House Bill hb1095e2

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                                   CS/CS/HB 1095, Second Engrossed



  1                      A bill to be entitled

  2         An act relating to sureties; amending ss.

  3         199.185, 201.23, F.S.; exempting certain

  4         mortgages and liens from the intangible

  5         personal property tax and the excise tax on

  6         documents at time of recording; providing that

  7         those taxes become due upon exercise of rights

  8         under the mortgage or lien; providing penalties

  9         for failure to pay those taxes when due;

10         amending s. 210.08, F.S.; providing methods

11         other than a bond for dealers, agents, or

12         distributing agents to guarantee tax payment to

13         the Division of Alcoholic Beverages and Tobacco

14         of the Department of Business and Professional

15         Regulation; amending s. 255.05, F.S.; requiring

16         public construction bonds to be the same as the

17         statutory form; revising the statutory form;

18         amending s. 713.24, F.S.; providing that

19         sureties have no liability in excess of a lien

20         transfer bond; providing an exception;

21         providing an effective date.

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23  Be It Enacted by the Legislature of the State of Florida:

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25         Section 1.  Subsection (9) is added to section 199.185,

26  Florida Statutes, to read:

27         199.185  Property exempted from annual and nonrecurring

28  taxes.--

29         (9)(a)  Notes, bonds, or other obligations secured by

30  mortgages or liens given to secure the performance of an

31  indemnitor in an amount less than $2 million to a surety by


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                                   CS/CS/HB 1095, Second Engrossed



  1  insurance companies licensed in this state when such surety is

  2  issued for the following purposes:

  3         1.  Construction bid bonds,

  4         2.  Construction performance bonds,

  5         3.  Construction payment bonds,

  6         4.  Construction licenses,

  7         5.  Permits,

  8         6.  Court bonds, or

  9         7.  Bail bonds

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11  are exempt from the tax imposed under this chapter at the time

12  of recording the mortgage, deed of trust, or lien. The clerk

13  of the court shall accept such recordings at the time of

14  submittal and such mortgage or lien shall have a priority as

15  of the date of recording over any subsequent filings by other

16  parties notwithstanding that the enforcement of the recorded

17  mortgage or lien on the indemnity may come subsequent to the

18  later recording and any action against the indemnitor

19  affecting said mortgage or lien shall provide notice to the

20  insurance company.

21         (b)  Upon exercise of the rights under the mortgage or

22  lien, all applicable taxes due pursuant to this chapter shall

23  become due and payable as if the mortgage or lien were

24  initially executed and recorded without this exemption.

25         (c)  Failure to pay tax at time of exercise shall not

26  affect the mortgage or lien, but any person who willfully

27  violates or fails to comply with this subsection is subject to

28  the penalties set forth in s. 199.282.

29         Section 2.  Subsection (5) is added to section 201.23,

30  Florida Statutes, to read:

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                                   CS/CS/HB 1095, Second Engrossed



  1         201.23  Foreign notes and other written obligations

  2  exempt.--

  3         (5)(a)  Mortgages, trust deeds, liens, or security

  4  agreements filed or recorded to secure the performance of an

  5  indemnitor to a surety in an amount less than $2 million by

  6  insurance companies licensed in this state when such surety is

  7  issued for the following purposes:

  8         1.  Construction bid bonds,

  9         2.  Construction performance bonds,

10         3.  Construction payment bonds,

11         4.  Construction licenses,

12         5.  Permits,

13         6.  Court bonds, or

14         7.  Bail bonds

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16  are exempt from the tax imposed under this chapter at the time

17  of recording the mortgage or lien. The clerk of the court

18  shall accept such recordings at the time of submittal and such

19  mortgage or lien shall have a priority as of the date of

20  recording over any subsequent filings by other parties

21  notwithstanding that the enforcement of the recorded mortgage

22  or lien on the indemnity may occur after the later recording

23  and any action against the indemnitor affecting said mortgage

24  or provides notice to the insurance company.

25         (b)  Upon exercise of the rights under the mortgage or

26  lien, all applicable taxes due pursuant to this chapter shall

27  become due and payable as if the mortgage or lien were

28  initially executed and recorded without this exemption.

29         (c)  Failure to pay any tax at time of exercise shall

30  result in the penalties set forth in this chapter for failure

31  to pay the tax.


