NASBP Focal Point – March 16, 2023

Federal Report

Budget Showdown–Last week the White House released its proposed budget for Fiscal Year (FY) 2024 which calls for the federal government to spend $6.9 trillion. Specifics of the President’s proposal include a 6.5 percent increase in nondefense discretionary spending and a 3.3 percent increase in defense spending. The President’s Budget also includes tax increases on the wealthiest Americans and major corporations, as well as rolling back some elements of the Trump-era tax law. It also extends the life of Medicare and Social Security and increases financial support for Ukraine and the Mexican border. House Speaker Kevin McCarthy labeled the President’s budget as “not serious” and warned the president not to “play games with the debt ceiling.” Meanwhile, the House Freedom Caucus has other policy ideas in mind when it comes to the federal budget such as limiting nondefense discretionary spending at fiscal 2022 levels for the next decade, rescinding unspent COVID funds, repealing spending dedicated to climate change, and blocking the President’s Executive Order on student loan debt relief, which the Supreme Court is set to hear later this year. Over the next few months, it will be interesting to watch the budget and debt ceiling negotiations between the White House and Speaker McCarthy. And if the Speaker is able to retain support for his own party, particularly those 20 or so members from the Freedom Caucus.

Federal Legislative Fly-in, March 29/30—Fly-in attendees will soon receive their schedules for their Congressional meetings from our consulting firm, Advocacy Associates. Fly-in attendees can also expect to receive their fly-in talking points, the specific points you will be asked to address during your Congressional meetings from NASBP soon. As we go to press, Advocacy Associates has confirmed over half of the 100 plus requested Congressional meetings. Additional information concerning the fly-in and the talking points will be accessible at the 2023 fly-in page.

State Report

SB157 (Villivalam)/HB2482(Buckner)–Amends Section 1 (30 ILCS 550/1) of the Public Construction Bond Act, (Illinois’ Little Miller Act), by raising the current bond threshold from $50,000 to $5,000,000. The legislation also creates a “self-insured risk pool” to pay claims or damages arising under a public works construction contract valued at $5,000,000 or less because of a contractor’s failure. SB157 was referred to the Senate Assignments and Executive Committees, while HB2482 was just assigned to the House State Government Administration. NASBP has created policy points and letters to each of the Senate and House Committees. The proponents of the legislation believe raising the bond threshold to $5M provides greater opportunity for minority contractors, and allows them to compete for procurement opportunities in transportation projects funded by the Rebuild Illinois Plan. NASBP has contacted a number of national groups to encourage their local chapters to oppose SB157/HB2482 such as the American Subcontractors Association (ASA), the Women Construction Owners & Executives (WCOE) and the IL Road and Transportation Builders Association (ILRTBA).

NASBP is asking your assistance of examples where you secured bonding for small minority contractors either through the SBA Bond Guarantee Program or through the standard surety market. This information would be helpful to counter those arguments by the proponents that raising the current bond threshold to $5M expands opportunities for minority businesses. Please consider sharing those examples on your company letterhead with me at lleclair@nasbp.org. This information will be useful to blunt the proponents arguments and will be shared with the members of the Illinois General Assembly.

SB1135 amends Chapter 846 §§49-41(a), Connecticut’s Little Miller Act, by raising the current bond threshold from $100,000 to $5,000,000 for “construction, alteration or repair of a public building or public work of a municipality, should “such municipality by a vote of its legislative body, waives the inclusion of such provision. Last Friday, SB1135 was heard in the Joint Planning and Development Committee. NASBP and a significant number of its CT members submitted opposition statements. Similar to the IL effort, NASBP contacted national groups to encourage their CT chapters to oppose SB1135 such as ASA, and WCOE. SB1135 is sponsored by the Ranking Member on the Committee, Ryan Fazio. CT NASBP members plan to contact and request a meeting with Senator Ryan to discuss the intent of his legislation and emphasize the importance of the surety product.

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.