Bill Text: MI HB5253 | 2015-2016 | 98th Legislature | Introduced

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Bill Title: Local government; financing; emergency management process under the local financial stability and choice act; modify. Amends secs. 7 & 9 of 2012 PA 436 (MCL 141.1547 & 141.1549).

Spectrum: Partisan Bill (Democrat 42-0)

Status: (Introduced - Dead) 2016-01-28 - Bill Electronically Reproduced 01/27/2016 [HB5253 Detail]

Download: Michigan-2015-HB5253-Introduced.html

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HOUSE BILL No. 5253

January 27, 2016, Introduced by Reps. Gay-Dagnogo, Banks, Robinson, Pagan, Garrett, Byrd, Hovey-Wright, Love, Zemke, Singh, Dianda, Darany, Lane, Chirkun, Yanez, Derek Miller, Sarah Roberts, Driskell, Irwin, Wittenberg, Brinks, Hoadley, Smiley, Brunner, Greimel, Rutledge, Talabi, Guerra, Moss, Schor, Greig, Faris, Plawecki, Kivela, Townsend, Clemente, Durhal, Santana, LaVoy, Kosowski, Chang and Cochran and referred to the Committee on Local Government.

 

     A bill to amend 2012 PA 436, entitled

 

"Local financial stability and choice act,"

 

by amending sections 7 and 9 (MCL 141.1547 and 141.1549).

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 7. (1) Notwithstanding section 6(3), upon the

 

confirmation of a finding of a financial emergency under section 6,

 

the governing body of the local government shall, by resolution

 

within 7 days after the confirmation of a finding of a financial

 

emergency, select 1 of the following local government options to

 

address the financial emergency:

 

     (a) The consent agreement option pursuant to section 8.

 

     (b) The emergency manager option pursuant to section 9.

 

     (c) The neutral evaluation process option pursuant to section

 

25.

 

     (d) The chapter 9 bankruptcy option pursuant to section 26.

     (2) Subject to subsection (3), if the local government has a

 

strong mayor, the resolution under subsection (1) requires strong

 

mayor approval. If the local government is a school district, the

 

resolution shall be approved by the school board. The resolution

 

shall be filed with the state treasurer, with a copy to the

 

superintendent of public instruction if the local government is a

 

school district.

 

     (3) If the governing body of the local government does not

 

pass a resolution as required under subsection (1), the local

 

government shall proceed under the neutral evaluation process

 

pursuant to section 25.

 

     (4) Subject to section 9(6)(c), (7), and (11), unless

 

authorized by the governor, a local government shall not utilize 1

 

of the local options listed in subsection (1)(a) to (d) more than 1

 

time.

 

     Sec. 9. (1) The governor may appoint an emergency manager to

 

address a financial emergency within that local government as

 

provided for in this act.

 

     (2) Upon appointment, an emergency manager shall act for and

 

in the place and stead of the governing body and the office of

 

chief administrative officer of the local government. The emergency

 

manager shall have broad powers in receivership to rectify the

 

financial emergency and to assure the fiscal accountability of the

 

local government and the local government's capacity to provide or

 

cause to be provided necessary governmental services essential to

 

the public health, safety, and welfare. Following appointment of an

 

emergency manager and during the pendency of receivership, the

governing body and the chief administrative officer of the local

 

government shall not exercise any of the powers of those offices

 

except as may be specifically authorized in writing by the

 

emergency manager or as otherwise provided by this act and are

 

subject to any conditions required by the emergency manager.

 

     (3) All of the following apply to an emergency manager:

 

     (a) The emergency manager shall have a minimum of 5 years'

 

experience and demonstrable expertise in business, financial, or

 

local or state budgetary matters.

 

     (b) The emergency manager may, but need not, be a resident of

 

the local government.

 

     (c) The emergency manager shall be an individual.

 

     (d) Except as otherwise provided in this subdivision, the

 

emergency manager shall serve at the pleasure of the governor. An

 

emergency manager is subject to impeachment and conviction by the

 

legislature as if he or she were a civil officer under section 7 of

 

article XI of the state constitution of 1963. A vacancy in the

 

office of emergency manager shall be filled in the same manner as

 

the original appointment.

 

     (e) The emergency manager's compensation shall be paid by this

 

state and shall be set forth in a contract approved by the state

 

treasurer. The contract shall be posted on the department of

 

treasury's website within 7 days after the contract is approved by

 

the state treasurer.

