State Legislative Update

There has been a flurry of activity at the state level in 2019, particularly legislation pertaining to public-private partnerships (P3s).

Indiana

In Indiana, Senate and House lawmakers have passed P3 legislation that includes bonding requirements to address the I-69 Section 5 shutterstock_1317515864.jpgProject. The effort dates as back as far as 2011. An Interim P3 Committee was created in the summer of 2016 to address the I-69 P3 failure where subcontractors and suppliers were left unpaid for more than nine months because the owner, the Indiana Finance Authority, choose to accept partial bonds of a 5% payment and a 25% performance bond from a Spanish concessionaire.

As originally introduced, H. 1374 would have provided discretionary performance and payment bond requirements on P3 agreements. After meeting with NASBP, SFAA, and other interested parties, including the Indiana Contractors, Inc., the bill sponsor, Indiana State House Majority Leader Matthew Lehman, agreed to amend his bill to require payment bonds at 100% and performance bonds at 50% percent of the project.

Eric_W.jpgEric M. Wahlstrom (pictured) Director of Surety with the NASBP Member firm AssuredPartners dba Tobias Insurance Group in Indiana, played an instrumental role in persuading Leader Lehman to amend his bill to require 100% payment protection for subcontractors and suppliers. Several of Wahlstrom’s subcontractor clients were financially harmed because of the inadequate 5% payment protection provided on the I-69 project. The surety industry also owes a great deal of thanks to Richard Hedgecock, President of the Indiana Contractors, Inc. Hedgecock’s testimony before the Indiana Senate Roads and Transportation Committee set the table for an 8-0 vote on the bill prior to its approval in the House by a vote of 93-2. The bill has been sent to the governor for signature. 

Montana

In Montana, NASBP members worked with the contractor community on S. 307, legislation that establishes private financing on an eligible public works project and requires the public owner to follow Montana procurement laws, which can be interpreted as Montana’s Little Miller Act. S.307 passed the Senate by a vote of 36-14 and was referred to the House Committee on Business and Labor.

Colorado

In Colorado, the Colorado Chapter of the American Subcontractors Association took the lead on S.138, legislation that requires bonds when P3 agreements are utilized on real property. Bill, S.138, passed the legislature and has been sent to the governor for signature.

Be sure to stay informed about changes and updates to these and other states' legislation that could impact the industry by reading the NASBP e-bulletin, Focal Point newsletter. Focal Point, is an electronic bulletin that provides concise, bulleted summaries of key legislative and regulatory developments, of information on industry partners and NASBP joint efforts, and of initiatives NASBP is pursuing on behalf of its members. Focal Point is distributed twice per month when most states are in legislative session (and less frequently when most states are out of session) to NASBP's grassroots network and strategic partners.