Surety Bond Encyclopedia

Toll and Service Fees Bond - Prepass Safety Alliance in Arizona

Brief Summary

PrePass does not ask tolling customers to prepay a balance. It asks for a payment guarantee, and a surety bond is one of the forms it accepts. A bond keeps the guarantee off your balance sheet as cash, covers tolls billed across every network PrePass Plus handles, and lets the fleet run on one monthly invoice instead of a stack of prepaid transponder accounts.

Motor carriers that use PrePass Tolls or PrePass Plus must give the PrePass Safety Alliance a Payment Guarantee Amount or a Required Program Amount before tolling services start. The Payment Guarantee Amount can be posted as a surety bond. The Alliance sets the amount from the carrier's estimated monthly tolling and other activity, pass through and program charges, and credit history, so there is no single fixed figure.

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How to Apply for a Toll and Service Fees Bond:

Estimate the fleet's monthly toll activity. The Alliance uses it to set the Payment Guarantee Amount.
Get the required guarantee amount and bond form from the PrePass Safety Alliance during tolling account setup.
Have the carrier's legal name exactly as it appears on the PrePass customer account.
Complete the bond application and review the quoted premium.
Pay the premium and receive the executed bond naming the PrePass Safety Alliance as obligee.
Deliver the bond to PrePass before tolling services under PrePass Tolls or PrePass Plus are activated.

Detailed Information About the Arizona Toll and Service Fees Bond:

Who has to post this bond

The PrePass Safety Alliance runs PrePass, and its PrePass Plus service pays tolls for commercial fleets across the E-ZPass, SunPass, K-Tag, PikePass, TxTag and FasTrak networks on one consolidated bill. Under Section 2 of the PrePass Supplemental Terms, a customer that wants tolling services through PrePass Tolls or PrePass Plus must provide either a Payment Guarantee Amount or a Required Program Amount.

The Payment Guarantee Amount may be in the form of a bond, letter of credit, cash deposit or other acceptable payment form. This page covers the bond. The Required Program Amount is the alternative for carriers who would rather fund a replenishing balance, which the Alliance recalculates each month from average prior invoice charges.

How the amount is set

There is no published flat figure, and this is where most carriers go wrong. The Alliance bases the Payment Guarantee Amount on the estimated monthly tolling and other activity the customer reports, pass through and program charges, and the customer's credit history. A fleet that underestimates its toll volume at setup can be asked to increase the guarantee later. The Alliance gives no less than 30 days prior written notice of an adjustment, and it can suspend the account if the guarantee falls short. It may also require an irrevocable letter of credit at its sole discretion.

The customer also consents to periodic consumer credit reviews to maintain the guarantee, so the amount can move after account setup.

What the bond guarantees

The bond backs payment of PrePass invoices for tolls and service fees. Invoiced fees are issued on the first day of each month and are due in full on receipt. Fees outstanding more than 21 days draw a late fee of the greater of $10.00 or 1% of unpaid fees per month, the loss of future toll discounts until paid, and possible suspension or termination of the account. If the carrier does not pay, the Alliance can look to the bond, and the carrier then repays the surety.

Before the bond is issued

Confirm the required amount and the current bond form with the PrePass Safety Alliance during account setup, and make sure the carrier name on the bond matches the PrePass customer account exactly.

How premium is set

The surety prices the bond on the amount the Alliance sets and on the carrier's credit, time in business and payment history.

Eligibility and Requirements for a Arizona Toll and Service Fees Bond:

PrePass Safety Alliance as obligee.
Bond amount equal to the Payment Guarantee Amount the Alliance sets.
Carrier name matching the PrePass customer account.
Consent to periodic credit review under the PrePass Supplemental Terms.
Owner and business credit review by the surety, which sets the premium rate.

Arizona Toll and Service Fees Bond FAQs:

How much is the PrePass toll bond?

The Alliance sets it for each customer from estimated monthly tolling and other activity, pass through and program charges, and credit history. Get the figure from PrePass during account setup.

Do I have to use a bond?

No. The Payment Guarantee Amount can also be a letter of credit, cash deposit or other acceptable form, or the carrier can fund a Required Program Amount instead. A bond keeps cash free for operations.

Can PrePass raise the amount later?

Yes. The Alliance can adjust the Payment Guarantee Amount with no less than 30 days prior written notice, and it can suspend the account if the guarantee falls below what is required.

When are PrePass invoices due?

Invoices are issued on the first day of each month and are due in full on receipt. After 21 days the account is charged a late fee of the greater of $10.00 or 1% of unpaid fees per month and loses future toll discounts until paid.

Which toll networks does the bond cover?

It backs payment of PrePass invoices, and PrePass Plus bills tolls from the E-ZPass, SunPass, K-Tag, PikePass, TxTag and FasTrak networks on one consolidated statement.