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It's
the Law! You Must Be Bonded in the State of New Mexico.
New Mexico Construction Industries Licensing Act 1978
60-23-49.
Proof of responsibility.
A. No applicant for a contractor’s license or for renewal of a contractor’s
license shall be issued a license until the director determines that he is
responsible to perform under the individual permit capacity for which he furnishes
proof of responsibility pursuant to Subsection C of this section.
B. Proof of responsibility shall be: 1) a license bond acceptable to the director
and underwritten by a corporate surety authorized to transact business in
New Mexico; 2) an agreement of cash collateral assignment executed with a
state or national bank or federally insured savings association authorized
to do business in New Mexico as trustee, in a form prescribed by the commission.
Interest, if any, accumulating on the cash collateral assignment shall accrue
to the licensee; or 3) a current financial statement, which shall be filed
initially with the license application and filed annually thereafter with
the division. The financial statement shall be a current audited financial
statement or certified by a financial institution.
C. Proof of responsibility shall be furnished in amounts of – please contact
CID for these amounts.
D. Proof of responsibility shall be for the payment of fines and penalties.
E. Proof of responsibility, if a bond, shall be a continuous form bond on
a form prescribed by the commission. it shall be a condition of the bond that
the total aggregate liability of the surety for all claims shall be limited
to the face amount of the bond irrespective of the number of years the bond
is in force.
F. Proof of responsibility posted by a licensee or applicant shall be in a
form to provide thirty days’ written notice of a cancellation to the division.
G. Failure to maintain proof of responsibility for the period required by
law is cause for revocation of the license.
H. No legal action may be maintained on the proof of responsibility unless
the action is commenced within twelve months after the case accrues or within
twelve months after substantial completion of the project, whichever is earlier.
I. If a licensee’s license bond or cash collateral’ assignment is canceled,
expires or otherwise becomes ineffective during the period for which it is
required, the division shall cancel the license upon receiving notice of such
cancellation, expiration or ineffectiveness. The cancellation of the license
shall become effective thirty days after the date that notice of such action
is mailed to the licensee by the division, unless the licensee provides to
the division within that thirty days proof of responsibility as required under
this section. A person whose license has been canceled pursuant to this subsection
may be renewed or reinstated provided he complies with all licensing requirements.
J. Contracting or bidding during the period when the license bond or cash
collateral assignment is canceled, expired or otherwise ineffective is cause
for revocation of the license by the commission.