Surety Bond News

New legislation was enacted in Maine relating to offshore energy demonstration projects. The new law is titled SB 545 and provides for offshore energy demonstration projects to construct wind energy complexes and wave energy conversion facilities. SB 545 requires operators of these facilities to attain a permit and to supply an approximation of the total project removal cost which includes the salvage value of the equipment and the net expenses of project removal. The operator is required to sustain funds in an amount equivalent to the net project removal cost. The new law authorizes the utilization of a performance bond, surety bond, letter of credit, corporate guarantee or other variety of financial assurance; this financial assurance must be accessible if the operator ceased to exist, affirmed bankruptcy, or is unable to finance and back the required project removal plan at the cancelation of the project permit.

In Maine, new revisions have been made to the Uniform Commercial Code. The new law, which is titled SB 506, implements amendments to the Uniform Commercial Code to conform to the Restatement of the Law of Surety by the American Law Institute. The present law defines surety to comprise any “other secondary obligor” as well as the present description as a “guarantor.” SB 506 became active on February 15th, 2010.

The state of Maine authorized a new law relating to the Efficiency Maine Trust. The new law, which is named HB 1038 requires the officers, directors, employees and other employed individuals of the new Efficiency Maine Trust that have custody of its finances or who are sanctioned to disburse its funds to attain “blanket or individual bonds with a minimum limitation of $100,000 coverage for each individual covered by the surety bond or bonds.” The surety bond is conditioned on the faithful and authentic execution of their responsibilities. Also, fiduciary liability insurance will be an authorized alternative in the place of the surety bond. HB 1038 became active upon enactment.

A new piece of legislation was presented in the state of Maine relating to tax refund lenders. The new law, which is titled HB 944, asks tax refund anticipation lenders to register and acquire a $10,000 surety bond to secure the payment of damages, losses and penalties suffered from infringement of the law. The surety bond must remain in effect for five years following the lender ceasing operations in the State; these lenders supply loans that are protected through the expected income tax refund or tax credits that a individual will receive.

Exchange facilitators must abide by a new bill presented in the state of Maine. The new bill, which is referred to as HB 144 regulates exchange facilitators; they are those that facilitate like-kind property exchanges abiding by the federal tax code. HB 144 requires these individuals to be licensed, and to acquire one of the following: a fidelity bond or surety bonds in a quantity no less than $250,000 from a State licensed insurer. Some alternative options to the bonds are to put up cash, securities, or an irrevocable letter of credit for an equivalent amount.