The Kentucky Energy and Environment Cabinet filed an emergency rule that requires mining operations to file a $75,000 reclamation bond to mine a site. The state had previously required mining operations to file a $10,000 reclamation bond.

The cabinet regulates mining operations to minimize their adverse effects on the state’s environment and citizens. As such, mine operators must file a Kentucky surety bond with the state before receiving a mining permit. The bonds provide a financial guarantee that, once a project is finished, the mining operator will reclaim the site according to standards specified in the mining permit. If the operator fails to do so, the state uses the bond funds to reclaim the site.

According to the cabinet’s Reclamation Advisory Memorandum 155 concerning the new surety bond requirements:

“KRS 350.060 (11) requires the cabinet to compute a performance bond amount sufficient to assure completion of reclamation if the work had to be completed by the cabinet in the event of forfeiture. The new regulation has been promulgated to resolve concerns related to the adequacy of certain types of bond amounts previously calculated by the Department.”

Kentucky hadn’t increased its reclamation bond amount in more than 20 years. In a letter sent to the cabinet on May 1, Federal Office of Surface Mining Director Joe Pizarchik outlined the federal government’s concerns that Kentucky was not implementing, administering, enforcing and maintaining its reclamation bond program according to federal law.

“Should Kentucky not correct its bond program deficiencies, it will likely lose approval of all or part of its regulatory program, and OSM will implement a full or partial Federal program in Kentucky. In that case, Kentucky should also expect, in accordance with 30 CFR 736.24, to lose eligibility to receive Federal funding for its abandoned mine land reclamation program.”

To avoid losing control of its mining reclamation program — as well as federal funding — the cabinet issued an emergency rule that raised the required bond amount immediately. According to a press release issued by the cabinet on May 4, the emergency rule will be in effect while the ordinary regulation undergoes the normal review process, which will include public hearings and a legislative subcommittee review.

The increased bonding amount could make it harder for some mine operators to get bonded. When underwriting bonds for amounts greater than $50,000, insurance companies are much more critical of applicants’ qualifying credentials. High bonding amounts in Pennsylvania have made it difficult for many operations to qualify for the Pennsylvania reclamation bonds they need. As such, the Pennsylvania legislature is currently looking for ways to ensure mining operators have access to the bonds.

How exactly Kentucky’s emergency rule will affect mining operators in the state remains to be seen. In the meantime, mining operators looking to purchase a surety bond should contact a surety specialist to discuss their bonding needs.

Texas Alcoholic Beverage Commission (TABC) stakeholders recently met to discuss the potential elimination of liquor and beer tax surety bond requirements.

The current law requires distributors, wholesalers, manufacturers and wineries to file a liquor and/or beer tax bond to protect the state against the anticipated tax liability. To date, however, no claims have ever been made on the bonds, spurring the ABC to consider eliminating the requirements.

According to the Surety and Fidelity Association of America, “Even if there were no claims, without the bond, TABC would lose the benefit of the surety’s prequalification and licenses and permits conceivably could be provided to entities that lack the financial capacity to meet their tax obligations.”

According to the TABC website, the current liquor and beer tax surety bond requirements are as follows.

“The amount is based on an estimate of sales for a six-week period and a minimum of $1,000 for liquor tax and $500 for beer tax. The amount of the bond can increase if it is determined the state is not fully protected for the tax liability. A new liquor tax and/or beer tax bond will be required each time the license or permit holder renews. At the end of your permit year, you can request an audit to determine if all taxes have been paid for that year. If so, you can request release of your liquor tax/beer tax bond. Once you have been in business for 36 months and you have filed all reports and paid all taxes and fees required by the Texas Alcoholic Beverage Commission, you can request exemption from the tax bond requirement by submitting the Application for Bond Exemption Form C-26.”

Although the TABC has not yet experienced losses, stakeholders must consider how — without the financial guarantees provided by Texas surety bonds — the government would step in to collect unpaid taxes from TABC licensee and permittees that might fail to pay taxes in the future.

The new form will be required of collection agencies when they purchase surety bonds for the 2012-2013 licensing renewal cycle that begins July 1. The amount of surety bond protection required of North Carolina collection agencies now ranges from $10,000 to $170,000 depending on the type of enterprise.

