June 2021 Legislative Roundup

June 2021 Surety Bond Legislative Roundup

Many pieces of legislation are getting passed as legislative sessions come to an end across the United States. Some of these states — such as Arkansas, Georgia, Kansas, New Jersey, and Ohio — have passed bills that affect bond requirements for industries including roofing, construction, broadband, and more.

Arkansas: Roofing Contractors Registration

Arkansas House Bill 1800, which will go into effect in January 2022, will require roofing contractors to register with the Residential Contractors Committee in order to operate. The application for this certificate of registration will require a surety bond in the minimum amount of $15,000, as well as proof of workers’ compensation coverage and any other information needed by the committee.

Arkansas: Payment/Performance Bonds

Arkansas House Bill 1855, which will go into effect on the 91st day after the Arkansas General Assembly’s adjournment (07/30/2021), will amend the bond procedure for certain payment/performance bonds, affecting construction contracts. Contractors involved in public construction contracts of sums greater than $50,000 will be required to furnish a payment bond equal to the amount of the contract. Contractors involved in construction contracts for religious organizations/churches of sums greater than $20,000 (previously $1,000) will be required to furnish a payment bond equal to the amount of the contract.

Groups or individuals who wish to take action on payment bonds may do so up to one year (previously six months) after final payments are made on the contract or the principal contractor on the bond ceases work on the contract. Groups or individuals who wish to take action on performance bonds may do so up to twoyears after final payments are made on the contract or the principal contractor on the bond ceases work.

Georgia: Structured Settlement Payment Transfers

Legislation that aims to protect recipients of structured settlements (Structured Settlement Protection Acts) have advanced across states, with different provisions regarding the legitimate sale of settlement payments. The Georgia Structured Settlement Protection Act (Georgia House Bill 443) provides new requirements for the transfers of structured settlement payment rights, amending Chapter 12 of Title 51 of the Official Code of Georgia Annotated.

Transferees acquiring payment rights in Georgia will be required to register with the Secretary of State —previously, transfers had to be approved by final court order. This registration will require certification that the applicant has obtained a surety bond, a letter of credit, or a cash bond in the amount of $50,000, payable to the State of Georgia. It should be renewed each year with the renewal of the applicant’s registration.

Kansas: Occupational Licensure for Military Spouses

Kansas House Bill 2066, effective July 1, 2021, expands Kansas’ expedited licensure law for in-state service members and military spouses and modifies the credentialing qualifications used by licensing bodies.

Previously, Kansas law required credentials to be issued for a probationary period for service members and military spouses who met certain requirements but did not qualify under endorsement, reinstatement, or reciprocity statutes. HB 2066 gives discretion to licensing bodies in granting credentials and modifies qualification requirements. One of these requirements is that applicants show proof of financial standing/solvency, bonding, or insurance.

New Jersey: Design-Build Contracts

New Jersey Assembly No. 1285 (the Design-Build Construction Services Procurement Act), establishes procedures for the awarding of design-build contracts. Solicitations for each of these contracts shall include, among other things, requirements for contractors to obtain performance bonds, payment bonds, and insurance, as well as meeting all of the qualifications of the Division of Property Management and Construction.

Ohio: Broadband Expansion

Ohio House Bill 2, effective May 17, 2021, establishes a grant program for Ohio residential broadband expansion within the development services agency. The broadband expansion program authority will require a provider who has been awarded a program grant under the program to furnish a performance bond, a letter of credit, or other assurance in the sum and with the sureties prescribed by the state before beginning construction. The bond shall not be required once the project is complete and should include the condition that the provider will faithfully complete the project, with the amount being determined by the state.

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