Rep. Felix introduces legislation to streamline financial guarantees from developers
Bill is part of Speaker Shekarchi’s 2024 legislative package addressing the housing crisis in Rhode Island
STATE HOUSE – Rep. Leonela Felix has introduced legislation that would streamline the way developers provide financial guarantees to municipalities on public projects.
The bill (2024-H 7950) would require municipalities to allow at least three disclosed types of financial security (such as surety bonds, letters of credit or cash) provided by developers on projects that include public improvements. Allowing varying types of financial options ensures that developers can choose the method that best suits their circumstances, which encourages participation in public projects. Municipalities would not be able to limit the bond to one specific type, but still retain their ability to require bonds and improvement guarantees for public improvements.
“Construction and improvement guarantees are an important way for municipalities in Rhode Island to ensure projects are completed in a satisfactory manner by providing a financial guarantee that the work will be completed,” said Representative Felix (D-Dist. 61, Pawtucket). “In streamlining this process, this bill will spur competition by allowing more companies to bid on public improvement projects, and allow important public improvement projects to move forward more quickly by not delaying them over the need for a specific type of improvement guarantee.”
The bill also updates language in the statute from “planning board” to “permitting authority,” reflecting that the project may have been approved by a planning board, technical review committee or administrative officer.
