THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY GINGRICH, ROSS, CREIGHTON, FREEMAN AND SANTARSIERO, MAY 3, 2011

AS REPORTED FROM COMMITTEE ON LOCAL GOVERNMENT, HOUSE OF REPRESENTATIVES, AS AMENDED, JUNE 14, 2011   

AN ACT

Amending Title 16 (Counties) of the Pennsylvania Consolidated

Statutes, adding provisions for required fiscal security

through bonding, blanket bonding and insuring of elected and

appointed county officers and employees; providing for

determining the form, amount and payment of premiums for and

the filing and recording of the required security and for the

subsequent issuance of official commissions; and making

related repeals.

TABLE OF CONTENTS

TITLE 16

COUNTIES

PART I.  PRELIMINARY PROVISIONS (Reserved)

PART II.  CREATION, ALTERATION AND FUNCTIONS (Reserved)

PART III.  GOVERNMENT AND ADMINISTRATION

Subpart A.  General Provisions

Chapter 11.  General Provisions

Subchapter A.  (Reserved)

Subchapter B.  Required Fiscal Security for Officers and

Employees

§ 1121.  Short title and scope of subchapter.

§ 1122.  Definitions.

§ 1123.  Required security.

§ 1124.  Official security and officers.

§ 1125.  Other county officers and employees.

§ 1126.  County officers and employees acting as agents.

§ 1127.  Bonds or blanket bond as security coverage.

§ 1128.  Insurance as security coverage.

§ 1129.  Form of required security.

§ 1130.  Amount of coverage.

§ 1131.  Custody and filing of required security documents.

§ 1132.  Payment of premiums and commissions on collections.

§ 1133.  Other requirements, references and approvals.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Title 16 of the Pennsylvania Consolidated

Statutes is amended by adding parts to read:

PART I

PRELIMINARY PROVISIONS (Reserved)

PART II

CREATION, ALTERATION AND FUNCTIONS (Reserved)

PART III

GOVERNMENT AND ADMINISTRATION

Subpart

A.  General Provisions

CHAPTER 11

GENERAL PROVISIONS

Subchapter

A.  (Reserved)

B.  Required Fiscal Security for Officers and Employees

Sec.

1121.  Short title and scope of subchapter.

1122.  Definitions.

1123.  Required security.

1124.  Official security and officers.

1125.  Other county officers and employees.

1126.  County officers and employees acting as agents.

1127.  Bonds or blanket bond as security coverage.

1128.  Insurance as security coverage.

1129.  Form of required security.

1130.  Amount of coverage.

1131.  Custody and filing of required security documents.

1132.  Payment of premiums and commissions on collections.

1133.  Other requirements, references and approvals.

§ 1121.  Short title and scope of subchapter.

(a)  Short title of subchapter.--This subchapter shall be

known and may be cited as the County Officer and Employee Fiscal

Security Act.

(b)  Scope of subchapter.--This subchapter applies to

security coverage and additional coverage in the form of bonds,

blanket bonds or insurance, protecting against events of loss of

money or property as a result of misconduct by officers and

employees in counties of the second class, second class A, third

class, fourth class, fifth class, sixth class, seventh class or

eighth class, including counties of these classes which have

adopted a home rule charter or an optional plan.

(c)  Inapplicability.--This subchapter shall not apply to

bonds of county treasurers acting as tax collectors as provided

in section 4 of the act of May 25, 1945 (P.L.1050, No.394),

known as the Local Tax Collection Law.

§ 1122.  Definitions.

The following words and phrases when used in this subchapter

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Additional coverage."  Insurance that covers each county

officer or employee who is required to receive, account for or

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hold any money or property by virtue of his or her office or

employment and which, at a minimum, indemnifies the county

against the loss of money and property through robbery, burglary

and larceny at a minimum for the loss of money or property

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through robbery, burglary and larceny committed by parties other

than officers or employees required to receive or hold money.

"Blanket bond."  Security coverage in the form of a bond for

county officers and employees as follows:

(1)  for county officers and employees as a comprehensive

group;

(2)  for a group of named county officers and employees;

or

(3)  for county officers and employees in scheduled

positions.

"Bond."  Security coverage under which a surety guarantees

the performance of a duty by a county officer or employee in

compliance with this subchapter.

