Federal Update

On November 21, President Trump signed a continuing resolution to avoid a government shutdown, keeping the government funded until December 20, 2019. Earlier this week, the House passed two giant spending bills providing $1.4 trillion to fund the federal government through September 30, 2020. The Senate is set to vote on both bills on Thursday, December 19. If approved by Congress, the President will likely sign both spending bills. As you recall, around this time last year, Congress and the president were unable to agree on a short-term funding bill, which resulted in a government shutdown lasting 35 days. The spending packages include provisions that both parties can claim victory on, such as raising the age for tobacco purchases to 21, increasing defense spending by $22 billion, Republican’s highest priority, along with a 3.1% pay increase for troops, while Democrats can claim victory on a 3.1% pay increase for federal workers. Also included were provisions to extend the Export-Import Bank and the Terrorism Risk Insurance Act (TRIA) for seven years,

So, what’s left for Congress to complete before adjournment? On December 11, the leadership of the U.S. House and Senate Armed Services Committees reached an agreement to fund the National Authorization Act for Fiscal Year 2020. The Conference Report includes $738 billion in funding for the Department of Defense as well as other federal agencies. The Report also includes a provision to create the President’s proposed “Space Force” as a separate branch of the military, which is the first new military service to be created in the U.S. in seven decades. For supporting the President’s “Space Force,” Republicans agreed to include 12 weeks of parental leave for all federal employees and a fix to fully reimburse military spouses for survival benefits. Unfortunately, the Conference Report did not include language sponsored by House Small Business Committee Chairwoman Nydia Velazquez to remove the indexing to the Miller Act, required by Title 41. NASBP is grateful to the Chairwoman for working with NASBP and her continued efforts to support small business subcontractors and the surety industry on this issue. The House and Senate passed the Conference Report, and the president is expected to sign it.

Other issues still unresolved include the formalizing of the trade agreement between the U.S., Mexico, and Canada, the United States-Mexico-Canada Agreement (USMCA). Agreeing to the USMCA offers a victory to the President (a top priority for the Administration) and the Democrats, showing the country that U.S. House Democrats are simultaneously able to legislate and investigate. On December 11, Senate Majority Leader Mitch McConnell (KY-R) stated that USMCA would not be voted on before recess but plans to bring to the floor the NDAA Conference Report and the appropriation funding bills.

In 2020, Congress will need to reauthorize the Fixing America’s Surface Transportation Act (FAST Act), i.e., the highway surface transportation bill, which expires on September 30, 2020. The Senate Committee on Environment & Pubic Works, prior to the August recess, marked up and unanimously approved a five-year, $287-billion highway surface bill, which includes a 27% increase over the 2015 Act. However, the Senate Committee on Commerce, Science and Transportation and Finance needs to pass sections in the bill over which they have jurisdictional authority. To date, there has been no legislative action, besides committee hearings in the House, where the Committee on Transportation and Infrastructure has primary jurisdiction. According to various Hill sources, the House is expected to markup its version of the highway transportation bill sometime this winter (February or March). While the House and Senate bills will likely differ a great deal, the key ingredient remains, funding. Lawmakers will have to decide what source of funding is needed to ensure that the Highway Trust Fund, which finances the repair of the country’s Interstate Highway System, is financially solvent. It is unclear whether that source is an increase to the federal gas tax (which has not increased since 1993) or some other funding mechanism, such as a vehicle miles traveled tax, which is a mileage-based fee, or road user charge.

NASBP is one of 15 groups that comprise the Construction Industry Procurement Coalition (CIPC). The members of CIPC have taken on the challenge of creating a congressional caucus to promote commonsense design and construction services procurement reforms that benefit the government, taxpayers, and businesses. CIPC members are currently meeting with and seeking House members who have an interest in taking a leadership role in the caucus. We will continue to provide updates concerning the caucus and its scheduled activities.

State Update – 2020 NASBP GR Agenda Approved

At the 2019 NASBP Midyear Board of Directors Meeting in October, the NASBP Board approved the 2020 NASBP Government Relations Agenda. Initiatives for 2020 include: (1) advocating for the removal of periodic threshold increases to the federal Miller Act based on inflation; (2) promoting bonding for the construction portion of P3 agreements (in the states and in Congress); and (3) seeking opportunities in the states to allow bonding on private projects in order to avoid lien claims. With the New Year comes the beginning of a new legislative session for the states. Please email Larry LeClair at lleclair@nasbp.org to inform him of any upcoming surety bond issues in your state of which NASBP should be aware. Please refer to this chart, which lists state session dates, the legislature’s party composition, and the presiding governor and/or mayor.

In November, NASBP submitted a comment letter to the Maryland Department of General Services in support of the proposed revision to the Code of Maryland Regulations regarding the Public-Private Partnership (P3) Program. The revision explicitly states that the Maryland Department of General Services must follow the state’s statutory bonding requirements for P3 agreements. Please take this opportunity to review all of NASBP Information maps, which have been updated to reflect the 2019 state legislative enactments. Note that a NASBP login is required to access them.