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                                   CS/CS/HB 1095, Second Engrossed



  1         Section 3.  Section 210.08, Florida Statutes, is

  2  amended to read:

  3         210.08  Bond for payment of taxes.--Each dealer, agent,

  4  or distributing agent shall file with the division a surety

  5  bond, certificate of deposit, or irrevocable letter of credit

  6  acceptable to the division in the sum of $10,000 as surety for

  7  the payment of all taxes; provided, however, that where in the

  8  discretion of the division the amount of business done by the

  9  dealer, agent, or distributing agent is of such volume that a

10  bond, certificate of deposit, or irrevocable letter of credit

11  of less than $10,000 will be adequate to secure the payment of

12  all taxes assessed as authorized by the cigarette tax law, the

13  division may accept a bond, certificate of deposit, or

14  irrevocable letter of credit in a lesser sum than $10,000, but

15  in no event shall it accept a bond, certificate of deposit, or

16  irrevocable letter of credit of less than $1,000, and it may

17  at any time in its discretion require any bond, certificate of

18  deposit, or irrevocable letter of credit in an amount less

19  than $10,000 to be increased not to exceed $10,000.

20         Section 4.  Subsection (3) of section 255.05, Florida

21  Statutes, is amended to read:

22         255.05  Bond of contractor constructing public

23  buildings; form; action by materialmen.--

24         (3)  The bond required in subsection (1) shall be in

25  the following form, and any deviation of the bond required by

26  the public owner or furnished by the contractor shall be

27  disregarded may be in substantially the following form:

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29                     PUBLIC CONSTRUCTION BOND

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                                   CS/CS/HB 1095, Second Engrossed



  1         BY THIS BOND, We ....{enter name principal business

  2  address, and telephone number of contractor}, as Principal and

  3  {enter name, principal business address, and telephone number

  4  of surety}...., a corporation, authorized to do business in

  5  Florida as a surety insurer, as Surety, are bound to ....

  6  {enter name, principal business address, and telephone number

  7  of public owner}, herein called Owner, in the sum of

  8  $....{enter contract amount as penal sum of bond}, for payment

  9  of which we bind ourselves, our heirs, personal

10  representatives, successors, and assigns, jointly and

11  severally.

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13         WHEREAS, Principal has entered into a contract with

14  Owner for ....{enter description of project sufficient to

15  identify it such as a legal description of property, the

16  street address of property, and a general description of the

17  improvement to be constructed}, which is Owner's Contract No.

18  ....{enter contract number} belonging to ....{enter name,

19  principal business address, and telephone number of owner of

20  property if different from the contract public entity}

21  (hereinafter the Project); and

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23         WHEREAS, this Bond is given to meet the requirements of

24  Section 255.05, Florida Statutes, which shall control the

25  respective rights and obligations of the Principal, Surety,

26  Owner, and any claimant.

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28         NOW, THEREFORE, THE CONDITION OF THIS BOND is that if

29  Principal:

30         1.  Performs the contract dated ...., ...., {enter date

31  of contract} between Principal and Owner for construction of


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                                   CS/CS/HB 1095, Second Engrossed



  1  the Project ...., the contract being made a part of this bond

  2  by reference, at the times and in the manner prescribed in the

  3  contract; and

  4         2.  Promptly makes payments to all claimants, as

  5  defined in Section 255.05(1), Florida Statutes, supplying

  6  Principal with labor, materials, or supplies, used directly or

  7  indirectly by Principal in the prosecution of the work

  8  provided for in the contract; and

  9         3.  Pays Owner all losses, damages, expenses, costs,

10  and attorney's fees, including appellate proceedings, that

11  Owner sustains because of a default by Principal under the

12  contract; and

13         4.  Performs the guarantee of all work and materials

14  furnished under the contract for the time specified in the

15  contract, then this bond is void; otherwise it remains in full

16  force.

17         Any changes in or under the contract documents and

18  compliance or noncompliance with any formalities connected

19  with the contract or the changes does not affect Surety's

20  obligation under this bond.

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22         DATED ON ...., .....

23                                            ...(Date of Bond)...

24                                       ...(Name of Principal)...

25                       By ...(As Authorized Attorney in Fact)...

26                                          ...(Name of Surety)...

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28         Section 5.  Subsection (3) of section 713.24, Florida

29  Statutes, is amended to read:

30         713.24  Transfer of liens to security.--

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                                   CS/CS/HB 1095, Second Engrossed



  1         (3)  Any party having an interest in such security or

  2  the property from which the lien was transferred may at any

  3  time, and any number of times, file a complaint in chancery in

  4  the circuit court of the county where such security is

  5  deposited, or file a motion in a pending action to enforce a

  6  lien, for an order to require additional security, reduction

  7  of security, change or substitution of sureties, payment of

  8  discharge thereof, or any other matter affecting the said

  9  security. If the court finds that the amount of the deposit or

10  bond in excess of the amount claimed in the claim of lien is

11  insufficient to pay the lienor's attorney's fees and court

12  costs incurred in the action to enforce the lien, the court

13  must increase the amount of the cash deposit or lien transfer

14  bond. However, the surety has no liability in excess of the

15  lien transfer bond filed with the clerk unless it provides a

16  new or amended bond.

17         Section 6.  This act shall take effect July 1, 2002.

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