GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2001
H	1
HOUSE BILL 1099

 
 
Short Title:	Substitute Letter of Credit for Surety Bond.	()	
Sponsors:	Representatives Church and Wainwright (Primary Sponsors).	
Referred to:	Judiciary II.	
April 11, 2001

A BILL TO BE ENTITLED
AN ACT to allow letters of credit to substitute for surety bonds to meet certain statutory requirements.

The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 1‑339.25 reads as rewritten:
"§ 1‑339.25.  Public sale; upset bid on real property; compliance bond.
(a)	An upset bid is an advanced, increased or raised bid in a public sale by auction whereby a person offers to purchase real property theretofore sold for an amount exceeding the reported sale price by a minimum of five percent (5%) thereof, but in any event with a minimum increase of seven hundred fifty dollars ($750.00). An upset bid shall be made by delivering to the clerk of superior court, with whom the report of the sale was filed, a deposit in cash or by certified check or cashier's check satisfactory to the clerk in an amount greater than or equal to five percent (5%) of the amount of the upset bid but in no event less than seven hundred fifty dollars ($750.00). The deposit required by this section shall be filed with the clerk of the superior court, with whom the report of sale was filed, by the close of normal business hours on the tenth day after the filing of the report of sale, and if the tenth day shall fall upon a Sunday or legal holiday or upon a day in which the office of the clerk is not open for the regular dispatch of its business, the deposit may be made on the day following when the office is open for the regular dispatch of its business. An upset bid need not be in writing, and the timely deposit with the clerk of the required amount, together with an indication to the clerk as to the sale to which it is applicable, is sufficient to constitute the upset bid, subject to the provisions of subsection (b) of this section.
(b)	The clerk of the superior court may require a person submitting an upset bid also to deposit a cash bond, or, in lieu thereof at the option of the bidder, a surety bond or letter of credit, approved by the clerk, conditioned on compliance with the upset bid. The letter of credit shall be an irrevocable letter of credit from a bank or savings institution insured by the Federal Deposit Insurance Corporation. The amount of such bond or letter of credit shall not exceed the amount of the upset bid less the amount of the required deposit.
(c)	The clerk of the superior court may in the order of resale require the highest bidder at a resale had pursuant to an upset bid to deposit with the clerk a cash bond, or, in lieu thereof at the option of the bidder, a surety bond or letter of credit, approved by the clerk, conditioned on compliance with his bid. The letter of credit shall be an irrevocable letter of credit from a bank or savings institution insured by the Federal Deposit Insurance Corporation. The bond shall be in such amount as the clerk deems adequate, but in no case greater than the amount of the bid of the person being required to furnish the bond.
(d)	A compliance bond or letter of credit, such as is provided for by subsections (b) and (c), shall be payable to the State of North Carolina for the use of the parties in interest and shall be conditioned on the principal obligor's compliance with his bid.
(e)	The provisions of this section do not apply to public sales of timber by sealed bid."
SECTION 2. G.S. 1‑339.64 reads as rewritten:
"§ 1‑339.64.  Upset bid on real property; compliance bond.
(a)	An upset bid is an advanced, increased or raised bid whereby a person offers to purchase real property theretofore sold for an amount exceeding the reported sale price by a minimum of five percent (5%) thereof, but in any event with a minimum increase of seven hundred fifty dollars ($750.00). An upset bid shall be made by delivering to the clerk of superior court, with whom the report of sale was filed, a deposit in cash or by certified check or cashier's check satisfactory to the clerk in an amount greater than or equal to five percent (5%) of the amount of the upset bid but in no event less than seven hundred fifty dollars ($750.00). The deposit required by this section shall be filed with the clerk of the superior court, with whom the report of sale was filed, by the close of normal business hours on the tenth day after the filing of the report of sale, and if the tenth day shall fall upon a Sunday or legal holiday or upon a day in which the office of the clerk is not open for the regular dispatch of its business, the deposit may be made and the upset bid filed on the day following when said office is open for the regular dispatch of its business. An upset bid need not be in writing, and the timely deposit with the clerk of the required amount, together with an indication to the clerk as to the sale to which it is applicable, is sufficient to constitute the upset bid, subject to the provisions of subsection (b).
(b)	The clerk of the superior court may require the person submitting an upset bid also to deposit a cash bond, or, in lieu thereof at the option of the bidder, a surety bond or letter of credit, approved by the clerk, conditioned on compliance with the upset bid. The amount of such bond or letter of credit shall not exceed the amount of the upset bid less the amount of the required deposit. The letter of credit shall be an irrevocable letter of credit from a bank or savings institution insured by the Federal Deposit Insurance Corporation.
(c)	The clerk of the superior court may in the order of resale require the highest bidder at a resale had pursuant to an upset bid to deposit with the clerk a cash bond, or, in lieu thereof at the option of the bidder, a surety bond or letter of credit, approved by the clerk, conditioned on compliance with his bid. The bond or letter of credit shall be in such amount as the clerk deems adequate but in no case greater than the amount of the bid of the person being required to furnish the  bond or letter of credit. The letter of credit shall be an irrevocable letter of credit from a bank or savings institution insured by the Federal Deposit Insurance Corporation.
