May 22

Despite a large spike in 2007 of state legislation for public private projects (PPPs), last year saw a significant decrease in the number of states that passed such permits. This is likely a result of the diminishing private funding for PPPs due to the current economic conditions within the United States. Additionally, recent reports from the U.S. House Transportation Committee on PPPs could have reflected negatively on them as well. However, international funding may still be an option seeing how PPPs were originally an overseas model. While many are concerned with the concept of PPPs in the United States, state officials should be able to protect public interest in PPPs with concession contracts, in which they have been able to provide oversight and address work force issues.

The only PPP-related enactment of 2008 was West Virginia’s House Bill 4476, which authorized public private projects for state transportation facilities. The new law requires payment bonds and performance bonds, both of which fall under the contract bond category of surety bonds, for qualifying transportation facilities in West Virginia. HB 4476 grants West Virginia’s Division of Highways the authority to determine the surety bond form and amount that is deemed satisfactory for the given circumstance.

May 19

Last year, a number of states passed legislation aimed at developing new technical assistance programs and surety bond guarantee programs, most of which were designed to aid small and emerging contractors (contract bonds), and other start-up companies, to include some minority business enterprises.

In the state of California, AB 2376 was enacted which crated the Small and Emerging Contractors Bonding Program, which followed a 2006 executive order from Governor Arnold Schwarzenegger. This newly enacted law tasks the Department of Transportation to work with California’s Officer of Small Business Advocate to create the Small and Emerging Contractor Technical Assistance Program no later than 1 June 2009. This program will provide necessary training and technical support for small business owners and contractors in order to assist such companies in obtaining liability insurance and/or any surety bonds required for them to qualify for public works construction projects. Specific information that the training must require is outlined in the new law. Another objective of the law is to aid the small businesses in qualifying for surety bond guarantees from the U.S. Small Business Administration.

On the other side of the country, in Connecticut, House Bill 5800 was recently enacted. With this enactment the Metropolitan District Commission for Hartford County must establish a new program that helps minority business enterprises in Hartford County acquire necessary performance bonds.

In Florida, HB 889/SB 1734 was enacted, which expanded a pre-existing program, similar to the one in Connecticut’s Hartford County. The new law increases the number of projects that performance bonds , or payment bonds can be waived for emerging companies awarded construction contracts. Previous law allowed three projects, but HB 889/SB 1734 now allow a total of five projects that performance bonds can be waived. Currently in Florida, such bond requirements can only be waived on projects with a estimated value of $200,000-$500,000. Lastly, the new law extends the sunset date two years from 30 September 2009 until 30 September 2011.

Michigan’s “budget bill” for 2009, House Bill 5808, resumes it’s current Department of Transportation program that provides aid to small businesses in the state of Michigan owned by either minorities or women. This assistance is to include surety bonding support.

Not all such efforts were successful. For instance, efforts in West Virginia (House Bill 2510) to institute bond assistance programs for new companies in need of support failed this year. If successful, this bill would have created the Targeted Minority Economic Development Fund, which could be used to encourage smaller start-up companies to form and expand. Additionally, this fund could have provided much needed money to help minority vendors meet bid bond requirements.