Bill Text: MI SB0153 | 2011-2012 | 96th Legislature | Introduced
Bill Title: Local government; other; local government and school district fiscal accountability act; create. Creates new act & repeals 1990 PA 72 (MCL 141.1201 - 141.1291). TIE BAR WITH: SB 0154'11, SB 0155'11, SB 0156'11, SB 0157'11, SB 0158'11
Spectrum: Partisan Bill (Republican 4-0)
Status: (Introduced - Dead) 2011-05-05 - Referred To Committee On Education [SB0153 Detail]
Download: Michigan-2011-SB0153-Introduced.html
SENATE BILL No. 153
February 16, 2011, Introduced by Senators PAVLOV, BRANDENBURG, MARLEAU and PROOS and referred to the Committee on Education.
A bill to safeguard the continued financial viability of units
of local government, including school districts; to preserve the
capacity of units of local government to provide necessary services
essential to the public health, safety, and welfare; to provide for
review, management, planning, and control of the financial
operation of units of local government, including school districts;
to provide criteria to be used in determining the financial
condition of units of local government, including school districts;
to permit a declaration of the existence of a local government
financial emergency and to prescribe the powers and duties of the
governor, other state departments, boards, agencies, officials, and
employees, and officials and employees of units of local
government, including school districts; to provide for placing
units of local government, including school districts, into state
receivership; to provide for a review and appeal process; to
provide for the appointment and to prescribe the powers and duties
of an emergency manager; to require the development of financial
plans to regulate expenditures and investments by units of local
government, including school districts, in a state of financial
stress or financial emergency; to provide for the modification or
termination of contracts under certain circumstances; to set forth
the conditions for termination of a local government financial
emergency; and to repeal acts and parts of acts.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act shall be known and may be cited as the "local
government and school district fiscal accountability act".
Sec. 3. The legislature hereby determines that the health,
safety, and welfare of the citizens of this state would be
materially and adversely affected by the insolvency of units of
local government, including certain school districts, and that the
survival and financial viability of units of local government is
vitally necessary to the interests of the citizens of this state to
assure the provision of necessary governmental services essential
to public health, safety, and welfare. The legislature further
determines that it is vitally necessary to protect the credit of
this state and its political subdivisions and that it is necessary
for the public good and it is a valid public purpose for this state
to take action and to assist a unit of local government in a
condition of financial stress or financial emergency so as to
remedy the stress or emergency by requiring prudent fiscal
management, permitting the restructuring of contractual
obligations, and prescribing the powers and duties of state and
local government officials and emergency managers. The legislature,
therefore, determines that the authority and powers conferred by
this act constitute a necessary program and serve a valid public
purpose.
Sec. 5. As used in this act:
(a) "Chief administrative officer" means any of the following:
(i) The manager of a village or, if a village does not employ a
manager, the president of the village.
(ii) The city manager of a city or, if a city does not employ a
city manager, the mayor of the city.
(iii) The manager of a township, the superintendent of a charter
township, or if the township does not employ a manager or
superintendent, the supervisor of the township.
(iv) The elected county executive or appointed county manager
of a county; or if the county has not adopted the provisions of
either 1973 PA 139, MCL 45.551 to 45.573, or 1966 PA 293, MCL
45.501 to 45.521, the county's chairperson of the county board of
commissioners.
(v) The chief operating officer of an authority or of a public
utility owned by a city, village, township, or county.
(vi) The superintendent of a school district.
(b) "Emergency manager" or "manager" means the emergency
manager appointed under section 15.
(c) "Local government" means a municipal government or a
school district.
(d) "Municipal government" means a city, a village, a
township, a charter township, a county, an authority established by
law, or a public utility owned by a city, village, township, or
county.
(e) "Review team" means a review team designated under section
12.
(f) "School board" means the governing body of a school
district.
(g) "School district" means a school district or an
intermediate school district as those terms are defined in the
revised school code, 1976 PA 451, MCL 380.1 to 380.1852.
(h) "State financial authority" means the following:
(i) For a municipal government, the state treasurer.
(ii) For a school district, the superintendent of public
instruction.
Sec. 12. (1) The state financial authority of a local
government may conduct a preliminary review to determine the
existence of a local government financial problem if 1 or more of
the following occur:
(a) The governing body or the chief administrative officer of
a local government requests a preliminary review under this act.
The request shall be in writing and shall identify the existing or
anticipated financial conditions or events that make the request
necessary.
(b) The state financial authority receives a written request
from a creditor with an undisputed claim that remains unpaid 6
months after its due date against the local government that exceeds
the greater of $10,000.00 or 1% of the annual general fund budget
of the local government, provided that the creditor notifies the
local government in writing at least 30 days before his or her
request to the state financial authority of his or her intention to
submit a written request under this subdivision.
(c) The state financial authority receives a petition
containing specific allegations of local government financial
distress signed by a number of registered electors residing within
the local government's jurisdiction equal to not less than 5% of
the total vote cast for all candidates for governor within the
local government's jurisdiction at the last preceding election at
which a governor was elected. Petitions shall not be filed under
this subdivision within 60 days before any election of the local
government.
(d) The state financial authority receives written
notification that a local government has not timely deposited its
minimum obligation payment to the local government pension fund as
required by law.
(e) The state financial authority receives written
notification that the local government has failed for a period of 7
days or more to pay wages and salaries or other compensation owed
to employees or benefits owed to retirees.
(f) The state financial authority receives written
notification from a trustee, paying agent, bondholder, or auditor
engaged by the local government of a default in a bond or note
payment or a violation of 1 or more bond or note covenants.
