California Contractors LLC Business Licence Bond

SB 392 requires contractors organized as limited liability companies (LLCs) to post a $100,000 bond as a condition of an LLC business license. The bond is for the benefit of any employee damaged by his or her employer’s failure to pay wages, interest on wages or fringe benefits. Further, if the licensee is a party to a collective bargaining agreement, the bond must cover welfare fund contributions, pension fund contributions and apprentice program contributions. The new law exempts qualifying individuals from the contractor license bond requirements if the individual held a 10% membership interest in a limited liability partnership. Current law requires a surety bond in the amount of $12,500 for contractors.

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New Jersey Foreclosure Consultants Bond

AB 359 would regulate foreclosure consultants. The bill would require such consultants to post a surety bond in the amount that the Director of the Division of Consumer Affairs prescribed by regulations. Such consultants would not include banks, savings banks, savings and loan associations, credit unions or other federally insured financial institutions or insurance companies. Also exempted would be those licensed under the “New Jersey Licensed Lenders Act,” and those licensed as a real estate broker, broker salesperson or salesperson. The bill now has passed the Assembly and has been sent to the Senate Commerce Committee.

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Ohio Debt Settlement Provider Bond

HB 549 would require debt adjustment service providers to be licensed and post a surety bond from a bonding or insurance company authorized to do business in the State. The bond would have to be in the amount that the Director of Commerce will determine based on the licensee’s financial condition, experience and risk to consumers, among other factors. The bond could not be less than $10,000 or more than $50,000. The bond would be concurrent with the license term. It would have to be for the exclusive benefit of an individual harmed by the licensee’s failure to comply with the law.

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Connecticut Surety Bond Guarantee Program

SB 736 would establish a surety bond guarantee program to help small and minority contractors with bonding.

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Pennsylvania Surety Bond Guarantee Program

HB 83 reintroduces a state bond guarantee program bill that died for lack of funding last year. HB 83 would create the Surety Bond Guarantee Fund Program. The program would serve to enable disadvantaged businesses to bid competitively for certain Commonwealth contracts. The Surety Bond Guarantee Fund (Fund) would provide guarantees up to $1 million for any one small or disadvantaged business enterprise. To qualify for a guarantee, the bond would have to meet the following criteria: 1) the bond must be listed in the contract bonds section of “The Surety Association of America’s Manual Of Rules, Procedures and Classifications”; 2) the bond is required by the contract, invitation for bid or request for proposal; 3) the surety company issuing the bond must be listed on the U.S. Treasury Department’s Circular 570 as an acceptable company; and 4) the bond must meet any other requirements established in regulations. The bill also contains a provision that the bond must contain a provision allowing the bond to be cancelled with 30-days notice to the Department, or the bond will not qualify for a guarantee.

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Connecticut Motor Vehicle Dealer Bonds

New legislation would reduce the license bond required for used motor vehicle dealers from $50,000 to $20,000.

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New York Debt Collection Agency Bond

New legislation was recently introduced that would require debt collection agencies to be licensed and post a surety bond, contract of indemnity, or an irrevocable letter of credit that must be payable to the people of New York. The bond amount would be based on the number of persons employed by the licensee. A $10,000 bond would be required for one to four employees; a $25,000 bond for five to nine employees; a $50,000 bond for 10 to 20 employees, and a $75,000 bond for 20 or more employees. The bond would secure the licensee’s compliance with the applicable law and the payment of all costs and penalties. The surety’s total liability would be limited to the face amount of the bond, regardless of the number or nature of claims made against the bond or the number of years the bond remained in force.

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