February 2025 Legislative Update

New Legislative Session Begins; UCANE Filings of Interest

January 1, 2025 rang in the start of the 2025-2026 legislative session as members of the Massachusetts House of Representatives and the Massachusetts Senate were sworn in for the new two-year session. Senate Democrats elected Senator Karen Spilka as their Senate President; House Democrats chose Representative Ron Mariano as Speaker of the House. For their part, House Republicans elected Representative Brad Jones as House Minority Leader; Senate Republicans elected Senator Bruce Tarr as Senate Minority Leader. In the House of Representatives, there will be 19 new Representatives while the Senate will see 3 new Senators, two of whom previously served in the House. Early areas of work will likely include rules reform to reflect the new reality of being able to pass larger bills past July of the second year, the filing of the Governor’s FY’26 budget proposal, and assignment of leadership and committee assignments in both branches.

For its part, UCANE will be seeking to advance three particular pieces of legislation during the session.  The first bill is relative to the timely payment of law enforcement. This legislation clarifies that awarding authorities are responsible for handling the payment of police details on a project.  By assigning responsibility in this manner, bid items for police details will become unnecessary at the procurement phase, which will result in more accurate bid proposals and greater control over construction costs. This language would only apply to public contracts bid under Chapter 30, §39M of the Mass. Gen. Laws. Furthermore, this type of work is often horizontal in nature including, but not limited to: road, bridge, water and sewer projects, among others. The legislation has been filed by Representative Dan Cahill and Senator Michael Moore.

The second proposal that UCANE will support creates a flexible Commonwealth Water Infrastructure Trust Fund, which will be funded on connection fees charged to general contractors. Already, many municipalities charge a “connection fee” for access to municipal water and sewer mains. The proposed legislation would increase the connection fees by $250 for residential properties and $1,000 for commercial properties paid by general contractors and specifically dedicate these additional funds to the newly created Commonwealth Water Infrastructure Trust Fund. The Commonwealth Water Infrastructure Trust Fund would then divide the collected fees among four entities: Fifty percent (50%) of the amount received would go to the city or town where the fee was collected; forty percent (40%) of the collected fee would be directed to the Massachusetts Clean Water Trust; five percent (5%) will go to the Massachusetts Department of Environmental Protection (MassDEP) to specifically work with municipalities with economic target areas to address their water infrastructure needs and the final five percent (5%) would be distributed to the Massachusetts Department of Revenue for administrative and enforcement costs associated with the increase. The legislation has been filed by Representative Sean Garballey and Senator Brendan Crighton.

The final proposal, with whom UCANE is joining with other Water Infrastructure Alliance (WIA) members like the Massachusetts Water Works Association, the American Council of Engineering Companies, Massachusetts and the MWRA Advisory Board, among others, creates an omnibus water infrastructure funding mechanism that will provide a wide variety of potential methods for increasing funding for the Commonwealth’s growing water infrastructure funding gap. While the American Rescue Plan Act (ARPA) and the federal bipartisan infrastructure law provided short term funding (i.e. five years or less); the Commonwealth will face a steep water infrastructure funding cliff as federal funds under the Clean and Drinking Water Revolving Funds (SRFs) programs are not expected to grow under the next Administration. The Clean Water Trust (CWT) has acknowledged the same. With the upcoming Environmental Bond Bill (EBB) to be debated in the 2025-2026 legislative session, this legislation will provide a mechanism for highlighting and discussing a variety of potential tools and mechanisms for addressing the growing gap and reduction in federal infrastructure funds. The legislation has been filed by Representatives Ted Phillips, Jessica Giannino, Mike Kushmerek, and Meg Kilcoyne and Senator John Cronin in the Senate.

Stay tuned for more information within Construction Outlook as the 2025-2026 legislative session progresses.

Governor Files FY26 Budget Proposal

The Healey-Driscoll Administration released its fiscal year 2026 (FY26) budget proposal on the third Wednesday of January. The $62 billion spending plan increases spending over the fiscal year 2025 (FY25) general appropriations act (GAA) by $4.3 billion (7.4 percent) and over the Administration’s estimated spending level of $60.256 billion by $1.8 billion (2.1 percent). As reported by the Massachusetts Taxpayers Foundation (MTF), spending increases are reflected in the healthcare, education, and transportation sectors, driven by non-discretionary cost increases and investments supported by the income surtax. To support this level of spending, despite expectations for limited revenue growth, the Governor’s budget utilizes approximately $1.94 billion in one-time and ongoing revenue generating-initiatives, including 12 tax policy proposals.

