Archive for March, 2013

2013 Surety Bond Legislature for North Carolina

Written by JoAnn Smith on March 30th, 2013. Posted in Legislation, License and Permit Bonds, North Carolina, Surety Bond Blog

     north carolina state seal
North Carolina State Seal
March 30, 2013 – There are currently no legislative bills in either the House of the Senate regarding the use of surety bonds in the North Carolina legislature. However, there is a motion to make changes to a Department of Transportation rule currently under revision regarding the removal of vegetation under specific conditions.

Department of Transportation 19A NCAC 2E. 0604 Adopted Rules

A change has been proposed by the North Carolina DOT regarding the surety permit bond requirements for selective vegetation removal permit. Prior to this the rule was that a permit or performance bond could be requested but was not a mandatory part of the permit process. With this change the surety bond will be a required part of the permit.   The new mandatory bonds will require the posting of a $2,000 license and permit bond for each permit. It will however allow a continuing surety bond if a company plans to apply for two or more permits within the year. That continuing surety bond would need to be posted for at least $100,000. This permit will require that a bond be posted prior to the permit being issued.   Additional changes include that the bond is to cover any costs for restoration of the property to the exact condition it was in prior to whatever damage has been caused during the vegetation clearing. Once inspection of the work has been completed to the satisfaction of the department, including repair of damage to fencing or other structures, the surety bond can be released. This bill was under consideration as of February 07, 2013. For a complete reading of the bill as it currently stands please follow this link.

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Surety Bond Bill Legislature for Ohio in 2013

Written by JoAnn Smith on March 28th, 2013. Posted in Legislation, Ohio, Performance Bonds, Surety Bond Blog

     ohio surety bonds
Ohio Statehouse
March 28, 2013 – There is one bill currently being reviewed in the Ohio legislature that will impact the use of surety bonds. This is a bill in the House that will create the Ohio Bond Bank and require surety bonds from its board and CEO as well as from the financial institutions that hold the bonds.

HB 615 – Public Official Bonds and Depository Bonds

If the Ohio House passes Bill 615 it would result in the creation of the Ohio Bond Bank. This bill would require the Board of Directors members and the Chief Executive Officer of the bond bank to post a surety bond. The amount of the bond would be determined by the State Treasurer. This performance bond would be posted to ensure the faithful performance by the board and CEO of their duties while in office.   If they wish to, a blanket bond can be issue that would cover both the CEO and the members of the board. Either bond would be required to be issued by a surety company that is authorized to do business in the State of Ohio. In addition, the board may require the financial institutions that hold the board’s funds to provide a depository bond. Ohio House Bill 615 was introduced in December of 2012 and is currently in review as of February 2013. For a reading of the bill as it currently stands, you may follow the link provided for HB615 in this summary.

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Surety Bond Bill Legislature for South Carolina in 2013

Written by JoAnn Smith on March 26th, 2013. Posted in Court Bonds, Legislation, License and Permit Bonds, South Carolina, Surety Bond Blog

     South Carolina surety bonds
South Carolina Commemorative Quarter
March 26, 2013 – There were two bills in the South Carolina legislature that will be impacted by the use of surety bonds in the early part of 2013. The first bill is in the House and concerns the change of a current requirement to post a surety bond when acting as a personal representative to a will in probate court. The second bill is in the Senate and is a revision of the current tax codes in South Carolina. One element in that bill will introduce the need for financial intermediation services that are foreign persons to register and post a surety bond with the Department of Revenue. As of February 2013 both bills were being reviewed in their respective houses.    

SB 143 – Court Bond

The South Carolina Senate is currently considering making a change to the requirements of a personal representative for a will in South Carolina. Currently any personal representative for a will in probate court would be required to post a surety bond. This bill is seeking to remove that requirement when the personal representative or another interested person applies for dispensation from the bond requirement.   The South Carolina Senate Bill 143 was introduced in December 2012 and as of February 2013 is in subcommittee for evaluation. For anyone wishing to read the entire bill as it currently stands please follow the link here for SB143.      

HB 3116 – Miscellaneous Bond: Financial Intermediation Services

This comprehensive tax bill includes changes to the State of South Carolina’s treatment of financial intermediation services to state residents. All such services will now be required to register with the Department of Revenue. The bill further states that the Director of the Department of Revenue will require any foreign persons that provide state residents with financial intermediation services must post a surety bond as part of that permit process.   This bill was introduced to the House in December 2012 as a prefile and has been introduced to the Committee on Ways and Means and read. It is currently in review with the House. For a view of the entire South Carolina House Bill 3116, please follow the link provided in this synopsis.

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Indiana and Maryland Fidelity Bond Legislature

Written by JoAnn Smith on March 24th, 2013. Posted in Indemnity Bonds, Indiana, Legislation, Maryland, Surety Bond Blog

     surety bonds for employees
Hiring At Risk Youth in Indiana
March 24, 2013 – The Legislative Houses for both Indiana and Maryland were reviewing a number of bills that will impact the use of surety fidelity bonds during the first quarter of 2013. Among these bills were the establishment of a Hoosier Bonding Program to aid employers of at-risk employees in Indiana and new bonding requirements for common ownership community managers in Maryland. Both of these bills were in review with committees within the House in their respective legislatures at the time of our review in February 2013.  

