26.1-21 State Bonding Fund
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<![CDATA[CHAPTER 26.1-21STATE BONDING FUND26.1-21-01. Definitions. In this chapter, unless the context otherwise requires:1."Blanket bond" means a bond that covers collectively all public employees and<br>public officials without the necessity of scheduling names or positions as a part of<br>the bond, and a bond whereby new public employees and new public officials<br>entering employment or office during the period of the bond are automatically<br>included without notice to the fund.2."Fund" means the state bonding fund.3."International peace garden" means an entity located upon the international<br>boundary line between the United States and Canada used and maintained as a<br>memorial to commemorate the long-existing relationship of peace and good will<br>between the people and the governments of the United States and Canada and to<br>further international peace among the nations of the world.4."Political subdivision" means a county, township, park district, school district, city,<br>and any other unit of local government which is created either by statute or by the<br>Constitution of North Dakota for local government or other public purposes.5."Public employee" means an individual employed by a state agency or any political<br>subdivision, an officer or employee eligible under section 57-15-56, an employee<br>under section 61-16.1-05, and an officer or employee of an international peace<br>garden."Public employee" does not include an individual employed by anoccupational and professional board or commission under title 43 or by the state bar<br>association.6."Public official" means an elected or appointed officer or deputy of a state agency or<br>a political subdivision, except for an officer of an occupational and professional<br>board or commission under title 43 or of the state bar association.7."State agency" means a state board, bureau, commission, department, agency,<br>industry, and institution and the international peace garden.26.1-21-02. State bonding fund - Management by commissioner. A fund must bemaintained as a fund for the bonding of public employees and public officials. Money collected<br>under this chapter must be paid into the fund. The commissioner shall manage the fund.26.1-21-03. Commissioner may employ assistants. The commissioner may employassistants as may be necessary to operate the fund. The salaries of all employees together with<br>all other expenditures for the operation of the fund must remain within the appropriations made<br>by the legislative assembly for these purposes and must be paid by warrant-check drawn on the<br>state treasury prepared by the office of management and budget after the approval of expense<br>vouchers by the office of the budget.26.1-21-04. Attorney general is attorney for fund. The attorney general shall act asattorney for the commissioner in any proceeding to which the commissioner is a party on behalf<br>of the fund.26.1-21-05. Investment of fund. Investment of the fund is under the supervision of thestate investment board in accordance with chapter 21-10.26.1-21-06. Condition of bond created by chapter - Limitation. Unless otherwiseprovided, the bond provided under this chapter is a blanket bond. The blanket bond is a fidelity<br>bond. The blanket bond is conditioned on the public employee or public official, as principal,Page No. 1rendering a true account of all moneys and property possessed as a public employee or public<br>official, and delivering the money or the property as required by law. The provisions of this<br>chapter and of any statute requiring a bond constitute the bond of each public official and public<br>employee for the purposes of any law of this state requiring the bond and constitute the entire<br>contract between the fund and a state agency or a political subdivision as the obligee for the<br>bond.26.1-21-07.Coverage.The amount of coverage afforded to each state agency orpolitical subdivision must be determined by the commissioner based upon the amount of money<br>or property handled and the opportunity for defalcation but the amount must at least equal the<br>amount of money or property actually handled or ten thousand dollars, whichever is less. The<br>coverage may be greater than but not less than the amount required by law or determined under<br>law for a position. The coverage for a state legislative or judicial branch agency, however, may<br>be determined by the legislative council or supreme court, respectively. Notwithstanding any<br>other provision of law, the commissioner may issue bonds in such amounts as the commissioner<br>determines necessary to carry out the purposes of the fund and, in determining the amount of<br>coverage to be offered, the commissioner may consider the reserves necessary to pay the bonds<br>and for all other necessary costs or expenses to carry out the purposes of the fund.26.1-21-08. Review of coverage by auditor. When conducting an audit examination ofa state agency or political subdivision, the auditor shall evaluate the blanket bond coverage and,<br>if necessary, the auditor shall include recommendations for changes in the amount of that<br>coverage in the auditor's report.26.1-21-09. Premiums - Amount to whom paid - Minimum. The commissioner shalldetermine the premium for a blanket bond. Each state agency and political subdivision shall pay<br>the premium in advance to the fund and the premiums collected must be kept in the fund. The<br>minimum premium for each bond must be two dollars and fifty cents per public employee per<br>year.Payments must be made for one year or for a longer term as prescribed by thecommissioner. The premiums referred to in this section must be waived until the reserve fund of<br>the state bonding fund has been depleted below the sum of two million dollars. The collection of<br>premiums must be resumed on the bonds, at the rates provided under this section, whenever the<br>reserve fund is depleted below the sum of two million dollars. The premiums must continue to be<br>collected until the reserve fund reaches a total of three million dollars, at which time all premiums<br>must again be waived until the reserve fund has been depleted below the sum of two million<br>dollars.26.1-21-09.1. Bonds of agents appointed to distribute hunting and fishing licensesor stamps - Premiums - Determination of eligibility. The annual premium for a bond of an<br>agent appointed by a county auditor to distribute hunting and fishing licenses or stamps pursuant<br>to section 20.1-03-17 is ten dollars. The premium must be paid to the fund pursuant to rules<br>adopted by the commissioner. The commissioner shall deposit the premiums with the state<br>treasurer to the credit of the fund. The commissioner may reduce or waive the premium if it is<br>determined that funds received pursuant to this section are sufficient to cover potential claims on<br>the bonds of agents appointed to distribute hunting and fishing licenses or stamps.Thecommissioner shall determine the conditions and qualifications of agents bonded under this<br>section. The amount of coverage afforded under this section is fifteen thousand dollars per agent<br>per year.26.1-21-10. Automatic insurance of state and political subdivisions.1.Each state agency and each political subdivision shall apply to be bonded in the fund<br>no less often than on a biennial basis or when a change in coverage is requested,<br>whichever occurs first. Unless an application is denied within sixty days from the<br>date it is received by the commissioner, the application will be deemed approved<br>and bond coverage in force. If a bond is in the discretion of the state agency or<br>political subdivision and a bond is not requested, the state agency or political<br>subdivision is exempt from this section.Page No. 22.The application must include a requested amount of bond coverage based on the<br>amount of money and property handled and the opportunity for defalcation and any<br>other condition imposed by law and list twenty-five percent of the money in control of<br>the public officials or employees for which the bond is requested for the preceding<br>year based on the total monthly balances. In addition, the application must include<br>any information requested by the commissioner to determine the amount of money<br>and property handled and the opportunity for defalcation, including the procedure<br>used to determine the amount of bond requested, revenues for the last budget<br>period by type, expenditures for the last budget period by type, the number of people<br>that handle money, any portion of the last audit, and any financial procedures.26.1-21-10.1. State employee - Defense. Repealed by S.L. 1997, ch. 286, </p>
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