New Jersey § 2a:44-143

§ 2a:44-143.

a. (1) When public buildings or other public works or improvements are about to be

constructed, erected, altered or repaired under contract, at the expense of the State

or any contracting unit, as defined in section 2 of P.L.1971, c. 198 ( C.40A:11-2 ), or school district, the board, officer or agent contracting on behalf of the State,

contracting unit or school district, shall require delivery of the payment and performance bond issued in accordance with N.J.S.2A:44-147 and otherwise , as provided for by law, with an obligation for the performance of the contract and for the payment by the contractor for all labor performed or materials, provisions, provender or other supplies, teams,

fuels, oils, implements or machinery used or consumed in, upon, for or about the construction,

erection, alteration or repair of such buildings, works or improvements provided by subcontractors or material suppliers in contract with the contractor,

or subcontractors or material suppliers in contract with a subcontractor to the contractor, which class of persons shall be the beneficiaries of the payment and performance bond. The board, officer or agent shall also require that all payment and performance bonds be issued by a surety which meets

the following standards: (a) The surety shall have the minimum surplus and capital stock or net cash assets

required by R.S. 17:17-6 or R.S. 17:17-7 , whichever is appropriate, at the time the invitation to bid is issued; and (b) With respect to all payment and performance bonds in the amount of $850,000 or

more, (i) if the amount of the bond is at least $850,000 but not more than $3.5 million,

the surety shall hold a current certificate of authority, issued by the United States

Secretary of the Treasury pursuant to 31 U.S.C. § 9305 , that is valid in the State of New Jersey as listed annually in the United States

Treasury Circular 570, except that if the surety has been operational for a period

in excess of five years, the surety shall be deemed to meet the requirements of this

subsubparagraph if it is rated in one of the three highest categories by an independent,

nationally recognized United States rating company that determines the financial stability

of insurance companies, which rating company or companies shall be determined pursuant

to standards promulgated by the Commissioner of Insurance by regulation adopted pursuant

to the “Administrative Procedure Act,” P.L.1968, c. 410 ( C.52:14B-1 et seq. ), and (ii) if the amount of the bond is more than $3.5 million, then the surety shall

hold a current certificate of authority, issued by the United States Secretary of

the Treasury pursuant to 31 U.S.C. § 9305 , that is valid in the State of New Jersey as listed annually in the United States

Treasury Circular 570 and, if the surety has been operational for a period in excess

of five years, shall be rated in one of the three highest categories by an independent,

nationally recognized United States rating company that determines the financial stability

of insurance companies, which rating company or companies shall be determined pursuant

to standards promulgated by the Commissioner of Insurance by regulation adopted pursuant

to the “Administrative Procedure Act,” P.L.1968, c. 410 ( C.52:14B-1 et seq. ). A surety subject to the provisions of subsubparagraph (ii) of this subparagraph

which does not hold a certificate of authority issued by the United States Secretary

of the Treasury shall be exempt from the requirement to hold such a certificate if

the surety meets an equivalent set of standards developed by the Commissioner of Insurance

through regulation which at least equal, and may exceed, the general criteria required

for issuance of a certificate of authority by the United States Secretary of the Treasury

pursuant to 31 U.S.C. § 9305 . A surety company seeking such an exemption shall, not later than the 180th day following

the effective date of P.L.1995, c. 384 , certify to the appropriate contracting unit that it meets that equivalent set of

standards set forth by the commissioner as promulgated. (2) When such contract is to be performed at the expense of the State and is entered

into by the Director of the Division of Building and Construction 1 or State departments designated by the Director of the Division of Building and Construction,

the director or the State departments may: (a) establish for that contract the amount

of the bond at any percentage, not exceeding 100%, of the amount bid, based upon the

director's or department's assessment of the risk presented to the State by the type

of contract , and other relevant factors, and (b) waive the bond requirement of this section entirely

if the contract is for a sum not exceeding $200,000. (3) When such a contract is to be performed at the expense of a contracting unit or

school district, the board, officer or agent contracting on behalf of the contracting

unit or school district may: (a) establish for that contract the amount of the bond

at any percentage, not exceeding 100%, of the amount bid, based upon the board's,

officer's or agent's assessment of the risk presented to the contracting unit or school

district by the type of contract and other relevant factors, and (b) waive the bond

requirement of this section entirely if the contract is for a sum not exceeding $100,000. b. A surety's obligation shall not extend to any claim for damages based upon alleged

