State Laws Change in 2018
Recent legislation in states around the country changed various laws regarding surety bond requirements for license permits in 2018, including:
- California Oil and Gas Well Drillers
- California Tax Preparers
- California Contractors
- Delaware Viatical Settlement Producers
- Pennsylvania Recreational Vehicle Dealers
California State Bill 1147 – Oil and Gas Well Drillers
California State Bill 1147 is in reaction to bankruptcies of two independent oil companies that left the state with decommissioning costs of at least $100 million. The surety bond that was in place was not enough to pay for all the decommissioning costs. The state wanted to make sure this didn’t happen again with other private oil and gas companies.
Those who drill, re-drill, or deepen, or permanently alter the casing of one or more wells located on submerged lands under ocean waters must provide a blanket indemnity bond for $1 million.
In addition, another security must be provided to cover the full costs of plugging and abandoning all of the operator’s wells. The State Oil and Gas Supervisor will determine the security amount. The security remains in effect until all wells are plugged and abandoned. The amount of the security may be reduced as wells are plugged and abandoned.
Before July 1, 2020, the Supervisor must determine the costs of decommissioning, and develop a schedule to increase the bond amounts or other financial security to ensure sufficient money is available for decommissioning.
California Assembly Bill 3143 – Tax Preparers
California’s Assembly Bill 3143 amends Section 22250 of the Business and Professions Code.
Changes to the law will require each individual in the state who prepares taxes for another person must maintain a $5,000 surety bond. Tax preparers must be at least 18 years old.
The surety bond is payable to the people of the State of California and for the benefit of persons damaged by fraud, dishonesty or unlawful acts or omissions by the tax preparer.
The tax preparer who files the bond must identify all tax preparers employed or associated with the tax preparer. Other tax preparers who are employed or associated with a tax preparer are covered by the bond of the tax preparer. The bond amount will not exceed $125,000, and claims against the bond will not exceed $5,000 for any one tax preparer.
California AB 3126 – Contractor’s State License Law
California’s AB3126 amends the Business and Professions Code relating to contractors.
The Contractor’s State License Board is a part of California’s Department of Consumer Affairs that licenses and regulates contractors. The Board requires applicants to file a contractor’s bond for $15,000. The previous law allowed contractors to post a cash deposit in lieu of a bond, but AB 3126 changes the security requirements.
- The bill prohibits certificates of deposit as a form of security and requires the contractor to deposit a cashier’s check with the registrar on or after January 1, 2019.
- The bill requires those subject to a bond amount to maintain the bond or the money deposited with the registrar in the appropriate amount.
- The bill requires all existing alternatives in lieu of a bond or the deposit to be replaced with a surety bond or the specified deposit with the registrar by January 1, 2020.
- The bill requires that information required from the contractor to obtain a surety bond is consistent with the information required to obtain a contractor’s license.
- The bill also mandates that the state must deposit money or cashier’s checks into an interest-bearing or share account.
- Contractors who deposit money or cashier’s check with the registrar must submit a $100 fee to be used to cover expenses to process deposits and pay claims made against the deposits. The Bill creates the Contractor’s Deposit Fund in the State Treasury for this purpose.
Delaware HB393 – Viatical Settlement Providers
Delaware House Bill 393 amends the license and bond requirements for Viatical Settlement Providers.
Viatical Settlement Provider licensees must provide audited financial statements showing equity of at least $250,000 OR providing audited financial statements showing positive equity and a surety bond or letter of credit for $250,000.
For more information, read the Delaware Viatical Settlements Act.
Pennsylvania SB764 – Recreational Vehicle Dealers
The passage of SB764 states that Pennsylvania recreational vehicle dealers may participate in a recreational vehicle show, off-premise sale, exhibition, or rally. They may also conduct a recreational vehicle show, exhibition, or rally at its place of business.
A $30,000 surety bond is required to ensure compliance with laws and regulations. The bond is security for any claims filed for money due, including unpaid taxes, fees, licenses, fines, or judgments. The bond remains in place until canceled.
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