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The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us) STATE OF MICHIGAN FRANK J. KELLEY, ATTORNEY GENERAL Opinion No. 6228 June 7, 1984 FAMILY FARM DEVELOPMENT AUTHORITY: Surety bonds for officers and members of authority STATE OFFICERS AND EMPLOYEES: Surety bonds for officers and employees of Family Farm Development Authority The officers and employees of the Michigan Family Farm Development Authority are not covered by the state blanket faithful performance bond authorized by 1969 PA 10. Dr. Paul Kindinger Director Department of Agriculture 4th Floor Ottawa North Lansing, Michigan You have requested my opinion as to the extent to which the Michigan Family Farm Development Authority is covered by the state blanket faithful performance bond. The Michigan Family Farm Development Act, 1982 PA 220; MCLA 285.251 et seq; MSA 12.80(1) et seq, Sec. 3, creates the Michigan Family Farm Development Authority ('authority'). The authority is authorized to make loans and grants to certain qualified beginning farmers which are underwritten through the issuance of notes and bonds of the authority. 1982 PA 220, supra, Secs. 5(3) and 10. The authority is composed of seven members, including the Director of the Department of Agriculture, the Director of the Department of Commerce, the State Treasurer, and four public persons appointed by the Governor by and with the advice and consent of the Senate. 1982 PA 220, supra, Sec. 3(1). Since 1982 PA 220, supra, is silent on the issue of whether employees and officers of the authority must provide a bond conditioned on the faithful performance of their duties, employees and officers of the authority are not required by the Act to file a faithful performance bond. 1969 PA 10; MCLA 15.1 et seq; MSA 3.930(11) et seq, provides for the establishment of uniform bond coverage for officers and employees of state departments and agencies. 1969 PA 10, supra, Sec. 1 provides: 'Notwithstanding the provisions of any other law, officers and employees of all State departments and agencies that are required by statute or in discretion of the director of the department covered, or otherwise to furnish bonds conditioned for their honesty or faithful discharge of their duties shall be covered by a blanket bond or bonds as a departmental group or as a state group by corporate surety companies as approved by the director of the department administration. Treasurers and tax collectors by whatever title known may be covered by individual bonds.' The Director of the Department of Management and Budget is to determine, after consultation with the Director of the Department of Commerce, the conditions of each bond and whether a single state bond for all state officers and employees or departmental bonds would 'best serve the State.' (Emphasis added.) 1969 PA 10, supra, Sec. 2. The Director of the Department of Mangement and Budget has decided to secure a 'blanket bond' for all employees of the executive and legislative branches of the State of Michigan, except state senators and representatives pursuant to 1969 PA 10, supra. The blanket bond provides that the surety will indemnify the people of the State of Michigan for losses caused by the failure of state officers or employees, acting alone or with others, to perform faithfully their duties or to account properly for all monies and property received by virtue of their positions or employment. The state 'blanket bond' established pursuant to 1969 PA 10, supra, covers only state funds. See, OAG, 1981-1982, No 6058, p 624 (April 21, 1982). The state is neither liable on notes or bonds of the authority nor are such notes and bonds a debt of the state. See, 1982 PA 220, supra, Sec. 19. It is my opinion, therefore, that the officers and employees of the Michigan Family Farm Development Authority are not covered by the state blanket faithful performance bond authorized by 1969 PA 10, supra. Frank J. Kelley Attorney General
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