Commission, Oath, And Bond

Ark. Code Ann. tit. 21, ch. 2

in effect

Ark. Code Ann. § 21-2-101 Officers commissioned by Governor.

Each Justice of the Supreme Court, judge of a circuit court, presiding judge of a county court, the Secretary of State, the Auditor of State, prosecuting attorney, sheriff, coroner, clerk of a circuit court, county treasurer, county surveyor, notary public, justice of the peace, judge of a district court, mayor of a city or town, and militia officer elected or appointed in this state shall be commissioned by the Governor.

Ark. Code Ann. § 21-2-102 Commission fee and duplicate oath to be forwarded to Secretary of State.

(a)(1) With the exception of judges elected at the nonpartisan judicial general election without a runoff, all civil and military state and county officers who are required by law to be commissioned by the Governor are required to forward the legal fee for their commissions to the Secretary of State within sixty (60) days after their election. (2) All judges elected at the nonpartisan judicial general election without a runoff are required to forward the legal fee for their commissions to the Secretary of State within sixty (60) days after the November general election. (3) Within fifteen (15) days after the commissions have been received, the officers shall forward their duplicate oaths to the Secretary of State to be recorded and filed in his or her office. (b)(1) In case any officer, elected or appointed and commissioned by the Governor, shall fail or neglect to apply for or procure his or her commission from the office of the Secretary of State within the time specified in subsection (a) of this section or shall, after the commission has been obtained, fail or neglect to forward to the office of the Secretary of State his or her duplicate oath for recordation in that office, within the time specified, then the office to which that person was commissioned shall be deemed vacant. (2) The Governor, on being satisfied from the official records of the office of the Secretary of State, by reason of any of the causes enumerated in this section, shall proceed to fill the vacancy in the manner provided by law.

Ark. Code Ann. § 21-2-103 Sending commission fees directly to Treasurer of State — Issuance of commission.

(a) Any officer entitled to a commission may send the fee for the commission to the Treasurer of State, who shall at once execute duplicate receipts for the fee. (b)(1) The Treasurer of State shall present the receipts to the Auditor of State, who shall countersign them and charge the amount therein specified to the Treasurer of State. (2) The Treasurer of State shall then file one (1) of the receipts with the Auditor of State and the other with the Secretary of State, and the Secretary of State shall immediately forward the commission to the officer.

Ark. Code Ann. § 21-2-104 District, county, and township officers — Issuance of commissions — Collection of fees.

(a)(1) The Secretary of State is authorized, after each general election in this state, and as soon as the full returns of the election in any county are received by him or her, to issue and forward the commissions of all the newly elected district, county, and township officers required by law to be commissioned to the county or circuit clerks of the respective counties for delivery to the person entitled to them. (2) The clerks shall collect the fees required to be paid for the commissions, before the delivery thereof, and return the fee, or the commissions when default is made, to the Secretary of State. (3) The Secretary of State shall account for the fee to the State Treasury as directed in § 21-6-202. (b) It shall be the duty of the county clerk, upon receipt of the commissions from the Secretary of State for the several officers of his or her county, to notify each elected officer of the receipt of the commission and to enter the commission in a well-bound book which shall be kept for that purpose and shall be ruled and divided into columns in the following order: (1) Name of officer; (2) Title of office; (3) Date of commission; (4) Date of qualification; and (5) Mailing address.

Ark. Code Ann. § 21-2-105 Administration of oaths generally.