(d)	A compliance bond, such as is provided for by subsections (b) and (c), shall be payable to the State of North Carolina for the use of the parties in interest and shall be conditioned on the principal obligor's compliance with his bid."
SECTION 3. G.S. 20‑288(e) reads as rewritten:
"(e)	Each applicant approved by the Division for license as a motor vehicle dealer, manufacturer, factory branch, distributor, distributor branch, or wholesaler shall furnish a corporate surety  bond, letter of credit,  cash bond or fixed value equivalent of the bond. The amount of the bond or letter of credit for an applicant for a motor vehicle dealer's license is twenty‑five thousand dollars ($25,000) for one established salesroom of the applicant and ten thousand dollars ($10,000) for each of the applicant's additional established salesrooms. The amount of the bond or letter of credit for other applicants required to furnish a bond is twenty-five thousand dollars ($25,000) for one place of business of the applicant and ten thousand dollars ($10,000) for each of the applicant's additional places of business. 
A corporate surety bond or letter of credit shall be approved by the Commissioner as to form and shall be conditioned that the obligor will faithfully conform to and abide by the provisions of this Article and Article 15. A cash bond or fixed value equivalent thereof shall be approved by the Commissioner as to form and terms of deposits as will secure the ultimate beneficiaries of the bond; and such bond shall not be available for delivery to any person contrary to the rules of the Commissioner. The letter of credit shall be an irrevocable letter of credit from a bank or savings institution insured by the Federal Deposit Insurance Corporation. Any purchaser of a motor vehicle who shall have suffered any loss or damage by any act of a license holder subject to this subsection that constitutes a violation of this Article or Article 15 shall have the right to institute an action to recover against the license holder and the surety. Every license holder against whom an action is instituted shall notify the Commissioner of the action within 10 days after served with process. A corporate surety bond or letter of credit shall remain in force and effect and may not be canceled by the surety unless the bonded person stops engaging in business or the person's license is denied, suspended, or revoked under G.S. 20‑294. Such cancellation may be had only upon 30 days' written notice to the Commissioner and shall not affect any liability incurred or accrued prior to the termination of such 30‑day period. This subsection does not apply to a license holder who deals only in trailers having an empty weight of 4,000 pounds or less. This subsection does not apply to manufacturers of, or dealers in, mobile or manufactured homes who furnish a corporate surety bond, cash bond, or fixed value equivalent thereof, pursuant to G.S. 143‑143.12."
SECTION 4. G.S. 20‑361 reads as rewritten:
"§ 20‑361.  Application for permit and permit fee.
Application for a permit to move a structure must be made to the division or district engineer having jurisdiction at least two days prior to the date of the move. For good cause shown, this time may be waived by the district or division engineer. A travel plan and a permit application fee of twenty dollars ($20.00) shall accompany the application. Division or district engineers are authorized to issue permits for individual moves of a structure or building whose width does not exceed 36 feet. The travel plan will show the proposed route, the time estimated for each segment of the move, a plan to handle traffic so that no one delay to other highway users shall exceed 20 minutes. The division or district engineers shall review the travel plan and if the route cannot accommodate the move due to roadway weight limits, bridge size or weight limits, or will cause undue interruption of traffic flow, the permit shall not be issued. The applicant may submit alternate plans if desired until an acceptable route is determined. If the width of the building or structure to be relocated is more than 36 feet, or if no acceptable travel plan has been filed, and the denial of the permit would cause a hardship, the application and travel plan may be submitted to the Department on appeal. After reviewing the route and travel plan, the Department may in its discretion issue the permit after considering the practical physical limitations of the route, the nature and purpose of the move, the size and weight of the structure, the distance the structure is to be moved, and the safety and convenience of the traveling public. A surety bond or irrevocable letter of credit from a bank or savings institution insured by the Federal Deposit Insurance Corporation in an amount to cover the cost of any damage to the pavement, structures, bridges, roadway or other damages that may occur can be required if deemed necessary by the Department."
SECTION 5.  G.S. 34‑9 reads as rewritten:
"§ 34‑9.  Qualifications of guardian; surety bond.
Before making an appointment under the provisions of this Chapter the court shall be satisfied that the guardian whose appointment is sought is a fit and proper person to be appointed. Upon the appointment being made the guardian shall execute and file a surety bond or irrevocable letter of credit from a bank or savings institution insured by the Federal Deposit Insurance Corporation to be approved by the court in an amount not less than the sum then due and estimated to become payable during the ensuing year. The said bond or letter of credit shall be in the form and be conditioned as required of guardians appointed under the guardianship laws of this State. The court shall have power from time to time to require the guardian to file an additional bond or letter of credit.
No bond or letter of credit shall be required of the banks and trust companies licensed to do trust business in North Carolina."
