In recent years, numerous state bills have been passed that look to hold sureties liable, and put contractors in default, when a contractor violates immigrations laws. Such bills have also made general contractors responsible (or liable) for immigration legislation compliance by all sub-contractors. However, due to the fact that the constitutionality of some of these laws is currently being challenged, the full affect of such immigration laws has not yet been experienced.

The Surety & Fidelity Association of America (SFAA) has been working closely with other interested groups to monitor immigration laws to identify what, if any, impact they will have on the surety bond industry. Specifically, the SFAA has worked to help contractors found in violation of such laws by trying to change the way penalties are handed down. Their thought is that project termination should not necessarily be the first option for a penalty, because terminating an on-going project may end up costing the taxpayers more money. Such terminations have many underlying costs associated with delays, etc, and will ultimately prove to be nonbeneficial to the public entity.

Currently, Mississippi is the only state in the country that passed immigration legislation in 2008 that will have a visible impact on contract surety bonds.

Mississippi