"County."  A county of the second class, second class A,

third class, fourth class, fifth class, sixth class, seventh

class or eighth class, including counties of these classes which

have adopted or may adopt a home rule charter or an optional

plan.

"County officers and employees."  Elected and appointed

county officials, the deputies and other appointees of county

elected and appointed officials and county employees, whether

acting on behalf of the county or as agents of a Commonwealth

agency or a governing authority, who are required to receive,

account for or hold any money or property by virtue of their

office or employment.

"Crime-fidelity insurance."  Insurance that is endorsed with

faithful performance of duty coverage and which insures, at a

minimum, against events of loss of money or other property,

resulting from one or more fraudulent or dishonest acts,

including, but not limited to, embezzlement, theft, forgery,

similar acts of dishonesty or fraud by a county officer or

employee acting alone or in collusion with others, or from a

breach of fiduciary duty or a failure of a county officer or

employee to perform faithfully the officer's or employee's 

duties or to account properly for all money and property

received, or held or required to be accounted for, by virtue of 

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the officer's or employee's office or employment.

"Governing authority."  Includes:

(1)  The Supreme Court.

(2)  Any agency or unit of the unified judicial system

exercising a power or performing a duty under 42 Pa.C.S. §

1721 (relating to delegation of powers).

"Governing body."  The county board of commissioners or the

body vested with the legislative authority of the county in

counties which have adopted a home rule charter or an optional

plan.

"Home rule charter."  A charter adopted under 53 Pa.C.S. Pt.

III Subpt. E (relating to home rule and optional plan

government) or its predecessor, the former act of April 13, 1972

(P.L.184, No.62), known as the Home Rule Charter and Optional

Plans Law, or Article XXXI-C of the act of July 28, 1953

(P.L.723, No.230), known as the Second Class County Code.

"Money."  Coin or currency of the United States or of any

other country, travelers checks, personal checks, bank checks

and bank notes in current use and having a face value, money

orders and securities.

"Official security."  Security on behalf of a county officer

to provide protection from events of loss or misconduct when the

officer fails to faithfully perform the duties of the office.

"Optional plan."  An optional plan adopted under 53 Pa.C.S.

Pt. III Subpt. E (relating to home rule and optional plan

government) or its predecessor, the former act of April 13, 1972

(P.L.184, No.62), known as the Home Rule Charter and Optional

Plans Law.

"Required security."  Security coverage and additional

coverage provided in compliance with this subchapter.

"Securities."  All negotiable and nonnegotiable instruments

or contracts representing either money or other property,

including revenue and other stamps in current use, tokens and

tickets and evidences of debt issued in connection with credit

or charge cards, which cards are not issued by the county.

"Security coverage."  A bond, a blanket bond or a crime-

fidelity insurance policy, which is endorsed with faithful

performance of duty coverage, provided in compliance with this

subchapter for the purpose of protecting against the loss of

money and other property sustained as a result of one or more

fraudulent or dishonest acts, including, but not limited to,

embezzlement, theft, forgery, similar acts of dishonesty or

fraud by a county officer or employee acting alone or in

collusion with others or from a breach of fiduciary duty or a

failure of a county officer or employee to perform faithfully 

the officer's or employee's duties or to account properly for

all money and property received by virtue of the officer's or

employee's position or employment.

§ 1123.  Required security.

(a)  In general.--A county shall obtain security coverage and

additional coverage for county officers and employees in

accordance with this subchapter.

(b)  Security coverage.--Security coverage shall be provided

in accordance with the following:

(1)  Section 1124 (relating to official security and

officers).

(2)  Section 1125 (relating to other county officers and

employees.

(3)  Section 1126 (relating to county officers and

employees acting as agents).

(c)  Additional coverage.--Supplemental to or as part of the

security coverage to be provided in accordance with this

subchapter, the county shall obtain additional coverage in the

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form of adequate insurance indemnifying it against the loss of

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money and property through robbery, burglary and larceny, shall

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be provided for each county officer or employee who is required

to receive, account for or hold any money and other property by

virtue of the officer's or employee's office or employment by

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parties other than those required to obtain security in

accordance with this chapter.

(d)  Primary liability.--

(1)  Except as provided in paragraph (2), the county

shall be primarily liable for a claim for the loss of money

and property which a county officer or employee is required

to receive, account for or hold by virtue of the officer's or

employee's office or employment, to the extent that the loss

is or could have been the subject of required security under

this subchapter.

