Surety Bond Insights and Requirements: July 2017 UpdatesJuly 2017

HB 1542 takes effect on January 1, 2018, and will require Virginia home service contract providers to post a surety bond when becoming licensed.

Virginia home service contract providers offer contracts that are for the repair, service, replacement, or maintenance of residential property or to cover the cost of service, repair, replacement, or maintenance of property that failed due to defects in materials or workmanship or due to normal wear and tear. Home service contracts can also cover roof leakage and damage sustained from power surges.

HB 1542 moves oversight of Virginia home service contract providers from the Department of Insurance to the Department of Agriculture and Consumer Services (VDACS). Providers must obtain a license from the VDACS and pay a $300 registration fee every year. Licenses must be renewed annually on or before July 1, and if a provider fails to register before selling a contract, the provider will be fined a $100 late filing fee for every 30-day period or portion thereof that registration is late. Providers that do not renew their registration on time must pay a $50 late fee for every 30-day period or portion thereof that registration is late.

The surety bond required of Virginia home service contract providers will be determined based on the value of unexpired home service contracts the provider has sold. The bond amount is determined as follows:

• $50,001 to $300,000 in contracts�$40,000 surety bond
• $300,001 to $750,000 in contracts�$65,000 surety bond
• $750,001 or more in contracts�$90,000 surety bond

Home service contract providers’ surety bonds guarantee that they will not cause financial damage to customers. In the event that a provider causes a customer to incur financial damage, the customer can file a claim against the provider’s surety bond and seek reimbursement.

Ready to get bonded as a home service contract provider? Get in touch with Single Source Insurance today!

Alabama natural gas public sellers and fleet producers will be required to get a license and post a surety bond following HB 333‘s passage. The new law takes effect on October 18, 2018.

Alabama natural gas public sellers operate service stations where compressed or liquefied natural gas�CNG or LNG� are sold to the public for use in vehicles. Fleet producers produce the CNG or LNG. HB 333 also creates a license for sellers and producers and a system for licensing natural gas.

HB 333 requires Alabama natural gas public sellers and fleet producers to apply for licensure through the Department of Revenue. In order to become licensed, applicants must submit a $50 application fee plus $25 for each additional business location. Sellers and producers must also obtain a surety bond that is $25,000 or approximately twice the seller or producer’s average monthly tax liability.

HB 333’s effective date will also bring a new excise tax on CNG and LNG. An excise tax of $.08 per diesel or gasoline gallon equivalent (DGE or GGE) will take effect on October 1, 2018.�On October 1, 2023, the excise tax will increase to $.13 per DGE or GGE. In lieu of the excise tax for personal producers of CNG, the state will assess a $100 application fee to be paid each year by January 20, beginning January 1, 2019.

The excise tax levied on Alabama natural gas public sellers and fleet producers brings about the surety bond requirement, since the bond is a guarantee that sellers and producers pay their taxes on time and as required. The surety bond amount will be reviewed by the Department every five years after January 2023 to ensure every seller and producer’s bond amount is sufficient.

Alabama natural gas public sellers and fleet producers must pay their taxes before the 20th of each month for the previous month, to be submitted with a report detailing the amount of CNG and LNG sold.

Ready to get an Alabama surety bond? Single Source Insurance can help! Get in touch and get a quote today.

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Texas driver education schools can post a lesser surety bond following HB 912‘s passage. The new law took effect when HB 912 was passed on June 15, 2016.

Drivers under the age of 18 must complete a driver education course offered through a Texas driver education school, parent-taught, or through a public school. Driver education schools must obtain a license and previously, a $25,000 surety bond. HB 912 decreases the required surety bond to $10,000. Driver education schools must increase their bond amount by $5,000 for each additional branch location of the school. A Texas driver education school surety bond serves as proof of the school’s financial stability and guarantees that the school will comply with Texas Education Code Title 5 Chapter 1001.

To get a Texas driver education school license, applicants must apply through the Texas Department of Licensing and Regulation (TDLR). Licensee applicants must include the following information on their application:

• DBA/assumed name of school
• Organization type
• School mailing �and physical address and contact information
• Owner information
• Signature of applicant, officer, or other authorized school representative
• Fee sheet and fees (including $1,000 license application fee)
• Original surety bond
• Copy of current insurance in the amount specified in the Transportation Code Chapter 601
• Staff roster
• Driver education course list

The full list of required documents is detailed on the Texas driver education school application, and all forms areavailable through the TDLR.

In addition to the decreased surety bond for Texas driver education schools, HB 912 allows driver education courses’ certificates of completion to be issued electronically. Under previous law, the certificate had to be printed. HB 912 also clarifies requirements for who can conduct parent-taught driver education, requiring that they are at least 25 years old with at least seven years’ driving experience, among other regulations.

Ready to get your Texas driver education school licensed and bonded? Contact Single Source Insurance for your Texas surety bond!

The passage of LB 186 will bring about some changes to Nebraska money transmitters’ surety bond amounts. The bill takes effect three months after the Nebraska legislature’s May 23 adjournment.

Currently, Nebraska money transmitters must post a surety bond of $100,000, plus $5,000 for each additional business location. The surety bond can be increased up to $250,000 by the director of the Department of Banking and Finance. LB 186 removes the requirement for a $5,000 surety bond increase per location, but new money transmitter applicants will still be required to post a $100,000 surety bond when applying for licensure. The increase to $250,000 at the director’s discretion also remains part of the law.

