Bill Text: MI HB4177 | 2011-2012 | 96th Legislature | Introduced

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Bill Title: Education; school districts; education financial emergency resolution board to provide oversight of school district emergency financial managers; create, and prescribe powers and duties. Amends sec. 38 of 1990 PA 72 (MCL 141.1238).

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2011-02-08 - Printed Bill Filed 02/03/2011 [HB4177 Detail]

Download: Michigan-2011-HB4177-Introduced.html

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HOUSE BILL No. 4177

 

February 1, 2011, Introduced by Rep. Nathan and referred to the Committee on Local, Intergovernmental, and Regional Affairs.

 

     A bill to amend 1990 PA 72, entitled

 

"Local government fiscal responsibility act,"

 

by amending section 38 (MCL 141.1238).

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 38. (1) If the superintendent of public instruction

 

determines under section 35 or 36 that a school district has a

 

financial emergency, the superintendent of public instruction,

 

within 30 days after that determination, shall submit to the state

 

board the names of nominees who shall be considered for appointment

 

to serve as an emergency financial manager for the school district.

 

From the list of nominees submitted to the state board, the state

 

board shall submit to the governor the names of not more than 3

 

nominees who shall be considered for appointment to serve as an

 

emergency financial manager for the school district. From the list

 

of nominees submitted to the governor, the governor shall appoint,

 

with the advice and consent of the senate, an emergency financial

 

manager for the school district who shall hold office for a term

 

fixed by the governor education financial emergency resolution

 

board created under subsection (4), but not to exceed 1 year. The

 

appointment shall be by written contract and may be renewed on an

 

annual basis for not more than 1 year. The written contract between

 

the education financial emergency resolution board and the

 

emergency financial manager shall contain specific contractual

 

remedies for failure of the emergency financial manager to comply

 

with the requirements of this article.

 

     (2) An emergency financial manager appointed under this

 

article shall be chosen solely on the basis of his or her

 

competence in public sector fiscal matters and shall not have been

 

either an elected or appointed official or employee of the school

 

district for which he or she is appointed for not less than 5 years

 

before the appointment. The emergency financial manager shall not

 

be the superintendent of public instruction. The emergency

 

financial manager need not be a resident of the school district for

 

which he or she is appointed. For the purposes of this section, an

 

individual shall not be considered to be competent in public sector

 

fiscal matters unless the education financial emergency resolution

 

board finds that he or she has demonstrated previous public sector

 

experience, which does not have to be with a school district,

 

showing that he or she is qualified to do at least all of the

 

following:

 

     (a) Prepare and analyze a budget of a size appropriate for a

 

school district the size of the affected school district.

 

     (b) Review and create bookkeeping and accounting systems of a

 

type appropriate for a school district the size of the affected

 

school district.

 

     (c) Create a deficit reduction plan appropriate for a school

 

district the size of the affected school district.

 

     (d) Take actions in accordance with the uniform budgeting and

 

accounting act, 1968 PA 2, MCL 141.421 to 141.440a, and in

 

accordance with generally accepted accounting principles.

 

     (e) Review and create profit and profit-loss statements,

 

balance sheet statements, cash flow analyses, cash receipts

 

journals, accounts payable, general ledgers, and other similar

 

financial documents.

 

     (3) Unless the legislature provides special funding, an

 

emergency financial manager shall receive compensation and

 

reimbursement for actual and necessary expenses from the school

 

district as approved by the superintendent of public instruction

 

education financial emergency resolution board created under

 

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

 

with the approval of the superintendent of public instruction,

 

education financial emergency resolution board created under

 

subsection (4), the emergency financial manager may appoint

 

additional staff and secure professional assistance considered

 

necessary to implement this article.

 

     (4) There is created an education financial emergency

 

resolution board within the department of education. All of the

 

following apply to this board:

 

     (a) This board shall consist of the superintendent of public

 

instruction or his or her designee, the state treasurer or his or

 

her designee, and the director of the department of technology,

 

management, and budget or his or her designee.

 

     (b) The attorney general, or his or her designee, shall serve

 

as a nonvoting member of the education financial emergency

 

resolution board for the sole purpose of providing legal counsel to

 

the education financial emergency resolution board.

 

     (c) For the education financial emergency resolution board's

 

functions related to a particular school district, the president of

 

the school board of that school district shall serve as a nonvoting

 

member of the education financial emergency resolution board.

 

     (d) The superintendent of public instruction, or his or her

 

designee, shall serve as chairperson of the education financial

 

emergency resolution board.

 

     (e) Except for budgeting, procurement, and related functions

 

of the education financial emergency resolution board that shall be

 

performed under the direction and supervision of the superintendent

 

of public instruction, the education financial emergency resolution

 

board shall exercise its prescribed statutory powers, duties, and

 

functions independently of the department of education.

 

     (5) The education financial emergency resolution board shall

 

do all of the following with respect to each school district that

 

has an emergency financial manager appointed under this article:

 

     (a) Directly supervise the emergency financial manager and

 

oversee all day-to-day operations of the emergency financial

 

manager.

 

     (b) Review and approve all compensation and reimbursements

 

made to the emergency financial manager and all appointments made

 

by the emergency financial manager.

 

     (c) Review all contracts entered into by the emergency

 

financial manager, the contracting practices of the emergency

 

financial manager, and all other decisions of and actions taken by

 

the emergency financial manager or his or her staff.

 

     (d) Review all written plans and reports developed by the

 

emergency financial manager.

 

     (6) The emergency financial manager's powers and duties under

 

sections 39 to 41a are subject to oversight by the education

 

financial emergency resolution board under this section.