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SD 736

An Act to strengthen the taxpayer protection act

194th Legislature (2025-2026) Introduced by Mike Brady and 3 co-sponsors

Strengthens taxpayer protections by expanding agency scope, tightening privatization contracts with an inflation-adjusted threshold, and mandating audits to prevent cost shifting.

House concurred
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Bill Summary · SD 736

Summary of Senate Docket No. 736 / SD 736 — An Act to strengthen the taxpayer protection act

Status: House concurred
Introduced: February 27, 2025
Filed: January 14, 2025
Committee: State Administration and Regulatory Oversight

Purpose and intent

This bill revises and strengthens protections around privatization of public services in Massachusetts. It expands how “agencies” are defined for the purposes of privatization oversight, tightens rules on privatization contracts, and establishes enhanced audit and enforcement mechanisms to ensure accountability and prevent costs from being shifted onto residents.

Key provisions

1) Expanded definition of “Agency”

  • Replaces the existing definition of “Agency” in Chapter 7, Section 53 with a broader list that includes:
    • Executive offices, departments, divisions, boards, commissions, or other offices in the executive branch
    • The Massachusetts Bay Transportation Authority (MBTA)
    • The Massachusetts Turnpike Authority
    • The Massachusetts Department of Transportation (MassDOT)
    • The Massachusetts Port Authority
    • Woods Hole, Martha’s Vineyard and Nantucket Steamship Authority
    • A school district (as defined in Chapter 70, Section 2)
    • An education collaborative (per Section 4E of Chapter 40)

2) Redefined “Privatization contract”

  • Defines privatization contract as any agreement by which a non-governmental entity provides services previously performed by regular agency employees, with an initial value threshold of $500,000.
  • The statutory threshold is annually adjusted for increases in the U.S. CPI for all urban consumers (the most recent 12-month period, or more), making the threshold responsive to inflation.
  • Any subsequent agreement (including rebids, renewals, or extensions) is treated as a privatization contract.
  • Exclusions:
    • IT services may be exempt if an employee organization representing affected employees signs the terms in writing (as determined by the secretary of administration and finance).
    • Contracts solely for legal, planning, engineering, or design services are not privatization contracts.

3) Cost adjustments and prohibitions

  • If a designated bidder’s contract increases the cost of services or products provided to a Massachusetts resident, the contract cost must be increased by that amount.
  • Prohibits privatization contracts from paying based on revenue or fee-sharing (e.g., percentage of tuition or other revenues).

4) Audit, enforcement, and oversight

  • Section 55(d): The state auditor’s objection to a privatization action is final and binding unless withdrawn in writing with stated reasons after a revised certification by the agency and the commissioner of administration.
  • The Attorney General may file a civil action to enforce Sections 52–55 or to remedy actions that harm employees due to reports of violations.
  • Section 55(e): Before renewing a privatization contract, the state auditor must conduct a financial and performance audit to ensure compliance.

Who is affected

  • A broad set of public sector agencies and authorities (as listed in the expanded definition of “Agency”) and any school districts or education collaboratives governed under Massachusetts law.
  • Private entities entering privatization agreements with these agencies, subject to the revised thresholds, cost adjustments, and audit/enforcement provisions.
  • State agencies responsible for administration and oversight, including potential changes to contracting and procurement practices.

Timeline and procedural note

  • The bill was introduced in 2025 and referred to the State Administration and Regulatory Oversight committee on February 27, 2025.
  • The House has concurred, indicating alignment between the Senate and House on the bill’s content for further action in that session.

This summary highlights the bill’s main changes to definitions, privatization contract rules, cost-structure constraints, and strengthened audit/enforcement to protect taxpayers.

Compiled from official sources — confirm details with the bill’s official record.

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