Surety Bond News

South Dakota grain buyers are affected by a new bill relating to bankruptcy. The new bill, which is referred to as SB 53, authorizes grain buyers in bankruptcy proceedings to file alternative financial documents in the place of the present surety bond if a bond cannot be attained during this period of time. The present law authorizes alternative security should the surety hault writing surety bonds within the State or be insolvent. SB 53 became active upon enactment.

New legislation was enacted in the State of South Dakota relating to mining operations using chemical leaching. The new law, which is named SB 40, boosts the quantity of the additional financial assurance required for mining operations that utilize cyanide leaching or any other chemical/biological leaching procedure to extract raw materials from ore. The previous law stated that the amount must be at a minimum of $25,000 and no more than $500,000. SB 40 states that the assurance can not be above $1 million, while there is no instituted minimum.

HB 1301 is a new bill that was introduced in the State of South Dakota relating to the South Dakota Ellsworth Development Authority. The new bill produces the South Dakota Ellsworth Development Authority; it states that the depository retaining the Authority’s funds must acquire a surety bond in an amount equivalent to at least the greatest sum anticipated to be on deposit at any one moment. The surety bond is conditioned on the safekeeping and punctual reimbursement of the funds.

New legislation was presented in the state of South Dakota concerning mortgage brokers and originators. The new law is titled HB 1060 and implements the S.A.F.E. Mortgage Licensing Act. The law attaches the federal definition of a mortgage originator and alters the present definition of mortgage broker so that the distinction between the two terms is that a mortgage broker is a mortgage originator that has at least a 10% interest in a mortgage brokerage. The previous law required a $25,000 license bond for both mortgage brokers and lenders. HB 1060 requires each mortgage lender, mortgage brokerage, mortgage broker and originator to sustain a surety bond that mirrors the sum dollar amount of loans originated by the licensee and all its staff and agents, but can not be less than $25,000. The new law states that each mortgage broker and originator must be covered by a surety bond. Should they be an employee of an individual or entity subject to licensing and bonding, the employer’s surety bond can be utilized in place of the mortgage broker/originator’s bond obligation. The employer’s surety bond must cover each mortgage broker and originator in a quantity set by this law. There is a 30 day termination stipulation in the present law. Fulfillment of the latest requirements becomes obligatory for licensure on July 31st, 2010 for a mortgage lender, mortgage brokerage, and a mortgage broker; on December 31st, 2010, for individuals licensed as a mortgage loan originator as of July 1st, 2009.

A new bill was enacted affecting tax liability procedures for limited liability companies, limited partnerships, limited liability partnerships, and limited liability limited partnerships. The new law is named HB 1022 and applies the present tax liability procedures for corporations to limited liability companies, limited partnerships, limited liability partnerships, and limited liability limited partnerships. The present law states that the representatives of a corporation accountable for submitting tax returns and paying any taxes due are individually responsible for any failures to file or make payments. HB 1022 authorizes the corporation’s officers to opt to not be individually responsible and instead acquire a surety bond or a certificate of deposit as security for the payment of taxes due in a quantity equivalent to the anticipated yearly gross receipts multiplied by the applicable sales or excise tax rate.