NASBP Focal Point - January 29, 2018

January 29, 2018

Legislative, Regulatory and Other News at a Glance for Grassroots Action

Currently forty legislatures are 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, Mississippi, Missouri, Nebraska, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Vermont, Washington, West Virginia, and Wisconsin.

In This Issue:

Federal Report
State Report

Federal Report

Administration’s Infrastructure Package Released Sooner than Expected

During his state of the union speech tomorrow, President Trump is expected to unveil the Administration’s plans for an infrastructure spending package, which calls for investing over $1 trillion over 10 years. Last week, however, a draft version surfaced, which details a plan to revitalize America’s roads, bridges, and transit systems by pushing for improvements to water infrastructure, transportation, land revitalization, and Veteran’s Affairs facilities. The six-page document, recommends that 50% of appropriations be allocated towards an “Infrastructure Incentives Initiative” that encourages states, local, and private investment in core infrastructure projects by providing incentives in the forms of grants. Twenty-five percent would be dedicated towards a “Rural Infrastructure Program” to encourage investments in rural areas of the country which includes access to rural broadband communications. Ten percent spending will be directed towards a “Transformative Projects Program” that would fall under the Commerce Department. The draft provides states with a great deal of flexibility concerning interstate tolls, credit assistance and grants. The draft package also calls for the expansion of private activity bonds, a common tool used to finance infrastructure projects.

Problem Solvers Caucus

A bipartisan group of House members this month released a report detailing policy suggestions for an infrastructure package.
The Problem Solvers Caucus, which includes 48 House members, led by Co-Chairs Tom Reed (R-NY-23) and Josh Gottheimer (D-NJ-05), launched an Infrastructure Working Group to find consensus on a bipartisan set of policies to address the need to rebuild and reinvest in our nation’s infrastructure. The Infrastructure Working Group, co-chaired by Reps. John Katko (R-NY-24) and Elizabeth Esty (D-CT-05), seeks a bipartisan solution to improve the nation’s highways/waterways, airports, energy systems and provide access to rural communities for broadband and communications networks. Late last year, Representative John Faso (R-NY-19) introduced H.R. 3977, “The Infrastructure Bank for America Act of 2017,” which establishes a federally chartered bank to invest in infrastructure projects throughout the country. H.R 3977 creates a privately funded and managed entity to fund roads, water and transit systems, bridges, power-grid improvements and broadband modernizations. H.R. 3977 was referred to the House Transportation and Infrastructure, Financial Services and Ways and Means Committees.

State Report

Bond Threshold Increase

Mississippi Senate Bill 2430

MS SB 2430 (Horhn) would amend
Miss. Code Ann. § 31-5-51 by raising the threshold from $25,000 to $50,000. This particular code is only relevant to non-highway projects. Highway works in Mississippi would still be bonded at $1,500. SB 2430 was referred to the Senate Committee on Accountability, Efficiency, and Transparency on 01/15/2018.

Prequalification

Virginia House Bill 398

VA HB 398 (Davis) adds a sunset date of July 1, 2021 to the provisions authorizing a locality, where the bid, performance, and payment bond requirements are waived, to waive the requirement for prequalification for a bidder or contractor with a current Class A contractor license for non-transportation-related construction contracts. This locality waiver was enacted last year as HB 2017. As originally enacted by the legislature, HB 2017 included a sunset date, however, the date was removed by former Governor Terry McAuliffe during the bill’s signing.

Public-Private Partnerships

Alabama Senate Bill 184

AL SB 184 (Orr) adds Section 8-29-9 to the Code of Alabama 1975, which would require an entity entering into a public-private agreement of $50,000 or more for development or construction, or both, to occur on public property or public right-of-way to be subjected to
Section 39-1-1, the Alabama Little Miller Act, regardless of the origination of the financing or funds for the work or improvements to be accomplished in the agreement. SB 184 was referred to the Senate Committee on Governmental Affairs on 01/16/2018.

Indiana House Bill 1301

IN HB 1301 (Carbaugh) amends three current P3 statutes to require a performance bond in an amount equal to 50% of the cost to design and construct the public facility; and provide for the payment of contractors and subcontractors under IC 4-13.6-7, IC 5-16-5, or IC 36-1-12, whichever is applicable. NASBP sent a
letter of support for the bill as originally introduced, before the performance bonds were amended to 50%. NASBP will continue to monitor this legislation and provide the membership with updates.

Maryland Senate Bill 92 and House Bill 195

MD SB 92/ HB 195 authorize a county board of education to contract with a county in a public-private partnership agreement as part of the Maryland School Overcrowding Reduction Act of 2018. The Senate bill applies to any county in the state, while the house version is specific to Prince George’s County. Bonding requirements for these P3 agreements are not explicitly stated. SB 92 will be heard in the Senate Committee on Budget and Taxation on 01/31/2018.

Mississippi House Bill 794

MS HB 794 (Weathersby) creates new authority for Mississippi to pursue quality public facility and infrastructure projects that provide economic and social value. Mississippi currently has limited P3 authority applicable to toll roads and bridges only. These P3 contracts require bonds of the successful bidder in an amount equal to the contract price. The contract price shall mean the entire cost of the particular contract let. HB 794 was recommended “do pass” by the House Committee on Public Property on 01/23/2018.

Statute of Limitations

Virginia House Bill 1084

VA HB 1084 (Yancey) expands the timeframe to take action on a performance bond from one year to five years after the date of substantial completion and the expiration of all warranties. HB 1084 also eliminates the application of the discovery rule. Currently a five-year statute of limitations only applies to VDOT work. HB 1084 was referred to the House Committee on General Laws on 01/10/2018. NASBP continues to analyze the impact of this bill on the surety industry.

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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 advocacy@nasbp.org. Copyright © 2015. NASBP. All rights reserved.