January 14, 2015 Issue
Currently there are forty legislatures in session. They are Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Federal, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota. Mississippi, Missouri, Nebraska, New Hampshire, New Jersey, New York, North Dakota, Ohio, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.
Alternative Project Delivery
- AZ HB 2095 (Coleman) waives the requirement for a performance bond if a job-order-contracting project is less than $500k. This bill was filed on January 13, 2015.
Bond Threshold Increases
- ND HB 1077 (Trottier) - NASBP was alerted to this legislation by members and the AGC Chapter of North Dakota. This bill would have increased the competitive bid threshold from $100k to $1M. The implications on the Little Miller Act were unclear, as was the legislative intent of the bill. Many testified in opposition to the bill and the committee gave the legislation a “Do Not Pass Recommendation”.
- MD COMAR 21.06.07.01 - NASBP submitted comments on this rulemaking to support the changes recommended to COMAR (Code of Maryland Regulations) 21.06.07.01, and other applicable sections, which removes all language and references allowing individual sureties to write bonds on public works projects in Maryland. This regulation is the result of the Maryland Individual Surety Law sunsetting on September 30, 2014.
- NJ SB 2489 (Sweeney) would authorize local governments to enter into P3 agreements for building or transportation facilities over $10M. This legislation would require a long-term maintenance bond. The legislation, however, fails to specify the length of bond. SB 2489 passed the Senate in Mid-December and has been referred to the Assembly State and Local Government Committee.
Performance and Payment Bonds
- IN HB 1293 (Ayelsworth) provides that, if a contractor enters into a public work contract with a political subdivision under which the contractor is to demolish a building and remove the demolition debris, the contractor is required to furnish a performance bond equal to the contract price plus, if applicable, a reasonable estimate of the value of any salvage materials to which the contractor will be entitled, regardless of the amount to be paid to the contractor under the contract. This bill was read for the first time on January 13, 2015 and referred to the House Committee on Local Government.
- FL HB 63 (Steube) expands the "responsible public entity" definition for Florida's P3 law (Fla. Stat. § 287.05712) to include "school district, special district, Florida College System institution, or state university." This P3 statute already includes a direct reference to Florida’s Little Miller Act and requires the components of the projects involving construction be bonded with a performance and payment bond. HB 63 was referred to the House Government Operation Subcommittee on December 19, 2014.
- MO HB 206 (Curtman) expands the scope of Missouri's P3 law to include non-transportation projects. These comprehensive P3 agreements would require: Delivery of maintenance, performance and payment bonds, and letters of credit in connection with the development or operation of the qualifying project in the forms and amounts satisfactory to the responsible public entity. HB 206 was read for a second time on January 8, 2015.
- TX SB 219 (Schwertner) waives the requirement for a performance bond in a Medicaid bed agreement for health facilities. SB 219 was pre-filed on December 19, 2014.
Small and Emerging Businesses
- FL HB 253 (Rogers) directs agencies to avoid contract bundling in order to enhance and encourage the participation of small businesses on state contracts. The bill also contemplates a set-aside from an agency to assure 35% of contracts are awarded to small businesses, either directly or indirectly, as subcontractors. However, also includes language stating that “an agency may not require a vendor to post a bid bond, performance bond, or other surety for a contract that does not exceed $500,000.” An identical bill was filed by Rogers in 2013. HB 253 was filed on January 13, 2015.
Small Contractor Outreach
- On February 23, 2015, NASBP will be hosting a bonding education workshop in Charles County, Maryland at the College of Southern Maryland, starting at 7:30am. NASBP has partnered with the Charles County Chamber of Commerce to develop this workshop at the specific request of Maryland State Senator Middleton. The Program will address topics small contractors and construction businesses need to understand when applying for surety credit.