Domestic collection agency bond requirement

The initial bond amount for a collection agency permit as a domestic entity (incorporated within North Carolina) is $10,000. Effective with the July 1 annual renewal cycle, bond amounts will range from a minimum of $10,000 to a maximum of $75,000.

Foreign collection agency bond requirement

The initial bond amount for a collection agency permit as a foreign entity (incorporated outside of North Carolina) is $20,000. Effective with the July 1 annual renewal cycle, bond amounts will range from a minimum of $20,000 to a maximum of $85,000. By issuing the bond, the surety also agrees to be liable to the Commissioner of Insurance for the department’s expenses incurred in visiting and examining the principal in connection with a federal bankruptcy or state receivership proceeding in which the principal is the subject.

Alien collection agency bond requirement

The initial bond amount for a collection agency permit as a alien entity (non-U.S. corporation/international) is $40,000. Effective with the July 1 annual renewal cycle, bond amounts will range from a minimum of $40,000 to a maximum of $170,000. The surety also agrees to be liable to the Commissioner of Insurance for the department’s expenses incurred in visiting and examining the principal in connection with a federal bankruptcy or state receivership proceeding in which the principal is the subject.

Download the North Carolina Collection Agency Financial Responsibility Surety Bond.

Nonresident entertainers will mail the original copy of their North Carolina surety bond to:

North Carolina Department of Insurance
Agent Services Division
1204 Mail Service Center
Raleigh NC 27699

Before attempting to satisfy the appetites of audiences hungry for amusement, nonresident entertainers much first satisfy the state’s appetite for verifiable financial credibility. The Wisconsin Department of Revenue has released a document that outlines surety bond expectations for nonresident entertainers.

The state defines a nonresident entertainer as “a nonresident person (a person who is not a legal resident of Wisconsin) or a foreign corporation, partnership or other entity that’s not regularly engaged in business in Wisconsin who furnishes amusement, entertainment, public speaking services or performs in sporting events in Wisconsin for a consideration.”

If the total contract price for a performance exceeds $3,200, a nonresident entertainer must file either a surety bond or cash deposit with the Wisconsin Department of Revenue at least seven days before the performance. The amount of the bond or deposit is typically 6% of the total contract price.

Download the Wisconsin Nonresident Entertainer Surety Bond.

Nonresident entertainers will mail the original copy of their Wisconsin surety bond to:

Wisconsin Department of Revenue
P.O. Box 8906
Madison WI 53708

Learning how surety bonds benefit your business now now will allow you to use bonding to your advantage later on.

Bonding promotes successful enterprises in three key ways:

1. by holding business owners to higher industry standards
2. by keeping unqualified individuals from gaining access to certain professions, thus limiting competition
3. by strengthening consumer confidence

Surety bonds allow consumers to hold business owners accountable for their professional performance. Consumers can avoid losing money at the hands of dishonest business professionals by making a claim against their bonds.

For example, say an auto dealer used fraudulent selling tactics and a claim was made on the bond. The surety would use the bond’s funds to pay the claim.

Since surety providers can choose not to bond risky applicants, this infraction could keep the auto dealer from getting a bond in the future. Without the bond, the auto dealer cannot get a license to operate legally, which, in turn, protects consumers from encountering a similar situation in the future.

On the flip side of this discussion, getting bonded also strengthens consumer relations. The bonding process requires a neutral third party (the surety) to verify a principal’s financial stability. When a company is licensed and bonded, consumers know it has met the strict financial guidelines required for getting a bond.  Furthermore, your customers will feel confident knowing your business has the financial guarantee of a bond.

One of the biggest benefits of having surety bond knowledge is being able to get through the application process quicker and easier. When planning to start a new business, you have plenty of time-consuming concerns stressing you out. Don’t let bonding be one of them.

Effective January 1, the Minnesota Construction Codes and Licensing Division of the Department of Labor and Industry now requires mechanical contractors to file their $25,000 surety bonds for two-year terms instead of one-year terms.