SECTION 6.  G.S. 44A‑16(6) reads as rewritten:
"(6)	Whenever a corporate surety bond or irrevocable letter of credit from a bank or savings institution insured by the Federal Deposit Insurance Corporation, in a sum equal to one and one‑fourth times the amount of the lien or liens claimed and conditioned upon the payment of the amount finally determined to be due in satisfaction of said lien or liens, is deposited with the clerk of court, whereupon the clerk of superior court shall cancel the lien or liens of record."
SECTION 7.  G.S. 45‑21.17A(g) reads as rewritten:
"(g)	Action for Damages from Foreclosure Sale for Failure to Comply. – A person entitled to notice of sale by virtue of this section shall not bring any action for damages resulting from the sale on grounds that he was not mailed the notice unless such action is brought within six months of the date of the filing of the final report and account as provided in G.S. 45‑21.33. The party bringing such an action shall also deposit with the clerk a cash or surety bond or irrevocable letter of credit from a bank or savings institution insured by the Federal Deposit Insurance Corporation approved by the clerk and in such amount as the clerk deems adequate to secure the party defending the action for such costs, expenses, and reasonable attorneys' fees to be incurred in the action."
SECTION 8.  G.S. 45‑21.27 reads as rewritten:
"§ 45‑21.27.  Upset bid on real property; compliance bonds.
(a)	An upset bid is an advanced, increased, or raised bid whereby any person offers to purchase real property theretofore sold, for an amount exceeding the reported sale price or last upset bid by a minimum of five percent (5%) thereof, but in any event with a minimum increase of seven hundred fifty dollars ($750.00). Subject to the provisions of subsection (b) of this section, an upset bid shall be made by delivering to the clerk of superior court, with whom the report of sale or last notice of upset bid was filed, a deposit in cash or by certified check or cashier's check satisfactory to the clerk in an amount greater than or equal to five percent (5%) of the amount of the upset bid but in no event less than seven hundred fifty dollars ($750.00). The deposit required by this section shall be filed with the clerk of the superior court, with whom the report of the sale or the last notice of upset bid was filed by the close of normal business hours on the tenth day after the filing of the report of the sale or the last notice of upset bid, and if the tenth day shall fall upon a Sunday or legal holiday, or upon a day in which the office of the clerk is not open for the regular dispatch of its business, the deposit may be made and the notice of upset bid filed on the day following when said office is open for the regular dispatch of its business. Subject to the provisions of G.S. 45‑21.30, there shall be no resales; rather, there may be successive upset bids each of which shall be followed by a period of 10 days for a further upset bid. When an upset bid is not filed following a sale, resale, or prior upset bid within the time specified, the rights of the parties to the sale or resale become fixed.
(b)	The clerk of the superior court may require an upset bidder or the highest bidder at a resale held pursuant to G.S. 45‑21.30 also to deposit with the clerk a cash bond, or, in lieu thereof at the option of the bidder, a surety bond or irrevocable letter of credit from a bank or savings institution insured by the Federal Deposit Insurance Corporation, approved by the clerk. The compliance bond or letter of credit shall be in such amount as the clerk deems adequate, but in no case greater than the amount of the bid of the person being required to furnish the bond or letter of credit, less the amount of any required deposit. The compliance bond or letter of credit shall be payable to the State of North Carolina for the use of the parties in interest and shall be conditioned on the principal obligor's compliance with the bid.
(c), (d)  Repealed by Session Laws 1993, c. 305, s. 16.
(e)	At the same time that an upset bid on real property is submitted to the court as provided for in subsection (a) above, together with a compliance bond or letter of credit if one is required, the upset bidder shall simultaneously file with the clerk a notice of upset bid. The notice of upset bid shall:
(1)	State the name, address, and telephone number of the upset bidder;
(2)	Specify the amount of the upset bid;
(3)	Provide that the sale shall remain open for a period of 10 days after the date on which the notice of upset bid is filed for the filing of additional upset bids as permitted by law; and
(4)	Be signed by the upset bidder or the attorney or the agent of the upset bidder.
(e1)	When an upset bid is made as provided in this section, the clerk shall notify the trustee or mortgagee who shall thereafter mail a written notice of upset bid by first‑class mail to the last known address of the last prior bidder and the current record owner(s) of the property.
(f)	When an upset bid is made as provided in this section, the last prior bidder, regardless of how the bid was made, shall be released from any further obligation on account of the bid and any  deposit, letter of credit, or bond provided by him shall be released.
(g)	Any person offering to purchase real property by upset bid as permitted in this Article shall be subject to and bound by the terms of the original notice of sale except as modified by court order or the provisions of this Article.
(h)	The clerk of superior court shall make all such orders as may be just and necessary to safeguard the interests of all parties, and shall have the authority to fix and determine all necessary procedural details with respect to upset bids in all instances in which this Article fails to make definite provisions as to that procedure."
