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

photo by Gage Skidmore

Yesterday an audio recording in which Newt Gingrich vocalizes his support for mandated health insurance went viral. The recording is stirring up controversy in both parties as Gingrich has frequently denounced “Obamacare” during the past few months of his presidential campaign.

The recording is from a May 2009 Center for Health Transformation conference call Gingrich hosted. At the time, the health care reform act had just been introduced to Congress.

In advocating for a degree of choice in the program, Gingrich proposed that individuals be allowed to post a bond as a way to opt out of purchasing federally mandated health insurance.

“We believe that there should be a must-carry — that is, everybody should have health insurance. Or, if you’re an absolute libertarian, we would allow you to post a bond. But we would not allow people to be free-riders failing to insure themselves and then showing  up at the emergency room with no means of payment.”

Gingrich also expressed similar sentiments as recently as May 2011 in an appearance on “Meet the Press.” On the show Gingrich said, “I’ve said consistently that we ought to have some requirement that you either have health insurance, or you post a bond, or in some way you indicate you’re going to be held accountable.”

Gingrich’s initial support for universal health care did vary from President Barack Obama’s plan in that it included options, which is where his suggestion for individual surety bonds comes in. But could a surety bond option reasonably substitute required health insurance policies? Not likely.

First of all, surety providers do not underwrite bonds in the same way insurance companies write health insurance policies. Insurance companies expect a reasonable number of claims to be made whereas surety providers only write bonds for principals who are highly unlikely to ever have a claim made against them. As such, surety providers would likely screen applicants for pre-existing conditions and other risky health factors. Insurance companies won’t be able to do so once the health care reform goes into full effect, but that doesn’t mean it would apply to surety providers.

Furthermore, according to HotAir.com, “In 2008, put the price of that [health care] bond at $100,000 – $150,000 — far out of the reach of most Americans.” Applicants who have a credit score of 700 or higher typically pay premiums calculated at 1 to 5% of the total bond amount. This would mean applicants who qualify for the standard market would pay $1,000 to $5,000 for a $100,000 bond or $1,500 to $7,500 for a $150,000 bond.

Those with credit scores below 700 could pay rates up to 20%, which would mean $20,000 to $25,000 premiums. As such, surety bond premiums would be nearly impossible for most Americans to afford. Not to mention the fact that surety bonds typically aren’t one-time purchases as each bond that’s issued is only valid for a certain duration. When the bond expires, the principal would be forced to purchase a new bond and pay the premium again.

Although Gingrich’s idea to offer bonding as an alternative to mandated health insurance policies might have, theoretically, given Americans a choice, it was quite misguided. Realistically it would have done nothing more than back individuals into a corner where purchasing an insurance policy would be the only real choice.

Of course, Gingrich currently continues to denounce “Obamacare” and claims he will overturn it if elected president, which is a far cry from where he stood on the issue less than a year ago.

Georgia auto dealer bonds expire statewide on March 31. Only Georgia auto dealers who sell used vehicles must file a $35,000 surety bond as a part of the state’s used auto dealer licensing process.

Qualified applicants who work with SuretyBonds.com could pay just $550 for a two-year, $35,000 Georgia auto dealer bond. To speak with a surety specialist about your Georgia surety bond, call 1 (800) 308-4358 Monday through Friday between 8 a.m. and 7 p.m. CST.

Auto dealers who are looking for lower rates might also be interested in contacting a SuretyBonds.com specialist. As brokers, they shop every bond application around with various underwriters to find some of the industry’s lowest rates. SuretyBonds.com can bond 99% of applicants regardless of their qualifying credentials.

The Georgia auto dealer bond requirement helps regulate the the state’s auto industry and also protects its consumers. The legal language found on the bond form provides a financial guarantee that auto dealers will comply with

“the conditions of any written contract or written warranty by such dealer or his agent, made in connection with the sale or exchange of any motor vehicle and shall pay all loss, damages, and expenses that may be sustained by any purchasers of any used motor vehicle and their vendees or successors in title by reason of any fraudulent misrepresentation as to liens against or titles to any used motor vehicle then the bond is to be void, otherwise it is to remain of full force and effect.”

