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Change In Bail Bond Forfeiture System Likely To Affect Public School Funding

As the 2018 short session came to a close, two bills impacting public school funding through the bail bonds forfeiture system made their way through the legislative process. House Bill 131 and House Bill 382 were both vetoed by Governor Roy Cooper, but H382 later became law after the General Assembly overrode the Governor’s veto.

H382 is an omnibus bill containing language on various state laws on insurance. However, it also adds a way for bail bondsmen to elude their payments to the state by amending a reason to set aside a forfeiture of a bail bond. The change extends the time period in which the defendant was incarcerated and the district attorney had notice of the incarceration to include not only the time of defendant's failure to appear but also any time between that failure and the final judgment date.

Bail bonds ultimately impact the amount of fine and forfeiture funding that the state provides to school districts. When someone is bailed out of jail but does not appear in court, the bail agent or surety company is responsible for paying the bail amount. That forfeiture goes into a fund to support public schools, but both bills considered by lawmakers this session sought to make it easier for bail bond agents and surety companies to avoid paying those forfeitures when criminal defendants do not appear in court.

 “The purpose of the bond forfeiture system is to ensure the appearance of the bonded defendant in court and facilitate the administration of justice,” Ken A. Soo, an attorney with Tharrington Smith, LLP, wrote to lawmakers, according to N.C. Policy Watch. “The amendments … in House Bills 382 and 131 are contrary to that purpose and will significantly increase the likelihood that defendants will not appear in court to face justice.”

Governor Cooper, in vetoing H382, cited the bail bond changes as his specific reason for objecting to the legislation that started out as an insurance industry omnibus bill.

“Adding another excuse to set aside a bond forfeiture when a criminal defendant fails to appear in court hurts school funding and reduces incentives to ensure justice is served,” the Governor wrote in his veto message to lawmakers.

Funds from bond forfeitures paid more than $11 million to N.C. public schools in 2016-17, according to reports from the N.C. School Boards Association (NCSBA), and the changes provided in H382 would decrease that amount by half.

NCSBA also has raised concerns that the changes under this new law will force school boards statewide to create trust accounts to hold bond forfeiture proceeds for three years, in case they have to pay them back years after collection. This new holding account and the related process may create a massive new administrative burden, especially on smaller counties.

Click here to view media coverage on H382 and H131, which had included a bail bond provision similar to the one that became law in H382.

Jacqueline Wyatt | NCASA