SECTION 9.  G.S. 66‑94.1(a) reads as rewritten:
"(a)	The provisions of Article 19 shall not apply to the sale or lease of any products, equipment, supplies or services where:
(1)	The seller has not derived net income from such sales within the State during either of its two previous fiscal years, and does not intend to derive net income from such sales during its current fiscal year; and
(2)	The primary commercial activity of the seller or its affiliate is substantially different from the sale of the goods or services to the purchaser, and the gross revenues received by the seller from all such sales during the current and each of the two previous fiscal years do not exceed ten percent (10%) of the total gross revenues from all operations for the same period of the seller and any other affiliated entity contractually obligated to compensate the purchaser for the purchaser's business activities arising from the sale; and
(3)	The sale results in an improvement to realty owned or leased by the purchaser which enables the purchaser to receive goods on consignment from the seller or its affiliate. An "improvement to realty" occurs when a building or other structure is constructed or when significant improvements to an existing building or structure are made; and
(4)	The seller has either a net worth on a consolidated basis, according to its most recent audited financial statement, of not less than five million dollars ($5,000,000) or has obtained a surety bond from a surety company authorized to do business in this State or an irrevocable letter of credit from a bank or savings institution insured by the Federal Deposit Insurance Corporation in an amount equal to or greater than the gross revenues received from the sale or lease of products, equipment, supplies or services in this State during the preceding 12‑month period which enabled the purchaser to start a business."
SECTION 10.  G.S. 66‑96 reads as rewritten:
"§ 66‑96.  Bond or trust account required.
If the business opportunity seller makes any of the representations set forth in G.S. 66‑94(3), the seller must either have obtained a surety bond issued by a surety company authorized to do business in this State or an irrevocable letter of credit from a bank or savings institution insured by the Federal Deposit Insurance Corporation or have established a trust account with a licensed and insured bank or savings institution located in the State  of North Carolina. The amount of the  bond, letter of credit, or trust account shall be an amount not less than fifty thousand dollars ($50,000). The  bond, letter of credit, or trust account shall be in favor of the State of North Carolina. Any person who is damaged by any violation of this Article, or by the seller's breach of the contract for the business opportunity sale or of any obligation arising therefrom may bring an action against the bond or trust account to recover damages suffered; provided, however, that the aggregate liability of the  surety, letter of credit, or trustee shall be only for actual damages and in no event shall exceed the amount of the  bond, letter of credit, or trust account."
SECTION 11. G.S. 66‑108(a) reads as rewritten:
"(a)	Every loan broker must obtain a surety bond issued by a surety company authorized to do business in this State, an irrevocable letter of credit from a bank or savings institution insured by the Federal Deposit Insurance Corporation or establish a trust account with a licensed and insured bank or savings institution located in the State of North Carolina. The amount of the  bond, letter of credit, or trust account shall be ten thousand dollars ($10,000). The  bond, letter of credit, or trust account shall be in favor of the State of North Carolina. Any person damaged by the loan broker's breach of contract or of any obligation arising therefrom, or by any violation of this Article, may bring an action against the  bond, letter of credit, or trust account to recover damages suffered. The aggregate liability of the  surety, issuer of the letter of credit, or trustee shall be only for actual damages and in no event shall exceed the amount of the bond or trust account."
SECTION 12.  G.S. 66‑168 reads as rewritten:
"§ 66‑168.  Bond or trust account required.
Before any permit shall be issued to a dealer pursuant to G.S. 66‑165, the dealer shall execute a satisfactory cash or surety bond or establish a trust account  with, or obtain an irrevocable letter of credit from a licensed and insured bank or savings institution located in the State of North Carolina in the sum of ten thousand dollars ($10,000). The  bond, letter of credit, or trust account shall be in favor of the State of North Carolina. A surety bond is to be executed by the dealer and by two responsible sureties or a surety company licensed to do business in the State of North Carolina and shall be on a form approved by the Department of Crime Control and Public Safety. Any bond shall be kept in full force and effect and shall be delivered to the law enforcement agency which first issued a current permit to the dealer. A  bond, letter of credit, or trust account shall be for the faithful performance of the requirements and obligations of the dealer's business in conformity with this Article. Any law enforcement agency shall have full power and authority to revoke the permit and sue for forfeiture of the  bond, letter of credit, or trust account upon a breach thereof. Any person who shall have suffered any loss or damage by any act of the permittee that constitutes a violation of this Article shall have the right to institute an action to recover against such permittee and the surety or trust account. Upon termination of the  bond, letter of credit, or trust account the permit shall become void."
SECTION 13.  G.S. 66‑222 reads as rewritten:
"§ 66‑222.  Bond or trust account required.
Every credit repair business shall obtain a surety bond issued by a surety company authorized to do business in this State, or shall establish a trust account  with, or obtain an irrevocable letter of credit from a licensed and insured bank or savings institution located in the State of North Carolina. The amount of the  bond, letter of credit, or trust account shall be ten thousand dollars ($10,000). The  bond, letter of credit, or trust account shall be in favor of the State of North Carolina. Any person damaged by the credit repair business' breach of contract or of any obligation arising therefrom, or by any violation of this Article, may bring an action against the  bond, letter of credit, or trust account to recover damages suffered. The aggregate liability of the  surety, letter of credit, or trustee shall be only for actual damages and in no event shall exceed the amount of the  bond, letter of credit, or trust account."