Indiana Fidelity Bond Legislature

 

Indiana House Bill 1218 – At-Risk Employees

The establishment of the Hoosier Bonding Program will allow the State of Indiana to create a program the helps businesses hire employees with at risk backgrounds. The program will provide coverage through a fidelity bond against any financial losses a business may have for an additional six months beyond the surety bond coverage that the federal program provides.   This Hoosier Bonding Program will authorize the Department of Workforce Development to contract with either insurance companies or surety agents to provide the fidelity bonds for the program. They can also contract with these companies for assistance in managing the program. The bill was introduced to the House on January 10, 2013 and referred to the Committee on Insurance. For a reading of Indiana House Bill 1218 as it currently stands, please use the link provided for the bill in this legislature summary.    

Maryland Fidelity Bond Legislature

Maryland House Bill 576 – Common Ownership Community Managers

Regulations regarding the provisioning of management services for common ownership communities will be created with the passage of Maryland House Bill 576. The regulations will include a requirement that these management services be licensed and post a fidelity bond. The surety bond will need to be acceptable to the State Board of Common Ownership Managers and cover any responsible manager along with the licensee and any of the licensee’s contractors or employees.   This fidelity bond or theft insurance will need to be either equal to the highest aggregate amount of operating and reserve balances on all common ownership communities that the provider has under contract or $2 million, whichever amount is the least. Total fidelity bond liability cannot exceed the sum of the bond. The bill was introduced to the House on January 31, 2013 and had its first hearing on February 14, 2013. To read the full text for Maryland House Bill 576 as it currently stands please follow the link provided in this legislative summary.  

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A Surety Bond Has Many Business Applications

Written by JoAnn Smith on March 22nd, 2013. Posted in Commercial Bonds, License and Permit Bonds

     surety bonds protect customers
surety bonds protect customers
Just about any business you can name gets a benefit from surety bonds. True, certain industries such as construction seem to hog all the limelight when it comes to the use of surety bonds. But there are many other types of business that will see a benefit from using the right surety bond at the right time. Everyone from brokers at the border to the private school in your home town uses surety bonds to guarantee financial security in some form for the business and their clients. If you are wondering just what is a surety bond – you can think of it as a three way agreement between the surety company, the person offering the service and the person or entity securing the service. Almost every type of business have run into situations where a surety bond can signal financial stability to their clients or give that company the flexibility to expand or grow. Here are just a few examples:

Customer Protection with Banking Surety Bonds

The banking industry probably has more regulations than just about any other industry. This also means that surety bonds are more likely to come into play to ensure banking customers are protected. A good example of this is recent legislature being considered for Montana. It is looking at joining a number of states that require a deferred deposit lender to have a surety bond posted. Basically this is a license bond that is part of the licensing requirements. It will cover any costs associated with civil penalties. If restitution is called for it will cover those costs and any other costs that the Department of Administration sees fit if there is a violation of the law. From the bank’s point of view, it is a new regulation they will need to fulfill. However, from the customer’s point of view, this is a welcome assurance that the banking organization that they use for their deferred deposit can be trusted to act in their best interests. These kinds of licensing surety bonds are an important part of the fabric of business and more are being passed every year. For an update on the latest legislature, be sure to check on our blog for your state’s recent news. They are listed to the right in the blue column under individual states such as in our surety bond posts for California or New York.

Why Telemarketing Needs Surety Bonds

This is another industry that has many regulations to follow and surety bonds are a part of those regulations. I am sure there are plenty of business owners and managers in the telemarketing world who question not only why a surety bond, but what is a surety bond and why do I need it? The quick answer is: they are needed to be sure that everyone in the industry complies with regulations and to protect your customers from financial losses. Because telemarketing has such a bad reputation, having a telemarketing bond in place marks your business as a reputable one that can be trusted. It separates you from the fly-by-night operations that are so notorious in the telemarketing industry. Each state has different regulations and requirements, so finding out what is needed in your state for your industry is a great first step. As you begin the licensing process, be sure to contact the state licensing agency for each location if you have more than one place of business. Finding out the surety bond requirements in a pro-active way is a professional approach to starting a telemarketing business in any state.

Sales Tax Bonds for Retail Business

If you do retail sales or if you rent or lease goods, there is a good chance that you probably should have a sales tax surety bond. Many states require them and they are usually a part of your licensing process for a retail business. This surety bond is to ensure that retail businesses and other kinds of businesses that charge sales tax are collecting the proper amount and remitting it to the right authority. Cigarettes, fuel and alcohol are probably the three categories where you will see this kind of tax surety bond the most often. For a retail business, a sales tax bond does require the business to have good credit to qualify. However, they are easier to qualify for then other types of financial guarantee bonds. The amount of the surety bond is based on the projected gross receipts of the business for that year. In the end, because you don’t need to place a security deposit against projected sales tax when you post a surety bond, this will actually free up working capital for most retail businesses. These are just three examples of the many ways that a surety bond can actually be a positive requirement for an industry. They help to protect the customer base, support good business practices in industries that have some loose cannons and keep the sales tax base supported without draining working capital. If your business needs a surety bond or you want to learn more about how posting a surety bond might protect your business, be sure to contact us at BuySurety to learn more. We are always standing by to answer your question.

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