What is the minimum bond amount required for Alabama general contractors with gross receipts between $100,000 and $500,000?
Correct Answer
B) $15,000
Alabama requires a minimum $15,000 bond for general contractors with gross receipts between $100,000 and $500,000.
Why This Is the Correct Answer
Alabama licensing law sets a tiered bond requirement based on gross receipts. For contractors with annual gross receipts between $100,000 and $500,000, the minimum required surety bond is $15,000. This bond protects consumers and project owners in the event of contractor default or violations.
Why the Other Options Are Wrong
Option A: $25,000
$25,000 is the bond amount required for a higher gross receipts tier (above $500,000), not for the $100,000–$500,000 range.
Option C: $50,000
$50,000 is not a standard Alabama bond tier amount for this receipts range — it significantly exceeds the requirement for contractors at this revenue level.
Option D: $10,000
$10,000 may be the requirement for a lower tier (contractors with gross receipts below $100,000), not for the $100,000–$500,000 range.
Memory Technique
Middle receipts = middle bond. The $100K–$500K tier is the 'middle tier' with a $15,000 bond. Think: 15 = middle ground. Below $100K may be $10K; $100K–$500K is $15K; above $500K is $25K.
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