Federal Government Relations Update

U.S. House and Senate Committees Consider Reauthorizing WRDA, While NASBP Seeks Bonding Requirements

The number one legislative priority for NASBP this year on Capitol Hill is to identify legislation addressing public-private partnership agreements (P3s) and to add bonding requirements. NASBP has identified the Water Resources Development Act (WRDA) of 2014, which is up for reauthorization this year, as such a legislative vehicle.
 
The Act creates 15 P3 pilot programs that are authorized for construction for coastal harbor improvements, channel improvement, inland navigation, flood damage reduction, or hurricane and storm damage reduction. Also, the Act requires those P3 agreements to abide by all applicable federal statutes, which includes the federal Miller Act. In addition, the Act includes a provision commonly known as Water Infrastructure Finance and Innovation Act (WIFIA), which provides federal credit assistance in the form of direct loans, loan guarantees, and standby lines of credit to finance P3 agreements. The Act, however, is silent as to whether bonds are required for WIFIA agreements. The surety industry believes that, when Congress appropriates funds to states and localities in the form of grants and loan guarantees for programs such as WIFIA, bonding requirements should be applied.
 
In recognizing the need for bonding on WIFIA agreements involving WIFIA funding, NASBP set forth a strategy to identify members of Congress and committee staff who would be charged with working on the reauthorization of the Act. Supported by the NASBP Executive Committee, NASBP staff retained a contract lobbyist in October 2015, whose role was to identify such congressional offices and staff and to set meetings to advance our position. Since October, NASBP has met with a number of members, both majority and minority, who serve on the Subcommittee on Water Resources and Environment of the U.S. House of Representatives Committee on Transportation and Infrastructure and the U.S. Senate Committee on Environment and Public Works (EPW), which are tasked with producing a final bill. NASBP has also met with committee staff (majority and minority) who serve both of these committees and have had personal meetings with U.S. House of Representatives Duncan Hunter (R-CA-50th), Reid Ribble (R-WI-8th), and Richard Hanna (R-NY-22nd), all of whom serve on the Subcommittee or the Transportation Committee, to discuss our position on the importance of bonds for WIFIA arrangements. During these meetings, NASBP provided language, drafted by NASBP and Surety & Fidelity Association of America, to require performance and payment bonds on WIFIA agreements. NASBP continues to meet with Senate offices that serve on EPW to advance the draft language in the Senate.
   
On February 2, the House Subcommittee conducted a roundtable policy discussion to examine stakeholder priorities for the reauthorization of WRDA. House Transportation Committee Chairman Bill Shuster (R-PA-9th), Subcommittee Chair Bob Gibbs (R-OH-7th), and Ranking Member Grace Napolitano (D-CA-32nd) all expressed the importance of passing the reauthorization bill. Committee Chairman Bill Shuster stated, “We’re starting the process now. We intend to do something this spring.” Shuster added, “We anticipate this bill will be easier to do in the sense that we had a lot of major reforms last time.” Subcommittee Chair Gibbs stated, “Our goal is to try to have a bill done by summer.”  He added, “It’s going to be more tweaking, I think, and where we can do things. . . to help the Corps [U.S. Army Corps of Engineers] do a better job.”
 
On February 10, the Senate EPW conducted a hearing titled “The Importance of Enacting a New Water Resources Development Act.”  In their opening statements, Chairman Inhofe (R-OK) and Ranking Member Barbara Boxer (D-CA), who disagree vehemently more often than not, said a new WRDA bill was critical to expanding exports of U.S. grain and other commodities, creating jobs and boosting the economy. Inhofe said he intends to have a WRDA bill enacted every two years, and added, “The U.S. marine transportation industry supports $2 trillion in commerce and creates jobs for over 13 million people, for every dollar we invest (in infrastructure), we get $16.60 in benefits. If we, as a country, ignore the problems facing our waterways, ports and flood-control infrastructure, those benefits and jobs will be at risk.” Senator Boxer stated that “the drinking water emergency in Flint, Michigan, puts a spotlight on our national infrastructure challenges. The health and safety of children and families depend on safe drinking water. As we develop a new Water Resources Development Act–known as WRDA, we must address the need to invest in our aging infrastructure.”
 
Given the current political climate on Capitol Hill, especially in the Senate, passing a reauthorization bill is not automatic. Based on the Senate and House committee hearings, however, it appears lawmakers are determined to pass a bill; but it must be completely noncontroversial. The language proposed by NASBP and SFAA is just that–a noncontroversial, technical change with the added feature of protecting federal taxpayer funds and subcontractors and suppliers. It is expected that both chambers will likely bring a bill to their respective floors sometime this spring. NASBP will keep the NASBP membership appraised and may ask for grassroots assistance with NASBP members’ lawmakers. 

For more information, contact NASBP Director of Government Relations Larry LeClair at lleclair@nasbp.org.