Date Enacted: April 29, 2015
Date Effective: July 1, 2015
Recently, Kansas has updated the Kansas Money Transmitter Act. The amendments to this Act include an increase in the maximum financial security amount for money transmitters license bonds. Not bonded yet? Learn how to get your Kansas money transmitter bond.
With the revisions to these statutes come financial security changes. HB 2216 allows for an increase in the maximum amount of a surety bond (or other security) from $500,000 to $1 million as determined by the State Bank Commissioner. This increase must be based on one of two factors: an increase in business volume in the state or evidence of financial impairment, such as a reduction in net worth or financial losses.
The minimum bond requirement for licensure remains at $200,000.
If you’ve never been required to obtain a bond before, you may not understand how it works. A money transmitter bond (also known as a surety bond) is a type of insurance. It doesn’t protect the bond holder, but rather the public, by providing an assurance that the laws of the state will be adhered to. Businesses are required to obtain the bond in order to be licensed, and claims can be made against the bond if there is a breach of contract or other legal violation. While the bond may pay the claim, you will still have to reimburse the surety bond company.
Never applied for a bond before? No problem. Follow these simple steps to get one.
The premium is determined by the size of the bond and your credit score. Bond premiums vary but they’re generally about 1-3% of the total bond amount if you have excellent credit and could be as much as 15% of the total bond amount if you have bad credit.
If you still have questions or concerns about surety bonds, you can always contact JW Surety Bonds for assistance.
If you want to see the full text of this new legislation, please read the Kansas Money Transmitter Act.]]>
Date Enacted: April 20, 2015
Date Effective: April 20, 2015
SB 877 TCA Title 66, Chapter 11 amends the Tennessee mechanic’s lien law and makes changes to contractors’ payment bond details. The revisions to Tennessee law attempt to make bonding and claim payouts a bit more straightforward for general contractors doing private work.
The mechanic’s lien act amends Tennessee’s mechanic’s lien law. These changes specifically affect prime (general) contractors who do private work and have posted a payment bond. The new law repeals the previous requirement that the bond pay for extras not included in the contract but authorized by the owner. This included things such as labor, materials, services, equipment, machinery, overhead, and profit. In the previous law, these extras could not be more than 15% of the prime contractor’s contract price.
In addition to removing the extras from bond amounts, changes to the claim process have been made. Claims on payment bonds provided for a project will not have to be filed in the county where the real property is located. The law states “where any portion of the real property is located,” so in some cases there may be more than one county that a claim could be filed in, adding flexibility to such claims.
Payment bonds are often something contractors deal with when working on public or private projects. You may have purchased one before or you may be new to the business. Either way, you may have some lingering questions about what a payment bond really is. In short it’s an insurance policy for the project owner to protect them against legal action should you fail to pay subcontractors, laborers or suppliers.
If you’re wondering how much your bond premium will cost you, know that it’s hard to give an exact answer without your application. Bond premiums are largely dependent on your credit. The premium is a percentage of the total bond amount and for excellent credit, it will usually be around 1-3% of the bond.
If a project owner has required a payment bond, it’s imperative that you avoid claims. A claim against your bond can be costly, both for your bottom line and your reputation. Remember that the bond is backed by your assets and you will be required to repay all claims.
Still need more info about this legislation? Read the full mechanics’ and materialmen’s lien act.
What are your thoughts on the new Tennessee mechanic’s lien law?
Date Enacted: April 14, 2015
Date Effective: October 1, 2016
Alabama’s SB 133 amends bond amounts for businesses and individuals selling petroleum products where an inspection fee is charged. The revised law also increases the list of entities required to post a bond. If you haven’t been required to post a bond in the past, you may need to know how to get your Alabama Motor Fuels Bond and how much it will cost you.
With the changes to Alabama’s law, you may be wondering who will need to post a motor fuels bond in 2016. The changes will affect anyone engaged in first person selling, importing, or who is a bonded distributor of dyed diesel, dyed kerosene, or lubricating oil. Permissive suppliers and suppliers who sell dyed diesel fuel or dyed kerosene at the rack at an out-of-state terminal to an importer for delivery into Alabama that is not a bonded distributor and doesn’t have a valid inspection fee permit; and suppliers, permissive suppliers and undyed diesel fuel sold to a licensed exempt entity (except the federal government) by a supplier or permissive supplier at the rack.
The prior Alabama fuel tax law required a bond of no less than $2,500 and no more than $5,000. The amended law requires a surety bond of $5,000. In the past the Department of Agriculture has been responsible for licensing and bonding administration and collection of taxes. With the amendments, this duty has been transferred to the Department of Revenue.