(a)(1) The Governor shall take the oath of office before: (A) A justice or judge of the: (i) Supreme Court; (ii) Court of Appeals; (iii) Circuit court; or (iv) District court; (B) A federal justice or judge of the: (i) United States Supreme Court; (ii) United States Court of Appeals; or (iii) United States District Court; (C) The county clerk; or (D) The clerk of the circuit court. (2) The justices of the Supreme Court, judges of the Court of Appeals, judges of the circuit courts, judges of the district court, Secretary of State, Treasurer of State, and Auditor of State shall take their oaths before: (A) The Governor; (B) A justice or judge of the: (i) Supreme Court; (ii) Court of Appeals; (iii) Circuit court, including any former circuit or chancery judge who served for at least four (4) years; or (iv) District court, including any former municipal or district judge who served for at least four (4) years; (C) A federal justice or judge of the: (i) United States Supreme Court; (ii) United States Court of Appeals; or (iii) United States District Court; (D) The clerk of the county court; or (E) The clerk of the circuit court. (3) All other officers, both civil and military, shall take their oaths before: (A) The Secretary of State or his or her official designee; (B) A justice or judge of the: (i) Supreme Court; (ii) Court of Appeals; (iii) Circuit court, including any former circuit or chancery judge who served for at least four (4) years; (iv) District court, including any former municipal or district judge who served for at least four (4) years; or (v) County court; (C) A federal justice or judge of the: (i) United States Supreme Court; (ii) United States Court of Appeals; or (iii) United States District Court; (D) The clerk of the county court; (E) The clerk of the circuit court; (F) A justice of the peace; (G) A clerk of a city of the first class; or (H) A recorder of a city of the second class or incorporated town. (b) However, if the officer is serving in or with the United States Armed Forces, he or she may take the oath of office before any commissioned officer in active service of the United States Armed Forces with the rank of second lieutenant or higher in the United States Army, United States Air Force, United States Space Force, or United States Marine Corps, or ensign or higher in the United States Navy or United States Coast Guard. (c) The oath shall not be rendered invalid by failure to recite a venue or to state the place of execution of the oath, nor is a special form of jurat of affidavit or any authentication thereof required, provided it appears on the instrument that the person taking the oath is a commissioned officer provided for in this section. (d)(1) If necessary, a county or district official listed under subsection (a) of this section may act as a holdover officer and administer the oath of office to any incoming county or district official, including without limitation his or her successor. (2) Upon the completion of the oath: (A) The outgoing officer immediately vacates his or her position; and (B) The incoming officer assumes all the rights, privileges, and duties of his or her respective office.

Ark. Code Ann. § 21-2-106 Endorsement of oath on commission.

(a) It shall be the duty of every officer administering the oath of office to any officer of this state to endorse the oath on the commission of the officer. (b) However, if the officer is serving in or with the United States Armed Forces at the time his or her oath is taken and the oath is taken before a commissioned officer in the manner provided in § 21-2-105, the oath may be attached to the commission of the officer whose oath is taken in lieu of being endorsed thereon.

Ark. Code Ann. § 21-2-107 Bonds of state, county, and district officers generally.

(a) The official bonds of all state, county, and district officers required by law to furnish official bonds shall be executed by those officials as principal and shall be executed by some surety company authorized to do business in Arkansas as surety. (b)(1) The official bonds of all state officers covered by subsection (a) of this section shall be filed in the offices of the Secretary of State and the Auditor of State, with the original's being filed in the office of the Secretary of State and a true and correct copy thereof filed in the office of the Auditor of State. (2) The official bonds of all county officers covered by subsection (a) of this section shall be filed in the office of the recorder in the county in which the officers are elected or appointed. (3) The official bonds of all district officers covered by subsection (a) of this section shall be filed in the office of the recorder of the county in which the district officer resides. (c) The recorders of the various counties whose duty it is to file the bonds under the provisions of this section, shall maintain a special record book and shall record therein each official bond filed as provided in this section. (d) When the original of any bond provided for or covered by this section shall be lost or destroyed, the record of the bond provided for in this section shall be deemed the original, and suit may be instituted on the recorded bond. (e) When any bond is required of any officer as described in subsection (a) of this section, then the Governor, county judge, mayor, or board of directors of the political entity affected may, in their discretion, make an order providing that the State Treasury or the treasury of a county, city, town, or district shall be drawn upon for the purpose of paying, and in such amount as may be necessary to pay, the expenses of premiums of surety bonds required by this section. (f) This section is cumulative and supplemental to all existing statutes. It shall repeal, alter, or modify them only where in direct conflict therewith.

Ark. Code Ann. § 21-2-108 Duration of bond.

All official bonds shall be executed for a definite period not to exceed two (2) years.

Ark. Code Ann. § 21-2-109 Payment of premium on bonds.

If state, county, or city officials, including officials of incorporated towns, required to give bond for the faithful performance of their duties and the paying over of funds which may come into their hands shall elect to make a corporate surety bond in a guaranty or bonding company authorized to do business within the state, then the state, county, city, or incorporated town, as the case may be, shall pay the premium on the bonds.

Ark. Code Ann. § 21-2-110 Liability of surety generally.

The surety on an official's bond shall be liable for losses or other liabilities covered by the bond which occur within the term to which the bond applies, regardless of when the loss or liability is discovered.

Ark. Code Ann. § 21-2-111 Discharge of sureties on official bonds.

