Use Of Government Obligations Instead Of Surety Bonds

TITLE 54 PROFESSIONS, VOCATIONS, AND BUSINESSES CHAPTER 19 PUBLIC WORKS CONTRACTORS 54-1926A. Use of government obligations instead of surety bonds. (a) If a person is required under a law of the state of Idaho to give a surety bond, the person may give a government obligation, as defined in subsection (2)(h) of section 54-1901 , Idaho Code. The government obligation shall: (1)  Be given to the official having authority to approve the surety bond, or its authorized custodian; (2)  Be in an amount equal at fair market value to the penal sum of the required surety bond; and (3)  Authorize the official receiving the obligation to collect or sell the obligation if the person defaults on a required condition. (b)  (1) An official receiving a government obligation under subsection (a) of this section may deposit it with: 1.  The state treasurer; 2.  A national or state chartered bank; or 3.  A depository designated by the state treasurer. (2)  The state treasurer, bank, or depository shall issue a safekeeping receipt that describes the obligation deposited. (c)  Using a government obligation instead of a surety bond for security is the same as using: (1)  A corporate surety bond; (2)  A certified check; (3)  A bank draft; (4)  A post office money order; or (5)  Cash. (d)  When security is no longer required, a government obligation given instead of a surety bond shall be returned to the person giving the obligation. If a person supplying labor or material to a contractor defaulting under the public contracts bond act, sections 54-1925 through 54-1930 , Idaho Code, files with the contracting body the application and affidavit provided under section 54-1927 , Idaho Code, the contracting body: (1)  May return to the contractor the government obligation given as security or proceeds of the government obligation given under the public contracts bond act, sections 54-1925 through 54-1930 , Idaho Code, only after the ninety (90) day period for bringing a civil action under section 54-1927 , Idaho Code; (2)  Shall hold the government obligation or the proceeds subject to the order of the court having jurisdiction of the action if a civil action is brought in the ninety (90) day period. (e)  The provisions of this section do not affect the: (1)  Priority of a claim of the contracting body against a government obligation given under this section; (2)  Right or remedy of the contracting body for default on an obligation provided under this section; (3)  Authority of a court over a government obligation given as security in a civil action; and (4)  Authority of an official of the state of Idaho authorized by another law to receive a government obligation as security. (f)  To avoid frequent substitution of government obligations, the state treasurer may promulgate rules limiting the effect of the provisions of this section, to a government obligation maturing more than one (1) year after the date the obligation is given as security.