PRIOR PRINTER'S NO. 852

PRINTER'S NO.  1669

  

THE GENERAL ASSEMBLY OF PENNSYLVANIA

  

SENATE BILL

 

No.

834

Session of

2011

  

  

INTRODUCED BY EICHELBERGER, ROBBINS, ERICKSON, WOZNIAK AND BLAKE, MARCH 14, 2011

  

  

AS AMENDED ON THIRD CONSIDERATION, OCTOBER 17, 2011   

  

  

  

AN ACT

  

1

Amending Title 16 (Counties) of the Pennsylvania Consolidated

2

Statutes, adding provisions for required fiscal security

3

through bonding, blanket bonding and insuring of elected and

4

appointed county officers and employees; providing for

5

determining the form, amount and payment of premiums for and

6

the filing and recording of the required security and for the

7

subsequent issuance of official commissions; and making

8

related repeals.

9

TABLE OF CONTENTS

10

TITLE 16

11

COUNTIES

12

PART I.  PRELIMINARY PROVISIONS (Reserved)

13

PART II.  CREATION, ALTERATION AND FUNCTIONS (Reserved)

14

PART III.  GOVERNMENT AND ADMINISTRATION

15

Subpart A.  General Provisions

16

Chapter 11.  General Provisions

17

Subchapter A.  (Reserved)

18

Subchapter B.  Required Fiscal Security for Officers and

19

Employees

20

§ 1121.  Short title and scope of subchapter.

21

§ 1122.  Definitions.

 


1

§ 1123.  Required security.

2

§ 1124.  Official security and officers.

3

§ 1125.  Other county officers and employees.

4

§ 1126.  County officers and employees acting as agents.

5

§ 1127.  Bonds or blanket bond as security coverage.

6

§ 1128.  Insurance as security coverage.

7

§ 1129.  Form of required security.

8

§ 1130.  Amount of coverage.

9

§ 1131.  Custody and filing of required security documents.

10

§ 1132.  Payment of premiums and commissions on collections.

11

§ 1133.  Other requirements, references and approvals.

12

The General Assembly of the Commonwealth of Pennsylvania

13

hereby enacts as follows:

14

Section 1.  Title 16 of the Pennsylvania Consolidated

15

Statutes is amended by adding parts to read:

16

PART I

17

PRELIMINARY PROVISIONS (Reserved)

18

PART II

19

CREATION, ALTERATION AND FUNCTIONS (Reserved)

20

PART III

21

GOVERNMENT AND ADMINISTRATION

22

Subpart

23

A.  General Provisions

24

CHAPTER 11

25

GENERAL PROVISIONS

26

Subchapter

27

A.  (Reserved)

28

B.  Required Fiscal Security for Officers and Employees

29

Sec.

30

1121.  Short title and scope of subchapter.

- 2 -

 


1

1122.  Definitions.

2

1123.  Required security.

3

1124.  Official security and officers.

4

1125.  Other county officers and employees.

5

1126.  County officers and employees acting as agents.

6

1127.  Bonds or blanket bond as security coverage.

7

1128.  Insurance as security coverage.

8

1129.  Form of required security.

9

1130.  Amount of coverage.

10

1131.  Custody and filing of required security documents.

11

1132.  Payment of premiums and commissions on collections.

12

1133.  Other requirements, references and approvals.

13

§ 1121.  Short title and scope of subchapter.

14

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

15

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

16

Security Act.

17

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

18

security coverage and additional coverage in the form of bonds,

19

blanket bonds or insurance, protecting against events of loss of

20

money or property as a result of misconduct by officers and

21

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

22

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

23

eighth class, including counties of these classes which have

24

adopted a home rule charter or an optional plan.

25

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

26

bonds of county treasurers acting as tax collectors as provided

27

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

28

known as the Local Tax Collection Law.

29

§ 1122.  Definitions.

30

The following words and phrases when used in this subchapter

- 3 -

 


1

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

2

context clearly indicates otherwise:

3

"Additional coverage."  Insurance that covers each county

4

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

<--

5

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

6

employment and which, at a minimum, indemnifies the county

7

against the loss of money and property through robbery, burglary

8

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

<--

9

through robbery, burglary and larceny committed by parties other

10

than officers or employees required to receive or hold money.

