1-443
USE OF ELIGIBLE
OBLIGATIONS INSTEAD OF SURETY BONDS
U.S. Code, Title 31, Money and Finance SECTION 9301
In this chapter—
(1) “person” means an individual, a trust,
an estate, a partnership, and a corporation.
(2) “eligible obligation” means any security
designated as acceptable in lieu of a surety bond by the Secretary
of the Treasury.
[31 USC 9301. Previously
6 USC 15 (act of July 30, 1947 § 15 (61 Stat. 650)). Restated and
recodified by act of Sept. 13, 1982 (96 Stat. 1046) and amended by
act of Oct. 13, 2006 (120 Stat. 2007).]
1-443.1
SECTION 9303
(a) If a person is required under a law of the United
States to give a surety bond, the person may give an eligible obligation
as security instead of a surety bond. The obligation shall—
(1) be given to the official having authority
to approve the surety bond;
(2) as determined by the Secretary of the
Treasury, have a market value that is equal to or greater than the
amount of the required surety bond; and
(3) authorize the official receiving the
obligation to collect or sell the obligation if the person defaults
on a required condition.
(b) (1) An official receiving an eligible
obligation under subsection (a) of this section may deposit it with—
(A) the Secretary of the Treasury;
(B) a Federal reserve bank; or
(C) a depositary designated
by the Secretary.
(2) The Secretary, bank, or depositary
shall issue a receipt that describes the obligation deposited.
(c) Using an eligible obligation instead
of a surety bond for security is the same as using—
(1) a personal or corporate surety bond;
(2) a certified check;
(3) a bank draft;
(4) a post office money order;
or
(5) cash.
(d) When security is no longer required, an eligible
obligation given instead of a surety bond shall be returned to the
person giving the obligation. If a person, supplying labor or material
to a contractor defaulting under sections 3131 and 3133 of title 40,
files with the United States Government the application and affidavit
provided under section 3133(a) of title 40, the Government—
(1) may return to the contractor the eligible
obligation given as security (or proceeds of the eligible obligation
given) under sections 3131 and 3133 of title 40, only after the 90-day
period for bringing a civil action under section 3133(b) of title
40; and
(2) if a civil
action is brought in the 90-day period, shall hold the eligible obligation
or the proceeds subject to the order of the court having jurisdiction
of the action.
(e) This section does
not affect the—
(1) priority of a claim of the Government
against an eligible obligation given under this section;
(2) right or remedy of the
Government for default on an obligation provided under—
(A) sections
3131 and 3133 of title 40; or
(B) this section;
(3) authority of a court over
an eligible obligation given as security in a civil action; and
(4) authority of an official
of the Government authorized by another law to receive an eligible
obligation as security.
(f) To avoid frequent
substitution of eligible obligations, the Secretary may prescribe
regulations limiting the effect of this section to an eligible obligation
maturing more than one year after the date the obligation is given
as security.
[31 USC 9303. Previously 6 USC 15 (act of July 30, 1947 (61 Stat.
650)). Restated and recodified by act of Sept. 13, 1982 (96 Stat.
1046). Amended by acts of Aug. 21, 2002 (116 Stat. 1300); Dec. 15,
2003 (117 Stat. 2641); and Oct. 13, 2006 (120 Stat. 2007).]
