various requirements for any public-private partnership
(P3) agreement for the project to construct toll lanes on Interstate 495 (I-495) or
Interstate 270 (I-270).
Fiscal Summary
State Effect: State operations and finances may be significantly affected, as discussed
below; the State’s proposed traffic relief plan is directly affected by the bill.
Local Effect: Local revenues and expenditures for transit projects may be affected, as
discussed below.
Small Business Effect: Meaningful.
Analysis
Bill Summary:
Public-private Partnership Agreement Requirements
The Board of Public Works (BPW) may not approve a phase P3 agreement for the project
to construct toll lanes on I-495 and I-270 unless the agreement:
 (1) requires that the payment of the toll revenue from the toll lanes agreed on in
accordance with a memoranda of understanding (MOU) between the Maryland
Department of Transportation (MDOT) and the governing bodies of the counties
where the toll facilities that are part of the program are located be transferred to the
special fund established by the bill, as discussed below; (2) authorizes MDOT to
make those payments in scheduled fixed payments; and (3) requires the special fund
to be budgeted in a specified manner;
 guarantees that any local, State, or regional transit system may use the toll lanes for
buses and other mass transit vehicles without charge;
 requires that the American Legion Bridge have a shared-use path for bicyclists and
pedestrians that is connected to one or more existing paths on the Maryland side of
the Potomac River;
 prohibits MDOT from using State funds to acquire land for the project before BPW
approves a section P3 agreement, except for option payments for the reservation of
the purchase of land;
 prohibits MDOT from awarding a contract to a bidder unless the bidder agrees to
initiate a community benefit agreement that demonstrates positive net economic,
environmental, and health benefits to the State, as specified;
 requires MDOT to share relevant data to the maximum extent practicable and in a
timely manner, as specified, with county departments of transportation and the
Maryland-National Capital Park and Planning Commission (M-NCPPC);
 requires that all initial Transportation Trust Fund expenditures and Maryland
Transportation Authority (MDTA) loans be repaid by vendors or tolls with no net
cost to the State or State taxpayers;
 encourages that no additional State funds for the project be expended beyond what
is allocated in the Consolidated Transportation Program (CTP) as of
October 1, 2021;
 prohibits MDOT from submitting a section P3 agreement to BPW for review until a
final environmental impact statement that complies with the National Environmental
Policy Act is available;
 requires any toll adjustments to be subject to public hearings in the county where
the toll facility is located;
 requires the State Highway Administration (SHA) to, at minimum, commit to
establishing priority bicycle and pedestrian connections to remove barriers and
provide connectivity for bicyclists and pedestrians consistent with connections
identified in the affected county master plans and priorities, including specified
projects in Montgomery and Prince George’s counties;
 requires SHA to, at minimum, commit to collaborating with local stakeholders and
delivering regional transit improvements to enhance existing and planned transit and
support new opportunities for regional transit service, as specified;
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 requires SHA to commit to working collaboratively with partner agencies to meet
specified project goals; and
 requires a phase developer to initiate a project labor agreement that meets specified
requirements.
A P3 agreement for the program may require a bidder to initiate a community benefit
agreement that demonstrates benefits in addition to the benefits listed above. MDOT must
enter into nondisclosure agreements with county departments of transportation and
M-NCPPC with regard to the data sharing requirement discussed above. Through such
agreements, MDOT may require confidentiality with regard to the data shared, as specified.
Toll Revenue Payments and Establishment of Special Fund
MDOT must execute an MOU with the governing body of each county where toll facilities
are located. The MOU must (1) specify the nature, amount, and timing of payments of toll
revenue to the county for the completion and operation of public transit improvements and
(2) be executed with each county before MDOT submits for BPW approval a P3 agreement
for any phase of a program that includes construction or operation of a toll facility located
in that county.
The bill distributes these toll revenue payments to an unnamed special fund. Revenues in
the special fund may only be used for establishing and providing funds for the counties
where toll facilities that are part of the project are located to operate transit improvements.
Current Law: Chapter 5 of 2013 established a new framework for the approval and
oversight of P3s in the State. It defined a “public-private partnership” as a method for
delivering public infrastructure assets using a long-term, performance-based agreement
between specified State “reporting” agencies and a private entity where appropriate risks
and benefits can be allocated in a cost-effective manner between the contract partners, in
which:
 a private entity performs functions normally undertaken by the government, but the
reporting agency remains ultimately accountable for the public infrastructure asset
and its public function; and
 the State may retain ownership of the public infrastructure asset and the private
entity may be given additional decision making rights in determining how the asset
is financed, developed, constructed, operated, and maintained over its life cycle.
Only specified “reporting agencies” may establish a P3. Reporting agencies include the
Department of General Services, which oversees building purchases and leases for most of
State government, MDOT, MDTA, and State higher education institutions.