 

     (f) In addition to the salary provided to an emergency manager

 

in a contract approved by the state treasurer under subdivision

 

(e), this state may receive and distribute private funds to an

emergency manager. As used in this subdivision, "private funds"

 

means any money the state receives for the purpose of allocating

 

additional salary to an emergency manager. Private funds

 

distributed under this subdivision are subject to section 1 of 1901

 

PA 145, MCL 21.161, and section 17 of article IX of the state

 

constitution of 1963.

 

     (4) In addition to staff otherwise authorized by law, an

 

emergency manager shall appoint additional staff and secure

 

professional assistance as the emergency manager considers

 

necessary to fulfill his or her appointment.

 

     (5) The emergency manager shall submit quarterly reports to

 

the state treasurer with respect to the financial condition of the

 

local government in receivership, with a copy to the superintendent

 

of public instruction if the local government is a school district

 

and a copy to each state senator and state representative who

 

represents that local government. In addition, each quarterly

 

report shall be posted on the local government's website within 7

 

days after the report is submitted to the state treasurer.

 

     (6) The emergency manager shall continue in the capacity of an

 

emergency manager as follows:

 

     (a) Until Subject to subdivision (c), until removed by the

 

governor or the legislature as provided in subsection (3)(d). If an

 

emergency manager is removed, the governor shall within 30 days of

 

the removal appoint a new emergency manager.

 

     (b) Until Subject to subdivision (c), until the financial

 

emergency is rectified.

 

     (c) If the emergency manager has served local government has

operated under emergency management under this act for at least 18

 

months, after his or her appointment under this act, the current

 

emergency manager for that local government may, by resolution, be

 

removed by a 2/3 vote of the governing body of the local

 

government. If the local government has a strong mayor, the

 

resolution requires strong mayor approval before the emergency

 

manager may be removed. Notwithstanding section 7(4), if the

 

emergency manager is removed under this subsection, and the local

 

government has not previously breached a consent agreement under

 

this act, the local government may within 10 days negotiate a

 

consent agreement with the state treasurer. If a consent agreement

 

is not agreed upon within 10 days, the local government shall

 

proceed with the neutral evaluation process pursuant to section 25.

 

     (7) A local government shall be removed from receivership when

 

the financial conditions are corrected in a sustainable fashion as

 

provided in this act. In addition, the local government may be

 

removed from receivership if an emergency manager is removed under

 

subsection (6)(c) and the governing body of the local government by

 

2/3 vote approves a resolution for the local government to be

 

removed from receivership. If the local government has a strong

 

mayor, the resolution requires strong mayor approval before the

 

local government is removed from receivership. A Notwithstanding

 

section 7(4), if a local government that is removed from

 

receivership while a financial emergency continues to exist as

 

determined by the governor, the local government may within 10 days

 

after being removed from receivership negotiate a consent agreement

 

with the state treasurer. If a consent agreement is not agreed upon

within 10 days, the local government shall proceed under the

 

neutral evaluation process pursuant to section 25.

 

     (8) The governor may delegate his or her duties under this

 

section to the state treasurer.

 

     (9) Notwithstanding section 3(1) of 1968 PA 317, MCL 15.323,

 

an emergency manager is subject to all of the following:

 

     (a) 1968 PA 317, MCL 15.321 to 15.330, as a public servant.

 

     (b) 1973 PA 196, MCL 15.341 to 15.348, as a public officer.

 

     (c) 1968 PA 318, MCL 15.301 to 15.310, as if he or she were a

 

state officer.

 

     (10) An emergency financial manager appointed under former

 

1988 PA 101 or former 1990 PA 72, and serving immediately prior to

 

the effective date of this act, shall be before March 28, 2013, is

 

considered an emergency manager under this act and shall continue

 

under this act to fulfill his or her powers and duties.

 

Notwithstanding any other provision of this act, the governor may

 

appoint a person who was appointed as an emergency manager under

 

former 2011 PA 4 or an emergency financial manager under former

 

1988 PA 101 or former 1990 PA 72 to serve as an emergency manager

 

under this act.

 

     (11) Notwithstanding section 7(4) and subject to the

 

requirements of this section, if an emergency manager has served

 

for less than 18 months after his or her appointment under this

 

act, the governing body of the local government may pass a

 

resolution petitioning the governor to remove the emergency manager

 

as provided in this section and allow the local government to

 

proceed under the neutral evaluation process as provided in section

25. If the local government has a strong mayor, the resolution

 

requires strong mayor approval. If the governor accepts the

 

resolution, notwithstanding section 7(4), the local government

 

shall proceed under the neutral evaluation process as provided in

 

section 25.

 

     Enacting section 1. This amendatory act takes effect 90 days

 

after the date it is enacted into law.