Surety Bond Bill Legislature for Tennessee in 2013

Written by Denise L. on February 28th, 2013. Posted in Legislation, Non-Construction Contract Performance Bonds, Performance Bonds, Surety Bond Blog, Tennessee

Social Share Counters
     surety bonds, surety bond, Tennessee surety bonds      
Tellico Plains gets a new town charter
There are currently five legislative bills being reviewed in Tennessee’s House or Senate that will have an impact on the use of surety bonds in specific situations or businesses. All five bills are House bills with three of these bills having concurrent Senate bills on the same legislature.
 
The bills primarily deal with the bonding of public officials, when in regards to the creation of a new financial system, town charter for Tellico Plains or the creation of a new marketing authority.
 
It also includes a revision regarding the roles of many public officials. This will be causing changes to a wide number of public officials and the amount of surety bonds required for the position. In addition, there is a school bond measure being considered that will create a scholarship program for both public and non-public schools.
 
   

Tennessee House Bill 63 – Public Officials

If passed this House bill would establish The County Financial Systems Act, a system for financial management for all counties under one system. It would create county finance departments that would each have a director. That director of the county finance department would then be required to post a $100,000 performance bond. This surety bond would be to secure the guarantee of that public official’s faithful performance of their duties as outlined in Tennessee House Bill 63.
 
If the decision was made that the purchasing agent for the county would be someone other than the Director of the Financial Department that individual acting as the purchasing agent would also have to post this surety bond. For a complete reading of Tennessee House Bill 63, please use the link to its legislative site provided in this summary report.  

Tennessee House Bill 75/Senate Bill 540 – Public Officials

When passed House Bill 75 and Senate Bill 540 will have rewritten the town charter for the town of Tellico Plains. This revised town charter will include the stipulation that any officer, employee or agent of the town that either disburses, receives or in any way has custody of the town’s money or handles it in any matter must be bonded by the posting of a surety bond or performance bond. The town may also use a blanket bond to fulfill this stipulation and the town’s council will be charged with the approval of the bond and the sureties involved.
 
House bill 75 has passed its second reading in the House and is currently in review with the House Local Government Committee. Concurrently, the Senate is currently reading Senate Bill 540. For a look at the complete language of Tennessee House Bill 75 as it now stands please follow the link provided for you in this bill summary.  

Tennessee House Bill 100/Senate Bill 135 – Public Officials

When passed House Bill 100 and Senate Bill 135 will make significant changes to the amount of surety bond protection required of public officials in Tennessee. The changes would affect eight distinct different public official groups in regards to their function as a caretaker for public funds.
 
County Trustees, Emergency Communications Districts Board Members, Executive Committee Members, Employees, Officers or other Authorized Persons who receive public funds – A corporate surety bond base of $50,000 for revenues less than $50,000, with that bond amount to increase to 10% of the funds collected for revenues between $50,000 and $500,000. For revenues of $500,000 to $1 million, an increase of an additional 5% of the additional revenue must be added. Revenues of between $1-3 million will see an increased bond amount equal to 3% of this additional revenue, and revenue over $3 million increases the bond another 2% of the revenue amount that exceeds $3 million. Bond scale is cumulative for all amounts.
 
Board Members, Policy Council Members, Employees, Officers or any Authorized Persons of a human resource agency who receive public funds – Bond amount is changed from “reasonable amount as determined” to equal to 4% of the fund collected up to a public fund amount of $3 million. For funds beyond this amount, a 2% additional amount will be added, with the scale of the surety bond amount to be cumulative.
 
County Mayors – The bond amount would be changed from a sliding scale according to the population to a simple $100,000 surety bond for each mayor. The county legislature can require a larger amount if they deem it necessary.
 
Sheriffs – The surety bond amount would be increased from the current $25,000 to $100,000.
 
Registers – If the county has a population of less than 15,000 the surety bond amount would be $50,000 and if the county has a population of more than 15,000 the surety bond will go up to $100,000.
 
County Director of Accounts and County Purchasing Agents – New surety bond amounts will be a minimum of $100,000.
 
County Director of the Finance Department – Changes were made to require a $100,000 public official surety bond and to require a blanket bond to cover both the Director and their employees.
 
Clerk of the Court – For counties with a population of under 15,000 a surety bond of $50,000 is required and if the population exceeds 15,000 the surety bond amount would increase to $100,000.
 
In addition, any county official authorized to administer state-shared funds will need a $100,000 surety bond with the county legislature having authority to increase the bond amount required as they see fit. Also, blanket surety bond coverage for all county employees not covered by these individual surety bonds will need to be in place from county governments with a minimum amount of $150,000.
 
House Bill 100 was introduced into the House on January 25, 2013 and is currently under review with the Local Government Subcommittee of the State Government Committee of Finance. To read the entire Tennessee House Bill 100 as it now stands, please feel free to use the link provided in this overview of the bill.  

Tennessee House Bill 190/Senate Bill 196 – School Bonds

The introduction of House Bill 190 and Senate Bill 196 is to create The Tennessee Choice and Opportunity Scholarship Act, a scholarship program with a school voucher measure. It will allow non-public schools to also participate providing they can demonstrate their financial viability with a surety bond.
 
The Department of Education will determine the amount of the bond to be posted that will help them to meet the requirement for participation in the measure. This bill has passed the second reading and is currently in review with the Senate Education Committee. For a full reading of Tennessee House Bill 190 and Tennessee Senate Bill 196 please follow the provided link to a legislative website.      

Tennessee House Bill 479 – Public Officials Bonds

This bill will establish the Cumberland Regional Business and Agribusiness Marketing Authority. With the creation of this authority will be the appointment of a board of directors. This board of directors will be authorized to appoint managers, officers, employees, attornies and agents as they see fit.
 
All of these positions will be required to post a surety bond. House Bill 479 was introduced into the House on January 30, 2013 and is currently in review with the State Government Committee’s subcommittee on Government Operations. For anyone interested in a reading of the complete Tennessee House Bill 479 as it currently stands, please be sure to follow the link we have created in this bill review.

Tags: , , , , , , ,