In particular, the Governor’s FY26 budget proposal recommends $62.07 billion in total spending, a $4.29 billion (7.4 percent), increase over the FY25 GAA. Non-surtax spending totals $59.58 billion, a $3.79 billion (6.8 percent) increase over the prior year and $1.5 billion (2.6 percent) greater than the administration’s reported estimate for FY25 spending. After accounting for $7.65 billion in statutorily required transfers, the Governor’s budget includes $69.73 billion in total spending commitments.

The proposed budget, filed as House 1, fully funds the fifth year of the Student Opportunity Act, increases Unrestricted General Government Aid by 2.2 percent and seeks to stabilize the MBTA, boost Chapter 90 funding to $300 million per year for the next five years, and invest billions in the transportation system and higher education campuses. In doing so, the Governor’s proposed budget dedicates $765 million in Fair Share revenue to the Commonwealth Transportation Fund (CTF) to leverage $5 billion in borrowing over the next 10 years for capital expenditures, while also making impactful investments in annual operations. These funds will be appropriated to support transportation investments including $500 million to stabilizing the MBTA’s operations, more than doubling support from last year. It also maintains key initiatives such as the Income-Eligible Fare Relief program, the MBTA Academy, grants to support fare-free programs at Regional Transit Authorities and RTA connectivity. 

According to a press release from the Governor’s Office, the borrowing unlocked by utilizing the CTF, along with surplus Fair Share and other resources, will enable the state to invest $8 billion in transportation over the next 10 years, including $1.5 billion ($300 million per year) over five years for Ch. 90 reform, $1.5 billion for road and bridge repair, and $850 million for the MBTA to support maintenance facilities modernization and power system resilience. 

Of particular interest to UCANE members, the Governor’s budget also proposes the following:

• Clean Water Contract Assistance Line-Item: $63.383 million (level funded from previous year).
• Underground Storage Tank (UST) Program Line-Item: $5.9 million ($1 million decrease as claims are decreasing).
• Department of Environmental Protection Administration Line-Item: $54.1 million ($200K reduction; the Massachusetts legislature usually pushes this amount a little higher).
• Commonwealth Sewer Rate Relief Line-item: Not included. (The Governor usually does not include this line-item; it is a House priority and usually gets included for $1.5M).

 

Policy sections of interest include language authorizing automated enforcement authorization for use in work zones (Sections 4, 49, 50, 56, 132 and 133). This language, following up on the new laws for bus lane enforcement and school bus stop-arm automated enforcement which passed at the end of last session, would allow the state and municipalities to establish speed camera enforcement on roadways and within work zones and school safety zones.

The Massachusetts House of Representatives and Massachusetts Senate will hold joint public hearings on the Governor’s proposed budget during February and March. The House will then release its proposed budget in April; the Senate will then release their version in May. A final Conference Committee report will then be issued after negotiations between both branches in June, in time for the fiscal year’s start on July 1.  

To view the Governor’s filing letter, budget message, budget briefs, and specific account information, please visit: https://budget.digital.mass.gov/govbudget/fy26/.

Emissions Webinar on Impact of ACT & HDO Rules Held for Legislators

Senator Mike Moore (D-Milbury) sponsored a webinar on Tuesday, January 28 for his colleagues and stakeholder groups to highlight the impact of Massachusetts’ adoption of the California Air Resources Board’s (CARB’s) Advanced Clean Truck (ACT), and Heavy-Duty Omnibus (HDO) rules back in December of 2021. Over 80 attendees from legislative offices and stakeholder groups heard from an array of panelists not only about the impact of the ACT and HDO rules, but about the truck purchasing process overall. Senator Moore and Representative Angelo Puppolo, along with Representatives Steve Howitt, David Muradian and Brad Jones, are sponsors of legislation to delay the implementation of the ACT & HDO rules until 2027 while directing the Commonwealth to purchase electric MHD in the meantime.

The purpose of presentation was to familiarize attendees with the truck purchasing and upfitting process, while also covering practical issues with simply embracing electric trucks without consideration of more reasonable and practical alternatives in the short term. To that end, Kevin Weeks, Executive Director of the Trucking Association of Massachusetts (TAM) provided an overview of the issues impacting end-users of medium- and heavy-duty (MHD) trucks. Chris Marsh, Director of Sales for Advantage Truck Group (ATG), highlighted the impact the regulations have had on truck dealers and the complexity of working with manufacturers in this new regulatory world, given ACT’s effective date of January 1, 2025.

UCANE’s own Gerry Carney, President of C. N. Wood Company, Inc., covered a number of topics, including, but not limited to: providing an overview of the MHD truck purchasing cycle; the relationship between manufacturers, truck dealers, and truck upfitters; impediments presented by the ACT & HDO rules as well as an explanation about how the current rules are preventing both the public and private sector from acquiring new, necessary equipment. Mr. Chris Cronin, the recently retired Director of the Andover Department of Public Works, provided the purchaser perspective. While speaking to his role within the Town of Andover, Chris highlighted the many considerations that go into maintaining, building and running a municipal fleet – particularly in an environment where needed MHD trucks can no longer be purchased.