(g) The state financial authority of a local government
receives a resolution from either the senate or the house of
representatives requesting a preliminary review under this section.
(h) The local government has violated a requirement of, or a
condition of an order issued pursuant to, former 1943 PA 202, the
revenue bond act of 1933, 1933 PA 94, MCL 141.101 to 141.140, the
revised municipal finance act, 2001 PA 34, MCL 141.2101 to
141.2821, or any other law governing the issuance of bonds or
notes.
(i) A municipal government has violated the conditions of an
order issued by the local emergency financial assistance loan board
pursuant to the emergency municipal loan act, 1980 PA 243, MCL
141.931 to 141.942.
(j) The local government has violated a requirement of
sections 17 to 20 of the uniform budgeting and accounting act, 1968
PA 2, MCL 141.437 to 141.440.
(k) The local government fails to timely file an annual
financial report or audit that conforms with the minimum procedures
and standards of the state financial authority and is required for
local governments under the uniform budgeting and accounting act,
1968 PA 2, MCL 141.421 to 141.440a, or 1919 PA 71, MCL 21.41 to
21.55. In addition, if the local government is a school district,
the school district fails to provide an annual financial report or
audit that conforms with the minimum procedures and standards of
the superintendent of public instruction and is required under the
revised school code, 1976 PA 451, MCL 380.1 to 380.1852, and the
state school aid act of 1979, 1979 PA 94, MCL 388.1601 to 388.1772.
(l) A municipal government is delinquent in the distribution of
tax revenues, as required by law, that it has collected for another
taxing jurisdiction, and that taxing jurisdiction requests a
preliminary review.
(m) A local government is in breach of its obligations under a
deficit elimination plan or an agreement entered into pursuant to a
deficit elimination plan.
(n) A court has ordered an additional tax levy without the
prior approval of the governing body of the local government.
(o) A municipal government has ended a fiscal year in a
deficit condition as defined in section 21 of the Glenn Steil state
revenue sharing act of 1971, 1971 PA 140, MCL 141.921, or has
failed to comply with the requirements of that section for filing
or instituting a financial plan to correct the deficit condition.
(p) A school district ended its most recently completed fiscal
year with a deficit in 1 or more of its funds and the school
district has not submitted a deficit elimination plan to the state
financial authority within 3 months after the district's deadline
for submission of its annual financial statement.
(q) A local government has been assigned a long-term debt
rating within or below the BBB category or its equivalent by 1 or
more nationally recognized credit rating agencies.
(r) The existence of other facts or circumstances that in the
state treasurer's sole discretion for a municipal government are
indicative of municipal financial stress, or, that in the
superintendent of public instruction's sole discretion for a school
district are indicative of school district financial stress.
(2) If the state financial authority determines that a
preliminary review is appropriate under this section, before
commencing the preliminary review the state financial authority
shall give the local government specific written notification of
the review. The preliminary review shall be completed within 30
days following its commencement. Elected and appointed officials of
a local government shall promptly and fully provide the assistance
and information requested by the state financial authority for that
local government in conducting the preliminary review.
(3) If a finding of probable financial stress is made for a
municipal government under subsection (2), the governor shall
appoint a review team for that municipal government consisting of
the state treasurer or his or her designee, the director of the
department of technology, management, and budget or his or her
designee, a nominee of the senate majority leader, and a nominee of
the speaker of the house of representatives. The governor may
appoint other state officials or other persons with relevant
professional experience to serve on a review team to undertake a
municipal financial management review.
(4) If a finding of probable financial stress is made for a
school district under subsection (2), the governor shall appoint a
review team for that school district consisting of the state
treasurer or his or her designee, the superintendent of public
instruction or his or her designee, the director of the department
of technology, management, and budget or his or her designee, a
nominee of the senate majority leader, and a nominee of the speaker
of the house of representatives. The governor may appoint other
state officials or other persons with relevant professional
experience to serve on a review team to undertake a school district
financial management review.
(5) The department of treasury shall provide staff support to
each review team.
(6) A review team appointed under former 1988 PA 101 or former
1990 PA 72 and serving on the effective date of this act shall
continue under this act to fulfill their powers and duties. All
proceedings and actions taken by the governor, the state treasurer,
or a review team under former 1988 PA 101 or former 1990 PA 72
before the effective date of this act are ratified and are
enforceable as if the proceedings and actions were taken under this
act, and a consent agreement entered into under former 1988 PA 101
or 1990 PA 72 is ratified and is binding and enforceable under this
act.
Sec. 13. (1) The review team shall have full power in its
review to perform all of the following functions:
(a) Examine the books and records of the local government.
(b) Utilize the services of other state agencies and
employees.
(c) Negotiate and sign a consent agreement with the chief
administrative officer of the local government. The consent
agreement may provide for remedial measures considered necessary to
address the local financial problem and provide for the financial
stability of the local government and may include either a
continuing operations plan or recovery plan as described in section
14a. The consent agreement may utilize state financial management
and technical assistance as necessary in order to alleviate the
local financial problem. The consent agreement shall also provide
for periodic financial status reports to the state financial
authority. In order for the consent agreement to go into effect, it
shall be approved, by resolution, by the governing body of the
local government and shall be approved and executed by the state
financial authority. A consent agreement shall provide that in the
event of a material uncured breach of the consent agreement, the
state treasurer, with the concurrence of the superintendent of
public instruction if the local government is a school district, is
authorized to place the local government in receivership as
provided under section 15.
(2) The review team shall meet with the local government as
part of its review. At this meeting, the review team shall receive,
discuss, and consider information provided by the local government
concerning the financial condition of the local government.
