Whoa, We’re Halfway There: Design-Build Legislation 2015

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Whoa, We’re Halfway There: Design-Build Legislation 2015

by Richard Thomas & Andrew Ausel  |  June 16, 2015

Halfway through 2015, and the Design-Build Institute of America (DBIA) has already seen some major success in our efforts to authorize design-build project delivery in every state, and codify DBIA Best Practices. While we still have half the year left, the heavy lifting is almost over, as most states end their legislative sessions in June.

So far, these are some of the successes we’ve seen this year:

Alabama: Even as the regular session drew to a close in early June, two pieces of design-build legislation are still pending in the Alabama Legislature. H.B. 415 remains in the House while S.B. 178 passed the Senate and failed to gain consideration in the House during the regular session. S.B. 178 allows the Department of Transportation to enter into design-build and other public-private-partnership (P3) financing agreements for constructing public improvements and for repairing its buildings, offices and other facilities. Neither proposal, however, will be addressed until a special session is conducted which has yet to be called. Legislators failed to pass a budget before the June 5 adjournment date which will require the Governor to reconvene the legislature prior to the start of the fiscal year on October 1.

California: The California legislature is once again pursuing improvements to design-build and P3’s in Sacramento. Currently, we at DBIA are tracking seven significant bills in California that would make authorizations or set aside funds for design-build projects. Among these proposals is A.B. 1265, which would repeal the sunset date on P3’s for transportation projects. It must clear the Appropriations Committee before it can be brought to a vote in the Assembly. “California needs access to every avenue possible to rehabilitate our crumbling roads. Public private partnerships are an asset to California’s infrastructure development system we cannot afford to lose,” said Assemblymember Henry Perea (D), the sponsor of the bill. DBIA, the Board of Transportation California and the Association of General Contractors (AGC) all support this legislation.

A.B. 1358 which lowers the design-build threshold on school projects from $2.5 million to $1 million has passed the State Assembly and has moved to the Senate.

A.B. 1290 Authorizes the Mayers Memorial Hospital District to use the design-build process. This bill passed the State Assembly and moved to the Senate.

S.B. 562 authorizes the City of Long Beach to use concession agreement, design-build agreement, design-build-finance agreement, lease-leaseback or other appropriate delivery methods for the Long Beach Civic Center for 50 years. This bill has passed the Senate and moved to the State Assembly.

Louisiana: The Louisiana Legislature successfully passed S.B. 66 this June, extending the time for any port to utilize the design-build method pilot program for five years, from December 31, 2015 to December 31, 2020. The measure passed both the House and the Senate by an almost unanimous vote. While the measure has cleared the two most challenging hurdles, it will still require the approval of Governor Bobby Jindal (R) who is currently squaring off with legislators on tax increases included in this year’s state budget. While the Governor is likely to sign the legislation, if he doesn’t act the bill will automatically become law after 20 days.

Minnesota: For the second consecutive year, legislation has been introduced in Minnesota to limit the use of design-build. H.B. 101 and S.B. 80 would have expanded the state’s municipal consent law to counties using design-build. DBIA strongly opposed these proposals, as they would have placed limits on local design-build authority which would stifle a program that is in its infancy, and limit growth in the region. Fortunately, Minnesota was a legislative success for DBIA, as both bills were successfully blocked. In the special session, the legislature passed a bonding bill which issued an additional $140 billion in transportation bonds for the trunk highway system and the design-build and outside consulting to support the program

Mississippi: DBIA had a successful legislative session in Mississippi by passing one bill expanding the use of design-build, and blocking another bill restricting the use of design-build. The legislature passed S.B. 2925, authorizing the city of Oxford to utilize design-build for the construction of parking facilities. Legislation to prohibit design-build for construction projects by the University of Mississippi Medical Center (H.B. 1139) was successfully blocked in committee. Another noteworthy bill; S.B. 2576, which would to authorize CM at-risk was defeated as well.

Missouri: DBIA made a lot of progress in Missouri this year, as the region leadership there was able to get our own bill to expand design-build authority to all local governments introduced. The bill passed the House by a wide margin, and region leadership was able to bring all the major trade associations together to back our bill. Had it not been for a last minute melt down in the Senate over “Right to Work” legislation, the bill would have passed the Senate. We were also successful in blocking four bills which would have limited design-build. The region has already begun working on the 2016 session and plans to introduce legislation in December based on the bill that passed the House.

New Mexico: Although New Mexico legislators eventually returned to Santa Fe to address lingering priorities during a special session, unfortunately, design-build was not one of them. Among the proposals that failed to pass both the regular and special session were H.B. 447 and S.B. 239 that authorized the Department of Transportation to use design-build contracts. While H.B. 447 passed the House, it failed to gain a committee hearing in the Senate during the final days of the legislative session. Similarly, H.B. 229, allowing public-private-partnerships for projects valued over $50 million, passed the House but failed to move forward following its referral to the Senate. No doubt, elections held this past November that created a divided legislature played a role in the failure of these proposals as legislators were unable to overcome partisan differences on these, as well as a number of other key bills. A small victory was achieved when legislators returned to Santa Fe June 8 to pass a $295 million capital projects package during a four-hour special session called by Governor Susana Martinez (R).

Ohio: While the Ohio Legislature is unique from most states in that it meets year-round, legislators in Columbus have already enacted a key piece of legislation to improve design-build in the state. Governor John Kasich (R) signed into law the transportation budget, H.B. 53, which included a provision allowing a county engineer to combine the design and construction elements of a bridge, highway or safety project into a single contract if the cost of the project as bid is between $1.5 and $5 million. In his press release following the bill signing, Governor Kasich described design-build as a key portion of the legislative package, calling it, “a new, innovative contracting process to streamline government and save taxpayer dollars.” Also of importance in Ohio are H.B. 180 and S.B. 152, identical proposals to prohibit a public authority from requiring a design-builder to employ a certain percentage of individuals from the geographic area of the public authority. Each of these two bills is still pending.

Washington: When the Washington Legislature failed to pass a budget during its normal legislative session, the expectation was that business would get done and that the budget would pass during a special session. What was not anticipated, or perhaps even considered a real question for that matter, was how many special sessions it would take. Regardless, Governor Jay Inslee (D) has called legislators back for a second, 30-day session to address the state budget that has still yet to pass. This special session reopens the possibility of design-build legislation passing before the legislature’s new June 28 adjournment. Currently among the pending proposals are bills that would require all highway construction contracts over $10 million to be completed through design-build, and a bill to authorize five pilot projects to be conducted through design-build, costing between $2-10 million, in order to analyze the effectiveness of design-build for projects of this size. The success of these bills will undoubtedly depend on the ease with which budget negotiations are conducted which remains to be seen at this point.