(a)(1) Any person bound as surety in any bond given by an officer for the faithful performance of the duties of his or her office, whether the office is held under an election or an appointment by the laws of the state or by any ordinance or resolution of any municipal corporation in this state, or by appointment by a board of any municipal corporation in this state, may be discharged from all future liability on the official bond upon his or her petition in writing adduced to the court authorized by law to take and approve the official bond. (2) In the event the bond is not required to be approved by a particular court, then his or her petition in writing shall be adduced to the circuit court of the county in which the bond is given and required to be filed. (b) The petition shall set forth the facts upon which the application for a discharge is founded and shall be verified by the affidavit of the petitioner. (c)(1) A notice in writing of the intended application, together with a copy of the petition, shall be personally served on the principal in the bond at least twenty (20) days before the making of the application. (2) If the principal in the bond has been absent from the state for the period of six (6) months, the publication of notice and petition, for three (3) successive weeks, in some newspaper printed in this state shall be a sufficient service of notice. (d)(1) The court to whom the petition is addressed shall hear the application and may, on examination thereof, in its discretion, make an order requiring the principal in the bond to give new bond and security for the performance of his or her official duties. (2) If new bond and security is given, it shall be taken, approved, filed, and recorded in the same manner that the official bond of the officer is required by law to be taken, approved, and recorded. (3) When a new bond is taken, approved, and filed, it shall immediately operate as a discharge of all the securities on the former bond from all liability arising from any subsequent misconduct or default of the principal therein. The securities on the former bond shall thenceforth be liable on that bond only for breaches thereof which happened prior to the taking, approving, and filing of the new bond.

Ark. Code Ann. § 21-2-112 Remedy of surety against principal and cosureties.

Any person bound as a security in any bond given by an officer to secure the faithful performance of his or her duties, who shall pay any money he or she shall have been liable to pay by reason of the bond, shall have the same right and remedy against the principal and cosureties as are provided in this section and § 21-2-111 against principal and security in bonds, bills, or notes for the payment of money or the delivery of property.

Ark. Code Ann. § 21-2-113 Discrepancies in accounts — Effect on surety.

(a) If any discrepancies are found in the accounts of an officer, the Auditor of State and the county clerk shall immediately notify the bonding company, and the penalties as prescribed in §§ 26-39-215, 26-39-501, and 26-39-502 shall not apply until sixty (60) days have expired from the official notification. (b)(1)(A) If the accounts are found to be correct, then, after final settlement has been made, the county clerk shall issue a quietus to the officer and shall forward a copy to the Auditor of State. (B) Issuance of a quietus shall automatically release bondsmen or sureties of the official from any and all liability on the bond in force for the term or part thereof covered by the final settlement. (2) However, if any discrepancy is found in the account of the county clerk or circuit clerk, the county judge shall immediately notify the bonding company.

Ark. Code Ann. § 21-2-114 Bond required of people employed by public officials.

Each public official or employee of this state, or political subdivision thereof, who has appointed deputies or employed individuals who handle any funds for the performance of their duties shall bond the deputies and employees in those amounts which he or she deems necessary to indemnify the state or political subdivision for any loss or mishandling of funds by the deputies or employees.

Ark. Code Ann. § 21-2-115 Persons in armed forces — Oath — Bond.

(a)(1) Any person in the armed forces of the United States who has been granted leave of absence under §§ 21-4-301 — 21-4-304 and 21-4-306 — 21-4-313 may take and subscribe the official oath of office required by the Arkansas Constitution and statutes of this state at any time after his or her election and before he or she enters upon the duties of his or her office. (2) The oath may be administered by any officer of this state or of any other state or of the United States or of any foreign country who may administer oaths. (b) The person taking and subscribing the official oath of office under the terms of this section must cause the oath of office, together with the attestation of the oath or office, to be filed with the Secretary of State before entering upon the duties of his or her office. (c)(1) Any person enumerated in subsection (a) of this section who is required by law to enter into a bond for the faithful performance of the duties of the office may execute and file the bond at any time within thirty (30) days after he or she shall have taken the official oath of office. (2) If the bond is not executed and filed within that time, the office shall be deemed and considered vacant.

Ark. Code Ann. § 21-2-701 Purpose.

It is found and determined that: (1) The State of Arkansas and the counties, municipalities, and school districts of the State of Arkansas are expending large sums of money each year for premiums on blanket bonds for officers and employees; (2) Considerable savings might be effected by the establishment of a self-insured fidelity bond program for any fraudulent or dishonest act committed by any state officials and employees, county officials and employees, municipal officials and employees, and school district officials and employees; (3) This subchapter is designed to establish a governmental bonding board to develop a self-insured fidelity bond program for participating government entities; and (4) This subchapter is designed to provide that self-insured fidelity bonds would be in lieu of the various fidelity blanket bonds that are presently required under this chapter for various officials and employees and to thereby effectuate substantial savings in the cost of fidelity blanket bonds for those officials and employees.