(3) The review team shall report its findings to the governor,
with a copy to the state financial authority, within 60 days
following the appointment of the review team under section 12 or
earlier if required by the governor or the state financial
authority. Upon request, the governor may grant one 30-day
extension of this 60-day time limit. A copy of the report shall be
forwarded by the state treasurer to the chief administrative
officer and the governing body of the local government, the speaker
of the house of representatives, the senate majority leader, and
the superintendent of public instruction if the local government is
a school district. The report shall include the existence, or an
indication of the likely occurrence, of any of the following:
(a) A default in the payment of principal or interest upon
bonded obligations, notes, or other municipal securities for which
no funds or insufficient funds are on hand and, if required,
segregated in a special trust fund.
(b) Failure for a period of 30 days or more beyond the due
date to transfer 1 or more of the following to the appropriate
agency:
(i) Taxes withheld on the income of employees.
(ii) For a municipal government, taxes collected by the
municipal government as agent for another governmental unit, school
district, or other entity or taxing authority.
(iii) Any contribution required by a pension, retirement, or
benefit plan.
(c) Failure for a period of 7 days or more to pay wages and
salaries or other compensation owed to employees or benefits owed
to retirees.
(d) The total amount of accounts payable for the current
fiscal year, as determined by the state financial authority's
uniform chart of accounts, is in excess of 10% of the total
expenditures of the local government in that fiscal year.
(e) Failure to eliminate an existing deficit in any fund of
the local government within the 2-year period preceding the end of
the local government's fiscal year during which the review team
report is received.
(f) Projection of a deficit in the general fund of the local
government for the current fiscal year in excess of 5% of the
budgeted revenues for the general fund.
(g) Failure to comply in all material respects with the terms
of an approved deficit elimination plan or an agreement entered
into pursuant to a deficit elimination plan.
(h) Existence of material loans to the general fund from other
local government funds.
(i) Existence of material recurring unbudgeted subsidies from
the general fund to other major funds as defined under government
accounting standards board principles.
(j) Existence of a structural operating deficit.
(k) Use of restricted revenues for purposes not authorized by
law.
(l) Any other facts and circumstances indicative of local
government financial stress or financial emergency.
(4) The review team shall include 1 of the following
conclusions in its report:
(a) The local government is not in financial stress or is in a
condition of mild financial stress as provided in section 14.
(b) The local government is in a condition of severe financial
stress as provided in section 14, but a consent agreement
containing a plan to resolve the problem has been adopted pursuant
to subsection (1)(c).
(c) The local government is in a condition of severe financial
stress as provided in section 14, and a consent agreement has not
been adopted pursuant to subsection (1)(c).
(d) A financial emergency exists as provided in section 14 and
no satisfactory plan exists to resolve the emergency.
(5) The review team may appoint an individual or firm to carry
out the review and submit a report to the review team for approval.
The department of treasury may enter into a contract with the
individual or firm respecting the terms and conditions of the
appointment.
Sec. 14. (1) For purposes of this act, a local government is
considered to be in a condition of no financial stress or mild
financial stress if the report required in section 13 concludes
that none of the factors in section 13(3) exist or are likely to
occur within the current or next succeeding fiscal year or, if they
occur, do not threaten the local government's capability to provide
necessary governmental services essential to public health, safety,
and welfare.
(2) For purposes of this act, a local government is considered
to be in a condition of severe financial stress if either of the
following occurs:
(a) The report required in section 13 concludes that 1 or more
of the factors in section 13(3) exist or are likely to occur within
the current or next succeeding fiscal year and, if left
unaddressed, may threaten the local government's future capability
to provide necessary governmental services essential to the public
health, safety, and welfare.
(b) The chief administrative officer of the local government
recommends that the local government be considered in severe
financial stress.
(3) For purposes of this act, a local government is considered
to be in a condition of financial emergency if any of the following
occur:
(a) The report required in section 13 concludes that 2 or more
of the factors in section 13(3) exist or are likely to occur within
the current fiscal year and threaten the local government's current
and future capability to provide necessary governmental services
essential to the public health, safety, and welfare.
(b) The local government has failed to provide timely and
accurate information enabling the review team to complete its
report under section 13.
(c) The local government has failed to comply in all material
respects with a continuing operations plan or recovery plan, as
provided in section 14a, or with the terms of an approved deficit
elimination plan or an agreement entered into pursuant to a deficit
elimination plan.
(d) The local government is in material breach of a consent
agreement entered into under section 13(1)(c).
(e) The local government is in a condition of severe financial
stress as provided in subsection (2), and a consent agreement has
not been adopted pursuant to section 13(1)(c).
(f) The chief administrative officer of the local government,
based upon the existence or likely occurrence of 1 or more of the
factors in section 13(3), recommends that a financial emergency be
declared and the state financial authority concurs with the
recommendation.
Sec. 14a. (1) A consent agreement as provided in section
13(1)(c) may require a continuing operations plan or a recovery
plan if required by the state financial authority.
(2) If the state financial authority requires that a consent
agreement include a continuing operations plan, the local
government shall prepare and file the continuing operations plan
with the state financial authority as provided for in the consent
agreement. The state financial authority shall approve or reject
the initial continuing operations plan within 14 days of receiving
it from the local government. If a plan is rejected, the local
government shall refile an amended plan within 30 days of the
rejection addressing any concerns raised by the state financial
authority. If the amended plan is rejected, then the local
government is considered to be in material breach of the consent
agreement. The local government is required to file annual updates
to its continuing operations plan. The annual updates shall be
included with the annual filing of the local government's audit
report with the state financial authority as long as the continuing
operations plan remains in effect.
