NASBP Focal Point - May 6, 2021

Legislative News at a Glance

Twenty-eight state legislatures, DC, and U.S. Congress are currently in session: Alabama, California, Colorado, Connecticut, Delaware, District of Columbia, Federal, Hawaii, Illinois, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Texas, Vermont, and Wisconsin.

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

*Click here for a complete 2021 calendar of the states’ legislative session dates.

In This Issue

Federal Report
National Infrastructure Week
Bill Exempting Miller Act from Inflation Adjustments
2020 Reapportionment Results
State Report
Bond Threshold
Performance and Payment Bonds
Rural Broadband

Federal Report

National Infrastructure Week

National Infrastructure Week starts in earnest this coming Monday, May 10. NASBP will recognize the significance of infrastructure week through its social media platforms (Facebook, Instagram, LinkedIn, and Twitter). United for Infrastructure, who partners with government, labor, and the business community, has a host of events scheduled for the week.

Last week, Republicans put forth their blue print infrastructure plan as a counter to the President’s proposal. The Republican’s plan calls for $568 billion in spending focused on more traditional infrastructure like roads and bridges. The five-year plan doubles the amount of spending of Biden’s plan for roads and bridges (nearly $300B) with the balance dedicated to transit, rail, airports, water, and rural broadband.

While funding is not entirely clear, one thing is certain: raising the corporate tax rate is not a consideration. According to the U.S. Chamber of Commerce, small businesses will be hit hardest if the corporate tax rate increase from 21 to 28%. This includes the 1.4 million small businesses (those with 500 employees or less) officially organized as C-Corporations, which would be forced to pay a higher tax rate. There are an estimated four million small businesses in the U.S. employing almost 13 million American workers across various sectors. Small business owners, not large corporations, may be impacted the most should the tax rate be increased.

Bill Exempting Miller Act from Inflation Adjustments

This week, Small Business Committee Chairwoman, Nydia Velázquez (D-NY-7 ^th ) introduced H.R. 2949, bipartisan legislation to exempt the Miller Act (40 USC §3131-3134) from periodic inflation adjustments as required by Section 1908 of Title 41. Joining Chairwoman Velázquez as an original bill co-sponsor is Representative Bryon Donalds (R-FL-19^th). Representative Donalds serves on the House Small Business and the Oversight and Reform Committee, which has jurisdictional authority over Title 41. Chairwoman Velazquez has championed this issue on behalf of the industry for the previous two Congresses. The Chairwoman and her staff should be commended for their tireless support of the issue and for persuading her Republican colleague to co-sponsor H.R. 2949. NASBP and SFAA are contacting Senate offices seeking an introduction of a standalone measure.

2020 Reapportionment Results

On April 26, the Census Bureau unveiled its official 2020 state population counts, determining how many House seats and electoral votes each state will receive for the next decade. The detailed data needed to draw official district lines won’t be released until the fall. Republicans, who only need to pick up five seats to win back the House, enter the upcoming mapping wars with a clear advantage. Texas was the big winner, picking up two seats. Colorado, Florida, Montana, North Carolina, and Oregon each picked up one seat. Seven states will lose one seat each: California, Illinois, Michigan, New York, Ohio, Pennsylvania and West Virginia (this is the first time California will lose a seat since statehood). Minnesota beat out New York for the 435th and final House seat by just 89 residents. The reapportionment counts alone offer a small net boost for Republicans. For example, if the 2020 presidential election had been held under the new apportionment counts, President Biden would have won the White House with 303, rather than 306, electoral votes.

State Report

Bond Threshold

Oklahoma House Bill 2862

UPDATE (in bold) OK H.2862 (Wallace) Amends Okla. Stat. tit. 61 §§ 1 and 113 by increasing the bond threshold for all public construction contracts from $50,000 to $100,000. This bill has passed the House and the Senate and was signed by the governor and passed into law on April 28.

Performance and Payment Bonds

Texas House Bill 1477

TX H.1477 (Bell) Amends Sections 2253.001 (3),(4) to expand the scope of the Texas Little Miller Act to require performance and payment bonds for public work contracts on public property leased to a nongovernmental entity. A nongovernmental entity leasing public property would require its prime contractor to furnish performance and payment bonds. A public work contract does not include “any contract entered into by a nongovernmental entity that leases property from a river authority created pursuant to Section 59, Article XVI, Texas Constitution, that owns electric generation capacity in excess of 1,000 megawatts.” This bill passed the House on May 5. If the bill is enacted into law, the new law would go into effect on September 1, 2021.

Rural Broadband

Ohio Senate Bill 8

UPDATE (in bold) OH S.8/H.2 (McColley/Carfagna) Establishes the Ohio residential broadband grant program for the expansion of broadband, which may require a broadband provider that is awarded a program grant to provide a performance bond, letter of credit, or other financial assurance acceptable to the authority prior to the commencement of construction. The bond, letter of credit, or assurance shall be in the sum, and with the sureties, that the state prescribes and shall be payable to the state, as applicable. The bond, letter of credit, or assurance may include the condition that the broadband provider will faithfully execute and complete the project.

H.2 has passed the House and the Senate with amendments, and the House concurred. Yesterday, H.2 was delivered to the governor for his signature.

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.

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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 © 2021 NASBP^®. All rights reserved.