SECTION 14.  G.S. 78C‑72 reads as rewritten:
"§ 78C‑72.  Registration requirements; renewal.
(a)	An athlete agent must register with the Secretary of State before the athlete agent may contact an athlete, either directly or indirectly, while the athlete is located in this State. An athlete agent may make those contacts only in accordance with this Article.
(b)	An applicant for registration as an athlete agent must submit a written application for registration to the Secretary of State on a form prescribed by the Secretary of State. The applicant must provide the information required by the Secretary of State, which shall include:
(1)	The name of the applicant and the address of the applicant's principal place of business;
(2)	The business or occupation engaged in by the applicant for the five years immediately preceding the date of application;
(3)	A description of the applicant's formal training, practical experience, and educational background relating to the applicant's professional activities as an athlete agent;
(4)	If requested by the Secretary of State, the names and addresses of five professional references; and
(5)	The names and addresses of all persons, except bona fide employees on stated salaries, that are financially interested as partners, associates, or profit sharers in the operation of the business of the athlete agent, except that an application for registration or renewal by any member of the North Carolina State Bar must state only the names and addresses of those persons that are involved in the activities of the athlete agent and is not required to state the names and addresses of all persons who may be financially interested as members of a law firm or professional corporation but who do not become involved in the business of the athlete agent.
(c)	If the applicant is a corporation, the information required by subsection (b) of this section must be provided by each officer of the corporation. If the applicant is an association or a partnership, the information must be provided by each associate or partner.
(d)	A certificate of registration issued under this Article is valid for one year from the date of issuance. The Secretary of State by rule may adopt a system under which certificates of registration expire on various dates during the year. For the year in which the registration expiration date is changed, the renewal fee payable on the anniversary of the date of issuance shall be prorated so that each registrant pays only that portion of the fee that is allocable to the number of months during which the registration is valid. On the renewal of the certificate of registration on the new expiration date, the total registration renewal fee is payable.
(e)	A registered athlete agent may renew the registration by filing a renewal application in the form prescribed by the Secretary of State, accompanied by the renewal fee. The renewal application must include the information prescribed by the Secretary of State, which shall include:
(1)	The names and addresses of all athletes for whom the athlete agent is providing professional services as an athlete agent for compensation at the time of the renewal; and
(2)	The names and addresses of all athletes not currently represented by the athlete agent for whom the athlete agent has performed professional services as an athlete agent for compensation during the three years preceding the date of the application.
(f)	The fee for issuing a certificate of registration or renewing a registration is two hundred dollars ($200.00). The fee is payable when an application for a certificate or the renewal of a certificate is filed and is not refundable to the applicant if the certificate or renewal is denied. No fee is imposed for a temporary certificate of registration.
(g)	When an application for registration or renewal is made and the registration process has not been completed, the Secretary of State may issue a temporary or provisional registration certificate that is valid for no more than 90 days.
(h)	Before the issuance or renewal of a certificate of registration, an athlete agent that enters into a financial services contract with an athlete must deposit with the Secretary of State a surety bond or an irrevocable letter of credit from a bank or savings institution insured by the Federal Deposit Insurance Corporation in the sum of one hundred thousand dollars ($100,000), payable to the State and conditioned that the person applying for the registration will comply with this Article, will pay all amounts due any individual or group of individuals when the person or the person's representative or agent has received those amounts, and will pay all damages caused to any athlete by reason of the intentional misrepresentation, fraud, deceit, or any unlawful or negligent act or omission by the registered athlete agent or the agent's representative or employee while acting within the scope of the financial services contract. The athlete agent shall maintain the bond or letter of credit until two years after the date on which the athlete agent ceases to engage in the provision of financial services for an athlete. This subsection does not limit the recovery of damages to the amount of the surety bond.
(i)	If an athlete agent that has entered into a financial services contract with an athlete fails to file a new bond or letter of credit with the Secretary of State not later than the 30th day after date of receipt of a notice of cancellation issued by the surety of the  bond or the issuer of the letter of credit, the Secretary of State shall suspend the certificate of registration issued to that athlete agent under the bond or letter of credit until the athlete agent files a new surety bond with the Secretary of State.
(j)	An athlete agent that enters into an agent contract only is not required to meet the bond requirements of this section.
(k)	The registration requirements of this section do not apply to a North Carolina licensed and resident attorney who:
(1)	Neither advertises directly for, nor solicits, any athlete by representing to any person that he has special experience or qualifications with regard to representing athletes; and
(2)	Represents no more than two athletes."
SECTION 15.  G.S. 97‑170(e) reads as rewritten:
"(e)	Every applicant shall execute and file with the Commissioner an agreement, as part of the application, in which the applicant agrees to deposit with the Commissioner cash, acceptable securities, an irrevocable letter of credit from a bank or savings institution insured by the Federal Deposit Insurance Corporation, or a surety bond issued by a corporate surety that will guarantee the applicant's compliance with this Article and the Act pursuant to G.S. 97‑185."