(2)  The county shall not be primarily liable for a claim

for the loss of money and property under paragraph (1) to the

extent that recovery of the loss can be obtained from other

insurance or bond protection provided by the Commonwealth

agency or any other person or entity asserting a claim.

(3)  With regard to the loss of money or property,

nothing in this subchapter shall be deemed to restrict or

diminish a county's right to reimbursement or subrogation or

to limit any right the county may have to be indemnified or

receive restitution for the loss.

§ 1124.  Official security and officers.

(a)  Official security.--Each county shall obtain official

security in the form of bonds, a blanket bond or a crime-

fidelity insurance policy, which is endorsed with faithful

performance of duty coverage, on behalf that protects the county

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from losses caused by acts of the officers set forth in

subsection (b) or the equivalent officers in home rule or

optional plans counties, whether elected, appointed or appointed

to fill a vacancy, before those officers begin their official

duties.

(b)  Officers.--The following are the officers or equivalent

officers in home rule or optional plans counties upon whose

behalf official security shall be obtained in accordance with

subsection (a):

(1)  Each county commissioner.

(2)  The chief clerk of the county commissioners.

(3)  The controller.

(4)  The county treasurer.

(5)  The prothonotary of the court of common pleas.

(6)  The sheriff.

(7)  The coroner.

(8)  The clerk of the courts of the court of common

pleas.

(9)  The clerk of the orphans' court division of the

court of common pleas.

(10)  The recorder of deeds.

(11)  The register of wills.

(12)  Probation and parole officers, if required by order

of court to obtain official security.

(13)  The fire marshal and deputy fire marshals, if

required by law to obtain official security.

(14)  The secretary of the board of health and the health

officer in a county in which the secretary is required by law

to obtain official security.

§ 1125.  Other county officers and employees.

A county shall obtain security coverage with faithful

performance of duty coverage for all county officers and

employees who are not subject to section 1124 (relating to

official security and officers), including deputies and other

appointees in each county office, who are required to receive,

account for or hold any money and other property by virtue of

their office or employment.

§ 1126.  County officers and employees acting as agents.

Each county shall obtain security coverage for county

officers and employees acting as agents of a Commonwealth agency

or governing authority in accordance with this subchapter or any

other law, regulation or rule requiring the posting of security

in the form of a bond or otherwise.

§ 1127.  Bonds or blanket bond as security coverage.

(a)  In general.--A county may comply with section 1123(b)

(relating to required security) by providing bonds or a blanket

bond in accordance with the following:

(1)  The bond or blanket bond shall be joint and several,

with one or more surety companies authorized to do business

in this Commonwealth and licensed by the Insurance

Commissioner.

(2)  The bond or blanket bond shall be conditioned upon

each of the following:

(i)  The faithful performance of all duties required

of the person holding the office or position.

(ii)  The just and faithful use, accounting or

payment over, according to law, of all moneys and

balances and other property, which is required to be

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received, accounted for or received or held by the

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officer or employee by virtue of the officer's or

employee's office or employment whether on behalf of the

county, the Commonwealth, a political subdivision or any

other person.

(iii)  The delivery to the successor in office of all

books, papers, documents or other official things, whole,

safe and undefaced, held in right of the office.

(3)  A bond or blanket bond shall be taken in the name of

the county and, in case of a breach of any of the conditions

thereof by the acts or neglect of a principal on the bond,

shall be for the use of the county, the Commonwealth, a 

political subdivision or any other person as that person's

interest shall otherwise appear.

(4)  The county, the Commonwealth, a political

subdivision or other interested persons listed obligees or

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insureds, as the case may be, may sue upon the bond in its 

name or for its own use. Acts of the General Assembly

pertaining to actions and limitations of actions upon

official bonds given to the Commonwealth shall apply to the

bonds provided for in this subchapter just as if they were

given to the Commonwealth, except as otherwise specifically

provided in this subchapter.

(b)  Combined offices.--In counties in which one or more of

the county offices set forth in section 1124(b) (relating to

official security and officers) are combined, if officers are

covered by individual bonds, a single bond covering the combined

offices shall suffice for the officer holding the combined

offices.

§ 1128.  Insurance as security coverage.

