NASBP Focal Point - August 27, 2020

Nine state legislatures and U.S. Congress are currently in session: California, Federal, Idaho, Michigan, Nebraska, New Jersey, Pennsylvania, Utah, Vermont, and Virginia.

Territories: Guam and the Virgin Islands.

*Click here for a complete 2020 calendar of the states’ original legislative session dates.

In This Issue

Federal Report
Indexing Federal Payment Bond Threshold; HUBZones; PPP Interim Rule
State Report
Public-Private Partnerships
NASBP Resource: Interactive Maps

Federal Report:

Indexing Federal Payment Bond Threshold;

HUB Zones; PPP Interim Rule

Construction Industry Procurement Coalition (CIPC) Addresses Indexing of Payment Bond Threshold

CIPC plans to submit a comment letter next week to the federal agencies that comprise the Federal Acquisition Regulation Council (GSA, DoD, and NASA), which has opened FAR case 2019-013, “Federal Acquisition Regulation: Inflation Adjustment of Acquisition-Related Threshold.” This FAR case calls for increasing the payment bond threshold for federal construction contracts from $35,000 to $40,000. Every five years, 41 U.S.C. Section 1908 (aka Title 41) requires an adjustment of statutory acquisition-related thresholds for inflation, using the Consumer Price Index (CPI), with the exception of the Construction Wage Rate Requirements statute (Davis-Bacon Act). Originally, the entire Miller Act was scheduled to be reviewed in 2020 with the possibility of the Miller Act threshold increasing from $150,000 to $200,000. The proposed FAR case only addresses the payment bond while preserving the Miller Act threshold at $150,000. In the next Congress, NASBP and our industry partners will continue to advocate that the Miller Act should be removed from indexing for inflation every five years. NASBP will keep you informed on this issue.

White House Issues Executive Order for HUBZones

Prior to the Republican National Convention, the president issued an amendment to Executive Order 12072, directing federal agencies to give priority to opportunity zones and other distressed areas when considering where to locate offices and other facilities. Opportunity zones, established in the 2017 tax law to spur investment in low-income and distressed areas, offer capital gains tax breaks for financing projects within designated census tracts. According to the White House fact sheet, the “goal is to rebuild homes, schools, businesses and communities that need it the most.” In 2019, opportunity zones attracted $75 billion in funds, while creating at least 500,000 new jobs, as cited in the White House fact sheet.

SBA Issues Interim Rules: PPP Interim Rule on Owner-Employees, Nonpayroll Costs

The Small Business Administration issued an interim final rule updating Paycheck Protection Program guidelines on owner-employees. The interim rule notes that owner-employees with less than a 5 percent ownership stake in a C- or S-corporation are not subject to the owner-employee compensation rule. The PPP loan-forgiveness rule issued June 26 caps the amount of loan forgiveness for payroll compensation attributable to an owner-employee. The interim final rule also clarifies that the amount of loan forgiveness requested for nonpayroll costs may not include any amount attributable to the business operation of a tenant or sub-tenant of the PPP borrower or, for home-based businesses, household expenses. However, rent payments to related parties may be eligible for loan forgiveness under certain conditions. Additional PPP guidance and resources are available on Treasury’s PPP webpage and NASBP’s COVID Page.

State Report

Public-Private Partnerships

Florida House Bill 925

FL H.925 (Gregory) Allows Manatee County to enter into public-private partnerships (P3s) for infrastructure development for the following: housing, transportation, and water treatment facilities. The governing board overseeing the P3 agreements may require bidders to furnish bonds with a responsible surety to be approved by the board. H.925 was signed into law on June 9, 2020.

Missouri House Bill 1963

MO H.1963 (Fitzwater) Amends the MO Public-Private Act (Mo. Rev. Stat. §§ 227.600-227.669) to include P3 projects for tube transportation. Under the current P3 statute, bid bonds would not be required on the project; but the Missouri Highways and Transportation Commission may require a private partner to provide performance and payment bonds for its protection, in any amount that it determines. The P3 Act provides that the Commission may require a payment bond for the total amount of the agreement, unless it is documented that the amount is not practical. In that case, the Commission may set the amount of the payment bond; but it may not be less than the amount of the performance bond. H.1963 was signed into law on July 14, 2020.

NASBP Resource: Interactive Maps

As a reminder, NASBP provides its membership online access to a series of interactive maps that highlight local legislative activity, bonding thresholds, and other valuable information across the United States.

The maps feature:

NASBP comment letters on bills and regulations;
A compilation of state statutes authorizing public-private partnerships;
Federal, state and local agencies that certify disadvantaged business enterprises (DBEs), with hyperlinks to agency websites;
A survey of state bonding thresholds;
A list of producer licensing state agencies; and
A compilation of anti-directed surety statutes.

To learn more, access the maps and other resources at www.nasbp.org.

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Surety PAC

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Toolkit

The National Association of Surety Bond Producers

www.nasbp.org

Focal Point is an e-bulletin sent to members and friends of the National Association of Surety Bond Producers when most state legislatures are in session and as needed thereafter. To obtain copies of Bills or other materials discussed above, contact advocacy@nasbp.org. Copyright © 2020. NASBP. All rights reserved.