(3) The continuing operations plan shall be in a form
prescribed by the state financial authority, but shall, at a
minimum, include all of the following:
(a) A detailed projected budget of revenues and expenditures
over not less than 3 fiscal years which demonstrates that the local
government's expenditures will not exceed its revenues and that any
existing deficits will be eliminated during the projected budget
period.
(b) A cash flow projection for the budget period.
(c) An operating plan for the budget period that ensures
continued viability for the local government.
(d) A plan showing reasonable and necessary maintenance and
capital expenditures so as to ensure the local government's
continued viability.
(e) An evaluation of the costs associated with pension and
health care for which the local government is responsible and a
plan for how those costs will be addressed within the budget
period.
(f) A provision for submitting quarterly compliance reports to
the state financial authority demonstrating compliance with the
continuing operations plan.
(4) If a continuing operations plan is approved for a local
government, the local government shall amend the budget and general
appropriations ordinance adopted by the local government under the
uniform budgeting and accounting act, 1968 PA 2, MCL 141.421 to
141.440a, to the extent necessary or advisable to give full effect
to the continuing operations plan. The chief administrative
officer, the chief financial officer, the governing body, and other
officials of the local government shall take and direct such
actions as may be necessary or advisable to maintain the local
government's operations in compliance with the continuing
operations plan.
(5) If the state financial authority requires that a consent
agreement include a recovery plan, the state financial authority
shall develop and adopt, in consultation with the review team if
desired by the state financial authority, a recovery plan. If a
recovery plan is developed and adopted for the local government,
the local government thereafter is required to file annual updates
to its recovery plan. The annual updates shall be included with the
annual filing of the local government's audit report with the state
financial authority as long as the recovery plan remains in effect.
(6) A recovery plan may include terms and provisions as may be
approved in the discretion of the state treasurer, including, but
not limited to, any 1 or more of the following:
(a) A detailed projected budget of revenues and expenditures
over not less than 3 fiscal years which demonstrates that the local
government's expenditures will not exceed its revenues and that any
existing deficits will be eliminated during the projected budget
period.
(b) A cash flow projection for the budget period.
(c) An operating plan for the budget period that ensures
continued viability for the local government.
(d) A plan showing reasonable and necessary maintenance and
capital expenditures so as to ensure the local government's
continued viability.
(e) An evaluation of legacy costs for which the local
government is responsible and a plan for how those costs will be
addressed within the budget period.
(f) Procedures for cash control and cash management,
including, but not limited to, procedures for timely collection,
securing, depositing, balancing, and expending of cash, and may
include the designation of appropriate fiduciaries.
(g) A provision for submitting quarterly compliance reports to
the state financial authority and the chief administrative officer
of the local government that demonstrates compliance with the
recovery plan.
(7) The recovery plan may include the appointment of a local
auditor or local inspector, or both, in accordance with section
19(1)(o).
(8) If a recovery plan is developed and adopted by the state
financial authority for a local government, the recovery plan shall
supersede the budget and general appropriations ordinance adopted
by the local government under the uniform budgeting and accounting
act, 1968 PA 2, MCL 141.421 to 141.440a, and the budget and general
appropriations ordinance is considered amended to the extent
necessary or advisable to give full effect to the recovery plan. In
the event of any inconsistency between the recovery plan and the
budget or general appropriations ordinance, the recovery plan shall
control. The chief administrative officer, the chief financial
officer, the governing body, and other officers of the local
government shall take and direct actions as may be necessary or
advisable to bring and maintain the local government's operations
in compliance with the recovery plan.
(9) The consent agreement may include a grant to the chief
administrative officer, the chief financial officer, the governing
body, or other officers of the local government by the state
financial authority of 1 or more of the powers prescribed for
emergency managers in section 19 for such periods and upon such
terms and conditions as the state financial authority considers
necessary or convenient, in the state financial authority's sole
discretion, to enable the local government to achieve the goals and
objectives of the consent agreement.
(10) The consent agreement may provide for the required
retention by the local government of a turnaround consultant for
the purpose of assisting the local government to achieve the goals
and objectives of the consent agreement.
(11) A local government is released from the requirements
under this section upon compliance with the consent agreement as
determined by the state financial authority.
Sec. 15. (1) Within 10 days after receipt of the report
provided for in section 13, the governor shall make 1 of the
following determinations:
(a) The local government is not in a condition of severe
financial stress.
(b) The local government is in a condition of severe financial
stress as provided in section 14, but a consent agreement
containing a plan to resolve the financial stress has been adopted
under this act.
(c) A local government financial emergency exists
as provided in section 14 and no satisfactory plan exists to
resolve the emergency.
(2) If the governor determines pursuant to subsection (1) that
a financial emergency exists, the governor shall provide the
governing body and chief administrative officer of the local
government with a written notification of the determination,
findings of fact utilized as the basis upon which this
determination was made, a concise and explicit statement of the
underlying facts supporting the factual findings, and notice that
the chief administrative officer or the governing body of the local
government has 7 days after the date of the notification to request
a hearing conducted by the state financial authority or the state
financial authority's designee. Following the hearing, or if no
hearing is requested following the expiration of the deadline by
which a hearing may be requested, the governor, in his or her sole
discretion based upon the record, shall either confirm or revoke,
in writing, the determination of the existence of a financial
emergency. If confirmed, the governor shall provide a written
report to the governing body and chief administrative officer of
the local government of the findings of fact of the continuing or
newly developed conditions or events providing a basis for the
confirmation of a financial emergency, and a concise and explicit
statement of the underlying facts supporting these factual
findings.