Minnesota Statutes 326.992 requires a $25,000 license and permit bond to be filed by those contracted to install certain mechanical equipment. Mechanical professionals subject to the Minnesota surety bond requirement include those who work with

• air conditioning
• ductwork
• fuel burning
• furnaces
• gas piping
• hot water heat
• refrigeration
• ventilation

According to a June 27, 2003, memorandum that outlines the statewide surety bond and filing fee requirements for mechanical work:

This bond is for the benefit of persons suffering financial loss by reason of the contractor’s failure to comply with the requirements of the State Mechanical Code. Furthermore, a statewide surety bond will eliminate duplication of multiple bonds required of mechanical contractors who work in more than one jurisdiction.

Download the Minnesota Mechanical Bond Registration Checklist

Download the Minnesota Mechanical Bond Registration Renewal Packet.

Applicants will submit the original copy of their legally executed Minnesota mechanical surety bond to:

Minnesota Department of Labor and Industry
CCLD: Licensing and Certification Services
PO Box 64220
St. Paul, MN 55164

For more information on the Minnesota mechanical surety bond, contact the Construction Codes and Licensing Division of the Department of Labor and Industry at (800) 657-3944.

Before they can legally conduct business, all California auto dealers must be licensed by the state’s Department of Motor Vehicles as well as the city/county office that regulates local business registration. To make the process easier, SuretyBonds.com has developed this quick and easy guide to outline California auto dealer license and bond requirements.

How to get a California auto dealer license

Whether you’re a new or existing dealer, you should download an application checklist from the California DMV website, which also provides downloadable forms. The checklist will ensure that you meet all requirements and pay all applicable fees, which might include:

• $150 fee for a dealer license application
• $100 fee for a dealer license renewal
• $225 fee for a new auto, commercial and motorcycle dealer license

Before receiving your California auto dealer license, you’ll have to submit all required fees, forms and documents to your local DMV inspector, which can be done at the time of exam. To verify that an inspector will be available, you should schedule an appointment with your local DMV ahead of time. Look on the DMV’s website to find detailed office information in your area.

Auto dealers must also be licensed by the city or county licensing division where they plan to work. For more information on local licensing requirements, contact the the city/county department that regulates auto dealers in your area.

Surety bond information for California auto dealers

Purchasing a surety bond can be one of the most confusing parts of getting a California auto dealer license. To help make the bonding process faster and easier for our clients, the following Q&A offers vital information to dealers who need a California auto dealer bond.

Why do I need a California auto dealer bond?

As with other surety bond types, California auto dealer bonds regulate the industry and protect consumer interests. Auto dealer bonds protect customers, sellers, financial enterprises and/or governmental agencies. If a dealer commits fraud or conducts business in other unethical ways, the bond protects against financial loss.

California Vehicle Code Section 1171 specifically requires California auto dealers to file surety bonds.  Depending on your specific line of work, you will file one of three specific bond forms.

1. Form OL 25: $50,000 Surety Bond of Dealer
2. Form OL 25A: $50,000 Surety Bond of Vehicle Remanufacturer
3. Form OL 25B: $10,000 Surety Bond of Motorcycle Dealer, Motorcycle Lessor-Retailer, All Terrain Vehicle Dealer, or Wholesale-Only Dealer (fewer than 25 vehicles per year)

If a bonded motor vehicle dealer breaks the bond’s terms, the wronged party (i.e. a customer, bank or government agency) can make a claim against the California surety bond to get reparation.

How much does a California auto dealer bond cost?

The exact price you’ll pay for a surety bond will vary for a couple reasons, namely:

• the surety bond amount (i.e. whether you need a $10,000 or $50,000 surety bond)
• your application and financial credentials

If your financial credentials qualify you for the standard market, your surety bond rate could be calculated as just 1% of the bond amount, which would only be $500 for the standard $50,000 bond. Conversely, dealers with poor credit could pay a premium that’s a higher percentage of the bond amount. The best way to determine your exact surety bond cost is get a free price quote from SuretyBonds.com.

How do I get a surety bond?

SuretyBonds.com can provide you with a free, no obligation California auto dealer bond quote in less than one business day. Once your payment has been processed, your surety specialist will issue your bond.  If you choose overnight shipping, SuretyBonds.com can have the bond in your hands by tomorrow. However, you should apply for your bond a few weeks before it’s due to ensure you have enough time to file it with the DMV.

What do I do with my surety bond once I get it?

Once you’ve received the original bond form in the mail, you’ll submit it to the DMV along with your other license application forms. SuretyBonds.com is not responsible for submitting the bond on your behalf.

