Surety Bond Encyclopedia

Water Well Contractor's License Bond - Statewide in Arkansas

Brief Summary

Cancelling this bond does not end your exposure on it. Arkansas keeps the surety and the contractor liable for the period the bond was in force for at least five years after termination. The Commission issues a water well contractor license only after it has the original notarized bond, and a bond kept in force lets the license renew without a new bond form.

Under 17 CAR 11-307, an Arkansas water well contractor posts a bond of no less than $20,000 for each licensing year, running to the Arkansas Natural Resources Commission for the use and benefit of the public. The bond guarantees that the contractor and its employees comply with Acts 1969, No. 641, as amended, and the rules under it. The Commission supplies the bond form and issues the license only after receiving the completed, notarized original.

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How to Apply for a Water Well Contractor's License Bond:

Pick the license type: drilling and pump system, drilling only, or pump system only.
Use the Commission's Water Well Contractor Bond Form.
Provide the owner name, address and Social Security number for the surety's credit review.
Have the bond executed for at least $20,000 and notarized, with the surety's power of attorney if required.
Mail the original bond with the license application, proof of age, and the license and rig permit fees.
Keep the bond in force so the license renews without a new bond form.
Complete 6 continuing education units each year, plus 2 more for each additional driller or pump installer employed.

Detailed Information About the Arkansas Water Well Contractor's License Bond:

Amount and obligee

Rule 17 CAR 11-307 sets the bond at no less than $20,000 for each licensing year. The water well contractor is the principal, a surety company authorized to do business in Arkansas is the surety, and the obligee is the Arkansas Natural Resources Commission for the use and benefit of the public. The condition is that the contractor and its employees comply with Acts 1969, No. 641, as amended, and all rules under it.

Form and filing

The Commission provides the contractor's bond form, and a license issues only after the Commission receives the original, completed and notarized. It is sent with the Arkansas Water Well Contractor License Application to the Arkansas Department of Agriculture Natural Resources Division, 1 Natural Resources Drive, Little Rock, AR 72205, along with a power of attorney if required. Each year's bond is construed as a new bond, but the license renews without a new bond form as long as the Commission has proof the original bond remains in full force.

Waiver and escrow for small operators

The Commission may waive the $20,000 requirement for a contractor whose contracts for each one-year period consistently total less than $20,000, when the contractor also shows it cannot obtain bonding or would face undue hardship and the Executive Secretary recommends the waiver. Contractors who install or repair pumping equipment and have been granted that waiver may, under the rule's conditions, post an escrow cash bond of no less than $500 per year until $20,000 has accrued.

Cancellation and the five-year tail

The surety ends a bond by giving the Commission at least 30 days written notice of the termination date. Termination does not relieve the surety or the contractor of liability for the period the bond was in force until at least five years after the termination date.

Fees on the application

The current contractor license application lists $350 a year for a drilling and pump system license, $175 a year for a drilling-only or pump system-only license, and a $145 rig permit fee per rig. Drillers and pump installers register separately at $125 per certificate, and all drilling and pump installation must be done by a registered driller or pump installer working for a licensed contractor.

Eligibility and Requirements for a Arkansas Water Well Contractor's License Bond:

Bond of no less than $20,000 for each licensing year.
Arkansas Natural Resources Commission named as obligee for the use and benefit of the public.
Surety company authorized to do business in Arkansas.
Original, completed and notarized Commission bond form.
At least 30 days written notice to the Commission before the surety terminates the bond.

Arkansas Water Well Contractor's License Bond FAQs:

My jobs are small. Do I still need the full $20,000 bond?

Usually yes. The Commission may waive it only when your contracts for each one-year period consistently total less than $20,000, you show you cannot obtain bonding or would face undue hardship, and the Executive Secretary recommends the waiver.

I only install and repair pumps. Is there another option?

Pump contractors who have been granted a waiver may, under the rule's conditions, post an escrow cash bond of at least $500 per year until $20,000 has accrued.

Do I need a new bond form every year?

No. The license renews without a new bond form as long as the Commission has proof the original bond remains in full force.

If my bond is cancelled, am I off the hook?

No. The surety must give the Commission at least 30 days written notice, and liability for the period the bond was in force continues for at least five years after termination.

Does each driller on my crew need a bond?

The bond is the contractor's. Drillers and pump installers register separately at $125 per certificate and must work for a licensed contractor.