(a) Requirements. - To obtain bonding assistance under this Part, an applicant must meet the eligibility requirements of G.S. 143B-472.78 and must demonstrate to the satisfaction of the Authority that all of the following apply:
(1) A bond is required in order to bid on a contract or to serve as a prime contractor or subcontractor.
(2) A bond is not obtainable on reasonable terms and conditions without assistance under this Part.
(3) The applicant will not subcontract more than seventy-five percent (75%) of the face value of the contract.
(b) Default. - If an applicant or a person that is a related party with respect to the applicant has ever defaulted on a bond or guaranty provided by the Authority, the Authority may approve a guaranty or bond under this Part only if one of the following applies:
(1) Five years have elapsed since the time of the default.
(2) Every default by the applicant or related party in any program administered by the Authority has been cured.
(c) Economic Effect. - Before issuing a guaranty or bond, the Authority must determine that the contract for which a bond is sought to be guaranteed or issued has a substantial economic effect. To determine the economic effect of a contract, the Authority must consider all of the following:
(1) The amount of the guaranty obligation.
(2) The terms of the bond to be guaranteed.
(3) The number of new jobs that will be created by the contract to be bonded.
(4) Any other factor that the Authority considers relevant. (2007-441, s. 1.)
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Last modified: March 23, 2014