(3) A local government for which a financial emergency
determination under this section has been confirmed to exist may,
by resolution adopted by a vote of 2/3 of the members of its
governing body elected and serving, appeal this determination to
the Ingham county circuit court. The court shall not set aside a
determination of financial emergency by the governor unless it
finds that the determination is either of the following:
(a) Not supported by competent, material, and substantial
evidence on the whole record.
(b) Arbitrary, capricious, or clearly an abuse or unwarranted
exercise of discretion.
(4) Upon the confirmation of a finding of a financial
emergency, the state treasurer, with the concurrence of the
superintendent of public instruction if the local government is a
school district, shall declare the local government in receivership
and shall appoint an emergency manager to 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 preserve the local government's capacity
to provide necessary governmental services essential to the public
health, safety, and welfare. Upon the declaration of receivership
and during the pendency of receivership, the governing body and the
chief administrative officer of the local government may not
exercise any of the powers of those offices except as may be
specifically authorized in writing by the emergency manager and are
subject to any conditions required by the emergency manager.
(5) All of the following apply to an emergency manager:
(a) The emergency manager shall be chosen on the basis of
competence.
(b) The emergency manager may but need not be a resident of
the local government.
(c) The emergency manager may be an individual or firm.
(d) The emergency manager shall serve at the pleasure of the
state treasurer, with the concurrence of the superintendent of
public instruction if the local government is a school district.
(e) The emergency manager's compensation and reimbursement for
actual and necessary expenses shall be paid by the local government
and shall be set forth in a contract approved by the state
treasurer.
(6) 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.
(7) The emergency manager shall make 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.
(8) The emergency manager shall continue in this capacity
until removed or replaced by the state treasurer, with the
concurrence of the superintendent of public instruction if the
local government is a school district, or until the financial
emergency is rectified.
(9) A local government shall be removed from receivership when
the financial conditions are corrected in a sustainable fashion as
determined by the state treasurer, with the concurrence of the
superintendent of public instruction if the local government is a
school district, in accordance with this act.
(10) The governor may delegate his or her duties under this
section to the state treasurer, with the concurrence of the
superintendent of public instruction if the local government is a
school district.
Sec. 16. An emergency financial manager appointed under former
1988 PA 101 or former 1990 PA 72, and serving on the effective date
of this act, shall continue under this act to fulfill his or her
powers and duties.
Sec. 17. (1) The emergency manager shall issue to the
appropriate officials or employees of the local government the
orders the manager considers necessary to accomplish the purposes
of this act, including, but not limited to, orders for the timely
and satisfactory implementation of a financial and operating plan
developed pursuant to section 18, including an academic plan for a
school district, or to take actions, or refrain from taking
actions, to enable the orderly accomplishment of the financial and
operating plan. An order issued under this section is binding on
the local officials or employees to whom it is issued.
(2) If an order of the emergency manager to officials or
employees of the local government under subsection (1) is not
reasonably carried out and the failure to carry out an order is
disrupting the emergency manager's ability to manage the local
government, the emergency manager, in addition to other remedies
provided in this act, may prohibit the official or employee from
access to the local government's office facilities, electronic
mail, and internal information systems.
Sec. 18. (1) The emergency manager shall develop and may amend
a written financial and operating plan for the local government.
The plan shall have the objectives of ensuring that the local
government is able to provide necessary governmental services
essential to the public health, safety, and welfare on an ongoing
and sustainable basis, and protecting the continued financial
viability of the local government. The financial and operating plan
shall provide for all of the following:
(a) Conducting all aspects of the operations of the local
government within the resources available according to the
emergency manager's revenue estimate.
(b) The payment in full of the scheduled debt service
requirements on all bonds, notes, and municipal securities of the
local government and all other uncontested legal obligations.
(c) The modification, rejection, termination, and
renegotiation of contracts pursuant to section 19.
(d) The timely deposit of required payments to the pension
fund for the local government or in which the local government
participates.
(e) For school districts, an academic plan.
(f) Any other actions considered necessary by the emergency
manager in the emergency manager's discretion to achieve the
objectives of the financial and operating plan, alleviate the
financial emergency, and remove the local government from
receivership.
(2) Within 45 days after the emergency manager's appointment,
the emergency manager shall submit the financial and operating plan
to the state treasurer, with a copy to the superintendent of public
instruction if the local government is a school district, and to
the chief administrative officer and governing body of the local
government. The plan shall be regularly reexamined by the emergency
manager and the state treasurer and may be modified from time to
time by the emergency manager. If the emergency manager reduces his
or her revenue estimates, the emergency manager shall modify the
plan to conform to the revised revenue estimates.
(3) The financial and operating plan shall be in a form as
provided by the state financial authority and shall contain that
information for each year during which year the plan is in effect
that the emergency manager, in consultation with the state
financial authority, specifies. The financial and operating plan
may serve as a deficit elimination plan otherwise required by law
if so approved by the state financial authority.
(4) The emergency manager, within 30 days of submitting the
financial and operating plan to the state financial authority,
shall conduct a public informational meeting on the plan and any
modifications to the plan. This subsection does not mean that the
emergency manager must receive public approval before he or she
implements the plan or any modification of the plan.
Sec. 19. (1) An emergency manager may take 1 or more of the
following additional actions with respect to a local government
which is in receivership, notwithstanding any provisions of law or
charter to the contrary:
(a) Analyze factors and circumstances contributing to the
financial emergency of the local government and initiate steps to
correct the condition.
(b) Amend, revise, approve, or disapprove the budget of the
local government, and limit the total amount appropriated or
expended.
(c) Receive and disburse on behalf of the local government all
federal, state, and local funds earmarked for the local government.
