(1) Every person who shall have charge of any supplies, materials, or equipment of any kind, exceeding five hundred dollars ($500) in aggregate value at any time, when deemed expedient by the State Highway Commission, shall furnish a surety bond in an amount equal to the value thereof, conditioned upon the proper care and use of it and the prompt delivery thereof or accounting therefor when required. The commission may require bonds of other employees as it may deem expedient.
(2) Every contractor for work in excess of one thousand dollars ($1,000) shall be required to furnish a bond to be approved by a majority of the commission in an amount at least equal to the amount of the contract, conditioned as the commission may require. These bonds shall also be liable for material, labor, supplies, and expenses used in or incidental to the work, including that which may become due to subcontractors, for which an action may be maintained on the bond by the parties to whom payments may be due.
(3) All bonds required by this act of officials or employees of the commission or required by the State Highway Commission of its employees shall be executed by a solvent surety company authorized to do business in the state and approved by the commission and filed with the Secretary of State, and the premium shall be paid out of the State Highway and Transportation Department Fund. The commission may itself take surety bonds on any or all employees and pay the premium thereon.