Ark. Code Ann. § 21-2-702 Definitions.

As used in this subchapter: (1) “Audit” or “audit report” means an audit or other statutorily allowed financial examination of the books and records; (2) “Commissioner” means the Insurance Commissioner; (3) “County” means the county or counties of the State of Arkansas; (4) “County public official” or “county public employee” means any elected officer of the counties and the employees or deputies of any elected officer, members of the quorum court, and the members of the various county boards and commissions, excluding officials and employees of county hospitals, county nursing homes, and conservation and improvement districts; (5)(A) “Fidelity bond” means coverage for direct pecuniary loss of value sustained as defined in subdivisions (6), (10), and (13) of this section, that is incurred as a result of any fraudulent or dishonest act, whether or not the result of a single act or series of acts committed against a participating government entity by officials or employees. (B) "Fidelity bond" includes a fidelity blanket bond; (6) “Money” means currency, coins, and bank notes in current use and having a face value and travelers' checks, register checks, and money orders held for sale to the general public; (7) “Municipal” or “municipality” means the municipalities of the State of Arkansas; (8) “Municipal public official” or “municipal public employee” means any elected officer of the municipalities and the employees or deputies of any elected officer, specifically including salaried municipal employees of municipally owned utilities, members of the city council, including the mayor, and the members of the various municipal boards and commissions, but excluding officials and employees of municipal hospitals, nursing homes, and improvement districts; (9) “Participating governmental entity” means those organizations defined in subdivisions (3), (7), (11), and (14) of this section; (10) “Property other than money and securities” means any tangible property, other than money and securities, that has intrinsic value; (11) “School district” means the school districts and open- enrollment public charter schools of the State of Arkansas; (12) “School district public official” or “school district public employee” means all school district salaried officials and salaried school district employees, whether elected or appointed, and the members of local school boards of directors; (13) “Securities” means negotiable and nonnegotiable instruments or contracts representing either money or other property and includes: (A) Tokens, tickets, and revenue and other stamps in current use whether represented by actual stamps or unused value in a meter; and (B) Evidences of debt, other than money, issued in connection with credit or charge cards; (14) “State” means the State of Arkansas; (15) “State officers and employees” means all elected and appointed salaried officials of the state and their salaried state employees, the salaried officials and salaried employees of all state boards and commissions, members of the General Assembly, and nonsalaried appointed members of the various state boards and commissions; and (16) “State public official” or “state public employee” means any elected or appointed salaried officer of the State of Arkansas and the salaried governmental employees of that elected or appointed officer, members of the General Assembly, and the nonsalaried members of the various state boards and commissions.

Ark. Code Ann. § 21-2-703 Coverage in lieu of statutory fidelity bonds.

(a)(1) The fidelity bond coverage provided under this subchapter shall be in lieu of all statutorily required fidelity bonds for any fraudulent or dishonest act or acts committed by the various public officers, officials, and employees of a participating governmental entity participating in the Self-Insured Fidelity Bond Program. (2) The various laws specifically requiring fidelity bonds or fidelity blanket bonds for the respective public officials, officers, and employees shall not be applicable so long as the fidelity bonds as provided in this subchapter are in effect covering the officials, officers, and employees. (b) In the event coverage ceases to be provided for any fraudulent or dishonest act or acts committed by any public officials, officers, or employees pursuant to this subchapter, the laws currently in effect providing for fidelity bonds or fidelity blanket bonds shall again become applicable to the public officials, officers, and employees.

Ark. Code Ann. § 21-2-704 Establishment — Scope of coverage.