This language essentially holds auto dealers accountable for financial losses consumers might incur when dealers misrepresent merchandise or use fraudulent sales tactics.

The state’s auto dealer bond form expires on even-numbered years. Failing to get a new bond issued before March 31 could result in a lapse of surety bond coverage.

Dealers will submit their Georgia auto dealer bonds to

Georgia State Board of Registration of Used Motor Vehicle Dealers & Used Motor Vehicle Parts Dealers
Used Motor Vehicle Dealers Division
P.O. Box 13446
Macon, GA 31208

The Georgia auto dealer licensing department can be reached at (404) 968-3880.

If you watched President Barack Obama’s State of the Union address on January 24, you probably remember a few key talking points about his stance on taxation, job creation and education, among other initiatives. What you might not have realized, though, is how some of his suggested overhauls could affect the way government agencies across the nation use surety bonds.

Obama briefly called out the mortgage lending industry for its corrupt lending practices of late. He then declared that Americans must hold lenders to higher standards in the future.

“We’ve all paid the price for lenders who sold mortgages to people who couldn’t afford them, and buyers who knew they couldn’t afford them. That’s why we need smart regulations to prevent irresponsible behavior. Rules to prevent financial fraud, or toxic dumping, or faulty medical devices, don’t destroy the free market. They make the free market work better.”

Surety bond requirements are commonly used to regulate professionals who work in finance. In short, the use of surety bonds holds professionals to higher industry standards. For example, surety bond requirements are enforced in the mortgage industry to curb instances of fraud and other unethical lending practices. The financial guarantee provide by mortgage bonds can protect consumers from lenders who might

• deliberately approve borrowers for loans they won’t be able to repay
• encourage buyers to use fraud when applying for mortgages
• pressure buyers into certain loan products, including high-risk loans or loans with higher interest rates
• intentionally target vulnerable or at-risk buyers and suggest cash-out refinances

Mortgage professionals typically have to file a surety bond before they can get their industry licenses. If their financial credentials or past work records disqualify them from a bond as required, they will not be permitted to work in the industry. As such, the surety application process keeps financially unstable or otherwise unqualified individuals from gaining a position through which they might take advantage of consumers.

A number of licensing agencies have discovered just how useful surety bonds requirements can be when screening those looking for jobs in the finance industry. As such, a number of new surety bond requirements have been established during the past few years. These new bonding requirements keep unqualified individuals out of the markets that have recently been known to take advantage of consumers.

Within the past two years, state governments in 10 states have established new surety bond requirements for appraisal management companies. These new appraisal management bonds provide a financial guarantee that appraisal management companies will fulfill their tasks according to law. If the trend of further regulating unruly financial professions continues — as Obama advocates — appraisal management companies across the country might find themselves struggling to get licensed.

Surety bond regulations are also being used to prevent a second robo-signing crisis, which resulted in the mass production of false and forged mortgages across the country. To combat the potential for such a problem in the future, Alabama recently increased its required surety bond amount for notaries from $10,000 to $25,000. The $25,000 notary bond amount is currently the highest in the nation.

The need to protect consumers from unneeded financial loss in the current unstable economy makes one thing certain: the government certainly values the financial security that surety bonds provide. If Obama’s call for stronger regulation is answered, government agencies will begin revising existing surety bond requirements while also developing new ones.

Before beginning their commissions, new and renewing notaries in Alabama must now file much larger surety bonds than previously required. The change went into effect January 1.

In 2011, Alabama increased the required notary bond amount from $10,000 to $25,000, which is currently the nation’s highest notary bond amount. The reasoning behind the significant increase is to cut down instances of notary misconduct as a part of America’s recent”robo-signing” crisis.