The change for Nebraska money transmitters comes after their first year of licensure, at which time the surety bond amount will depend on the dollar amount of transactions in the previous year. Per LB 186, the surety bond amounts required are as follows:

• Up to $2,000,000 in transactions�$100,000 surety bond
• $2,000,000.01 to $4,000,000 in transactions�$150,000 surety bond
• $4,000,000.01 to $6,000,000 in transactions�$200,000 surety bond
• $6,000,000 or more in transactions�$250,000 surety bond

If a licensee fails to maintain the correct surety bond amount, the Department must give the licensee 30 days’ written notice to comply with the law.

Nebraska money transmitters apply for licensure through the Nationwide Multistate Licensing System (NMLS) and the Department has created a licensing checklist for applicants. Some of the information applicants must submit is as follows:

• $1,000 licensing fee
• DBAs and trade names
• Money Services Business (MSB) number issued by the United States Department of the Treasury
• Audited financial statement for the most recent three fiscal years
• Business plan
• Certificate of authority/Good standing certificate

The Department’s checklist contains a full list of required applicant information. Nebraska money transmitters’ licenses expire annually on December 31 and they must submit the following information for renewal on or before that date:

• $250 licensing fee plus any processing fees required under Nebraska Revised Statutes 8-2730
• Copy of licensee’s most recent audited financial statement
• Any material changes from the original application not already reported to the Department

Nebraska Revised Statutes 8-2734 contains a full list of renewal requirements.

Ready to get a Nebraska surety bond? The team at Single Source Insurance can help you get bonded today!

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Florida travel agents, referred to as Florida sellers of travel, must register with the state and purchase a surety bond in order to do business. Read on to find out how to get started as a Florida travel agent.

Registration for Florida Travel Agents

Florida travel agents must register every year with the�Florida Department of Agriculture and Consumer Services (FDACS). Sellers of travel must provide the FDACS with the following information when registering, among other information:

• Organization’s legal name
• Organization’s street address and phone number
• Designated contact person and their name, title, and address
• Federal employer identification number
• $300 registration fee

The registration application contains a full list of the required information for seller of travel applicants. Each advertisement, contract, certificate, and travel document issued by the seller of travel must include their registration number in a prescribed format and display their registration certificate prominently in the place of business.

Florida travel agents that offer vacation certificates (defined in Section 559.927 of the Florida Statutes) must also submit an additional $100 document fee along with the documents required under Florida Statutes Section 559.9295. Sellers of travel that employ independent sales agents must include a $50 fee per agent.

Florida Seller of Travel Surety Bond

Florida travel agents whose businesses do not offer vacation certificates typically need to include a $25,000 surety bond with their registration. If the agent has no unresolved complaints can request to have their surety bond amount reduced by submitting a Security Reduction Application along with the travel agent’s federal income tax return or audited financial statement for the previous year. If the reduction is granted, the surety bond amounts are as follows:

• $10,000 bond for a new business, business under new ownership, or a business under the same ownership for at least one year with less than $500,000 gross annual sales
• $15,000 bond for a business under the same ownership for at least one year with gross annual sales between $500,000 and $1,000,000
• $20,000 bond for a�business under the same ownership for at least one year with gross annual sales between $1,000,000 and $2,000,000

New businesses do not need to provide financial documents with their Security Reduction Application.�Florida travel agents offering vacation certificates will need to submit a $50,000 surety bond and are not eligible for a security reduction. All sellers of travel must submit an original surety bond and not a copy of the document.

Get in touch with the FDACS to verify your bond amount and the documents needed to become registered. If you’re ready to get a Florida travel agent surety bond, get in touch with Single Source Insurance today!

Mississippi small craft breweries need to post a surety bond if they plan to sell their products (beer or wine) on the premises, for consumption on or off premises. HB 1322 took effect on July 1, 2017, and the new surety bond requirement is in addition to one already required.

Mississippi small craft breweries are those permitted to brew or manufacture beer with an alcohol by volume (ABV) of no more than 8% and wine with an ABV of no more than 5%. As defined in HB 1322, a small craft brewery manufactures or brews no more than 60,000 barrels of light wine or beer, including any brewed under contract with another beer manufacturer. Small craft breweries cannot sell at retail more than 10% or 1,500 barrels of beer or wine produced annually on site, whichever is less�not including contract-brewed beer. There are a few more rules small craft breweries must follow in order to be eligible for on-site sales:

• Beer and wine must be available to wholesalers for purchase
• No more than 576 ounces of beer or wine can be sold to one person in a 24-hour period
• Beer or wine must be sold at retail only for personal use, not for resale
• No sales of contract-brewed beer can be made
• No beer or wine can be shipped to consumers

HB 1322 requires Mississippi small craft breweries to abide by many of the same general rules as a bar or restaurant, including prohibiting sales to intoxicated or underage persons and prohibiting sales between midnight and 7 a.m. unless the sale of alcohol is extended beyond midnight in their area.

When Mississippi small craft breweries apply for a manufacturing permit, they must already post a surety bond in an amount between $5,000 and $200,000, not to exceed the amount of 60 days’ excise tax owed by the brewery. The amount is determined by the Department of Revenue’s Mississippi State Tax Commission. HB 1322 now requires small craft breweries that manufacture and sell their products on the premises to post a separate surety bond in a similar amount, also not to exceed 60 days of excise tax owed by the brewery. The new surety bond is an assurance that the brewery will pay all excise taxes owed to the state.

Mississippi small craft breweries’ monthly excise taxes must be paid by the fifteenth of the following month, and breweries can incur fines for late or nonpayment of taxes. Read HB 1322 and consult the Mississippi Department of Revenue for full regulations.

Ready to get bonded in Mississippi? Single Source Insurance can help!