(a) There is established the Self-Insured Fidelity Bond Program for the State of Arkansas and the counties, municipalities, and school districts of this state, to be administered by the Governmental Bonding Board. (b)(1) The fidelity bond coverage provided by the program shall cover direct pecuniary losses sustained by a participating governmental entity only when the loss is sustained through any fraudulent or dishonest act or acts committed by any official or employee of the participating governmental entity acting alone or in collusion with another, during the bond period to an amount not exceeding the lesser of three hundred thousand dollars ($300,000) or the amount of the bond. (2) Coverage for loss of property other than money and securities, the loss of which is caused by theft or by a dishonest or fraudulent act or acts, shall be limited to the actual cash value of the property on the day the loss was discovered. (3) No coverage shall be provided for any claim in which a participating governmental entity through fraudulent means takes money or other property from another participating governmental entity. (c) This coverage shall not include compensatory, punitive, or exemplary damages, and no interest or penalty amounts shall accrue on a bond claim made pursuant to this subchapter including, but not limited to, investigative expenses, legal fees, or court costs. (d) The fidelity bond coverage provided by the program shall not cover a loss sustained by a participating governmental entity as a result of: (1) Liability imposed upon or assumed by the participating governmental entity to exonerate or indemnify an official or employee from or against liability incurred by the official or employee in the performance of duties; (2) Damages for which the participating governmental entity is legally liable as a result of: (A) The deprivation or violation of a civil right of any person by an official or employee; or (B) The tortious conduct of an official or employee, except conversion of property of another party held by the participating governmental entity in any capacity; or (3) Loss of property other than money and securities unless the participating governmental entity or Arkansas Legislative Audit shall be able to designate the specific official or employee causing such loss. (e) Fidelity bond coverage shall not cover a loss sustained by any party other than a participating governmental entity. (f) Except as provided in subdivision (d)(3) of this section, in case of a loss alleged to have been caused to a participating governmental entity through any fraudulent or dishonest act or acts by an official or employee covered under the fidelity bond coverage afforded under the provisions of this subchapter, when the participating governmental entity or Arkansas Legislative Audit shall be unable to designate the specific official or employee causing the loss, the participating governmental entity shall nevertheless have the benefit of fidelity bond coverage. (g)(1) For valid coverage under the program, each participating governmental entity, including each segment or component of the participating governmental entity for which coverage is available under the program, shall procure an audit of its books and records for each fiscal year. (2)(A) If a participating governmental entity, or covered segment or component of the participating governmental entity, is not audited by Arkansas Legislative Audit, the participating governmental entity, or covered segment or component of the participating governmental entity, shall procure an audit of its books and records by accountants in good standing with the Arkansas State Board of Public Accountancy in accordance with government auditing standards issued by the Comptroller General of the United States. (B) The audit must be completed within eighteen (18) months of the close of each participating governmental entity's fiscal year. (3) All audit reports revealing or disclosing unauthorized expenditures, asset shortages, or unaccounted-for funds shall be forwarded immediately upon completion to Arkansas Legislative Audit, the State Risk Manager, and the appropriate prosecuting attorney.

Ark. Code Ann. § 21-2-705 Governmental Bonding Board.

(a) There is created the Governmental Bonding Board, which shall be composed of the following five (5) members: (1) The President of the Association of Arkansas Counties; (2) The President of the Arkansas Municipal League; (3) The Commissioner of Elementary and Secondary Education; (4) The Secretary of the Department of Finance and Administration; and (5) The Insurance Commissioner, who shall serve as chair. (b)(1) The members of the board shall receive no compensation for their services, but members other than the Commissioner of Elementary and Secondary Education, the Secretary of the Department of Finance and Administration, and the Insurance Commissioner may receive expense reimbursement in accordance with § 25-16-901 et seq. (2) The expense reimbursement of members of the board shall be paid from the Fidelity Bond Trust Fund. (c)(1)(A)(i) The board shall meet at least quarterly. (ii) However, if there is no proof of loss or other business for the board to consider, the chair may cancel a regularly scheduled quarterly meeting upon written notice to the members. (B) The board shall also meet at any other time as necessary to carry out its responsibilities and duties, at the call of the chair, or upon the request of a majority of the board. (2) All action of the board shall be by majority vote of the membership in attendance. (3) If a board member is unable to attend any board meeting, the member shall appoint a designee to act as his or her representative. The representative shall have all the rights and privileges of the member represented.

Ark. Code Ann. § 21-2-706 Administration.

It is the responsibility of the Governmental Bonding Board to develop and administer the Self-Insured Fidelity Bond Program .

Ark. Code Ann. § 21-2-707 Operations and recommendations.

(a) The Insurance Commissioner, at the direction of the Governmental Bonding Board, shall receive and disburse funds necessary for the establishment and operation of the Self-Insured Fidelity Bond Program. (b) The State Risk Manager shall assist in the operations of the program and shall submit to the board recommendations for the establishment of: (1) Premium schedules for all participating governmental entities; (2) Schedules for deductible amounts; (3) Loss histories, loss reporting, and loss payment procedures; (4) Program enrollments; (5) Annual review of funds income, balances, and expenditures; (6) Proposed invitations to bid, and retention levels, if the board determines that excess bonds or reinsurance is necessary; and (7) Other information required by the board for efficient operation of the program.

Ark. Code Ann. § 21-2-708 Notice and proof of losses — Investigations — Restitution.

