Capitol Hill News
The U.S. Congress is in recess until September 9, but just prior to the adjournment, President Trump signed a two-year bipartisan agreement to increase government spending and extend the national debt limit. The U.S. Senate passed the legislation by a 67-28 vote. The U.S. House of Representatives passed the bill a week before by a vote count of 284-149.
In order to avoid a government shutdown, the Senate needs to pass all 12 spending bills that fund federal government agencies before the fiscal year ends on September 30. Meanwhile, the House has passed 10 out of 12 spending bills for fiscal year 2020, while urging the Senate to follow suit in order for Senate/House appropriators to conference the spending bills to meet the September 30 deadline. Consensus is that the Senate will not meet the deadline and will likely have to pass short-term extenders to fund some government agencies.
Just as the clock is running out on funding the federal government for fiscal year 2020, the First Session of the 116th U.S. Congress is rapidly coming to a close. According to the congressional calendar, the House has slightly more than 40 working days left this session, while the Senate has just over 50 days. In addition to funding the federal government, other top legislative goals that remain in limbo are: the defense authorization bill (see next paragraph), reauthorization of the National Flood Insurance Program (expires Sept. 30), approval of the United States-Mexico-Canada Agreement, and perhaps legislation to address infrastructure. Given the limited number of congressional days left in 2019, it’s hard to imagine how Congress will be able to accomplish all of its top priorities.
On the federal legislative front, members of the Construction Industry Procurement Coalition sent a support letter to the Chairman and Ranking Members of the U.S. House and Senate Armed Services Committee (HASC/SASC), urging them to include Section 877 in the Conference Report of the 2020 National Defense Authorization Act (NDAA). Section 877 exempts the Miller Act from threshold increases (per Title 41 USC § 1908) due to inflation. The Senate’s version of the NDAA, S.1790, did not include the Title 41 language. Because Title 41 falls under the jurisdictional authority of the Senate Committee on Homeland Security & Governmental Affairs, Chaired by Senator Ron Johnson (R-WI), the Surety Association of Wisconsin sent a letter to the Chairman, requesting that he waive jurisdiction in order for the provision to be considered for inclusion in the NDAA Conference Report. Based on recent conversations with congressional staff, HASC/SASC committee staff has asked their congressional colleagues to submit all outstanding issues by end of the month, so a bill will be ready when Congress returns in September. Expectations are that a final NDAA Conference Report will be released sometime later this fall.
Just before the August recess, the U.S. Senate Committee on Environment & Public Works (EPW) unanimously approved (21-0) S.2302, “America’s Transportation Infrastructure Act of 2019.” This bipartisan legislation establishes a five-year, $287-billion highway bill, which is a 27% increase from the previous highway surface and transportation bill. NASBP, the Surety & Fidelity Association of America, and several other construction-related organizations plan to submit a letter to EPW Chairman John Barrasso (R-WY) and Ranking Member Thomas Carper (D-DE), asking for support for a floor amendment to require bonds when alternative construction delivery methods are used, etc. through public-private partnerships or when loans or grants are federally funded by programs such as the Transportation Infrastructure Finance & Innovation Act. S. 2302 will likely receive floor time sometime this fall. There is broad support for enacting a long-term highway surface transportation package among the construction groups, which includes NASBP and a number of NASBP strategic partners. For a copy of the summary of S. 2302 or to review the complete text of the 467-page bill as introduced, click here. On the other side of the chamber, while the U.S. House Transportation and Infrastructure Committee has conducted several hearings and markups, the Committee has yet to put forth its version of an infrastructure bill.
Regulatory Comment Letters Submitted
NASBP recently submitted comments to the U.S. Small Business Administration’s Office of Surety Guarantees, recognizing the recent enhancements made to the SBA Bond Guarantee Program while offering additional suggestions that would further enhance business opportunities for small contractors. NASBP’s comment letter also requested that strong consideration be given to make permanent the temporary rule that reduced the fees charged to sureties and contractors that secure surety bonds through the Program. As of now, this rule is set to expire on September 30, 2020.
In addition, NASBP submitted a comment letter to the New Jersey Department of the Treasury who sought comments concerning a 2018 public-private partnership law. Our comment letter commended the legislature for recognizing the important policy decision of including bonding requirements on P3 agreements.
Finally, NASBP submitted comments to the Maryland Interagency Commission on School Construction (Commission) to address legislation enacted in 2018, which established the Public School Construction Innovation Incentive Pilot Program. The Pilot Program seeks to incentivize three Maryland County public school systems (Harford, Prince George’s, and Washington) to use innovative construction delivery methods, e.g., public-private partnerships (P3s), to accelerate school construction projects. NASBP’s letter reminded the Commission that P3 agreements for school constructions should include bonding requirements in accordance with Maryland law as well as the Commission’s Administrative Procedures Guide.
State Legislation
Once again, legislation has been introduced in Massachusetts, H.2773 (Rogers), that amends the Little Miller Act to give a construction manager at risk (CM@R) the option to obtain a subcontractor default insurance policy in lieu of performance and payment bonds “for some or all trade contractors.” H. 2773 also requires any trade contractor not covered through the subcontractor default insurance policy program to submit a payment and performance bond at no additional cost to the CM@R or the awarding agency. H.2773 was heard on July 26 in the Joint Committee on State Administration and Regulatory Oversight. NASBP submitted a letter in opposition to the Chair and Vice Chairs of the Committee. Although the Massachusetts General Assembly is on recess until September, NASBP has contracted with a Massachusetts lobbying firm that will begin to meet with members of the Joint Committee this fall.
Note that the six NASBP Advocacy Maps, including the NASBP Comment Letters Map, offer a wide assortment of valuable information and can be accessed at nasbp.org with a NASBP member login.