2015 SFAA State Legislative Goals and Objectives
SFAA’s Government Affairs Advisory Committee (GAAC) concluded that the following should
be the legislative priorities for SFAA and AIA in seeking legislation in the states in 2015:
--Amend the existing P3 laws in Indiana and Pennsylvania to require bonding of the
design and construction portion of the P3;
Amending existing P3 laws to require bonding for the design and construction portions of a
P3 has been a high priority for SFAA recently. The GAAC agreed that Indiana and
Pennsylvania now are the priority states in which to amend the P3 laws so that they require
bonding. SFAA and its members are aware of P3 projects in both of those states that have or
could have been let without bonding so that these state laws need to be a priority. In Indiana,
bonding is being required at the discretion of the lenders in P3s. In Pennsylvania, the Rapid
Bridge Replacement Project documents did not require bonding but the private partner
chosen will require 100% bonding.
Virginia has been one of our target states to amend the law as Virginia has been cited in
Congress and in other states as being the leader and model for the U.S. on P3s. The Virginia
transportation P3 law provides that the P3 agreement shall, as appropriate, provide for
payment and performance bonds in the form and amount satisfactory to the public
contracting entity. Virginia has a second P3 law authorizing P3s for a variety of public
buildings and facilities. The P3 agreement under this newer law must require maintenance,
payment and performance bonds or letters of credit (LOCs) in connection with the
development or operation of a P3 in the forms and amounts satisfactory to the public
contracting entity. Bonds on the construction component of the P3 must conform to the
Commonwealth’s Little Miller Act. If Virginia is going to be used by other states as a
model, we want the transportation P3 law amended to require bonding under the Little Miller
Act. The P3 law for public buildings and facilities, which is the Virginia law cited at the
model, requires bonding of the construction portion of the P3, but still could be clarified.
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The Virginia Surety Association has told us that only one project in Virginia is known to
have been let without bonding to date.
--Make technical changes to the Maryland P3 law;
The Maryland and Ohio P3 laws both require bonding buy need technical clarifications. The
Ohio sureties are poised to seek amendments in the budget bill next year. AIA is in the best
position in Maryland to seek the technical corrections that we need.
--Eliminate the indexing in the Wisconsin bond threshold;
Eliminating the biennial indexing of the Wisconsin bond threshold remains a high priority for
SFAA.
--Amend the North Carolina law to reduce the long term guaranty for energy savings
contracts;
North Carolina requires a bond to guarantee the promised energy savings of a period of 20
years and state regulators recently have been enforcing the requirements. Attempts at
regulatory improvements have been unsuccessful. Public entities are increasingly looking for
longer guarantees in many areas and this would be a good law to amend.
--Amend the Nebraska law regarding the surety’s agent for service of process;
Nebraska remains the only state that has not by statute designated a state agent upon which
process can be served on a surety that is on the bonds on a federal public works project in the
State. We need to continue to pursue as the individual company filings are an unnecessary
business.
--Create a Statute of Limitation and Repose in Connecticut;
It remains a high priority to enact a statute of limitation and/or repose to replace the doctrine
of nullum tempus in Connecticut, but in terms of this as a priority for the SFAA and AIA in
addressing our surety issues, this is an issue for which the Connecticut contractors must take
the lead. Sureties would support this effort but it is not an issue on which the sureties should
take the lead.
--Address Surety Eligibility Requirements in Washington;
An effort likely will be made in Washington to eliminate the A rating required by some
public contracting entities on the retainage bonds for port authority projects. This change in
the law would be nice to have but it impacts only sureties that issue retainage bonds for the
port authorities in question and the premium volume impacted is not great. Some GAAC
members will pursue this if the AIA does not.
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2015 SFAA Federal Legislative Priorities
SFAA’s federal priorities as they have developed in recent years are as follows:
--Title 41 Procurements;
Amend the federal procurement law to exclude the Miller Act from the federal procurement
thresholds that automatically increase periodically based on the Consumer Price Index.
--P3s;
Assure that the design and construction portion of any federal P3 be bonded in compliance
with the Miller Act.
--SBA Reauthorization Act;
Address SFAA’s concerns with the Bond Guarantee Program of the Small Business
Administration (SBA) in the SBA Reauthorization.
--Individual Sureties;
Enact legislation that requires individual sureties who pledge assets on federal bonds to
comply with the same requirements as any other person or entity providing collateral to the
federal government. In the alternative, seek to open a FAR case to amend the types of
collateral that can be pledged to the federal government and the documentation required
under Standard Form 28.
--Assignment of Claims Acts;
Amend these federal acts, which void any assignment of a government contract or claim
against the government. The acts contain numerous exemptions that help contractors to
obtain financing but to not specifically list a surety as a permissible assignee. These federal
laws need to be clarified.
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