(a) The Legislative Auditor, with the approval of the Legislative Joint Auditing Committee, shall give notice and make proof of loss to the Governmental Bonding Board under the Self-Insured Fidelity Bond Program on behalf of a participating governmental entity when the audit of the records of the participating governmental entity reflects unauthorized disbursements or unaccounted-for funds or property for which the public official, officer, or employee may be liable. (b) If an audit reflects unauthorized disbursements or unaccounted-for funds or property for which a public official, officer, or employee may be liable, then the Legislative Auditor shall request that: (1) The appropriate prosecuting attorney or the Attorney General assist the state or the appropriate political subdivision in obtaining restitution; and (2) The appropriate city attorney, county attorney, prosecuting attorney, or the Attorney General assist the state or appropriate political subdivision in filing a civil lawsuit against the public official, officer, or employee if the board determines that civil remedies should be pursued under § 21-2-709(a). (c)(1) To obtain restitution under subsection (b) of this section and as authorized by § 5-4-205, the board shall consider the Self-Insured Fidelity Bond Program and the participating governmental entity as victims. (2) In any criminal prosecution against the official or employee causing the loss, where such official or employee enters a plea of guilty or nolo contendere, or is found guilty following a trial, restitution shall be awarded to the participating governmental entity for the entire amount of its unreimbursed losses and to the program for the entire amount of its payment to the participating governmental entity.

Ark. Code Ann. § 21-2-709 Determination of coverage — Assignment of rights.

(a)(1)(A) Upon the receipt of the proof of loss from the Legislative Auditor, the Governmental Bonding Board shall determine whether the loss is covered under the Self-Insured Fidelity Bond Program. (B) The board may withhold claim determination and a loss payment until the investigation in each case has been completed and all information deemed necessary for determination of coverage under the program has been received. (2) If the board determines that the loss is covered under the program, then: (A) The Insurance Commissioner shall authorize fidelity bond loss payments from the Fidelity Bond Trust Fund to the participating governmental entity on a timely basis; and (B) The board shall: (i) Provide a timely explanation of a loss payment and a denial of loss to the Legislative Auditor and to the participating governmental entity; and (ii)(a) Determine whether civil remedies should be pursued to recover the loss. (b) In making a determination under subdivision (a)(2)(B)(ii)(a) of this section, the board shall consider the cost-effectiveness of pursuing civil remedies. (3) All vouchers for a loss payment shall include as supporting documents a copy of the payment recommendation by the State Risk Manager and a copy of the proof of loss from the Legislative Auditor. (4) Any loss payment may be adjusted by any applicable deductible, restitution, or coinsurance payment. (b)(1)(A) Before any loss payment is paid from the fund, the recipient of the loss payment shall sign and return a transfer of rights form assigning to the program to the extent of the loss payment all rights and claims that the recipient may have against the official, officer, or employee involved. (B) The program shall be subrogated to all of the rights of the recipients of the loss payment to the extent of the loss payment. (2)(A) If the participating governmental entity shall sustain any loss that exceeds the amount of indemnity provided by the program, the participating governmental entity shall be entitled to all recoveries, except from suretyship, insurance, reinsurance, security, or indemnity taken by or for the benefit of the program, by whomever made, on account of the loss until fully reimbursed, less the amount of the deductible and coinsurance. (B) Any remainder shall be applied to reimbursement of the program. (3) If a participating governmental entity fails to pay over an amount due the program under these provisions, the board may deduct any amount due from future loss payments due the applicable participating governmental entity or from any treasury funds of the applicable participating governmental entity.

Ark. Code Ann. § 21-2-710 Billing certification — Payment and deposit.

(a) The Governmental Bonding Board, with the assistance of the State Insurance Department, shall prepare a billing certification to be remitted to the: (1)(A) Department of Finance and Administration. Upon receipt of the billing certification, the Secretary of the Department of Finance and Administration shall pay the billing certification from funds specifically appropriated for the billing certification by the General Assembly or from other funds available to pay for the billing certification. (B) Funds appropriated for premiums for fidelity bonds for state public officials and employees and state officers and employees or funds otherwise made available for this purpose shall not be subject to reduction as a result of any shortfall of projected revenues; and (2) Chief Fiscal Officer of the State, who shall pay the billing certification from funds withheld from the: (A) County Aid Fund that are due each county participating in the Self-Insured Fidelity Bond Program for premiums for fidelity bonds for county public officials and employees; (B) Municipal Aid Fund that are due each municipality participating in the program for premiums for fidelity bonds for municipal public officials and employees; and (C) Public School Fund that are due each school district participating in the program for premiums for fidelity bonds for school district officials and employees. (b) Upon receipt of these funds, the Insurance Commissioner shall deposit them into the Self-Insured Fidelity Bond Trust Fund.

Ark. Code Ann. § 21-2-711 Self-Insured Fidelity Bond Trust Fund.