SECTION 16.  G.S. 143‑129(b) reads as rewritten:
"(b)	Advertisement of the letting of such contracts shall be as follows:
Where the contract is to be let by a board or governing body of the State government, or of a State institution, as distinguished from a board or governing body of a subdivision of the State, proposals shall be invited by advertisement at least one week before the time specified for the opening of said proposals in a newspaper having general circulation in the State of North Carolina. Provided that the advertisements for bidders required by this section shall be published at such a time that at least seven full days shall lapse between the date of publication of notice and the date of the opening of bids.
Where the contract is to be let by a county, city, town or other subdivision of the State, proposals shall be invited by advertisement at least one week before the time specified for the opening of said proposals in a newspaper having general circulation in such county, city, town or other subdivision.
Such advertisement shall state the time and place where plans and specifications of proposed work or a complete description of the apparatus, supplies, materials or equipment may be had, and the time and place for opening of the proposals, and shall reserve to said board or governing body the right to reject any or all such proposals.
Proposals shall not be rejected for the purpose of evading the provisions of this Article. No board or governing body of the State or subdivision thereof shall assume responsibility for construction or purchase contracts, or guarantee the payments of labor or materials therefor except under provisions of this Article.
All proposals shall be opened in public and shall be recorded on the minutes of the board or governing body and the award shall be made to the lowest responsible bidder or bidders, taking into consideration quality, performance and the time specified in the proposals for the performance of the contract. In the event the lowest responsible bids are in excess of the funds available for the project, the responsible board or governing body is authorized to enter into negotiations with the lowest responsible bidder above mentioned, making reasonable changes in the plans and specifications as may be necessary to bring the contract price within the funds available, and may award a contract to such bidder upon recommendation of the Department of Administration in the case of the State government or of a State institution or agency, or upon recommendation of the responsible commission, council or board in the case of a subdivision of the State, if such bidder will agree to perform the work at the negotiated price within the funds available therefor. If a contract cannot be let under the above conditions, the board or governing body is authorized to readvertise, as herein provided, after having made such changes in plans and specifications as may be necessary to bring the cost of the project within the funds available therefor. The procedure above specified may be repeated if necessary in order to secure an acceptable contract within the funds available therefor.
No proposal shall be considered or accepted by said board or governing body unless at the time of its filing the same shall be accompanied by a deposit with said board or governing body of cash or a cashier's check, or a certified check on some bank or trust company insured by the Federal Deposit Insurance Corporation in an amount equal to not less than five percent (5%) of the proposal. In lieu of making the cash deposit as above provided, such bidder may file a bid bond executed by a corporate surety licensed under the laws of North Carolina to execute such bonds, or an irrevocable letter of credit from a bank or savings institution insured by the Federal Deposit Insurance Corporation, conditioned that the surety will upon demand forthwith make payment to the obligee upon said bond or letter of credit if the bidder fails to execute the contract in accordance with the bid bond. This deposit shall be retained if the successful bidder fails to execute the contract within 10 days after the award or fails to give satisfactory surety as required herein. In the case of proposals for the purchase of apparatus, supplies, materials, or equipment, the board or governing body may waive the requirement for a bid  bond, letter or credit, or other deposit.
Bids shall be sealed and the opening of an envelope or package with knowledge that it contains a bid or the disclosure or exhibition of the contents of any bid by anyone without the permission of the bidder prior to the time set for opening in the invitation to bid shall constitute a Class 1 misdemeanor."
SECTION 17.  G.S. 143‑139.1 reads as rewritten:
"§ 143‑139.1.  Certification of manufactured buildings, structures or components by recognized independent testing laboratory.
The State Building Code may provide, in circumstances deemed appropriate by the Building Code Council, for testing, evaluation, inspection, and certification of buildings, structures or components manufactured off the site on which they are to be erected, by a recognized independent testing laboratory having follow‑up inspection services approved by the Building Code Council. Approval of such buildings, structures or components shall be evidenced by labels or seals acceptable to the Council. All building units, structures or components bearing such labels or seals shall be deemed to meet the requirements of the State Building Code and this Article without further inspection or payment of fees, except as may be required for the enforcement of the Code relative to the connection of units and components and enforcement of local ordinances governing zoning, utility connections, and foundations permits. The Building Code Council shall adopt and may amend from time to time such reasonable and appropriate rules and regulations as it deems necessary for approval of agencies offering such testing, evaluation, inspection, and certification services and for overseeing their operations. Such rules and regulations shall include provisions to insure that such agencies are independent and free of any potential conflicts of interest which might influence their judgment in exercising their functions under the Code. Such rules and regulations may include a schedule of reasonable fees to cover administrative expenses in approving and overseeing operations of such agencies and may require the posting of a bond or other security satisfactory to the Council guaranteeing faithful performance of duties under the Code.