These funds may include, but are not limited to, funds for specific
programs and the retirement of debt.
(d) Require and approve or disapprove, or amend or revise a
plan for paying all outstanding obligations of the local
government.
(e) Require and prescribe the form of special reports to be
made by the finance officer of the local government to its
governing body, the creditors of the local government, the
emergency manager, or the public.
(f) Examine all records and books of account, and require
under the procedures of the uniform budgeting and accounting act,
1968 PA 2, MCL 141.421 to 141.440a, or 1919 PA 71, MCL 21.41 to
21.55, or both, the attendance of witnesses and the production of
books, papers, contracts, and other documents relevant to an
analysis of the financial condition of the local government.
(g) Make, approve, or disapprove any appropriation, contract,
expenditure, or loan, the creation of any new position, or the
filling of any vacancy in a permanent position by any appointing
authority.
(h) Review payrolls or other claims against the local
government before payment.
(i) Notwithstanding any minimum staffing level requirement
established by charter or contract, establish and implement
staffing levels for the local government.
(j) Reject, modify, or terminate 1 or more terms and
conditions of an existing contract. After meeting and conferring
with the appropriate bargaining representative and, if in the
emergency manager's sole discretion and judgment, a prompt and
satisfactory resolution is unlikely to be obtained, reject, modify,
or terminate 1 or more terms and conditions of an existing
collective bargaining agreement. The rejection, modification, or
termination of 1 or more terms and conditions of an existing
collective bargaining agreement under this subdivision is a
legitimate exercise of the state's sovereign powers if the
emergency manager and state financial authority determine that all
of the following conditions are satisfied:
(i) The financial emergency in the local government has created
a circumstance in which it is reasonable and necessary for the
state to intercede to serve a significant and legitimate public
purpose.
(ii) Any plan involving the rejection, modification, or
termination of 1 or more terms and conditions of an existing
collective bargaining agreement is reasonable and necessary to deal
with a broad, generalized economic problem.
(iii) Any plan involving the rejection, modification, or
termination of 1 or more terms and conditions of an existing
collective bargaining agreement is directly related to and designed
to address the financial emergency for the benefit of the public as
a whole.
(iv) Any plan involving the rejection, modification, or
termination of 1 or more terms and conditions of an existing
collective bargaining agreement is temporary and does not target
specific classes of employees.
(k) Act as sole agent of the local government in collective
bargaining with employees or representatives and
approve any contract or agreement.
(l) For municipal governments, elect to have the municipal
government participate in the municipal employees retirement system
under the municipal employees retirement act of 1984, 1984 PA 427,
MCL 38.1501 to 38.1555.
(m) Consolidate or eliminate departments of the local
government or transfer functions from 1 department to another and
appoint, supervise, and, at his or her discretion, remove
administrators, including heads of departments other than elected
officials.
(n) Employ or contract for, at the expense of the local
government and with the approval of the state financial authority,
auditors and other technical personnel considered necessary to
implement this act.
(o) Retain 1 or more persons or firms, which may be an
individual or firm selected from a list approved by the state
financial authority, to perform the duties of a local inspector or
a local auditor as described in this subdivision. The duties of a
local inspector are to ensure integrity, economy, efficiency, and
effectiveness in the operations of the local government by
conducting meaningful and accurate investigations and forensic
audits, and to detect and deter waste, fraud, and abuse. At least
annually, a report of the local inspector shall be submitted to the
emergency manager, the state treasurer, and the superintendent of
public instruction if the local government is a school district.
The duties of a local auditor are to ensure that internal controls
over local government operations are designed and operating
effectively to mitigate risks that hamper the achievement of the
emergency manager's financial plan, ensure that local government
operations are effective and efficient, ensure that financial
information is accurate, reliable, and timely, comply with
policies, regulations, and applicable laws, and ensure assets are
properly safeguarded. At least annually, a report of the local
auditor shall be submitted to the emergency manager, the state
treasurer, and the superintendent of public instruction if the
local government is a school district.
(p) Require compliance with his or her orders by court action
if necessary.
(q) If provided in the financial and operating plan, or
otherwise with the prior written approval of the state treasurer in
the case of a municipal government or the superintendent of public
instruction in the case of a school district, sell, lease, convey,
or otherwise use the assets of the local government to meet past or
current obligations, provided the use of assets for this purpose
does not endanger the health, safety, or welfare of residents of
the local government.
(r) Apply for a loan from the state on behalf of the local
government, subject to the conditions of the emergency municipal
loan act, 1980 PA 243, MCL 141.931 to 141.942, in a sufficient
amount to pay the expenses of the emergency manager and for other
lawful purposes.
(s) Order, as necessary, 1 or more millage elections for the
local government consistent with the Michigan election law, 1954 PA
116, MCL 168.1 to 168.992, sections 6 and 25 through 34 of article
IX of the state constitution of 1963, and any other applicable
state law.
(t) Authorize the borrowing of money by the local government
as provided by law.
(u) Approve or disapprove of the issuance of obligations of
the local government on behalf of the local government under this
subdivision. An emergency manager may, with the prior approval of
the state treasurer, authorize the issuance of financial recovery
bonds or notes by the local government in amounts greater than the
limitations established otherwise by state law or charter. Any
financial recovery bonds or notes issued under this subdivision are
subject to the terms and conditions approved by the state
treasurer. Any financial recovery bonds or notes issued under this
subdivision are not subject to notice requirements established
otherwise by state law or charter. The net indebtedness of a local
government, reduced by any amounts excluded otherwise by law, shall
not exceed 10% of the state equalized value of the local
government. An emergency manager may provide in the order
authorizing the issuance of the bonds or notes for the deposit of
revenues generated from taxes levied by the local government into
an escrow account to be used for the sole purpose of paying
principal of and interest on the bonds or notes, and such tax
revenues may be pledged by the local government for the payment of
the bonds or notes issued under this subdivision. If the local
government enters into an agreement with a third-party tax
collector pursuant to which the third-party tax collector has the
duty to collect taxes that otherwise would be collected by the
treasurer for the local government, the agreement shall also
provide for the direct payment of pledged tax revenues collected by
the third-party tax collector to a trustee to be deposited into an
escrow account and used for the sole purpose of paying principal of
and interest on bonds or notes issued pursuant to this subdivision.
