California Assembly Bill 3126 Changes Contractor License Requirements 

California Assembly Bill 3126 Changes Contractor License Requirements

Enacted January 2019, California Assembly Bill 3126 adjusts the financial security requirements for a contractor license by no longer allowing substitutes for a contractor’s license bond. Prior to the amendment, contractors were allowed to post a cash deposit in lieu of a $15,000 contractor’s bond. Now, contractors may provide either the required surety bond, lawful money such as treasury notes and bonds, or a cashier’s check.

Those who submit money or a cashier’s check must also pay a $100 processing fee. Additionally, contractors that submitted a cash deposit have until January 1, 2020 to file the proper financial security requirements to the California Contractors State License Board. The Board stopped accepting cash deposits as of January 1, 2019. 

Why do contractors need a surety bond?

Contractors in the state of California need a $15,000 surety bond to receive their license before performing construction work in the state. The bond protects harmed parties from financial loss up to the full amount of the bond if the principal (the contractor, in this case) fails to comply with the law. The principal must then reimburse the surety for all damages paid out. Contractor license bonds are subject to underwriting, which means the premium the contractor must pay for the bond is dependent on his or her personal credit. Contractors with excellent credit may be approved for as little as $99 for their surety bond.

Are all California contractors affected by AB 3126?

AB 3126 affects all contractors who need to apply for a license through the California Contractors State License Board. California organizes contractor license types into three primary groups: general engineering contractors, general building contractors, and specialty contractors. A full list of specialty contractor licenses is accessible by visiting the California Contractors State License Board website.

Need a Surety Bond for a Contractor License?

The experts at have years of experience issuing California contractor license bonds, meaning they know what it takes to get you bonded while saving you time and money. Get started by calling 1 (800) 308-4358 or applying securely online at!

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About the Author

Trevor Cleveland
Trevor is a Senior at the University of Missouri studying Strategic Communications. He is a marketing intern for, a leading provider of online bonding for clients nationwide.