11

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

12

county officers and employees as follows:

13

(1)  for county officers and employees as a comprehensive

14

group;

15

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

16

or

17

(3)  for county officers and employees in scheduled

18

positions.

19

"Bond."  Security coverage under which a surety guarantees

20

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

21

compliance with this subchapter.

22

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

23

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

24

class or eighth class, including counties of these classes which

25

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

26

plan.

27

"County officers and employees."  Elected and appointed

28

county officials, the deputies and other appointees of county

29

elected and appointed officials and county employees, whether

30

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

- 4 -

 


1

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

2

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

3

office or employment.

4

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

5

faithful performance of duty coverage and which insures, at a

6

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

7

resulting from one or more fraudulent or dishonest acts,

8

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

9

similar acts of dishonesty or fraud by a county officer or

10

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

11

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

12

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

13

duties or to account properly for all money and property

14

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

<--

15

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

16

"Governing authority."  Includes:

17

(1)  The Supreme Court.

18

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

19

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

20

1721 (relating to delegation of powers).

21

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

22

body vested with the legislative authority of the county in

23

counties which have adopted a home rule charter or an optional

24

plan.

25

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

26

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

27

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

28

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

29

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

30

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

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1

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

2

other country, travelers checks, personal checks, bank checks

3

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

4

orders and securities.

5

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

6

to provide protection from events of loss or misconduct when the

7

officer fails to faithfully perform the duties of the office.

8

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

9

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

10

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

11

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

12

Plans Law.

13

"Required security."  Security coverage and additional

14

coverage provided in compliance with this subchapter.

15

"Securities."  All negotiable and nonnegotiable instruments

16

or contracts representing either money or other property,

17

including revenue and other stamps in current use, tokens and

18

tickets and evidences of debt issued in connection with credit

19

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

20

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

21

fidelity insurance policy, which is endorsed with faithful

22

performance of duty coverage, provided in compliance with this

23

subchapter for the purpose of protecting against the loss of

24

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

25

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

26

embezzlement, theft, forgery, similar acts of dishonesty or

27

fraud by a county officer or employee acting alone or in

28

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

29

failure of a county officer or employee to perform faithfully 

30

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

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1

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

2

employee's position or employment.

3

§ 1123.  Required security.

4

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

5

additional coverage for county officers and employees in

6

accordance with this subchapter.

7

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

8

in accordance with the following:

9

(1)  Section 1124 (relating to official security and

10

officers).

11

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

12

employees).

13

(3)  Section 1126 (relating to county officers and

14

employees acting as agents).

15

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

16

security coverage to be provided in accordance with this

17

subchapter, the county shall obtain additional coverage in the

<--

18

form of adequate insurance indemnifying it against the loss of

<--

19

money and property through robbery, burglary and larceny, shall

<--

20

be provided for each county officer or employee who is required

21

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

22

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

<--

23

parties other than those required to obtain security in

24

accordance with this chapter.

25

(d)  Primary liability.--

26

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

27

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

28

and property which a county officer or employee is required

29

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

30

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

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1

is or could have been the subject of required security under

2

this subchapter.

3

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

4

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

5

extent that recovery of the loss can be obtained from other

6

insurance or bond protection provided by the Commonwealth

7

agency or any other person or entity asserting a claim.

8

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

9

nothing in this subchapter shall be deemed to restrict or

10

diminish a county's right to reimbursement or subrogation or

11

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

12

receive restitution for the loss.

13

§ 1124.  Official security and officers.

14

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

15

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

16

fidelity insurance policy, which is endorsed with faithful

17

performance of duty coverage, on behalf that protects the county

<--

18

from losses caused by acts of the officers set forth in

19

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

20

optional plans counties, whether elected, appointed or appointed

21

to fill a vacancy, before those officers begin their official

22

duties.

23

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

24

officers in home rule or optional plans counties upon whose

25

behalf official security shall be obtained in accordance with

26

subsection (a):

27

(1)  Each county commissioner.

28

(2)  The chief clerk of the county commissioners.