A county may comply with section 1123(b) (relating to

required security) by providing crime-fidelity insurance for

county officers or employees in accordance with this subchapter.

§ 1129.  Form of required security.

The form and contents of a bond, a blanket bond or insurance

obtained in compliance with this subchapter shall be approved by

the governing body of the county, after review by the county

solicitor and consultation with the county risk manager, if any.

In cases in which required security is being provided for a

county officer or employee who is acting as an agent for a

Commonwealth agency or the governing authority, the Commonwealth

agency or the governing authority may review and comment on the

form of the required security. The governing body may refer to

sample forms that may be made available by the Department of

State in the approval process.

§ 1130.  Amount of coverage.

(a)  Governing body.--The governing body shall establish a

procedure pursuant to which the governing body shall annually

determine the form and amount of required security that will be

reasonably sufficient to protect against the risks of loss in

compliance with this subchapter.

(b)  Risk manager.--The governing body may appoint a risk

manager who, at the request of the governing body, shall compile

and submit information relevant to the determination of an

amount of required security under subsection (a).

(c)  Consultation.-- To determine the amount of security for

a county officer or employee who is acting as an agent for a

Commonwealth agency or governing authority, the governing body

may, or the risk manager shall, if directed by the governing

body, provide written notice to the secretary or head of the

Commonwealth agency or the governing authority. The Commonwealth

agency or governing authority may provide input concerning the

amount of security it believes is reasonably sufficient to

protect against the risks of loss required to comply with this

subchapter. Nothing in this subchapter shall impair the right of

a Commonwealth agency or governing authority from approving the

amount of required security, if it is explicitly authorized by

law to approve the amount of a bond or other security of a

county officer or employee acting as its agent.

§ 1131.  Custody and filing of required security documents.

(a)  Custody.--The governing body shall direct the chief

clerk or equivalent officer in a home rule or optional plan

county to present the documents evidencing required security

obtained in accordance with this subchapter to the recorder of

deeds or equivalent officer in a home rule or optional plan

county for recording. No tax, fee or other charge shall be

imposed for the recording of documents in compliance with this

section. Following the recording, the documents shall be

returned to the chief clerk or equivalent officer in a home rule

or optional plan county, who shall maintain the custody of these

documents on behalf of the governing body.

(b)  Department of State filing.--

(1)  In compliance with section 809 of the act of April

9, 1929 (P.L.177, No.175), known as The Administrative Code

of 1929, it shall be sufficient for a copy of the recorded

documents evidencing the required security for county

officers to be filed with the Department of State in

accordance with deadlines established by the department.

(2)  No other filing or approvals, except as provided in

section 1133(c)(2) (relating to other requirements,

references and approvals) of documents evidencing the

required security for county officers, except that required

in accordance with paragraph (1), shall be required as a

condition for the issuance of commissions to elected county

officials by the Department of State.

(3)  Notwithstanding the provision of any other law, no

tax, fee or other charge shall be imposed as a result of the

issuance of commissions to elected county officials, and no

fee may be imposed for the recording of required security

documents or commissions.

(c)  Copies.--If requested by the Commonwealth agency or

governing authority on whose behalf a county officer or employee

is acting as an agent, a copy of recorded documents evidencing

the required security shall be provided by the chief clerk or

the equivalent officer in a home rule or optional plans county

to the Commonwealth agency or governing authority. No charge or

fee shall be imposed for any copy provided in accordance with

this subsection.

(d)  Filing by governing body.--The governing body shall have

the duty to file documents as required by this section.

(e)  Retention of documents.--Documents evidencing required

security shall be held by the custodian thereof for the longer

of the following periods:

(1)  For at least one year after the officer's term of

office or employee's period of employment and, in the case of

a county officer or employee who is acting as an agent for a

Commonwealth agency or governing authority, for at least one

year after the settlement of accounts with the Commonwealth

agency or the governing authority.

(2)  For the period of time required by the act of August

14, 1963 (P.L.839, No.407), entitled "An act creating a

county records committee; imposing powers and duties upon it;

authorizing the Pennsylvania Historical and Museum Commission

to assist and cooperate with it; defining county records; and

authorizing the disposition of certain county records by

county officers in counties of the second to eighth class,"

or the rules and regulations adopted pursuant thereto.

