Bill Text: MI HB4861 | 2017-2018 | 99th Legislature | Introduced

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Bill Title: Local government; other; bonding for emergency managers; require, and exempt emergency managers from governmental immunity. Amends sec. 20 of 2012 PA 436 (MCL 141.1560) & adds sec. 9a. TIE BAR WITH: HB 4862'17

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2017-09-06 - Bill Electronically Reproduced 08/16/2017 [HB4861 Detail]

Download: Michigan-2017-HB4861-Introduced.html

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HOUSE BILL No. 4861

 

 

August 16, 2017, Introduced by Rep. Lucido and referred to the Committee on Local Government.

 

     A bill to amend 2012 PA 436, entitled

 

"Local financial stability and choice act,"

 

by amending section 20 (MCL 141.1560) and by adding section 9a.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 9a. An emergency manager appointed by the governor under

 

section 9 shall post a suitable bond of not less than

 

$5,000,000.00, issued by a responsible bonding entity, for the

 

faithful performance of the duties of the office. An emergency

 

manager forfeits the bond if his or her conduct as an emergency

 

manager amounts to gross negligence or is willful and wanton

 

misconduct, and the emergency manager is responsible for all

 

damages, expenses, and costs associated with that gross negligence

 

or willful and wanton misconduct.

     Sec. 20. (1) An emergency manager is immune from liability as

 

provided in section 7(5) of 1964 PA 170, MCL 691.1407. not

 

protected by the immunity conferred by 1964 PA 170, MCL 691.1401 to

 

691.1419.

 

     (2) A person employed by an emergency manager is immune from

 

liability as provided in section 7(2) of 1964 PA 170, MCL 691.1407.

 

     (3) (2) The attorney general shall defend any civil claim,

 

demand, or lawsuit which that challenges any of the following:

 

     (a) The validity of this act.

 

     (b) The authority of a state official or officer acting under

 

this act.

 

     (c) The authority of an emergency manager if the emergency

 

manager is or was acting within the scope of authority for an

 

emergency manager under this act.

 

     (4) (3) With respect to any aspect of a receivership under

 

this act, the costs incurred by the attorney general in carrying

 

out the responsibilities of subsection (2) (3) for attorneys,

 

experts, court filing fees, and other reasonable and necessary

 

expenses shall be are at the expense of the local government that

 

is subject to that receivership and shall must be reimbursed to the

 

attorney general by the local government. The failure of a

 

municipal government that is or was in receivership to remit to the

 

attorney general the costs incurred by the attorney general within

 

30 days after written notice to the municipal government from the

 

attorney general of the costs is a debt owed to this state and

 

shall must be recovered by the state treasurer as provided in

 

section 17a(5) of the Glenn Steil state revenue sharing act of

1971, 1971 PA 140, MCL 141.917a. The failure of a school district

 

that is or was in receivership to remit to the attorney general the

 

costs incurred by the attorney general within 30 days after written

 

notice to the school district from the attorney general of the

 

costs is a debt owed to this state and shall must be recovered by

 

the state treasurer as provided in the state school aid act of

 

1979, 1979 PA 94, MCL 388.1601 to 388.1896.

 

     (5) (4) An emergency manager may procure and maintain, at the

 

expense of the local government for which the emergency manager is

 

appointed, worker's compensation, general liability, professional

 

liability, and motor vehicle insurance for the emergency manager

 

and any employee, agent, appointee, or contractor of the emergency

 

manager as may be provided to elected officials, appointed

 

officials, or employees of the local government. The insurance

 

procured and maintained by an emergency manager may extend to any

 

claim, demand, or lawsuit asserted or costs recovered against the

 

emergency manager and any employee, agent, appointee, or contractor

 

of the emergency manager from the date of appointment of the

 

emergency manager to the expiration of the applicable statute of

 

limitation if the claim, demand, or lawsuit asserted or costs

 

recovered against the emergency manager or any employee, agent,

 

appointee, or contractor of the emergency manager resulted from

 

conduct of the emergency manager or any employee, agent, appointee,

 

or contractor of the emergency manager taken in accordance with

 

this act during the emergency manager's term of service.

 

     (6) (5) If, after the date that the service of an emergency

 

manager is concluded, the emergency manager or any employee, agent,

appointee, or contractor of the emergency manager is subject to a

 

claim, demand, or lawsuit arising from an action taken during the

 

service of that emergency manager, and not covered by a procured

 

worker's compensation, general liability, professional liability,

 

or motor vehicle insurance, litigation expenses of the emergency

 

manager or any employee, agent, appointee, or contractor of the

 

emergency manager, including attorney fees for civil and criminal

 

proceedings and preparation for reasonably anticipated proceedings,

 

and payments made in settlement of civil proceedings both filed and

 

anticipated, shall must be paid out of the funds of the local

 

government that is or was subject to the receivership administered

 

by that emergency manager, provided that the litigation expenses

 

are approved by the state treasurer and that the state treasurer

 

determines that the conduct resulting in actual or threatened legal

 

proceedings that is the basis for the payment is based upon both of

 

the following:

 

     (a) The scope of authority of the person or entity seeking the

 

payment.

 

     (b) The conduct occurred on behalf of a local government while

 

it was in receivership under this act.

 

     (7) (6) The failure of a municipal government to honor and

 

remit the legal expenses of a former emergency manager or any

 

employee, agent, appointee, or contractor of the emergency manager

 

as required by this section is a debt owed to this state and shall

 

must be recovered by the state treasurer as provided in section

 

17a(5) of the Glenn Steil state revenue sharing act of 1971, 1971

 

PA 140, MCL 141.917a. The failure of a school district to honor and

remit the legal expenses of a former emergency manager or any

 

employee, agent, appointee, or contractor of the emergency manager

 

as required by this section is a debt owed to this state and shall

 

must be recovered by the state treasurer as provided in the state

 

school aid act of 1979, 1979 PA 94, MCL 388.1601 to 388.1896.

 

     Enacting section 1. This amendatory act takes effect 90 days

 

after the date it is enacted into law.

 

     Enacting section 2. This amendatory act does not take effect

 

unless Senate Bill No.____ or House Bill No. 4862 (request no.

 

03704'17 a) of the 99th Legislature is enacted into law.