North Dakota’s budget office manages the state bonding fund

The Office of Management and Budget manages the state bonding fund and may contract for help running it. The fund provides bond coverage for covered state and local government workers and officials, including those of the International Peace Garden. Covered workers and officials exclude those of occupational and professional boards under title 43 and the state bar association. Contracts end June 30 of odd-numbered years and cannot end early. Either party must give notice by September 30 of the preceding even-numbered year if it does not expect to renew.

The budget office has ongoing authority to spend fund money on claims, administration, state auditor investigations, and insurance protecting the fund against large claims. State agencies and local governments pay into the fund. The office collects payments when the balance is below $3 million. After waiving payments above $3 million, it resumes collection when the balance falls below $2 million. The minimum payment is $2.50 per public employee per year unless payments are waived. Agencies and local governments must pay in advance.

The budget office reviews claims and decides the amount allowed. The attorney general must approve the claim and amount before the office pays. These rules concern covered losses caused by a public worker’s or official’s failure to meet obligations or wrongful act. The office may wait for the state auditor’s report before deciding how much to allow. A claimant must present a claim to the office and have it refused before suing the fund. The fund covers only violations of the bond’s terms that occurred within the two years before the claim was presented. Responsible officials must file claims within 60 days after discovering the loss. A lawsuit against the fund must begin within one year after presenting the claim to the office.

The budget office may cancel bond coverage after an investigation. Public agencies and local governments may buy extra coverage from an authorized bond insurer. These rules apply to covered public workers and officials and their public employers. Workers and officials may buy replacement coverage after cancellation or choose private coverage instead of fund coverage. The office sets the coverage amount. Workers and officials cannot use public money to pay for their replacement or substitute bonds. Cancellation takes effect 30 days after written notice. The office must immediately notify the public employer by certified mail when coverage is canceled.