How do auto dealer bonds work?

Like other surety bonds, California auto dealer bonds are three-party contracts.

1. Principal: the dealer who purchases the bond to get a license and guarantee compliance with industry regulations
2. Obligee: the DMV that requires the bond to enforce industry regulations and protect consumers
3. Surety: the provider that executes the bond and provides a financial guarantee of the dealer’s performance

According to California law, a dealer’s license will be automatically suspended if a court finds the professional liable for certain actions protected by the bond. The license can only be reinstated if the bond is reinstated or if a new bond is purchased.

Plumbers in Minnesota have new bonding regulations to wade through. Effective January 1, the state now requires plumbers to file a $25,000 Minnesota plumbers bond for a two-year term instead of a one-year term. The term now runs from January 1, 2012, to January 1, 2014. Plumbers who have yet to renew their Minnesota surety bond for the new two-year term should contact SuretyBonds.com immediately.

The Minnesota plumbers bond and the subsewage treatment system (SSTS) bonds are still bound under the same surety bond. All individuals who do plumbing work in Minnesota must purchase a plumbers bond even if they aren’t licensed as a state contractor. However, if they don’t need the plumbers bond, contractors in Minnesota can still get the $10,000 SSTS bond on its own for a one-year term.

According to the Minnesota Department of Labor and Industry,

“A bond helps protect the consumer from work that does not comply with the plumbing code. The state can use the bond amount to have noncomplying work corrected. A bond filed with a city would offer similar protection.”

Download the 2012-2013 Minnesota pipe laying contractors plumbing bond registration packet.

Applicants will submit the original copy of their legally executed Minnesota plumbers surety bond to:

Minnesota Department of Labor and Industry Construction Codes and Licensing Division Licensing and Certification Services
P.O. Box 64222
St. Paul, MN 55164

Yesterday the Maryland Board of Pharmacy posted an updated surety bond form for the state’s wholesale distributors.

Health Occupations Article, 12-6C-05(f), Annotated Code of Maryland, requires applicants to file a surety bond with the Maryland Board of Pharmacy before getting licensed. HB 1195 modified the previous law that had required all wholesale distributors to file a $100,000 Maryland surety bond or alternative form of financial security. The recently enacted law now requires the bonding amount to be based on the distributor’s annual gross receipts.

If wholesale distributor’s receipts from the previous tax year were $10 million or more, a $100,000 surety bond is required. If the receipts total less than $10 million, the wholesale distributor only needs to file a $50,000 bond. The reasoning behind HB 1195 was to give smaller distributors more access to bonding as a $50,000 surety bond is easier to qualify for than a $100,000 surety bond.

According to the bond form, the purpose of the bond is to

“secure payment of any fines or penalties imposed by the Board and any fees and costs incurred by the State of Maryland relating to the permit that are authorized under State law; and are not paid by the permit holder within 30 days after the fines, penalties, fees or costs become final.”

Wholesale distributors must renew the surety bond each time they reapply for their business licenses. Pharmacy warehouses must only be bonded if they are engaged in wholesale distribution.

Wholesale distributors in Maryland will submit completed surety bond forms to

Maryland Board of Pharmacy
4201 Patterson Ave.
Baltimore, MD 21215

For additional information on surety bonds or other licensing requirements, the Maryland Board of Pharmacy can be reached by phone at 800-542-4964 or by e-mail at mdbop@dhmh.state.md.us.

Jefferson County, Missouri, has made some changes to its contractor bond requirements, which went into effect January 1. Previous Jefferson County contractor bond requirements mandated that construction professionals file a $10,000 Missouri surety bond for various construction trades. Jefferson County now requires construction professionals to file a $25,000, and a few new trades now need to be bonded.

Trades that now require a $25,000 Jefferson County, Missouri, contractor license bond include:

• Backflow Preventive Device Tester
• Communications
• Drain-Layer
• Electrical
• Elevator Electrical
• Industrial Electrical
• Lawn Irrigation Installer
• Mechanical
• On-Site Sewer System Designer
• On-Site Evaluator
• Sprinkler Fitter

SuretyBonds.com can issue updated Jefferson County contractor bond forms quickly and easily.

Get a Jefferson County Missouri contractor bond