I just received an update from Kent Starwalt at the Tennessee Association of Road Builders and Brian Egan, Construction Division Director at TDOT, regarding new state requirements for payment and performance bonds in Tennessee. The requirements apply to "contractors entering into contracts with any city, county or state authority for public works within this state."
The General Assembly has passed, and the Governor has signed, legislation which sets standards for what constitutes a “good and solvent” surety bond, found at Public Chapter 195 (pdf). The new law states that:
- the bond must be written by a surety company listed on the U.S. Treasury Department (USTD) financial management service list of approved surety companies;
- the bond shall not be written for an amount in excess of the amount indicated on the same U.S. Treasury list; and
- the surety must be licensed to do business as a surety or insurance company in the State of Tennessee.