Legislative Detail: IA House Bill 2122 – 84th General Assembly

The State of Iowa is considering HB 2122, introduced by Representative Dawn Pettengill and Representative Lee Hein, is “a bill for an act relating to motor home dealer and manufacturer licensing and the business hours of recreational vehicle dealers, making a penalty applicable, and including effective and applicability date provisions.

Iowa HB 2122 would require motor home dealers to submit a dealer surety bond in the amount of $50,000 for their dealer licensing. The bill provides that the surety’s aggregate liability would be limited to the penal sum of the bond.

The bill was introduced on January 26, 2012.

Commercial Surety

The California State Senate introduced SB 1478 recently which deals with caps on appeal (safety net) bonds, which are required both state and federal courts. The party making the appeal secures the right to appeal with this bond.

SB 1478 proposes to set a ceiling (cap) on amount of the appeal bonds that are used to stay the execution of a court judgment. For civil cases, the proposed cap is $25 million, and for individuals and small businesses it would be $1 million. As it stands today, the uncapped requirement is 150% of the original judgement.

Contract surety

California also introduced a few Assembly Bills earlier this year. Contract surety bonds include payment, performance, and bid bonds. The bills include:

• AB 1901 – Affects design-build contracts and proposes removing the $2.5 million threshold for using design-build contractors for county public construction projects, but does change the bonding requirements that exist under current law.
• AB 1947 – Affects bid bonds and proposes a requirement for bid bonds for State Legislature projects (other than emergency projects).
• SB 2185 – Relates to payment bonds and allows the High-Speed Rail Authority to accept payment bond in an amount equal to the lesser of half the contract price, or $500 million. This requirement only applies to projects with a contracts over $250 million.

There are just a few items currently under consideration in Arizona related to surety bonds. The following laws are either being reviewed or simply held for future discussion.

As you will see in the following legislative activity, several new bond requirements are being reviewed, and several other existing requirements are under modification review.

They include HB 2168 (permit bonds), HB 2204 (court bonds), HB 2462 (court bonds), and HB 2737 (bond for towing companies.

Arizona Surety Bond Activity

• House Bill 2168 relating to permit bonds is being monitored while held in committee. HB 2168 sets forth the ability for Arizona municipalities to issue self-certified permits. If enacted, these municipalities would be required to set adequate surety bond limits for coverage against faulty permits.
• House Bill 2204 concerns private prisons and miscellaneous surety bond requirements. In essence, HB 2204 clarifies that the surety bond (or alternative insurance) that is currently required for private prisons to prove financial responsibility shall be for AT LEAST $10 million, and not EXACTLY $10 million, as it is currently set. Status: Second Read.
• House Bill 2462 relates to court bonds associated with seized animals. HB 2462 would reduce the surety bond amount for owners of a dog that was seized due to suspected cruel mistreatment, neglect or abandonment from $200 to $25 per animal. The bond is suposed to cover care costs for the animals. Status: HB 2462 has passed the House and is headed to the Senate.
• House Bill 2737 relates to towing companies and sets forth a brand new surety bond requirement of $100,000. HB 2737 status: second read.

There is plenty of legislative activity at the state level for commercial surety in the United States this year. As a matter of fact, the are numerous proposed laws and amendments are being introduced across 39 states and the District of Columbia in early 2012 that affect surety bond companies in many states, including Alabama. Although it would be impractical to list all of the proposed laws here in the blog, we’ll attempt to introduce a few of these proposals over the coming days and weeks. This will give you some idea about the broad scope of surety bonds in legislation.

Alabama

• HB 80 passed to the State Senate, a law which seeks to regulate private investigators by preventing local authorities from managing licensing, thus affecting private investigator and private detective surety bond requirements.
• HB 169 passed to the Senate and declares the Alabama Development Office could determine performance bond requirements for special state projects.
• HB 191/HB 195, introduced on 2/7/12, sets for a bonding requirement for the treausrer of the board for a municipal improvement district.

If Alabama State Senate Bill (SB 136) passes, companies that wish to sell and install storm shelters in the State of Alabama will need to have a $20,000 surety bond.

Senator Paul Bussman, a co-sponsor of the bill, indicated that the growing storm shelter manufacturing industry could use some regulation. The $20,000 surety bond requirement provides protection “in case there was a problem with an installation. Just like insurance. Like any construction bond. When you have someone building you have to get a bond say if you don’t do it then bonding company will do it for them,” he said.

WAFF news in Huntsville, AL provides an in depth video about the storm shelter surety bond issue.