negligence that resulted in personal injury, wrongful death, or damage to real or

personal property, and no bond shall in any way be construed as a liability insurance

policy. Nothing herein shall relieve the surety's obligation to guarantee the contractor's

performance of all conditions of the contract, including the maintenance of liability

insurance if and as required by the contract. Only the obligee named on the bond, and any subcontractor performing labor or any

subcontractor or materialman providing materials for the construction, erection, alteration

or repair of the public building, work or improvement for which the bond is required

pursuant to this section, shall have any claim against the surety under the bond. c. A board, officer or agent contracting on behalf of the State, contracting unit

or school district shall not accept more than one payment and performance bond to

cover a single construction contract. The board, officer or agent may accept a single bond executed by more than one surety

to cover a single construction contract only if the combined underwriting limitations

of all the named sureties, as set forth in the most current annual revision of United

States Treasury Circular 570, or as determined by the Commissioner of Insurance pursuant

to R.S. 17:18-9 , meet or exceed the amount of the contract to be performed. d. A board, officer or agent contracting on behalf of the State, contracting unit

or school district shall not accept a payment or performance bond unless there is

attached thereto a Surety Disclosure Statement and Certification to which each surety

executing the bond shall have subscribed. This statement and certification shall be complete in all respects and duly acknowledged

according to law, and shall have substantially the following form: SURETY DISCLOSURE STATEMENT AND CERTIFICATION ________________________, surety(ies) on the attached bond, hereby certifies(y) the following: (1) The surety meets the applicable capital and surplus requirements of R.S.17:17-6 or R.S.17:17-7 as of the surety's most current annual filing with the New Jersey Department of Insurance. (2) The capital (where applicable) and surplus, as determined in accordance with the

applicable laws of this State, of the surety(ies) participating in the issuance of

the attached bond is (are) in the following amount(s) as of the calendar year ended

December 31, .... (most recent calendar year for which capital and surplus amounts are available),

which amounts have been certified as indicated by certified public accountants (indicating

separately for each surety that surety's capital and surplus amounts, together with

the name and address of the firm of certified public accounts that shall have certified

those amounts): ................................ ................................ ................................. (3) (a) With respect to each surety participating in the issuance of the attached

bond that has received from the United States Secretary of the Treasury a certificate

of authority pursuant to 31 U.S.C. § 9305 , the underwriting limitation established therein and the date as of which that limitation

was effective is as follows (indicating for each such surety that surety's underwriting

limitation and the effective date thereof): ................................ ................................ ................................. (b) With respect to each surety participating in the issuance of the attached bond

that has not received such a certificate of authority from the United States Secretary

of the Treasury, the underwriting limitation of that surety as established pursuant

to R.S.17:18-9 as of (date on which such limitation was so established) is as follows (indicating

for each such surety that surety's underwriting limitation and the date on which that

limitation was established): ................................ ................................ ................................. (4) The amount of the bond to which this statement and certification is attached is

$........... (5) If, by virtue of one or more contracts of reinsurance, the amount of the bond

indicated under item (4) above exceeds the total underwriting limitation of all sureties

on the bond as set forth in items (3)(a) or (3)(b) above, or both, then for each such

contract of reinsurance: (a) The name and address of each such reinsurer under that contract and the amount

of that reinsurer's participation in the contract is as follows: ................................ ................................ ................................ ................................; and (b) Each surety that is party to any such contract of reinsurance certifies that each

reinsurer listed under item (5)(a) satisfies the credit for reinsurance requirement

established under P.L.1993, c. 243 ( C.17:51B-1 et seq. ) and any applicable regulations in effect as of the date on which the bond to which

this statement and certification is attached shall have been filed with the appropriate

public agency. CERTIFICATE (to be completed by an authorized certifying agent for each surety on the bond) I ......... (name of agent), as ......... (title of agent) for ......... (name of surety), a corporation/mutual insurance company/other (indicating type of

business organization) (circle one) domiciled in ......... (state of domicile), DO HEREBY CERTIFY that, to the best of my knowledge, the foregoing

statements made by me are true, and ACKNOWLEDGE that, if any of those statements are

false, this bond is VOIDABLE . _ (Signature of certifying agent) _ (Printed name of certifying agent) _ (Title of certifying agent) 1

Title of the Director of the Division of Building and Construction changed to Director

of Property Management and Construction by Reorganization Plan 003-1997, set out under

N.J.S.A. § 52:18A-178.