The Building Code Council may also adopt rules to insure that any person that is not licensed, in accordance with G.S. 87‑1, and that undertakes to erect a North Carolina labeled manufactured modular building, meets the manufacturer's installation instructions and applicable provisions of the State Building Code. Any such person, before securing a permit to erect a modular building, shall provide the code enforcement official proof that he has in force for each modular building to be erected a $5,000 surety bond or an irrevocable letter of credit from a bank or savings institution insured by the Federal Deposit Insurance Corporation insuring compliance with the regulations of the State Building Code governing installation of modular buildings."
SECTION 18.  G.S. 143‑143.12 reads as rewritten:
"§ 143‑143.12.  Bond required.
(a)	A person licensed as a manufactured home salesperson shall not be required to furnish a bond, but each applicant approved by the Board for license as a manufacturer, dealer, or setup contractor shall furnish a corporate surety bond, cash  bond, irrevocable letter of credit from a bank or savings institution insured by the Federal Deposit Insurance Corporation or fixed value equivalent in the following amounts:
(1)	For a manufacturer, two thousand dollars ($2,000) per manufactured home manufactured in the prior license year, up to a maximum of one hundred thousand dollars ($100,000). When no manufactured homes were produced in the prior year, the amount required shall be based on the estimated number of manufactured homes to be produced during the current year.
(2)	For a dealer who has one place of business, the amount shall be thirty‑five thousand dollars ($35,000).
(3)	For a dealer who has more than one place of business, the amount shall be twenty‑five thousand dollars ($25,000) for each additional place of business.
(4)	For a setup contractor, the amount shall be ten thousand dollars ($10,000).
(b)	A corporate surety bond or letter of credit shall be approved by the Board as to form and shall be conditioned upon the obligor faithfully conforming to and abiding by the provisions of this Article. A cash bond or fixed value equivalent shall be approved by the Board as to form and terms of deposits in order to secure the ultimate beneficiaries of the bond. A corporate surety bond or letter of credit shall be for a one‑year period, and a new  bond, letter of credit, or a proper continuation certificate shall be delivered to the Board at the beginning of each subsequent one‑year period.
(c)	Any buyer of a manufactured home who suffers any loss or damage by any act of a licensee that constitutes a violation of this Article may institute an action to recover against the licensee and the  letter of credit.
(d)	The Board may adopt rules to assure satisfaction of claims."
SECTION 19.  G.S. 143‑143.13(a) reads as rewritten:
"(a)	A license may be denied, suspended or revoked by the Board on any one or more of the following grounds:
(1)	Making a material misstatement in application for license.
(2)	Failing to post an adequate corporate surety  bond, irrevocable letter of credit from a bank or savings institution insured by the Federal Deposit Insurance Corporation, cash bond or fixed value equivalent.
(3)	Engaging in the business of manufactured home manufacturer, dealer, salesperson, or setup contractor without first obtaining a license from the Board.
(4)	Failing to comply with the warranty service obligations and claims procedure established by this Article.
(5)	Failing to comply with the setup requirements established by this Article.
(6)	Failing or refusing to account for or to pay over moneys or other valuables belonging to others that have come into licensee's possession arising out of the sale of manufactured homes.
(7)	Using unfair methods of competition or committing unfair or deceptive acts or practices.
(8)	Failing to comply with any provision of this Article.
(9)	Failing to appear for a hearing before the Board or for a prehearing conference with a person or persons designated by the Board after proper notice or failing to comply with orders of the Board issued pursuant to this Article.
(10)	Employing unlicensed salespersons.
(11)	Offering for sale manufactured homes manufactured or assembled by unlicensed manufacturers or selling manufactured homes to unlicensed dealers for sale to buyers in this State.
(12)	Conviction of a felony or any crime involving moral turpitude.
(13)	Having had a license revoked, suspended or denied by the Board; or having had a license revoked, suspended or denied by a similar entity in another state; or engaging in conduct in another state which conduct, if committed in this State, would have been a violation under this Article.
(14)	Employing or contracting with any person to perform setups who is not licensed by the Board as a setup contractor."
SECTION 20.  G.S. 65‑66(g) reads as rewritten:
"(g)	In lieu of the deposits required under subsection (b) of this section, the cemetery company or other entity may post with the Commission a good and sufficient performance bond by surety company licensed to do business in North  Carolina, or an irrevocable letter of credit from a bank or savings institution insured by the Federal Deposit Insurance Corporation, and in an amount sufficient to cover all payments made directly or indirectly by or on account of purchasers who have not received the purchased property and services. Money received from the sale or assignment of notes entered into by the purchasers, or otherwise, shall be treated as payments made by the purchasers."
SECTION 21.  G.S. 65‑70(f) reads as rewritten:
"(f)	In lieu of the payments outlined hereunder to the preconstruction trust account the cemetery company may deliver to the Commission a good and sufficient completion or performance bond in an amount and by surety companies acceptable to the  Commission, or an irrevocable letter of credit from a bank or savings institution insured by the Federal Deposit Insurance Corporation."