29

(3)  The controller.

30

(4)  The county treasurer.

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1

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

2

(6)  The sheriff.

3

(7)  The coroner.

4

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

5

pleas.

6

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

7

court of common pleas.

8

(10)  The recorder of deeds.

9

(11)  The register of wills.

10

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

11

of court to obtain official security.

12

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

13

required by law to obtain official security.

14

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

15

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

16

to obtain official security.

17

§ 1125.  Other county officers and employees.

18

A county shall obtain security coverage with faithful

19

performance of duty coverage for all county officers and

20

employees who are not subject to section 1124 (relating to

21

official security and officers), including deputies and other

22

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

23

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

24

their office or employment.

25

§ 1126.  County officers and employees acting as agents.

26

Each county shall obtain security coverage for county

27

officers and employees acting as agents of a Commonwealth agency

28

or governing authority in accordance with this subchapter or any

29

other law, regulation or rule requiring the posting of security

30

in the form of a bond or otherwise.

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1

§ 1127.  Bonds or blanket bond as security coverage.

2

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

3

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

4

bond in accordance with the following:

5

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

6

with one or more surety companies authorized to do business

7

in this Commonwealth and licensed by the Insurance

8

Commissioner.

9

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

10

each of the following:

11

(i)  The faithful performance of all duties required

12

of the person holding the office or position.

13

(ii)  The just and faithful use, accounting or

14

payment over, according to law, of all moneys and

15

balances and other property, which is required to be

<--

16

received, accounted for received or held by the officer

<--

17

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

18

office or employment whether on behalf of the county, the

19

Commonwealth, a political subdivision or any other

20

person.

21

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

22

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

23

safe and undefaced, held in right of the office.

24

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

25

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

26

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

27

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

28

political subdivision or any other person as that person's

29

interest shall otherwise appear.

30

(4)  The county, the Commonwealth, a political

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1

subdivision or other interested persons listed obligees or

<--

2

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

3

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

4

pertaining to actions and limitations of actions upon

5

official bonds given to the Commonwealth shall apply to the

6

bonds provided for in this subchapter just as if they were

7

given to the Commonwealth, except as otherwise specifically

8

provided in this subchapter.

9

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

10

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

11

official security and officers) are combined, if officers are

12

covered by individual bonds, a single bond covering the combined

13

offices shall suffice for the officer holding the combined

14

offices.

15

§ 1128.  Insurance as security coverage.

16

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

17

required security) by providing crime-fidelity insurance for

18

county officers or employees in accordance with this subchapter.

19

§ 1129.  Form of required security.

20

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

21

obtained in compliance with this subchapter shall be approved by

22

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

23

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

24

In cases in which required security is being provided for a

25

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

26

Commonwealth agency or the governing authority, the Commonwealth

27

agency or the governing authority may review and comment on the

28

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

29

sample forms that may be made available by the Department of

30

State in the approval process.

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1

§ 1130.  Amount of coverage.

2

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

3

procedure pursuant to which the governing body shall annually

4

determine the form and amount of required security that will be

5

reasonably sufficient to protect against the risks of loss in

6

compliance with this subchapter.

7

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

8

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

9

and submit information relevant to the determination of an

10

amount of required security under subsection (a).

11

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

12

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

13

Commonwealth agency or governing authority, the governing body

14

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

15

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

16

Commonwealth agency or the governing authority. The Commonwealth

17

agency or governing authority may provide input concerning the

18

amount of security it believes is reasonably sufficient to

19

protect against the risks of loss required to comply with this

20

subchapter. Nothing in this subchapter shall impair the right of

21

a Commonwealth agency or governing authority from approving the

22

amount of required security, if it is explicitly authorized by

23

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

24

county officer or employee acting as its agent.

25

§ 1131.  Custody and filing of required security documents.

26

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

27

clerk or equivalent officer in a home rule or optional plan

28

county to present the documents evidencing required security

29

obtained in accordance with this subchapter to the recorder of

30

deeds or equivalent officer in a home rule or optional plan

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1

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

2

imposed for the recording of documents in compliance with this

3

section. Following the recording, the documents shall be

4

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

5

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

6

documents on behalf of the governing body.

