HB 2 -- DESIGN-BUILD STATE HIGHWAY PROJECT BONDS

SPONSOR:  St. Onge

COMMITTEE ACTION:  Voted "do pass" by the Committee on
Transportation by a vote of 9 to 1.

This bill allows the Highways and Transportation Commission to
modify bonding requirements for projects designated as
design-build-finance-maintain projects for which the contract
with the design-builder is expected to exceed 25 years.  The
surety bond for the design-build project must:

(1)  Require a bid or proposal bond in an amount of at least $5
million;

(2)  Require a performance bond or bonds for the construction
period specified in the design-build highway project contract in
an aggregate amount of at least $250 million or 25% of a
reasonable estimate of the cost of the construction work,
whichever is lower, except that the commission may allow other
security in lieu of or in addition to any bond or bonds
including, but not limited to, letters of credit or other
negotiable instruments considered to be adequate and satisfactory
to the commission; and

(3)  Require a payment bond or bonds for the protection of
persons supplying labor and material in carrying out the
construction work specified in the contract in an amount equal to
a reasonable estimated total contract price under the terms of
the project contract unless the commission makes a final
determination by written findings of fact that the amount is
impractical, in which case the commission will establish the
amount of the payment bond or bonds, but in no case will the
payment bond or bonds be less than the performance bond or bonds.

The bill contains an emergency clause.

FISCAL NOTE:  No impact on state funds in FY 2008, FY 2009, and
FY 2010.

PROPONENTS:  Supporters say that the bill is needed because the
traditional surety bonding procedures and statutes do not cover
such a long and extensive process like this proposal.

Testifying for the bill were Representative St. Onge; Department
of Transportation; Dwight Munk, Zachry American Infrastructure;
Mark Wando, Team United; Edward DeSoigne, Heavy Constructors
Association of Greater Kansas City; Associated General
Contractors of St. Louis; St. Louis Regional Chamber and Growth
Association; American Council of Engineering Companies of
Missouri; Associated General Contractors of Missouri,
Incorporated; Missouri Laborers' Legislative Committee; Missouri
Limestone Producers Association; Missouri Chamber of Commerce and
Industry; and Missouri Farm Bureau.

OPPONENTS:  There was no opposition voiced to the committee.

Missouri House of Representatives
94th General Assembly, 1st Special Session
Last Updated September 11, 2007 at 3:25 pm