Notary bonds do not protect notaries; rather, they protect consumers from notaries who might commit fraud or other errors. If a notary should make a mistake that’s against the bond’s terms, a claim can be filed against the bond so that consumers have access to financial reparation.

Surety companies have traditionally issued notary bonds quickly and easily without credit checks. With the significant increase in the bond amount, some surety providers review notary bond applicants more closely.

The Florida Legislature doesn’t want to take any risks when it comes to the possibility of licensing new destination resort casinos.

The Seminole Tribe of Florida currently maintains exclusive casino gaming rights in the state. However, passage of Senate Bill 710 would allow up to three unaffiliated operators to build destination resort casinos.

One part of Senate Bill 710 would require casino operators to file a surety bond with the state before being approved for a destination resort license.

The bond would provide a legal guarantee that operators

• make all required payments to the Chief Financial Officer
• keep the licensee’s books and records
• make reports as provided
• conduct limited gaming activities according to law

The bill would also dissolve the Division of Parimutuel Wagering and establish a new Department of Gaming Control in its place. This new department would set the bond’s penal sum based on a casino’s total annual license fees and estimated taxes.

In lieu of a bond, the operator may deposit another means of financial security, including

• a savings certificate
• a certificate of deposit
• an investment certificate
• a letter of credit from a bank, savings bank, credit union or savings and loan association.

The bill also contains a number of other stipulations that would further regulate new destination resort casinos. According to Florida Today,  “The gambling bill likely will be one of the most heavily lobbied issues of the 2012 session.”

On Monday, the Senate Regulated Industries Committee passed the bill, which was introduced to the Senate on Tuesday. The bill could be discussed in the House Business and Consumer Affairs Committee early next week.

Puppy mill owners and other high volume dog breeders in Ohio have the state’s legislators barking at their heels.

In an effort to reduce puppy mill cruelty, Ohio Senate Bill 130 aims to establish higher standards for the state’s dog breeders.

According to The Humane Society, “Ohio is rapidly becoming one of the leading states for puppy mills, the cruel commercial dog breeding operations that mass-produce puppies for sale through pet stores, over the Internet and directly to the public.”

The bill would amend and add sections to licensing requirements and standards of care for dog breeders in Ohio. One of the proposed rules would require high volume breeders to provide evidence of insurance or a surety bond when applying for a license in the state.

Proposed surety bond amounts for high volume breeders included in SB 130 are as follows:

• $5,000 for fewer than 25 adult dogs
• $10,000 26 to 50 adult dogs
• $50,000 for more than 50 adult dogs

If needed, the funds provided by an Ohio dog breeder surety bond would pay for the maintenance and care of dogs that are seized or otherwise impounded from the high volume breeder.

The bill was introduced on March 3, 2011. The bill was assigned to the Agriculture, Environment & Natural Resources Committee, which has yet to make a report. As such, the proposed legislation currently remains in limbo. However, it could resurface now that the 129th general assembly has reconvened.

Appraisal management companies working in Oregon will now file their bonds with the state’s Appraiser Certification and Licensure Board.  The board was created in 1991, but AMCs had previously filed their bonds with the Oregon Department of Consumer and Business Services, Division of Finance and Corporate Securities.

The required appraisal management bond amount remains $25,000.

Under Chapter 447, Section 9 of 2011 Oregon Laws, appraisal management companies must file a $25,000 Oregon surety bond with the Department of Consumer and Business Services. The bonds are used to reimburse individuals who have been harmed by negligent or improper real estate appraisal activity, appraisal management services, breach of contract in performing real estate appraisals, or any other appraisal management activity not in compliance with the law.

Download the Oregon Appraisal Management Company Bond Form (Updated 1/12).

Oregon AMCs will mail the original copy of their legally executed bond to:

Appraiser Certification and Licensure Board
3000 Market St. NE, Ste. 541
Salem, OR 97301

The board can be reached by phone at (503) 485-2555, by fax at (503) 485-2559 or at www.oregonaclb.org.

Trouble, like moonshine, could be brewing for some Virginian men looking to get a distillery bond.