The first question most people have is, what is a surety bond? In simple terms, a surety bond is an insurance policy of sorts. However, it’s not like homeowners’ insurance or car insurance, because a surety bond protects the public. Generally, surety bonds protect citizens and governments when companies fail to meet their contractual obligations or break a law.
The bond application process is easy. First, get a license application from the Alabama Department of Revenue. Then, you may apply for a surety bond directly on our website. Once you have obtained the bond, send both the bond and license application to the Alabama Department of Revenue.
Now that you know how to get a bond, you probably wonder how much it will cost you. While it’s hard to give an exact price due to variations in credit histories, a general set of guidelines can be given. First, you should know that a bond premium is a percentage of the whole bond amount. The premium amount is directly based on your credit score. If you have excellent credit, your bond premium will generally be about 1-3% of the total bond amount. However, if you have bad credit your premium can be as much as 15% of the total bond amount.
For more details, read the full enacted law on motor fuels.
Tell us how you feel about these changes.
Date Enacted: May 4, 2015
Date Effective: November 1, 2015
Oklahoma has recently made changes to license bond laws for public insurance adjusters. The changes come as a protection for storm victims in this Tornado Alley state. According to a recent article in Insurance Journal, Oklahoma’s Insurance Commissioner John D. Doak states SB 439 attempts to protect Oklahoma storm victims, and ensure transparency and accountability in the insurance adjusting process. The amendment also increases bond amounts for public adjusters. Are you up to date with the changes? Read on to learn more about what revisions have been made and how they may affect you. Plus, learn how to get your Oklahoma Public Adjuster’s Bond before the bill comes into force!
If you are a public insurance adjuster, you will now pay more for your bonds. In the past, a license bond of $10,000 was required. When the revisions take effect, the bond amount will increase to $25,000.
A surety bond is a type of insurance. It doesn’t protect the bond holder, but rather the public at large (consumers or the government). This really depends on who the particular business serves. Businesses are required to purchase the bond, and claims can be made against it if there is a breach of contract or other legal violation. While the bond may pay damages, you will still have to pay the surety bond company for the claim. When you have claims against you, you risk your reputation and your profits.
The bonding process is simple and easy. First, get a license application from the State of Oklahoma Insurance Commission. Then, apply for your public adjuster license bond. Once you get your approval, simply send your bond and your application to the State of Oklahoma Insurance Commissioner.
Read the full Oklahoma Public Adjusters License Bond Bill for more details.
< ??>Do you think the amendments will help protect consumers or hurt small business?
Date Enacted: April 15, 2014
Date Effective: July 1, 2014
The Georgia money transmission bond legislation, also known as HB 982, amends prior laws for money transmitters and check sellers. Specifically, it modifies Chapter 1 of Title 7 of the Official Code of Georgia Annotated as it relates to financial institutions, and repeals Article 4 and 4a with regard to the sale of checks and money orders as well as the cashing of checks, money orders and drafts. The Act provides new definitions, guidelines and penalties for entities who are governed by this law.
These revisions to prior state laws impact money transmitters, check sellers and those who sell payment instruments. This includes businesses that cash checks, drafts, and money orders, as well as those that sell money orders and checks.
There are some institutions which don’t fall under this bill, primarily because they are covered by other laws. According to O.C.G.A. § 7-1-682, these entities are the U.S. Postal Service, federal and state agencies, departments, authorities, recognized agents or instrumentality. In addition to these particular institutions, federally chartered banks, credit unions, trust companies, savings and loan association, or savings banks (if they are federally insured) are exempt, as well as authorized agents of a licensee and individuals employed by a licensee or employees of an exempt entity when they are acting within the scope of their employment and under the oversight of a licensee or exempt organization (not as an independent contractor). Lastly, foreign banks that create a federal branch under International Bank Act, 12 U.S.C. Section 3102 are not subject to this law.
Georgia’s HB 982 stipulates that money transmitters, check sellers and individuals taking part in the sale of payment instruments must be licensed.
The revised law also changes the provisions regarding money transmission bonds. This bill sets a bond amount of $250,000 for payment instrument sellers and $100,000 for money transmitters. Previously, check sellers had a $100,000 bond obligation while money transmitters needed to post a transmission bond of $50,000.
The updated Georgia state law has also increased the requisite bond amount by $5,000 for each additional business location. If the daily pending transactions surpass the current bond amount, the Department of Banking and Finance may find that added bond coverage is necessary, but this supplemental coverage has a cap of $2,000,000 while the previous law put the cap at $1,500,000.
