A Class C-10 electrical contractor has annual gross receipts of $3.2 million. What is the required bond amount under current California law?
Correct Answer
C) $50,000
For Class C contractors with gross receipts over $1 million, the bond requirement increases to $50,000 per B&P Code Section 7071.6.
Why This Is the Correct Answer
Under California Business and Professions Code Section 7071.6, Class C contractors with annual gross receipts exceeding $1 million must maintain a $50,000 contractor's license bond. Since this C-10 electrical contractor has $3.2 million in gross receipts, which is well above the $1 million threshold, the required bond amount is $50,000. This increased bond requirement provides additional financial protection for consumers when working with higher-volume contractors.
Why the Other Options Are Wrong
Option B: $100,000
$25,000 is not a standard bond amount under California contractor licensing law. The law specifies either $15,000 for contractors under $1 million in receipts or $50,000 for those over $1 million.
Option D: $15,000
$15,000 is the standard bond amount for Class C contractors with gross receipts of $1 million or less. Since this contractor's receipts exceed $1 million at $3.2 million, the higher bond requirement applies.
Memory Technique
Remember 'Million = Fifty': When gross receipts exceed $1 Million, the bond jumps to $50,000. Think 'M&F' - Million triggers Fifty thousand.
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