On a recent episode of “Moonshiners,” one of the stars expressed difficulty in getting a $200,000 surety bond. The Discovery Channel airs the show, which “tells the story of those who brew their shine — often in the woods near their homes using camouflaged equipment — and the local authorities who try to keep them honest.”

Brewing moonshine without proper distillery registration is an act that’s illegal at the federal level. Tim, one of the show’s main characters, has begun the process of legitimizing his practice by registering it with the proper authorities. He runs into trouble, though, when he’s told he needs a $200,000 bond.

When filing an application to register a distillery plant, applicants must provide a surety bond that will cover distilled spirit operations at the site. The bond provides a financial guarantee that the distiller will

• comply with all provisions of certain laws and regulations relating to distillery activities
• pay all taxes imposed by 26 U.S.C. Chapter 51
• pay all penalties incurred or fines imposed for violation of any such provisions

Although their intended purpose is to ensure distillers comply with regulations and practices safe techniques, the bonds also keep some individuals from registering a distillery, whether for personal or professional production.

According to the federal Alcohol and Tobacco Tax and Trade Bureau, “There are numerous requirements that must be met that make it impractical to produce spirits for personal or beverage use.” The need to provide a surety bond is one such requirement listed.

The difficulty involved in getting a distillery bond depends on the bond amount needed, which will vary depending on who exactly is requiring the bond.

For example, Tim, who’s looking to register a legitimate moonshine business, says he needs a $200,000 surety bond to register a distillery in his area. Such a high bonding threshold means most moonshine producers won’t qualify for and/or be able to afford the needed bond, which frequently keeps smaller producers out of the market. As a result, the inability to be bonded can keep smaller distillery owners, such as those featured on “Moonshiners,” from being able to legally register a distillery.

The story of David versus Goliath is an age-old tale, and one that’s all too common in the construction industry. Unfortunately, the real-world Davids rarely emerge from battle as the winners, especially when contract bond requirements limit their access to construction projects. Smaller contractors often have trouble funding, or even qualifying for, the surety bonds they need. When contractors are unable to purchase surety bonds as required by law, they’re automatically disqualified from many publicly funded construction projects. Because large contracting firms usually don’t have this problem, bonding requirements can create an unintentional monopoly in certain situations. Such was the case with a recent controversy in Louisiana.

On Nov. 1, 2011, Louisiana’s Hazard Mitigation Grant Program instituted a rule that required contracting firms to file performance bonds with the state before beginning work on a home elevation project. The program has funded numerous projects to restore structures in the state following the aftermath of Hurricane Katrina.

Gov. Bobby Jindal originally proposed the bonding rules on August 19, 2011, after numerous reports of fly-by-night contractors who disappeared after receiving payment for home elevation projects. Other contractors left behind shoddy work or failed to complete jobs altogether, leaving homeowners and the state to deal with additional financial loss.

According to an article by the The Times-Picayune out of New Orleans, the state said the goal of the new surety bond rules was to prevent contractors from “collecting an 80 percent advance payment on a grant only to walk off the job without finishing.”

However, small contracting firms were unable to find bonding companies who would issue them the needed bonds. Similarly, some who were able to qualify for the bonds were ultimately unable to pay their steep premiums. This gave larger contracting firms an advantage at securing valuable contracts, which is a common problem state agencies face when setting surety bond requirements.

As a result of the many complaints smaller contractors file with the state, an alternative to the bonding requirement was added before the new rules went into effect on December 1, 2011.

To qualify for the bonding exemption, contracting firms

• must show proof that they cannot get the required surety bond
• must get the homeowner’s approval to waive the bonding requirement
• can only collect 25 percent of the payment up front (rather than 80 percent)
• may only work on a maximum of four projects at one time
• must meet new insurance and warranty rules

In an interview with The Times-Picayune, State Commissioner of Administration Paul Rainwater said the updated rules would “protect homeowners without stifling competition or giving larger firms an unfair advantage.”