House backs bill letting DFCM require performance and payment bonds selectively to limit state exposure

Representative Brooks presented third substitute HB 508 and explained language inserted in the Senate from the Division of Facilities Construction and Management (DFCM). The amendment authorizes the division to require performance and payment bonds when necessary to protect the division from financial loss or performance risk, rather than imposing a blanket bond requirement on every state building project.

"The meat of this is ... it authorized the division to require performance and payment bonds when necessary to protect the division from financial loss or performance risk," Brooks said, adding that the language came from DFCM.

Representative Tom Peterson rose to support the bill and said the change addresses critical bonding issues; others raised concerns about protections for subcontractors who lack lien rights on public projects. Representative Cutler and Representative Kristofferson asked about the effect on subcontractor payment protections and how DFCM would use prequalification, retention, and contingency funds to manage risk. Brooks said DFCM uses multiple tools — prequalification, contingency buckets, and a 5% retention on draws — to ensure subs and suppliers are paid and to limit state loss.

Brooks gave a practical example, saying the state had spent roughly $1,000,000 on bonds for a prior project where the contractor performed well. Sponsor and supporters framed the bill as a way to save state funds where bonding is unnecessary while keeping protections in place when risk is present.

The House concurred with Senate amendments to the third substitute of HB 508. The clerk reported final passage by a 71–1 vote; the bill will be transmitted to the Senate for the signature of the president.

What the bill does: allows DFCM discretion to require bonds on state‑administered projects when DFCM determines bonding is necessary to protect the state's financial interest; retains other statutory protections and adds implementation tools (prequalification, retention, contingencies).