(f)  Evidence.--A copy of original documents evidencing

required security, certified as true and correct by the

custodian thereof, or a copy of the recorded documents

evidencing required security, certified as true and correct by

the recorder of deeds, shall be competent evidence thereof in

any judicial proceeding, in the same manner as the original

would be if produced and offered in evidence.

(g)  Sufficiency of filing and recording.--Notwithstanding

any other provision of law, it shall be sufficient to file and

record documents evidencing required security in accordance with

this subchapter without further acknowledgment, filing or

recording of these documents with any other county officer or

with any other Commonwealth agency, except as required by this

subchapter.

§ 1132.  Payment of premiums and commissions on collections.

(a)  Premiums and costs.--The premiums and costs for all

forms of required security for county officials and employees

shall be paid by the county. The requirement of this subchapter

that a county acquire and pay the premiums and costs for

required security shall not relieve a Commonwealth agency on

whose behalf a county officer or employee is acting as an agent

from an obligation, imposed by law, to procure insurance or

bonding protection.

(b)  Commissions on collections.--Nothing in this subchapter

shall affect the right, provided for in any other law, of a

county officer or employee to retain a commission, for use of

the county, on amounts collected or transmitted as agent for a

Commonwealth agency. Notwithstanding the right to retain

commissions in accordance with this paragraph, no county officer

or employee shall be entitled to retain any additional sums from

amounts collected for or to be transmitted to the Commonwealth

agency for the purpose of paying premiums or costs related to

the acquisition of required security.

§ 1133.  Other requirements, references and approvals.

(a)  Compliance .--A requirement in another law, regulation

or rule that a bond be provided by a county officer or employee

to secure the faithful performance of duty or to act as the

agent of a Commonwealth agency or governing authority may be

satisfied by including this obligation within the coverage of

required security supplied in accordance with this subchapter.

(b)  Reference to bonds.--Reference to bonds of county

officers and employees in any other law shall be construed and

read together with this subchapter, and if a conflict exists

between this subchapter and the reference to bonds of county

officers and employees in any other law, the provisions of this

subchapter shall prevail.

(c)  Other approvals.--Notwithstanding any other provision of

law, the following shall apply to required security in the form

of a bond, a blanket bond or insurance:

(1)  Except as provided in paragraph (2), when required

security is obtained in compliance with this subchapter, it

shall not require the approval of any Commonwealth agency or

the Governor as to form, content or amount.

(2)  If any other law explicitly authorizes a

Commonwealth agency or the Governor to approve the amount of

a bond or other security of a county officer or employee, the

amount of required security under this subchapter shall be

subject to approval by the Commonwealth agency or the

Governor, which approval shall not be unreasonably withheld.

Section 2.  Repeals are as follows:

(1)  The General Assembly declares that the repeals under

paragraph (2) are necessary to effectuate the amendment or 

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addition of 16 Pa.C.S. Ch. 11 Subch. B.

(2)  The following acts and parts of acts are repealed:

(i)  Sections 420, 421, 422, 423, 424, 425, 426, 427,

428, 429, 430, 431, 432, 433, 434, 435, 436, 437, 802,

803, 804 of the act of August 9, 1955 (P.L.323, No.130),

known as The County Code.

(ii)  Sections 420, 421, 422, 423, 424, 425, 426,

427, 428, 429, 430, 431, 802, 803, 804, 1261 and 1262 of

the act of July 28, 1953 (P.L.723, No.230), known as the

Second Class County Code.

(iii)  As much of section 3103 of the Second Class

County Code, as reads as follows: "The bond of the fire

marshal shall be in the sum of ten thousand dollars

($10,000) and the bonds of the deputy fire marshals shall

be in the sum of five thousand dollars ($5000)."

(3)  All acts and parts of acts are repealed insofar as

they are inconsistent with this act.

Section 3.  A county may, at any time after the effective

date of this section, obtain required security in accordance

with 16 Pa.C.S. Ch.11 Subch. B. A county shall have in place

required security in accordance with 16 Pa.C.S. Ch.11 Subch. B

prior to the time that any elected county official takes office

after the municipal election next following the effective date

of this section. Bonds and insurance, which, on the effective

date of this section, cover county officers and employees, shall

remain in force and effect until required security is purchased. 

Section 4.  This act shall take effect immediately.