SENATE BILL REPORT
BYSenators Lee and Rasmussen
Allowing security deposits in lieu of bonding under certain circumstances.
Senate Committee on Economic Development & Labor
Senate Hearing Date(s):January 31, 1989
Senate Staff:Steve Boruchowitz (786-7429)
AS OF JANUARY 24, 1989
There are 13 license categories administered by the Department of Licensing that have surety bond requirements. Several other agencies have similar requirements. It has been argued by some that surety bond company requirements and expenses are prohibitive, that cash deposits allow for an equal amount of consumer protection, and that bond requirements can restrain new businesses. Also, several of these license categories do allow cash deposits, and therefore the issue of fairness has been raised.
All license categories administered by the Department of Licensing and several administered by other agencies that have surety bond requirements are given a cash-in-lieu option. Deposits are returned one year after the license expires or one year after a surety bond has been filed for the same license. Cash accounts must be maintained and replenished within 20 days of any withdrawal below the bond dollar amount. Interest accrues to the depositor. The responsible agency can authorize payment from the account based on claims presented.
Fiscal Note: requested January 23, 1989