§ 20-63.01. Bonds required for commission contractors.

593 words·~3 min read·/nc/chapter-20/20-63-01

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(a)A surety bond is required for each commission contractor that is not a governmental subdivision of this State that is granted a contract to issue license plates or conduct business pursuant to G.S. 20-63. Provided, however, a commission contractor that is unable to secure a bond may, with the consent of the Division, provide an alternative to a surety bond, as provided in subsection

(c)of this section.

The Division may revoke, with cause, a contract with a commission contractor that fails to maintain a bond or an alternative to a bond, pursuant to this section.

(b)(1) When application is made for a contract or contract renewal, the applicant shall file a surety bond with the clerk of the superior court and/or the register of deeds of the county in which the commission contractor will be located. The bond shall be in favor of the Division. The bond shall be executed by the applicant as principal and by a bonding company authorized to do business in this State. The bond shall be conditioned to provide indemnification to the Division for a loss of revenue for any reason, including bankruptcy, employee embezzlement or theft, foreclosure, or ceasing to operate.

(2)The bond shall be in an amount determined by the Division to be adequate to provide indemnification to the Division under the terms of the bond. The bond amount shall be at least one hundred thousand dollars ($100,000).

(3)The bond shall remain in force and effect until cancelled by the surety. The surety may cancel the bond upon 30 days' notice to the Division. Cancellation of the bond shall not affect any liability incurred or accrued prior to the termination of the notice period.

(4)Repealed by Session Laws 2024-30, s. 18, effective July 2, 2024.

(c)An applicant that is unable to secure a bond may seek a waiver of the surety bond from the Division and approval of one of the surety bond alternatives set forth in this subsection. With the approval of the Division, an applicant may file with the clerk of the superior court and/or the register of deeds of the county in which the commission contractor will be located, in lieu of a bond:

(1)An assignment of a savings account in an amount equal to the bond required

(i)that is in a form acceptable to the Division;

(ii)that is executed by the applicant;

(iii)that is executed by a federally insured depository institution or a trust institution authorized to do business in this State; and

(iv)for which access to the account in favor of the State of North Carolina is subject to the same conditions as for a bond in subsection

(b)of this section.

(2)A certificate of deposit

(i)that is executed by a federally insured depository institution or a trust institution authorized to do business in this State;

(ii)that is either payable to the State of North Carolina, unrestrictively endorsed to the Division of Motor Vehicles; in the case of a negotiable certificate of deposit, is unrestrictively endorsed to the Division of Motor Vehicles; or in the case of a nonnegotiable certificate of deposit, is assigned to the Division of Motor Vehicles in a form satisfactory to the Division; and

(iii)for which access to the certificate of deposit in favor of the State of North Carolina is subject to the same conditions as for a bond in subsection

(b)of this section. (2007-488, s. 1; 2017-25, s. 1(b); 2024-30, s. 18.)