Another "Gift" from our Friends in Sacramento- Contractor’s License Bond Increase to $15,0
On October 8, 2015, Governor Brown signed Senate Bill 467, authored by the Southern California Contractors Association’s Legislator of the Year, Senator Hill. Senate Bill 467, requires, inter alia, as a condition precedent to the issuance, reinstatement, reactivation, renewal, or continued maintenance of a license, the applicant and/or licensee to file or have on file a contractor’s bond in the sum of $15,000. The full text of SB 467 can be found here.
Contractors should contact their bond agent, broker, or existing bond company for guidance on increasing their bond amount to comply with this new requirement. This law goes into effect January 1, 2016 so you should contact your broker, agent or existing bond company and make their holiday season before the New Year—just another gift to the construction industry from our friends in Sacramento.
While this is yet another example of increased costs and regulation of contractors in our Golden State (not to mention some additional “juice and gravy” for the surety and insurance industries), contractors please remember that this is a requirement and California has incredibly draconian penalties for contractors who are not licensed. Consequently, if you are a contractor, or a contractor “wanna be,” you must comply with the new law.
Next year, I think contractors would prefer a stale fruit cake.