-
Current through October 23, 2012
(a)(1)(A) Each fiduciary of a Fund established by this chapter and each person who handles funds or other property of such a Fund (hereinafter in this section referred to as "Fund official") shall be bonded as provided in this section, except that no bond shall be required of a fiduciary (or of any director, officer, or employee of such fiduciary) if such fiduciary:
(i) Is a corporation organized and doing business under the laws of the United States or of any state;
(ii) Is authorized under such laws to exercise trust powers or to conduct an insurance business;
(iii) Is subject to supervision or examination by federal or state authority; and
(iv) Has at all times a combined capital and surplus in excess of such a minimum amount as may be established by regulations issued by the Council, which amount shall be at least $1,000,000.
(B) Sub-subparagraph (iv) of subparagraph (A) of this paragraph shall apply to a bank or other financial institution which is authorized to exercise trust powers and the deposits of which are not insured by the Federal Deposit Insurance Corporation only if such bank or institution meets bonding or similar requirements under state law which the Council determines are at least equivalent to those imposed on banks by federal law.
(2)(A) The amount of such bond shall be the lesser of 10 percent of the amount of the funds handled by such fiduciary and $500,000, except that the amount of such bond shall be at least $1,000.
(B) The Mayor, after notice and opportunity for hearing to such fiduciary and all other parties in interest to such Fund, may waive the $500,000 limit.
(C) The amount of such bond shall be set at the beginning of each fiscal year.
(3) For purposes of fixing the amount of such bond, the amount of funds handled shall be determined by the funds handled by the person, group, or class to be covered by such bond and by the predecessor or predecessors, if any, during the preceding reporting year, or if the Fund has no preceding reporting year under this chapter, the amount of funds to be handled during the current reporting year by such person, group, or class, estimated as provided in regulations to be prescribed by the Council.
(4) Such bond shall provide protection to the Fund against loss by reason of acts of fraud or dishonesty on the part of the Fund official, directly or through connivance with others.
(5) Any bond shall have as surety thereon a corporate surety company which is an acceptable surety on federal bonds under authority granted by the Secretary of the Treasury pursuant to §§ 6 through 13 of Title 6, United States Code. Any bond shall be in a form or of a type approved by the Council, including individual bonds or schedule or blanket forms of bonds which cover a group or class.
(b) It shall be unlawful for any Fund official to receive, handle, disburse, or otherwise exercise custody or control of any of the funds or other property of any Fund without being bonded as required by subsection (a) of this section, and it shall be unlawful for any Fund official or any other person having authority to direct the performance of such functions to permit such functions, or any of them, to be performed by any Fund official with respect to whom the requirements of subsection (a) of this section have not been met.
(c) It shall be unlawful for any person to procure any bond required by subsection (a) of this section from any surety or other company or through any agent or broker in whose business operations the Fund or any party in interest in the Fund has any control or significant financial interest, direct or indirect.
(d) Nothing in any other provision of law shall require any person required to be bonded as provided in subsection (a) of this section because he handles funds or other property of a Fund to be bonded insofar as the handling by such person of the funds or other property of such Fund is concerned.
(e) The Council shall prescribe such regulations as may be necessary to carry out the provisions of this section.
(Nov. 17, 1979, 93 Stat. 866, Pub. L. 96-122, § 185.)
HISTORICAL AND STATUTORY NOTES
Prior Codifications
1981 Ed., § 1-745.
1973 Ed., § 1-1845.
References in Text
"Sections 6 through 13 of Title 6, United States Code," referred to in subsection (a)(5), were repealed by § 5(b) of the Act of September 13, 1982, Pub. L. 97-258, 96 Stat. 1068.