HB 67/ Page 3
Chapter 5 establishes the public policy of the State to utilize P3s, if appropriate, for
(1) developing and strengthening the State’s public infrastructure assets; (2) apportioning
between the public sector and the private sector the risks involved in the development and
strengthening of public infrastructure assets; (3) fostering the creation of new jobs; and
(4) promoting the State’s socioeconomic development and competitiveness. The public
policy also asserts that private entities that enter into P3s must comply with the provisions
of the Labor and Employment Article and the federal Fair Labor Standards Act. Any
proceeds or revenues received by a reporting agency from a P3 that are not paid to the
private sector must accrue to the fund that would have normally received those funds.
BPW must approve all P3 agreements, subject to specified processes; however, BPW may
not approve a P3 that results in the State exceeding its capital debt affordability guidelines.
State Fiscal Effect: MDOT and MDTA are still in the planning stages of the traffic relief
plan and, as such, the details of the proposed P3 to construct toll lanes on I-270 and I-495
have not yet been finalized; the CTP for fiscal 2021 through 2026 includes $40.1 million
to continue planning for the new lanes on I-270 and I-495. Additionally, a shortlist of
qualified developers was announced in July 2020. MDOT and MDTA completed the
review of proposals from three qualified firms for Phase 1 of the project and announced
the selection of a preferred developer; MDOT and MDTA plan to recommend a Phase 1
P3 agreement to BPW for review and approval in spring 2021.
As such, the bill’s provisions related to the P3 agreement and the special fund likely affect
State operations and finances in the short term (as MDOT seeks BPW approval of a partner
for the P3) and in future years (depending on if, when, and how the project is ultimately
implemented). For example, the bill prohibits BPW approval for a P3 for the project unless
certain processes are followed, studies are completed, or the private partner agrees to
certain conditions.
While MDOT’s current plan for the P3 agreement addresses some of the bill’s requirements
(including requirements for the American Legion Bridge and a guarantee that transit
vehicles can use the new toll lanes at no charge), it does not address all of the requirements.
If MDOT does not or cannot meet all of the bill’s remaining requirements, then the project
may have to be altered, delayed, or canceled. Accordingly, State expenditures may then
increase to maintain and/or upgrade the portions of I-270 and I-495 targeted by the
proposed P3.
If the project does move forward as currently proposed, the bill may affect State finances
in various ways. Among other things, the bill requires that (1) the State is repaid for any
initial expenditures made to plan the project and (2) funds are provided to explore new
transit solutions or improve existing transit solutions in the counties where the project’s
toll facilities are located. To the extent that there is not sufficient toll revenue to meet these
HB 67/ Page 4
additional funding requirements, either the State may need to provide funding to fill the
gap or the project may not move forward.
Local Fiscal Effect: MDOT has publicly indicated that it plans to enter into an MOU with
local governments affected by the plan to provide toll revenues from the P3 for local transit
improvements. It has further stated that the MOU would then become part of the
P3 agreement submitted to BPW for approval. The bill ensures that the MOU and toll
revenue payments take place.
Conversely, to the extent that the bill changes, delays, or results in the cancellation of the
P3 project, revenues for local projects may be delayed or do not materialize.
Small Business Effect: P3s are required to comply with the State’s minority business
enterprise preference requirements. To the extent that the bill significantly changes, delays,
or results in the cancellation of the project, small and minority-owned business contracts
are likely negatively affected. For example, if the project is canceled, any small and
minority-owned business contractors that otherwise would have been hired to work on the
project would lose business.
Additional Information
Prior Introductions: HB 1249 of 2020, a similar bill, passed the House as amended, but
no action was taken in the Senate.
Designated Cross File: SB 843 (Senator Benson) - Budget and Taxation and Finance.
Information Source(s): Maryland Department of Transportation; P3 Marketing
Corporation; Department of Commerce; Comptroller’s Office; Board of Public Works;
Frederick, Montgomery, and Prince George’s counties; Department of Legislative Services
Fiscal Note History: First Reader - February 10, 2021
rh/mcr Third Reader - April 5, 2021
Revised - Amendment(s) - April 5, 2021
Revised - Updated Information - April 5, 2021
Analysis by: Richard L. Duncan Direct Inquiries to:
(410) 946-5510
(301) 970-5510
HB 67/ Page 5


Statutes affected:
Text - First - I-495 and I-270 Public-Private Partnership - Partnership Agreement - Requirements (Maryland Department of Transportation Promises Act of 2021): 4-313 Transportation, 4-408 Transportation
Text - Third - I-495 and I-270 Public-Private Partnership - Partnership Agreement - Requirements (Maryland Department of Transportation Promises Act of 2021): 4-313 State Finance and Procurement, 4-408 State Finance and Procurement