If the local government and a third-party tax collector enter into
such an agreement providing for the direct payment of taxes to a
trustee, a statutory lien and trust is created applicable to such
tax revenues received or to be received from the third-party tax
collector by the trustee. The tax revenues paid or to be paid to a
trustee for the purpose of paying the principal of and interest on
the bonds or notes issued pursuant to this subdivision shall be
subject to a lien and trust, which is hereby made a statutory lien
and trust paramount and superior to all other liens and interests
of any kind, for the sole purpose of paying the principal of and
interest on bonds or notes issued pursuant to this subdivision and
any other bonds or notes subsequently issued by the local
government sharing a parity or subordinate pledge of such tax
revenues. The lien and trust imposed by this subdivision with
respect to pledged tax revenues has a priority as established in
the agreement, except that the agreement shall not impair any
existing lien and trust previously created pursuant to this
subdivision. The lien created under this subdivision for the
benefit of holders of bonds or notes or others is perfected without
delivery, recording, or notice. The tax revenues held or to be held
by a trustee shall be held in trust for the sole benefit of the
holders of the bonds or notes issued pursuant to this subdivision
and shall be exempt from being levied upon, taken, sequestered, or
applied toward paying the debts or liabilities of the local
government other than for payment of debt service on the bonds or
notes to which the lien applies. Financial recovery bonds or notes
issued under this subdivision are not subject to the revised
municipal finance act, 2001 PA 34, MCL 141.2101 to 141.2821. As
used in this subdivision, "third-party tax collector" means a party
that is not the treasurer for the local government or other elected
or appointed local government official with whom the local
government has entered into a contractual agreement pursuant to
which the third-party tax collector agrees to collect taxes that
otherwise would be collected by the treasurer for the local
government.
(v) Enter into agreements with creditors for the payment of
existing debts, including the settlement of claims by the
creditors.
(w) Enter into agreements with creditors to restructure debt
on terms, at rates of interest, and with security as shall be
agreed among the parties, subject to approval by the state
treasurer.
(x) To the extent applicable, set and approve all actuarial
assumptions for pension obligations of a municipal government to a
pension fund.
(y) Enter into agreements with other local governments, or
with private entities to the extent provided by law, for the
provision of services.
(z) For municipal governments, enter into agreements with
other units of government to transfer property of the municipal
government under 1984 PA 425, MCL 124.21 to 124.30, or as otherwise
provided by law, subject to approval by the state treasurer.
(aa) Enter into agreements with 1 or more other municipal
governments for the consolidation of services. For a city, village,
or township, the emergency manager may recommend to the state
boundary commission that the municipal government consolidate with
1 or more other municipal governments, if the emergency manager
determines that consolidation would materially alleviate the
financial emergency of the municipal government and would not
materially and adversely affect the financial situation of the
government or governments with which the municipal government in
receivership is consolidated. Any consolidation under this
subdivision is not subject to sections 7 to 14 of 1968 PA 191, MCL
123.1007 to 123.1014, or other relevant law.
(bb) For municipal governments, disincorporate or dissolve the
municipal government and assign its assets, debts, and liabilities
as provided by law.
(cc) Exercise solely, for and on behalf of the local
government, all other authority and responsibilities of the chief
administrative officer and governing body concerning the adoption,
amendment, and enforcement of ordinances or resolutions of the
local government as provided in the following acts:
(i) The home rule city act, 1909 PA 279, MCL 117.1 to 117.38.
(ii) The fourth class city act, 1895 PA 215, MCL 81.1 to
113.20.
(iii) The charter township act, 1947 PA 359, MCL 42.1 to 42.34.
(iv) 1851 PA 156, MCL 46.1 to 46.32.
(v) 1966 PA 293, MCL 45.501 to 45.521.
(vi) The general law village act, 1895 PA 3, MCL 61.1 to 74.25.
(vii) The home rule village act, 1909 PA 278, MCL 78.1 to
78.28.
(viii) The revised school code, 1976 PA 451, MCL 380.1 to
380.1852.
(dd) Replace the serving trustees and assume and exercise the
authority and responsibilities of a local pension board as sole
trustee of the pension fund of the municipal government if
appointed to that role by the state treasurer.
(ee) Take any other action or exercise any power or authority
of any officer, employee, department, board, commission, or other
similar entity of the local government, whether elected or
appointed, relating to the operation of the local government. The
power of the emergency manager shall be superior to and supersede
the power of any of the foregoing entities.
(ff) Remove, replace, appoint, or confirm the appointments to
any board, commission, authority, or other entity which is a
component unit of the local government.
(2) Except as otherwise provided in this act, during the
pendency of the receivership, the authority of the chief
administrative officer and governing body to exercise power for and
on behalf of the local government under law and charter shall be
suspended.