(a) There is established on the books of the Treasurer of State, the Auditor of State, and the Chief Fiscal Officer of the State a separate fund to be known as the “Self-Insured Fidelity Bond Trust Fund”. (b)(1) No money shall be appropriated from the fund for any purpose except for the use and benefit of participating governmental entities for bond claims and for Governmental Bonding Board expenses, including without limitation travel, actuarial, consultant, and service contract fees. (2) The fund shall be administered by and disbursed at the direction of the Governmental Bonding Board. (c)(1)(A) The assets of the fund may be invested and reinvested as the Governmental Bonding Board may determine with the advice of the State Board of Finance. (B) All incomes derived through investment of the fund shall be credited as investment income to the fund. (C) For the purposes of investment, fund moneys invested and interest earned on fund moneys invested shall be administered as trust funds under § 19-3-318. (2) Further, all moneys deposited to the fund shall not be subject to any deduction, tax, levy, or any other type of assessment. (d) All moneys received by the Governmental Bonding Board for the Self-Insured Fidelity Bond Program, including premiums collected by the Governmental Bonding Board under this subchapter, restitution, interest payments, grants, gifts, and refunds shall be deposited into the fund.

Ark. Code Ann. § 21-2-712 Other bond requirements of participating governmental entities.

A participating governmental entity that participates in the Self- Insured Fidelity Bond Program under this subchapter is considered to have satisfied any other statutorily required bond requirements for the participating governmental entity under state law.

Ark. Code Ann. § 21-2-801 Title.

This subchapter shall be known and may be cited as the "Arkansas Self- Funded Cyber Response Program Act".

Ark. Code Ann. § 21-2-802 Legislative findings and intent.

(a) The General Assembly finds that: (1) The counties, municipalities, and school districts of this state are increasingly targeted by cyberattacks from malicious actors resulting in substantial risks, damages, and losses; (2) The cost to purchase cybersecurity insurance for coverage of the risks, damages, and losses suffered during a cyberattack is too burdensome for a city, county, or school district; and (3) Considerable savings might be effected by the establishment of a self-funded cyber response program for a cyberattack committed against the counties, municipalities, and school districts of this state and their respective public officials and public employees. (b) By enacting this subchapter, the General Assembly intends to: (1) Establish the Arkansas Self-Funded Cyber Response Program for participating governmental entities and to establish the Arkansas Cyber Response Board to administer the program; and (2) Provide that the program is in lieu of, or in addition to, various cybersecurity insurance policies and to thereby effectuate substantial savings in the cost of a response to a cyberattack for those participating governmental entities.

Ark. Code Ann. § 21-2-803 Definitions.

As used in this subchapter: (1) “County” means any county of this state; (2) “Cyber response contact” means a person or entity designated by the Arkansas Cyber Response Board to be the initial contact for a participating governmental entity that is the subject of a cyberattack; (3) “Higher education entity” means a: (A) State-supported college, university, technical college, community college, or other institution of higher education; or (B) Department, division, or agency of a state institution of higher education; (4) “Money” means: (A) Currency, coins, and bank notes in current use and having a face value; and (B) Travelers' checks, register checks, and money orders held for sale to the general public; (5) “Municipality” means: (A) A city of the first class; (B) A city of the second class; or (C) An incorporated town; (6) “Participating governmental entity” means a: (A) County; (B) Municipality; or (C) School district; (7) “Property other than money and securities” means any tangible property, other than money and securities, that has intrinsic value; and (8) “School district” means a school district or open- enrollment public charter school in this state.

Ark. Code Ann. § 21-2-806 Operations and recommendations.

(a) At the direction of the Arkansas Cyber Response Board, the Insurance Commissioner shall receive and disburse funds necessary for the establishment and operation of the Arkansas Self-Funded Cyber Response Program. (b) The State Risk Manager shall assist in the operations of the program and shall submit to the board recommendations for: (1)(A) Premium schedules for all participating governmental entities, not to exceed a total of nine hundred thousand dollars ($900,000) in each of the first two (2) years of operation. (B) The premium schedule for each participating governmental entity for the first two (2) years of operation shall be as follows: (i) The aggregate amount for municipalities shall not exceed three hundred thousand dollars ($300,000); (ii) The aggregate amount for counties shall not exceed three hundred thousand dollars ($300,000); and (iii) The aggregate amount for school districts shall not exceed three hundred thousand dollars ($300,000); (2) Schedules for deductible amounts; (3) Loss histories, loss reporting, and loss payment procedures; (4) Program enrollments; (5) Annual review of funds, income, balances, and expenditures; and (6) Other information required by the board for efficient operation of the program. (c) The board may utilize up to five percent (5%) of the monthly premiums remitted to the Arkansas Self-Funded Cyber Response Program Trust Fund for administrative expenses and staff. (d) Additional money may be provided to the program through grants and provisions from public and private entities.

