NASBP Focal Point - February 7, 2019

February 7, 2019 Government Relations Focal Point

Currently forty-seven legislatures are in session: Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Federal, Georgia, Hawaii, Idaho, Illinois, Indiana, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Vermont, Virginia, Washington, West Virginia, Wisconsin and Wyoming.

Territories: Virgin Islands and Puerto Rico

In This Issue

Federal Report
State of the Union & Infrastructure
State Report
Bond Threshold Increase
Countersignature Requirements
Project Delivery/Bonding Requirements
Public-Private Partnerships
Retainage/Miller Act

Federal Report:

State of the Union & Infrastructure

President Trump stated during his State of the Union speech that “infrastructure legislation is not just an option, it’s a necessity.” During the speech, the President emphasized that “both parties should be able to unite for a great rebuilding of America’s crumbling infrastructure.” Of course the big question still remains, where does Congress find the necessary funds in order to pay for a major overhaul of the nation’s infrastructure? That question and potential answers will likely be addressed on Thursday, February 6 when the House Transportation and Infrastructure Committee conducts its first hearing under the Chairmanship of Peter DeFazio (D-OR-4 ^th). The hearing, “The Cost of Doing Nothing: Why Investing in Our Nation’s Infrastructure Cannot Wait,” will examine the significant repairs needed to the nation’s highways, bridges, rails, ports and airports and the cost associated with inaction. Following President Trump’s address, Chairman DeFazio stated that “any serious infrastructure proposal must provide sustainable, long-term federal funding so we can make necessary investments, create millions of living-wage American jobs, increase economic growth, and decrease congestion and emissions.” The Chairman added, I will work to build bipartisan agreement around legislation, but I can’t do it alone and this will require massive effort from the White House, stakeholders, and supporters in Congress to get something real across the finish line.” For more information regarding the testimony and to access the hearing via a live streaming webcast, please click here.

State Report

Bond Threshold Increase

Pennsylvania Senate Bill 207

PA S. 207 (DiSanto)Amends P.L.382, (No.164), known as the “Municipality Authorities Act of 1945” to increase the bond threshold from $10,000 to $500,000 for public contracts relating to counties, school districts, intermediate units, area vocational-technical school, city, borough, incorporated town, township, home-rule municipality and any authority formed under the Act. S. 207 were referred to the Senate Committee on Local Government.

Countersignature
Requirements

Nevada Senate Bill 86

NV S. 86 (Senate Commerce and Labor Committee) Eliminates any remaining countersignature requirements for insurance agents for insurance policies and bonds in current law. Nearly all countersignature requirements were repealed in 2009 to implement a court decision, which determined that countersignature laws were unconstitutional. S. 86 was referred to the Senate Commerce and Labor committee on February 4^th.

Project Delivery/Bond Requirement

Iowa House Bill 2

Iowa HSB. 2 (House State Government Committee) Amends the “Construction Bidding Procedures Act” (Title 26) to allow a governmental entity, which includes the state and the board of regents, to establish alternative project delivery methods to include construction manager-at-risk and design-build if the estimated total cost of a public improvement exceeds the competitive bid threshold of $100,000. While the bill requires that construction documents for CMa contracts shall comply with all state laws, as applicable, the bill does not explicitly identify Iowa’s Little Miller Act (§ 26.8). Under the Design-build method, the state entity/regents can select design-builders in either a two-or three-phase process. Request for proposals shall be prepared for each design-build contract and shall contain, “any available ratings for performance bonds, payment bonds, and insurance, if any.” HSB. 2 was introduced on January 16 and was referred to the House Committee on State Government. A hearing is scheduled for February 7th.

West Virginia House Bill 2420

WV H. 2420 (Summers) Requires that for any contract that exceeds $25,000 in total cost, the Mountaineer Trail Network Recreation Authority shall require the vendors to post a bond, with form and surety to be approved by the authority, in an amount equal to at least 50 percent of the contract price conditioned upon faithful performance and completion of the contract. This bill was referred to the House Committee on Government Organization January 15th. On February 5th H. 2420 passed the House and was referred to the Senate.

Public-Private Partnerships

Indiana House Bill 1374

UPDATE: IN H. 1374 (Lehman) As originally introduced; the bill revised the IN P3 statutes to require some form of discretionary bonding on P3 agreements, based upon the cost to design and construct the facility. After a meeting with NASBP, SFAA and other interested parties, the bill sponsor, House Majority Leader Matthew Lehman agreed to amend his bill to require payment bonds at 100% of the cost of the project and performance bonds for 50% percent of the project. On February 6, NASBP member Eric Wahlstorm and a representative from the Indiana Contractors Inc. testified before the House Roads and Transportation Committee. H. 1374 was held without a vote, which is customary practice for that particular Committee. NASBP will continue to keep its members apprised of this legislation moving forward.

Pennsylvania House Bill 176

PA H. 176 (Quinn) Establishes the Public-Private Partnership Infrastructure Board for improvement of public infrastructure or a public infrastructure-related service that is totally or partially located within the Commonwealth. The development entity, which is defined as a private entity, offer or a public entity, other than the public entity providing or improving its own infrastructure may be required to provide performance and payment bonds, parent company guarantees, letters of credit or other acceptable forms of security in an amount acceptable to the proprietary public entity. H. 176 was referred to the House Committee on State Government on January 28^th.

Retainage/Miller Act

Tennessee H 271

TN H. 271 (Gant) Requires the prime contractor to pay all retainage due to any subcontractor within ten (10) days after receipt of the retainage from the owner. Additionally, any subcontractor receiving the retainage from the prime contractor shall pay to any sub-subcontractor or material supplier all retainage due the sub-subcontractor or material supplier within ten (10) days after receipt of the retainage. This bill was referred to the House Committee on Commerce on February 1^st.

Missouri House Bill 791

MO H. 791 (Grishmer) Expands the definition of “contractor” in RSMo (§ 107.170.01) to include a contractor that “provides or arranges for construction services to a public entity under a contract or agreement with a private person or entity who is acting as a lessee, agent, designee, or representative of the public entity.” Per the request of an NASBP Missouri member, NASBP submitted a letter to the Missouri Chapter of the AGC voicing our concerns while suggesting alternative legislation, SB. 167/HB. 490 which provides a clear and concise amended definition to contractor, which addresses the Brentwood decision. This bill was introduced on January 31st, and is currently awaiting committee assignment. NASBP will continue to monitor the bill and keep NASBP members apprised.

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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
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