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Public-private partnership legislation moves forward

ANNAPOLIS — The House of Delegates gave preliminary approval on Wednesday to legislation that would create rules for long-term capital project agreements between state agencies and businesses — and let those businesses propose the projects themselves.

House Bill 560, backed by the O’Malley administration, creates special procurement rules for public-private partnerships, like those already in place at the Port of Baltimore and two Interstate 95 rest stops.

The special rules are needed, advocates say, to create an faster bid process that includes greater certainty for wary private investors and allows greater scrutiny of those deals by the General Assembly and Board of Public Works.

Under such an agreement, a business signs a long-term lease — often 30 years or more — to conduct capital improvements and manage day-to-day operations usually undertaken by state employees, though the state retains ownership of the property. The deals let the state upgrade infrastructure without spending money, and have been noted as one potential aide to Maryland’s transportation funding woes.

A state agency could solicit bids for a project, but the bill also lets businesses propose a project on their own, a feature meant to entice private companies eager for work but wary of Maryland’s sometimes-burdensome procurement system.

The bill could reach final approval in the House this week with unusual support; both Democrats and Republicans agree the legislation would help the state. Minority Leader Anthony J. O’Donnell, R-Calvert and St. Mary’s, says he plans to vote for the bill.

“The economy is fragile, we have to do something to stimulate job creation,” O’Donnell said.

Last year, when the bill was first introduced, the reaction was somewhat different. During a working session of the Environmental Matters Committee, amendments were added to the legislation that would have allowed the state to immediately appeal two decisions made by Baltimore Circuit Court Judge Althea M. Handy in a case that challenged the contract award for the $1.5 billion redevelopment of the State Center office complex.

Had last year’s legislation passed both chambers and been signed into law by Gov. Martin O’Malley, the state could have appealed both rulings to the Court of Special Appeals without allowing the lawsuit to first play out in circuit court.

But, after the amended bill passed the House, despite the strenuous objection of some delegates, members of the Senate Budget and Taxation Committee took exception to the amendments and passed their own version of the administration bill, without the controversial changes.

The full Senate later passed that bill, but the clock ran out on the regular session before both chambers of the legislature could convene a conference committee to work out differences — effectively killing the legislation.

In January, Handy voided the State Center public-private partnership between Ekistics LLC and the state, saying officials violated procurement law. The Maryland Court of Appeals is expected to take up the case this fall. Lt. Gov. Anthony G. Brown, who has run point on the bill for the administration, has been careful to note that this version of the legislation would apply to future deals only.

Del. Maggie McIntosh, a Baltimore Democrat who chairs the Environmental Matters Committee, assured House members of that fact on Wednesday.

“The State Center project … is not in this bill,” McIntosh said.

Despite the State Center debacle, Maryland has had some success with its other public-private partnerships, most notably at the Port of Baltimore. There, Ports America Chesapeake has upgraded the public marine terminal with supersized cranes and a 50-foot berth as part of a 50-year deal. The improvements allow the port to handle huge ships that could arrive once the Panama Canal is expansion is completed.