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§ 858.1. Blanket Performance and Payment Bond Requirements.

16 CA ADC § 858.1Barclays Official California Code of Regulations

Barclays California Code of Regulations
Title 16. Professional and Vocational Regulations
Division 8. Contractors' State License Board
Article 6. Bonds
16 CCR § 858.1
§ 858.1. Blanket Performance and Payment Bond Requirements.
Currentness
(a) A blanket bond that is filed on behalf of a licensee to satisfy the provisions of Section 858 shall be underwritten for a dollar amount that is sufficient to cover one-hundred percent (100%) of the home improvement contracts for which the licensee has an obligation.
(b) Upon written request by a licensee, the Registrar is authorized to approve a blanket bond that is capped according to the schedule listed under subsection (c) provided the following conditions are met:
(1) The licensee, or the parent company of the licensee, is required to submit annual reports (Form 10-K) to the United States Securities and Exchange Commission (U.S. SEC).
(2) Upon the filing of a request that the blanket bond be capped, a copy of the most recently filed Form 10-K shall be submitted to the Registrar. Thereafter, a copy of any Form 10-K report shall be submitted to the Registrar within 10 days of filing with the U.S. SEC.
(3) The net worth of the applicable firm shall, initially and annually thereafter, be not less than 10 times the sum of the blanket bond as determined by the Registrar. Each net worth calculation shall be applicable to the period for which the most recent Form 10-K report was submitted to the U.S. SEC.
(c) The blanket bonds for which a request has been submitted under subsection (b) shall comply with the following schedule:
(1) If a licensee, or the parent company of a licensee, is classified as a “large accelerated filer” by the U.S. SEC, the amount of the blanket bond shall be $10 million.
(2) If a licensee, or the parent company of a licensee, is classified as an “accelerated filer” by the U.S. SEC, the amount of the blanket bond shall be $5 million.
(3) If a licensee, or the parent company of a licensee, is classified as a “non-accelerated filer” by the U.S. SEC, the amount of the blanket bond shall be $1 million.
(d) A licensee who is granted approval of a blanket bond pursuant to subsections (b) and (c) is not subject to the biennial financial reporting requirement specified under Section 858.4(a)(2). However, the qualifier's certification statement must be submitted biennially as specified under that section.
(e) For the purpose of executing the qualifier's certification statement required under Section 858.2(a)(4), the provisions of subsections (a), (b), and (c) of Section 858.1 shall be referenced collectively as “the 100% rule.”
On the date that this section becomes effective, any licensee that has a blanket bond on file with the Board that fails to comply with the 100% rule shall achieve compliance not later than 90 days after the effective date of the section. The Registrar is authorized to rescind the approval of the blanket bond in accordance with the provisions of Section 858.8 of this Article if the licensee fails to comply with any provision of this section.
(f) The form of the blanket bond specified under this section is subject to the approval of the Registrar and shall conform to the following with regard to content:
This bond shall be filed with the Registrar of Contractors
State of California
Contractors State License Board
Surety Code: ____________________
Bond No.: ____________________
License No.: ____________________
BLANKET PERFORMANCE AND PAYMENT BOND
(Business and Professions Code Section 7159.5)
The term of this bond is ____________________ (Starting Date) to ____________________ (Ending Date).
KNOW ALL BY THESE PRESENTS: That ____________________ (Business Name as Shown on the License) whose address for service is
 
