Sec. 32-55-5. Approval or decline of application

(a) No application for a Surety Bond Guarantee shall be approved unless the following determinations have been made by the Department.

(i) That there is a reasonable expectation that the applicant will perform the covenants and conditions of the contract with respect to which a Surety Bond Guarantee is required;

(ii) That the successful completion of the contract is feasible and the cost of such completion reasonable;

(iii) That the terms and conditions of any Surety bond guaranteed are reasonable in light of the risks involved and the extent of the Surety's participation.

(b) Surety Bond Guarantees for bid bonds shall obligate the State to pay the Surety a sum not to exceed the lesser of (1) 90 percent of the loss incurred by the Surety in fulfilling the terms of its bond as a result of the breach by the principal of its contract; or (2) $10,000.

(c) Surety Bond Guarantees of performance and payment bonds shall obligate the State to pay the Surety a sum not to exceed the lesser of (1) 90 percent of the loss incurred by the Surety in fulfilling the terms of its bond as a result of the breach by the principal of its contract; or (2) $100,000.

(d) An application for a Surety Bond Guarantee shall be approved or approval shall be declined within 15 working days of receipt by the Department of Economic Development of the completed Surety Bond Guarantee application forms, including all additional information required in supporting schedules and forms and the application fee of $10.

(Effective May 28, 1985)