COLUMBUS—State Representative Bob Cupp (R-Lima), announces the passage of legislation he co-sponsored, House Bill 291, to update state requirements of local governments to protect public funds.


Local governments are required by law to have in place means to reimburse the public treasury in the case of misuse of public dollars under the control of local public officeholders. For more than 60 years, this has meant the purchase of surety bonds to safeguard against loss of public funds. Costs can vary, but in one medium size county alone, $4,080.00 public funds were spent on surety bonds for just one year of protection. Moreover, surety bonds require a lot of attention and time in tracking, renewing and replacing the bonds. Many counties purchase insurance in addition to surety bonds to provide additional protection against the loss of local public dollars because surety bonds often have relatively low levels of coverage. This results in a dual cost to the local government.

H.B. 291 would help save public funds and provide for greater protection by allowing certain political subdivisions to just purchase insurance instead of surety bonds.


“In many cases, insurance coverage can be more cost effective, provide more coverage and require less time to monitor, compared to surety bonds. This bill permits insurance coverage in place of surety bonds as a local option,” Cupp said.


House Bill 291 is supported by several local government organizations including the Ohio Municipal League, the Ohio Township Association and the County Commissioners Association of Ohio (CCAO). CCAO testified in support of the bill, stating the flexibility to use insurance instead of surety bonds “would provide administrative efficiency” and “save our counties money while obtaining similar or greater coverage limits”.


House Bill 291 received unanimous bipartisan support in the House. The bill now goes to the Senate for consideration.

 
 
 
  
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