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.