NASBP Focal Point - February 3, 2022

Legislative News at a Glance

Forty state legislatures, DC, and U.S. Congress are currently in session: Alabama, Alaska, Arizona, California, Colorado, Delaware, District of Columbia, Federal, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Hampshire, New Jersey, New Mexico, New York, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Utah, Vermont, Virginia, Washington, West Virginia, and Wisconsin.

Territories: Guam, Northern Mariana Islands, Puerto Rico, and U.S. Virgin Islands.

*Click here for a complete 2022 calendar of the states’ legislative session dates.

In This Issue

Federal Report
Comment Letter to NTIA
Comment Letter to Office of Surety Guarantees
Guide to IIJA
State Report
Bond Threshold Increase
Bond Waiver
Public-Private Partnerships

Federal Report

Comment Letter to Department of Commerce’s NTIA

On November 15, 2021, President Biden signed the Infrastructure Investment and Jobs Act (IIJA) of 2021 into law, which includes a historic investment of $65 billion to help close the digital divide and ensure that all Americans have access to reliable, affordable, highspeed broadband. The National Telecommunications and Information Administration (NTIA) is responsible for distributing more than $48 billion in broadband funding through several different programs. NTIA sought public comments concerning the program’s design and implementation. NASBP submitted comments underscoring the inclusion of surety bonds as an acceptable form of security for guaranteeing the payment and performance of rural broadband infrastructure projects, which, in turn, will afford greater participation among small businesses.

SBA’s Office of Surety Guarantees New Requirement

Recently, NASBP was contacted about a new requirement at the Small Business Administration’s Office of Surety Guarantees (OSG). It requires that, effective January 6, 2022, small businesses that apply for surety bonds through the SBA Surety Bond Guarantee Program must furnish five years of financial statements to verify that they qualify as small businesses, based on the North American Industry Classification System (NAIC’s) code. This is a dramatic shift in policy from 2021, when OSG required businesses to furnish three years of financial statements. Subsequent to learning of this new requirement, NASBP submitted a letter to the OSG describing the potential impact this will place on small businesses while noting that the SBA Business and Disaster Loan Programs are exempt from the 5-year requirement. NASBP understands that several of its members have contacted the OSG seeking clarification. NASBP has requested to meet with the OSG and will keep you informed of our deliberations.

Guide for Infrastructure Investment and Jobs Act

This week, the White House released The Bipartisan Infrastructure Law Guidebook, a 465 page roadmap describing the funding available under the Infrastructure Investment and Jobs Act (IIJA) for transportation, climate/energy/environment, broadband, and much more. The Guide provides details concern direct federal spending at the program level. Some of you have expressed interest in learning where to locate resources relating to the IIJA. For those of you who are interested, the administration continues to update resources online at Build.gov.

State Report

Bond Threshold Increase

Virginia Senate Bills 258 & 259

UPDATE VA S.258/259 (Bell) Amends sections 2.2-4336 and 2.2-4337 to increase the bond threshold for transportation-related contracts from $350,000 to $500,000. The proposed legislation would align the bond thresholds for transportation and non-transportation public contracts at $500,000. SB258/259 have both passed the Senate and have been sent to the House. The bond threshold for non-transportation contracts was increased in the Commonwealth of VA in 2011 to $500,000 and for transportation contracts to $350,000. For historical reference, please see NASBP’s comment letter. When these bills are referred to a House Committee, NASBP plans to submit a comment letter to those committee members describing the policy reasons why SB 258/259 are not in the best interest of the Commonwealth.

Bond Waiver

Illinois House Bill 5035

IL H.5035 (Davis) Amends IL LMA, 30 ILCS 550/1, to permit the IL DOT to implement a 5-year pilot program to allow a contractor to provide a non-diminishing irrevocable bank letter of credit in lieu of specified bond requirements on contracts under 500,000 dollars; provides that projects selected by the Department of Transportation for the pilot program must be classified by the Department as low-risk scope of work contracts. The Department shall adopt rules to define the criteria for pilot project selection and implementation of the pilot program. This bill has been referred to the House Committee on Rules.

Public-Private Partnerships

New Mexico House Bill 55

UPDATE NM H.55 (Garrett) Establishes the Public Private Partnership Act for public-private agreements (P3) for the construction or improvement of a public transportation facility or public transportation infrastructure, other than a toll road; or for public construction or improvement of broadband telecommunications network facilities. Prior to entering a P3 agreement, the private partner shall provide performance and payment bonds pursuant to Section 13-4-18 NMSA (LMA); require a private partner to provide guarantees, letters of credit or other acceptable forms of security, the amount of which may be less than one hundred percent of the value of the contract involved based on the determination of the public partner, or for public-private partnership agreements requiring board approval, based on the determination by the board. H.55 has passed the House Committee on Transportation, Public Works and Capital Improvements.

Click here for a state-by-state breakdown of P3 statutes.

If you are aware of any bills impacting the industry, please reach out to Larry LeClair, NASBP’s Director of Government Relations, and let us know.

Have you provided your written authorization for 2022 for SuretyPAC? If not, click below!

Surety PAC

Have you been asked to conduct a bonding awareness seminar? If so, download the Bonding Awareness Toolkit!

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 © 2021. NASBP. All rights reserved.