SENATE BILL REPORT

                   SB 5996

                      As of March 4, 1997

Title:  An act relating to contractor registration bonds.

Brief Description:  Regulating contractor registration bonds.

Sponsors:  Senators Schow, Newhouse and Horn.

Brief History:

Committee Activity:  Commerce & Labor:  3/4/97.

SENATE COMMITTEE ON COMMERCE & LABOR

Staff:  Aurora Almeda (786-7488)

Background:  Under the current law governing contractor registration, a contractor must renew his or her registration, surety bond, and insurance each year.

Members in the industry have expressed concern about the requirement of renewing a bond and insurance each year.

Summary of Bill:  A contractor=s surety bond and insurance are continuous until canceled or a judgment has been filed against the bond.  The bond amount for an applicant who is a general contractor is $6,000, and the bond amount for a specialty contractor is $4,000.  The bond may be canceled by the surety upon written notice to the director of the Department of Labor and Industries.  Registration of a contractor is suspended if there is a cancellation or revocation of the bond, or withdrawal of the surety from the bond.

The bond must be conditioned so that the contractor=s payment obligations include amounts that may be adjudged against the contractor by reason of breach of contract.

The prevailing party in a claim for breach of contract, against a contractor and the contractor=s bond claim, is entitled to costs, interest, and reasonable attorney=s fees.  The surety is not liable for any amount in excess of the penal limit of its bond.

Appropriation:  None.

Fiscal Note:  Not requested.

Effective Date:  Ninety days after adjournment of session in which bill is passed.