As NASBP actively pursues legislation at the Federal level (see the CEO’s column in this issue), we are also actively monitoring legislation and engaging at the state level as well. You only have to travel beyond the nation’s capitol to Annapolis, Maryland to witness an example of this activity. In Maryland, legislation, SB 764 (Kelley)/ HB 885 (Jameson), has been introduced on NASBP’s behalf, that establishes an individual surety fraud statute. SB 764 was introduced and referred to the Senate Finance Committee, while HB 885 was introduced and referred to the House Economic Matters Committee (EMC) and has bipartisan support including nine co-sponsors. Both bills are scheduled for hearings in March. HB 885 will be heard on March 2 at 1pm in ECM, while SB 764 will be heard in the Senate Finance Committee on March 13 at 1pm. NASBP will provide written and oral testimony at both hearings.
The legislation clarifies the November 2010 announcement of the Maryland Insurance Authority (MIA) concerning legislation enacted in 2006 that allows individual sureties to write bonds on state projects at the prime contractor level. Last year, proponents of individual sureties attempted to expand the 2006 law to allow individual sureties to write bonds on private projects. SB 764/HB 885 gives the MIA the authority to penalize those individual sureties and producers that go beyond the current scope of the 2006 law, which they currently do not have statutory authority to do. Further, the bill provides consumer protection that Maryland businesses currently do not have. Currently, the only redress small business construction owners have in Maryland is to file a lawsuit, which may be cost prohibitive for them.
In Minnesota, NASBP members requested our involvement concerning legislation, MN HF 1981 (Howes)/ SF 1673 (Carlson) that amends current law to increase the contract threshold at which performance and payment bonds are required on public works projects from $75,000 to $100,000. NASBP members sent letters to the bill sponsors requesting that they reconsider their position on the legislation. To view the letter to the Senate sponsor, click here, and to view the letter to the House sponsor, click here.
NASBP Volunteerism
Earlier this year, NASBP was contacted by the New York State’s Empire State Development (ESD) regarding a new initiative designed to increase access to bonding for minority and women-owned business enterprises (MWBEs) and other small businesses awarded state agency contracts. Specifically, the Bonding Guarantee Assistance Program, a program that will provide irrevocable letters of credit (ILOC’s) to firms that would not qualify for bonding without outside collateral support. The State of New York will issue $10 million in ILOCs per year for each of the program’s five years. With the maximum ILOC of 30% of the contract or bond amount, it is estimated that over 50 ILOCS will be issued per year, averaging approximately $187,500 per ILOC. There will also be an educational component, which includes both new and existing programs that will assist participating contractors to improve broad-based managerial, operational, and financial functions. Representatives from the ESD have asked for NASBP New York members to become involved with this initiative. For more information please click here.
NASBP members continue to be actively involved in the U.S. Department of Transportation’s Bonding Education Program (BEP). All fourteen of the 2012 BEPs are either underway, are about to start, or have concluded. NASBP’s involvement is instrumental to the success of the BEP, and NASBP is sure our friends at DOT would echo this statement. If you have already volunteered your service, Thank you for devoting your time and expertise to this important effort. If you have not volunteered, please consider doing so. For more information about the BEP taking place near you, please click here.
