17 CAR § 11-307 – Bonding

(a) Conditions of bond for resident and nonresident contractor.
1. (1) The water well contractor, as defined in Acts 1969, No. 641, as amended, as principal and a surety company or corporation authorized to do business in the State of Arkansas as surety shall bind themselves and their successors and assigns jointly and severally to the Arkansas Natural Resources Commission for the use and benefit of the public in the full penal sum of no less than twenty thousand dollars ($20,000) for each licensing year beginning August 1, 2016, that said principal and any person employed by him or her shall duly comply with Acts 1969, No. 641, as amended, and all rules pertaining to said act.
2. (2) Any one (1) contract, as prescribed herein by subsection (g) of this section, between said principal and a person doing business with said principal exceeding twenty thousand dollars ($20,000) or the amount of aforesaid bond if in excess of twenty thousand dollars ($20,000) shall require said principal to enter into a separate agreement and a bond equal to the amount of said contract as required in Acts 1969, No. 641, § 11(c).
(b) Recovery of damages. Any and all persons doing business with said principal or person in his or her employ, who have been damaged by reason of violation of any of the provisions set out in Acts 1969, No. 641, as amended, and all rules pertaining to said act, may in their own name and without joining the commission as a party, sue thereon and join in said action as one (1) of the defendants against the surety on said bond or bonds.
(c) Exhaustion of administrative remedies. No action shall be taken against the principal and surety on said bond or bonds until all reasonable administrative remedies have been exhausted by the commission.
(d) Term of bond. Each bond shall be construed as a new bond in the sum aforesaid in subsection (a) of this section, for each year it remains in full force unless the bond is waived as set forth in subsection (h) of this section.
(e) Termination of bond.
1. (1) The surety shall terminate each bond by giving not less than thirty (30) days written notice of the effective date of said termination to the commission.
2. (2) Termination shall not relieve said surety or principal of any liability during which the bond was in force until a period of not less than five (5) years from the effective date of termination has expired.
(f) Bond form.
1. (1) The commission shall provide a contractor's bond form to each person applying for the contractor's license.
2. (2) Each contractor's license shall be issued only after the receipt of the original copy of the water well contractor's bond prescribed above and said form is completed and notarized.
3. (3) The contractor's license may be renewed annually without receipt of a new contractor's bond form provided the commission has proof that the original contractor's bond or bonds remain in full force and effect.
(g) The amount of the contract. "The amount of the contract" as used in subsection (a) of this section shall be defined as the amount or cost of the construction of the well, including, but not limited to, the cost of drilling, casing, screens, grout, seals, etc., excluding the costs of systems employed, constructed, or installed on the discharge side of the pressure tank or beyond the point of discharge from the pump if no tank is employed, or to pivot systems, ditches, pumping stations, pump houses, buildings, air conditioning duct work, or items that the water well contractor may construct or install, but are not directly connected with the construction of the well or included under the definition or scope of a water well as prescribed in Acts 1969, No. 641, § 3(e) and § 4, as amended, and this part.
(h) Waiver.
1. (1) The commission shall reserve the right to waive the requirement of obtaining a water well contractor's bond in the amount of twenty thousand dollars ($20,000) in favor of a bond of a lesser amount to those contractors whose contracts for each one-year period consistently amount to less than twenty thousand dollars ($20,000).
2. (2) The contractor must provide proof that he or she is unable to obtain a bond, or such bond would cause an undue hardship.
3. (3) Further, the Executive Secretary of the Commission must be willing to recommend that a bond of a lesser amount would be sufficient protection for any persons doing business with the contractor.
(i) Cash bond.
1. (1) Persons who install pumping equipment or repair pumping equipment that have been granted a waiver for a twenty thousand-dollar bond and are unable to post a twenty thousand-dollar bond may post in lieu of a water well contractor’s bond an escrow cash bond of no less than five hundred dollars ($500) per year until twenty thousand dollars ($20,000) is accrued.
2. (2) Persons authorized to post an escrow cash bond in lieu of posting bond shall also submit a statement of personal indemnification signed by the principal owner or chief executive officer.