7

(b)  Department of State filing.--

8

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

9

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

10

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

11

documents evidencing the required security for county

12

officers to be filed with the Department of State in

13

accordance with deadlines established by the department.

14

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

15

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

16

references and approvals) of documents evidencing the

17

required security for county officers, except that required

18

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

19

condition for the issuance of commissions to elected county

20

officials by the Department of State.

21

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

22

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

23

issuance of commissions to elected county officials, and no

24

fee may be imposed for the recording of required security

25

documents or commissions.

26

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

27

governing authority on whose behalf a county officer or employee

28

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

29

the required security shall be provided by the chief clerk or

30

the equivalent officer in a home rule or optional plans county

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1

to the Commonwealth agency or governing authority. No charge or

2

fee shall be imposed for any copy provided in accordance with

3

this subsection.

4

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

5

the duty to file documents as required by this section.

6

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

7

security shall be held by the custodian thereof for the longer

8

of the following periods:

9

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

10

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

11

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

12

Commonwealth agency or governing authority, for at least one

13

year after the settlement of accounts with the Commonwealth

14

agency or the governing authority.

15

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

16

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

17

county records committee; imposing powers and duties upon it;

18

authorizing the Pennsylvania Historical and Museum Commission

19

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

20

authorizing the disposition of certain county records by

21

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

22

or the rules and regulations adopted pursuant thereto.

23

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

24

required security, certified as true and correct by the

25

custodian thereof, or a copy of the recorded documents

26

evidencing required security, certified as true and correct by

27

the recorder of deeds, shall be competent evidence thereof in

28

any judicial proceeding, in the same manner as the original

29

would be if produced and offered in evidence.

30

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

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1

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

2

record documents evidencing required security in accordance with

3

this subchapter without further acknowledgment, filing or

4

recording of these documents with any other county officer or

5

with any other Commonwealth agency, except as required by this

6

subchapter.

7

§ 1132.  Payment of premiums and commissions on collections.

8

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

9

forms of required security for county officials and employees

10

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

11

that a county acquire and pay the premiums and costs for

12

required security shall not relieve a Commonwealth agency on

13

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

14

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

15

bonding protection.

16

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

17

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

18

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

19

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

20

Commonwealth agency. Notwithstanding the right to retain

21

commissions in accordance with this paragraph, no county officer

22

or employee shall be entitled to retain any additional sums from

23

amounts collected for or to be transmitted to the Commonwealth

24

agency for the purpose of paying premiums or costs related to

25

the acquisition of required security.

26

§ 1133.  Other requirements, references and approvals.

27

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

28

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

29

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

30

agent of a Commonwealth agency or governing authority may be

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1

satisfied by including this obligation within the coverage of

2

required security supplied in accordance with this subchapter.

3

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

4

officers and employees in any other law shall be construed and

5

read together with this subchapter, and if a conflict exists

6

between this subchapter and the reference to bonds of county

7

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

8

subchapter shall prevail.

9

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

10

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

11

of a bond, a blanket bond or insurance:

12

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

13

security is obtained in compliance with this subchapter, it

14

shall not require the approval of any Commonwealth agency or

15

the Governor as to form, content or amount.

16

(2)  If any other law explicitly authorizes a

17

Commonwealth agency or the Governor to approve the amount of

18

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

19

amount of required security under this subchapter shall be

20

subject to approval by the Commonwealth agency or the

21

Governor, which approval shall not be unreasonably withheld.

22

Section 2.  Repeals are as follows:

23

(1)  The General Assembly declares that the repeals under

24

paragraph (2) are necessary to effectuate the amendment or

25

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

26

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

27

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

28

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

29

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

30

known as The County Code.

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1

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

2

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

3

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

4

Second Class County Code.

5

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

6

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

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marshal shall be in the sum of ten thousand dollars

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

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

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

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they are inconsistent with this act.

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

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date of this section, obtain required security in accordance

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

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

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prior to the time that any elected county official takes office

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after the municipal election next following the effective date

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

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

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remain in force and effect until required security is purchased. 

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Section 4.  This act shall take effect immediately.

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