SECTION 22.  G.S. 130A‑255(b) reads as rewritten:
"(b)	The Secretary shall require the permittee within five days after issuance of the provisional permit to file with the Secretary a performance bond, irrevocable letter of credit from a bank or savings institution insured by the Federal Deposit Insurance Corporation, or other surety to be executed to the State in the amount of five thousand dollars ($5,000) for up to 10,000 persons and an additional one thousand dollars ($1,000) for each additional 5,000 persons or fraction reasonably estimated to attend the mass gathering. The bond or letter of credit shall be conditioned on full compliance with this Part and the rules of the Commission and shall be forfeitable upon noncompliance and a showing by the Secretary of injury, damage or other loss to the State or local governmental agencies caused by the noncompliance."
SECTION 23.  G.S. 130A‑256(d) reads as rewritten:
"(d)	If the Secretary installs facilities or makes arrangements or provisions for cleanup pursuant to subsection (c), the Secretary may apply to a court of competent jurisdiction prior to or within 60 days after the action to order forfeiture of the permittee's performance  bond, letter of credit, or surety for violation of this Part or the rules of the Commission. The court may order that the proceeds shall be applied to the extent necessary to reimburse State and local governmental agencies for expenditures made pursuant to the action taken by the Secretary upon the permittee's failure to comply with the order. Any excess proceeds shall be returned to the insurer of the bond or to the surety after deducting court costs."
SECTION 24.  G.S. 160A‑37.3(c) reads as rewritten:
"(c)	The city may require that the contract contain:
(1)	A requirement that the private firm post a performance  bond or irrevocable letter of credit from a bank or savings institution insured by the Federal Deposit Insurance Corporation, and maintain public liability insurance coverage;
(2)	A requirement that the private firm agree to service customers in the annexed area that were not served by that firm on the effective date of annexation;
(3)	A provision that divides the annexed area into service areas if there were more than one firm being contracted within the area, such that the entire area is served by the private firms, or by the city as to customers not served by the private firms;
(4)	A provision that the city may serve customers not served by the firm on the effective date of annexation;
(5)	A provision that the contract can be cancelled for substantial violations of the contract, but no contract may be cancelled on these grounds unless the Local Government Commission finds that substantial violations have occurred, except that the city may suspend the contract for up to 30 days if it finds substantial violation of health laws;
(6)	Performance standards, not exceeding city standards, with provision that the contract may be cancelled for substantial violations of those standards, but no contract may be cancelled on those grounds unless the Local Government Commission finds that substantial violations have occurred;
(7)	A provision for monetary damages if there are violations of the 10 business days following receipt of the written request for information from the city, provided that the city's written request states that statutory rights will be forfeited in the absence of a timely response and includes a specific reference to this section."
SECTION 25.  G.S. 160A‑49.3(c) reads as rewritten:
"(c)	The city may require that the contract contain:
(1)	A requirement that the private firm post a performance  bond or irrevocable letter of credit from a bank or savings institution insured by the Federal Deposit Insurance Corporation, and maintain public liability insurance coverage;
(2)	A requirement that the private firm agree to service customers in the annexed area that were not served by that firm on the effective date of annexation;
(3)	A provision that divides the annexed area into service areas if there were more than one firm being contracted within the area, such that the entire area is served by the private firms, or by the city as to customers not served by the private firms;
(4)	A provision that the city may serve customers not served by the firm on the effective date of annexation;
(5)	A provision that the contract can be cancelled for substantial violations of the contract, but no contract may be cancelled on these grounds unless the Local Government Commission finds that substantial violations have occurred, except that the city may suspend the contract for up to 30 days if it finds substantial violation of health laws;
(6)	Performance standards, not exceeding city standards, with provision that the contract may be cancelled for substantial violations of those standards, but no contract may be cancelled on those grounds unless the Local Government Commission finds that substantial violations have occurred;
(7)	A provision for monetary damages if there are violations of the contract or of performance standards."
SECTION 26.  G.S. 160A‑324(c) reads as rewritten:
"(c)	The city may require that the contract contain:
(1)	A requirement that the private firm post a performance  bond or irrevocable letter of credit from a bank or savings institution insured by the Federal Deposit Insurance Corporation, and maintain public liability insurance coverage;
(2)	A requirement that the private firm agree to service customers in the annexed area that were not served by that firm on the effective date of annexation;
(3)	A provision that divides the annexed area into service areas if there were more than one firm being contracted within the area, such that the entire area is served by the private firms, or by the city as to customers not served by the private firms;
(4)	A provision that the city may serve customers not served by the firm on the effective date of annexation;
(5)	A provision that the contract can be cancelled for substantial violations of the contract, but no contract may be cancelled on these grounds unless the Local Government Commission finds that substantial violations have occurred, except that the city may suspend the contract for up to 30 days if it finds substantial violation of health laws;
(6)	Performance standards, not exceeding city standards, with provision that the contract may be cancelled for substantial violations of those standards, but no contract may be cancelled on those grounds unless the Local Government Commission finds that substantial violations have occurred;
(7)	A provision for monetary damages if there are violations of the contract or of performance standards."
SECTION 27.  This act becomes effective December 1, 2001.