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What's New: Government Affairs

Joint Trade Group to Urge State Legislators to Address Bonding for P3s

Wednesday, August 14, 2013  

SFAA, NASBP and ASA recently initiated an effort to persuade the National Conference of State Legislators (NCSL) to address bonding issues in the Tool Kit that NCSL has developed for state legislators on public private partnerships (P3s). The NCSL is a bipartisan organization that serves state legislators and staffs by providing research, technical assistance and opportunities for policymakers to exchange ideas on the key state public policy issues.

In December 2010, the NCSL released a comprehensive report on P3 and a Toolkit for state legislators, which was last updated in January 2013. The Toolkit contains a list of the key issues that state legislators need to address in considering a P3, and key elements of P3 enabling statutes, among other items. The focus of the NCSL Toolkit is transportation projects. Because of the bipartisan nature of NCSL, the Toolkit frames the issues, but does not draw conclusions on them. The Toolkit can be found on the NCSL website at www.ncsl.org.

The NCSL Toolkit does not include any information about bonding P3s. Given the current interest at both the state and federal levels in obtaining private financing for needed public works projects, SFAA, NASBP and ASA recently initiated an effort to put surety bonding issues on NCSL’s radar screen. Maryland has a sizeable delegation of state legislators on the NCSL Natural Resources and Infrastructure Committee. In addition, while the Maryland P3 law enacted this year needs some technical correction, it does specifically require payment and performance bonds. The joint trade group wrote the attached letter to the Maryland delegation at the NCSL to raise the issue of bonding. NASBP separately retained AIA’s state counsel in Maryland, and state counsel will use our letter to approach key Maryland legislators to get the bonding issues on the NCSL committee agenda for consideration.

We believe that this is important as NCSL advocates the interests of state governments before Congress and the federal agencies. As P3s are being considered in some forums in Congress, we want any NCSL advocacy on P3s to include support for bonding. State legislators also rely on NCSL’s products. We’ve received a report from AIA’s local counsel in New Mexico that the New Mexico Transportation Infrastructure Revenue Subcommittee invited the NCSL to make a presentation on P3s on August 28. P3s are on the Committee’s agenda to study before the 2014 session. New Mexico had P3 legislation this year that did not pass. AIA local counsel will attend the August 28 hearing and provide a report. Local counsel also is seeking an opportunity or a presentation on surety bonds before the committee.


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