Do these amendments leave you wondering how to get your Georgia Sale of Payment Instruments or Money Transmission Bond?
If one of the entities requiring a bond or its agents commit an act of noncompliance according to HB 982, then all damages will be paid to the person injured. Any creditors or departments owed fines, fees and other damages will also be paid out of the money transmission bond. Claimants are allowed to bring all actions directly against the bond.
A licensee must give written notice to the Department of Banking and Finance by certified mail or registered mail if there is any action against the bond. This must be done within 30 days of the action. The licensee is obligated to provide enough details to the Department so that the action is identifiable. Licensees must also provide notice of judgements by certified or registered mail to the Department within 30 days of the judgement being entered.
The corporate surety or licensee can’t cancel the money transmission bond without providing proper notice. A notice must be sent to the Department by registered or certified mail or statutory overnight delivery. The sender must ask for a return receipt. The cancellation may not be effective any sooner than 30 days after the Department receives the notice and only in relation to breach of condition that happens after the effective cancellation date.
Read Georgia’s full text regarding money transmission bonds for details.
The new Georgia Money Transmission law changes several stipulations for bonding. What do you think about the new requirements?]]>
Date Enacted: August 2, 2014
Date Effective: August 2, 2014
North Carolina’s HB 366 (also known as the North Carolina Farm Act of 2014) rewrites and revises many rules for a variety of businesses that fall under the umbrella of agriculture.
The changes touch on a variety of issues including confidential agricultural investigations, authority to regulate fertilizer, and landscape contractor licensing statutes. One of the biggest changes is the required surety bond type has changed.
Previously, only registration was needed if a contractor fell under the landscaping contractor laws, but requirements now include licensing and the posting of a license surety bond. Get your North Carolina Landscape Contractors’ Licensing Compliance Bond in order to comply with the new standards set forth in this bill.
Landscape contractors are now required to be licensed and post a contractor license bond in the amount of $10,000. A letter of credit may also be posted in lieu of the surety bond. Prior to these amendments, landscapers were only required to register with the state. According to these revisions, direct actions against the bond can now be made.
HB 366 also provides exemptions. Under this law, the North Carolina Department of Transportation (NCDOT) is excluded from the licensing obligations. However, when a landscaping project surpasses the state bond threshold, NCDOT must hire a licensed landscape contractor to carry out the work.
Not all landscaping projects fall under this law. There are some jobs that may not meet the state’s stipulated project amount of $30,000 for a consecutive twelve month period for a single job site. This amount is the total of all labor, materials and anything else included to perform the job.
Golf course owners and property owners are not required to be licensed or bonded under this bill. Individuals and businesses which are clearing land, grading plots and other areas of land and performing erosion control are also exempt. Landscaping performed on a farm for agricultural purposes falls outside the requirements of this law as well. Arboriculture, landscaping other than mowing and edging, any project for wastewater management and landscape construction done by utilities for erosion control and grading are also all exempt.
Sod, seed and plugs can be placed by sod producers who are certified by the Plant Industry Division of the North Carolina Department of Agriculture and Consumer Services without need for a license or bond as it applies to this particular bill. Lastly, plumbers, electrical engineers, electrical contractors and general contractors licensed under various General Statutes and carrying out work in their designated professions do not need to be licensed and bonded in accordance with HB 366 as they are covered under other statutes.
Now that you understand the requirements of the North Carolina Farm Act, you may have to become licensed and bonded. If you’ve never done this before, you may have a few questions about the process.
First, get an application for a business/license from the North Carolina Landscape Contractors’ Licensing Board. Then apply for your contractor’s license bond. You can complete this process online and get an instant approval.
Prices for the bond depend on your credit. The price you pay for the bond is a percentage of the total amount of the bond, called a premium. Your premium can be as little as 1%–3% of the bond amount for those with good credit and as much as 15% for those with bad credit.
Last, send the business/license application and your surety bond to the Board.
Some landscapers may be grandfathered and licensed without sitting for the license exam. Those landscaping contractors that were registered by December 31, 2014, but not licensed must obtain a landscape contractors license bond and send their proof of bond and the appropriate Grandfather Application to the North Carolina Landscape Contractors’ Licensing Board before August 1, 2015. Other entities included in the grandfathering clause are:
A word to the wise — bonds are meant to protect the public, not you. They are basically an insurance policy to ensure that damages can be taken care of if you don’t follow the letter of the law. You should avoid bond claims because they will cost you money, and potentially your reputation. It’s always best to follow the law and any contracts you have signed rather than default.
Read the full text version of the North Carolina Farm Act for more details.
What are your thoughts about the revisions? Share them with us below.