Ark. Code Ann. § 21-2-807 Notice of proof of losses — Determination of coverage and remediation.

(a) Following a cyberattack on a participating governmental entity, the Arkansas Cyber Response Board may establish security requirements for the participating governmental entity that shall be followed in order to maintain the full Arkansas Self-Funded Cyber Response Program under § 21-2-804(b)(1). (b) The expenses associated with losses, investigation, and remediation shall be attributed to the participating governmental entity and shall be used by the State Risk Manager and board in calculating future program premiums. (c)(1) Upon determination of proof of loss from the cyber response contact and the board, the Insurance Commissioner shall authorize cybersecurity loss payments to the participating governmental entity that was activated by the cyber response contact as well as any participating governmental entity for board-approved expenditures. (2) A voucher for a loss payment shall include, as supporting documents, a copy of the payment recommendations by the State Risk Manager and a copy of the proof of loss provided by the participating governmental entity and approved by the board. (3) A loss payment may be adjusted by any applicable deductible, restitution, or coinsurance payment by the board. (d)(1) If a participating governmental entity sustains any loss that exceeds the amount of indemnity provided by the program, then the participating governmental entity is entitled to all recoveries, except from suretyship, insurance, reinsurance, security, or indemnity taken by or for the benefit of the program, made by whomever, on account of the loss until fully reimbursed, less the amount of the deductible and coinsurance. (2) Any remainder of the recovery under subdivision (d)(1) of this section shall be applied to reimbursement of the program. (3) If a participating governmental entity fails to pay the amount due to the program under this section, then the board may deduct any amount due from future loss payments due the applicable participating governmental entity or from any treasury funds of the applicable participating governmental entity.

Ark. Code Ann. § 21-2-808 Billing certification – Payment and deposit.

(a) Beginning on and after July 1, 2024, the Arkansas Cyber Response Board, with the assistance of the Insurance Commissioner, shall prepare a billing certification to be remitted to the: (1) Department of Finance and Administration; and (2) Chief Fiscal Officer of the State. (b)(1) Upon receipt of the billing certification, the Secretary of the Department of Finance and Administration shall pay the billing certification from funds specifically appropriated for the billing certification by the General Assembly or from other funds available to pay for the billing certification. (2) Funds appropriated for premiums for Arkansas Self-Funded Cyber Response Program coverage, or funds otherwise made available for this purpose, shall not be subject to reduction as a result of any shortfall of projected revenues. (c) Upon receipt of the billing certification under this section, the Chief Fiscal Officer of the State shall pay the billing certification from funds withheld from the: (1) County Aid Fund that are due each county participating in the program for premiums for county public officials and public employees; (2) Municipal Aid Fund that are due each municipality participating in the program for premiums for municipal public officials and public employees; and (3) Public School Fund that are due each school district participating in the program for premiums for school district officials and school district employees. (d) Upon receipt of the funds under this section, the commissioner shall deposit the funds into the Arkansas Self-Funded Cyber Response Program Trust Fund.

Ark. Code Ann. § 21-2-809 Future enrollment — State of Arkansas and higher education entity.

(a) The Arkansas Self-Funded Cyber Response Program shall be open to the State of Arkansas or a higher education entity to join at any time. (b) Beginning on the date that the State of Arkansas or a higher education entity joins the program, the Arkansas Cyber Response Board, with the assistance of the Insurance Commissioner, shall prepare a billing certification to be remitted to the: (1) Department of Finance and Administration; and (2) Chief Fiscal Officer of the State. (c)(1) Upon receipt of the billing certification, the Secretary of the Department of Finance and Administration shall pay the billing certification from funds specifically appropriated for the billing certification by the General Assembly or from other funds available to pay for the billing certification. (2) Funds appropriated for premiums for program coverage, or funds otherwise made available for this purpose, shall not be subject to reduction as a result of any shortfall of projected revenues. (d) Upon receipt of the funds under this section, the commissioner shall deposit the funds into the Arkansas Self-Funded Cyber Response Program Trust Fund.

Source: Public.Resource.Org / UniCourt, Official Code of Arkansas Annotated, Release 78 (2020) (unicourt.github.io/cic-code-ar)URL: https://unicourt.github.io/cic-code-ar/transforms/ar/ocar/r78/gov.ar.code.title.21.htmlFetched: 11/8/2026