(Street Address)
(City)
(State)
(Zip Code)
as Principal, and ______________________________ (Name of Surety) a corporation organized under the laws of the State of _______________ and authorized to transact a general surety business in the State of California, as Surety, are held and firmly bound unto each owner or tenant of a residence or dwelling unit as the beneficiaries with whom the Principal, as of the date of this bond and thereafter, enters into a home improvement contract as defined in Section 7151.2 of the Business and Professions Code for repairing, remodeling, altering, converting, or modernizing such building or structure; and the aggregate contract price specified in one or more improvement contracts including all labor, services, and materials to be furnished by the Principal as the contractor exceeds ____________________ the dollar amount prescribed in subparagraph (3) of subdivision (b) of Section 7159 of the Business and Professions Code in the just and full sum of the amount of each individual contract for which sum, well and truly to be paid, we bind ourselves, our heirs, executors, successors, and assigns, jointly and severally, firmly by these presents. The blanket performance and payment bond is issued in the amount of _______________ (Bond Dollar Amount) ($ _______________).
THE CONDITION OF THE OBLIGATION IS SUCH, That, WHEREAS, Sections 7159 and 7159.5 of the Business and Professions Code provide for bonding requirements for contractors entering into contracts covered by these provisions of law, AND, WHEREAS, the Principal desires to file a blanket guarantee to operate as security in accordance with Section 995.020 of the Code of Civil Procedure, to cover the performance and payment of all obligations resultant from such contracts in order to conduct business under the exemptions specified under paragraph (8) of subdivision (a) of Section 7159.5 of the Business and Professions Code. NOW THEREFORE, if the Principal shall well and truly perform and fulfill all the understandings, covenants, terms, conditions, and agreements of said contracts, and shall also well and truly perform and fulfill all the undertakings, covenants, terms, conditions, and agreements of any and all duly authorized modifications of said contracts; and if the Principal shall promptly make payments to all persons, whether or not in direct contractual relationship with Principal, supplying labor or material or both for the prosecution of the work provided in said contracts, then this obligation is to be void; otherwise, it is to remain in full force and effect as though separate bonds in the full amount of the contract price had been written on the individual contracts.
PROVIDED, HOWEVER, this bond is issued subject to the following express conditions:
1. This bond may be cancelled by the Surety in accordance with the provisions of Sections 996.310 et seq. of the Code of Civil Procedure.
2. This bond shall be deemed continuous in form and shall remain in full force and effect and shall run concurrently with the license period for which the license is granted and shall continue beyond that period and every succeeding license period or periods for which said Principal may hold this license or until the effective date of rescission of the Registrar's approval of the bond, after which liability hereunder shall cease in accordance with provisions of Section 996.360 of the Code of Civil Procedure.
3. This bond to become effective ____________________ (Date)
4. Even though this bond may be in effect for more than one year, the Surety's aggregate liability for all contracts covered hereunder shall in no event exceed the amount set forth above.
5. The Surety signing this bond is jointly and severally liable on the obligations of the bond, the obligations of the statutes providing for this bond, and the applicable provisions of the Code of Civil Procedure regarding bonds.
 
(Name of Surety)
(Address for Service)
I declare under penalty of perjury under the laws of the State of California that I have executed the foregoing bond under an unrevoked power of attorney. I further declare that I have relied upon the “Qualifier's Certification Statement” to determine that, as of the date of execution, the penal sum of this bond is a good faith valuation of the funds required to safeguard the financial interests of the beneficiaries relative to the obligations for which this bond is posted.
Executed in _______________, _______________ (City and State) on _______________ (Date), under the laws of the State of California.
Certificate of Authority #
 
Signature of Attorney-in-Fact
 
Printed or Typed Name of Attorney-in-Fact
 
Address of Attorney-in-Fact
 
Telephone Number of Attorney-in-Fact ( )
 
Signature of Principal (Qualifier for the License)
 
13B-39 (rev. 07/2021)

Credits

Note: Authority cited: Section 7008, Business and Professions Code. Reference: Sections 7151.2, 7159 and 7159.5, Business and Professions Code.
History
1. New section filed 11-22-2011; operative 12-22-2011 (Register 2011, No. 47).
2. Change without regulatory effect amending subsections (a) and (f) filed 11-10-2021 pursuant to section 100, title 1, California Code of Regulations (Register 2021, No. 46).
This database is current through 5/26/23 Register 2023, No. 21.
Cal. Admin. Code tit. 16, § 858.1, 16 CA ADC § 858.1
End of Document