Finally, UCANE’s contract lobbyist, Mark Molloy of Cascade Strategies focused on the need to reasonably reduce emissions in the short and long terms. In doing so, he provided insight into some of the clean emissions strategies that can be used – whether related to clean diesel MHD trucks, focusing on “last mile” transportation or alternative fuels other than electric – to reduce emissions throughout the Commonwealth. Senator Moore closed out the presentation by urging his colleagues to work with him, but, as importantly, urging stakeholder groups to “get involved by getting to know your legislators” and asking them to co-sponsor the new legislation.

To review a copy of the aforementioned legislation, please visit: https://malegislature.gov/Bills/194/SD137.

Agreement Reached on Mistakenly Spent Unemployment Insurance Funds

As reported by the State House News Service, Massachusetts must pay the federal government $2.1 billion over the next decade after the Baker Administration mistakenly used federal pandemic funds to cover unemployment benefits. Governor Healey, who worked feverishly to reduce the original amount of $3.5 billion, reached the agreement with President Joe Biden’s Administration before he left office. In essence, the Commonwealth will repay most, but not all, of the amount it owed due to the error committed years ago.

By way of background, the Governor’s Office announced in the summer of 2023 that it was discovered that the Baker Administration improperly used about $2.5 billion in federal pandemic relief funds to cover jobless benefits that should have been paid by the state. With fees and interest, the total liability surpassed $3 billion. Payments will begin December 1, 2025 and continue each year for the next decade, according to the Healey Administration.

The agreement calls for principal payments to come from the Unemployment Insurance Trust Fund, which is funded by a tax on employers and is also used to pay benefits. Interest payments will come from the state's General Fund. Businesses will not face higher rates on their unemployment insurance payments through at least the end of 2026. After that, rates will depend on system reforms, meaning that the business community may see a large increase in unemployment insurance rates in the future. To forestall any future increase, Governor Healey instructed Secretary Lauren Jones of the Executive Office of Labor and Workforce Development and Secretary Matthew Gorzkowicz  of the Executive Office of Administration and Finance to "conduct a comprehensive review of the solvency of UI and assess potential reforms.” Even before accounting for $2.1 billion in additional payments, the Healey Administration projected the UI Trust Fund will be hundreds of millions of dollars in the red by the end of 2028.

To learn more about the unemployment insurance system and how calculations are made, please visit: https://www.mass.gov/guides/guide-to-employer-contributions-to-dua.

News in Brief

Chapter 90 Funding Reform Filed by Governor. In addition to filing their proposed FY26 budget, the Healey-Driscoll Administration filed a supplemental budget to provide $1.5 billion over 5 years for municipalities for transportation related costs. The funding, which will support the so-called “Chapter 90 funding program”, has provided road and bridge funding for all 351 cities and towns since 1973. Rising construction costs and changing travel patterns however necessitated a renewed focus on the program. Funded at $200 million annually since 2012, except for a one-time increase in 2015 and some supplemental funds from the Fair Share surtax in 2023 and 2024. Many municipalities and stakeholder have stated that the funding was not keeping pace with municipal needs considering inflation, rising construction costs, and the impacts of climate change. Flat funding levels have made it difficult for municipalities to address larger projects in a timely manner, forcing them to save annual program funds over multiple years to cover such work. The distribution formula, based on roadway mileage, population, and employment, has not been changed in 50 years.

New Sideguard Legislation Filed to Address Liability and Expand Program to Municipal Contracts and Utilities. With the ink still drying on MassDOT’s new regulations governing safety equipment for heavy trucks under state contracts (540 CMR 4.00 et. seq.), proponents of sideguards and other safety equipment (convex / concave mirrors / rear facing cameras) have already filed legislation to mandate the use of such equipment on all trucks used in connection with municipal and utility contracts. The legislation (SD801/HD3225), which proposes a start date in 2028, presents an interesting dynamic of jumping from purely public contracts (i.e. state / municipal) to private contracts of the utility companies. Every utility company or type of utility would be impacted by the proposed requirement, which may raise significant federal preemption issues. Another filed legislative matter, SD1245, would create a rebuttable presumption of negligence for any use of a truck, regardless of whether it is used in service of a state contract, that did not have sideguards or other equipment on said vehicle. The proposed legislation also presents a number of potential legal issues. Neither bill has been sent to a committee yet. UCANE will continue to monitor these and similar bills as the session progresses.