Sec. 19a. Immediately upon the local government being placed
in receivership under section 15 and during the pendency of the
receivership, the salary or other compensation, including the
accrual of postemployment benefits, and other benefits of the chief
administrative officer and members of the governing body of the
local government shall be eliminated. This section does not
authorize the impairment of vested retirement benefits. If an
emergency manager has reduced, suspended, or eliminated the salary
or other compensation of the chief administrative officer and
members of the governing body of a local government before the
effective date of this act, the reduction, suspension, or
elimination is valid to the same extent had it occurred after the
effective date of this act. The emergency manager may restore, in
whole or in part, any of the salary, other compensation, or
benefits of the chief administrative officer and members of the
governing body during the pendency of the receivership, for such
time and on such terms as the emergency manager considers
appropriate, to the extent that the manager finds that the
restoration of salary, compensation, or benefits is consistent with
the financial and operating plan.
Sec. 20. In addition to the actions authorized in section 19,
an emergency manager for a school district may take 1 or more of
the following additional actions with respect to a school district
that is in receivership:
(a) Negotiate, renegotiate, approve, and enter into contracts
on behalf of the school district.
(b) Receive and disburse on behalf of the school district all
federal, state, and local funds earmarked for the school district.
These funds may include, but are not limited to, funds for specific
programs and the retirement of debt.
(c) Seek approval from the superintendent of public
instruction for a reduced class schedule in accordance with
administrative rules governing the distribution of state school
aid.
(d) Sell or otherwise use the assets of the school district to
meet past or current obligations, provided the use of assets for
this purpose does not impair the education of the pupils of the
school district.
(e) Approve or disapprove of the issuance of obligations of
the school district.
(f) Recommend to the governor, the legislature, and the
superintendent of public instruction that the school district be
reorganized with 1 or more contiguous school districts.
(g) Exercise solely, for and on behalf of the school district,
all other authority and responsibilities affecting the school
district that are prescribed by law to the school board and
superintendent of the school district.
Sec. 21. The emergency manager shall, on his or her own or
upon the advice of the local inspector if a local inspector has
been retained, make a determination as to whether possible criminal
conduct contributed to the financial situation resulting in the
local government's receivership status. If the emergency manager
determines that there is reason to believe that criminal conduct
has occurred, the manager shall refer the matter to the attorney
general and the local prosecuting attorney for investigation.
Sec. 22. (1) An emergency manager appointed under this act
shall file with the governor, the senate majority leader, and the
speaker of the house of representatives, and shall post on the
internet on the website of the local government, a report that
contains all of the following:
(a) A description of each expenditure made, approved, or
disapproved during the reporting period that has a cumulative value
of $10,000.00 or more and the source of the funds.
(b) A list of each contract that the emergency manager awarded
or approved with a cumulative value of $10,000.00 or more, the
purpose of the contract, and the identity of the contractor.
(c) A description of each loan sought, approved, or
disapproved during the reporting period that has a cumulative value
of $10,000.00 or more and the proposed use of the funds.
(d) A description of any new position created or any vacancy
in a permanent position filled by the appointing authority.
(e) A description of any position that has been eliminated or
from which an employee has been laid off.
(2) The report required under this section shall be submitted
every 6 months, beginning 6 months after the emergency manager's
appointment.
Sec. 23. (1) If, in the judgment of the emergency manager, no
reasonable alternative to rectifying the financial emergency of the
local government which is in receivership exists, then the
emergency manager may recommend to the governor and the state
treasurer that the local government be authorized to proceed under
title 11 of the United States Code, 11 USC 101 to 1532. If the
governor approves of the recommendation, the governor shall inform
the state treasurer and the emergency manager in writing of the
decision, with a copy to the superintendent of public instruction
if the local government is a school district. Upon receipt of the
written approval, the emergency manager is authorized to proceed
under title 11 of the United States Code, 11 USC 101 to 1532. This
section empowers the local government for which an emergency
manager has been appointed to become a debtor under title 11 of the
United States Code, 11 USC 101 to 1532, as required by section 109
of title 11 of the United States Code, 11 USC 109, and empowers the
emergency manager to act exclusively on the local government's
behalf in any such case under title 11 of the United States Code,
11 USC 101 to 1532.
(2) The recommendation to the governor and the state treasurer
under subsection (1) shall include 1 of the following:
(a) A determination by the emergency manager that no feasible
financial plan can be adopted that can satisfactorily rectify the
financial emergency of the local government in a timely manner.
(b) A determination by the emergency manager that a plan, in
effect for at least 180 days, cannot be implemented as written or
as it might be amended in a manner that can satisfactorily rectify
the financial emergency in a timely manner.
(3) The emergency manager shall provide a copy of the
recommendation as provided under subsection (1) to the
superintendent of public instruction if the local government is a
school district.
Sec. 24. A local government that is in receivership is
considered to be in a condition of financial emergency until the
emergency manager declares the financial emergency to be rectified
in his or her quarterly report to the state treasurer required
under section 15, and is subject to the written concurrence of the
state treasurer, and the concurrence of the superintendent of
public instruction if the local government is a school district.
The declaration shall not be made until the financial conditions
have been addressed and rectified.
Sec. 25. (1) An emergency manager is immune from liability as
provided in section 7(5) of 1964 PA 170, MCL 691.1407. A person
employed by an emergency manager is immune from liability as
provided in section 7(2) of 1964 PA 170, MCL 691.1407.
(2) The attorney general shall defend any civil claim, demand,
or lawsuit which 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.
(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) for attorneys, experts, court
filing fees, and other reasonable and necessary expenses shall be
at the expense of the local government that is subject to that
receivership and shall be reimbursed to the attorney general by the
local government. The failure of the local 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 local government from the attorney general of the
costs is a debt owed to this state and shall 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.
(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.
(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 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.
(6) The failure of the local 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 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.
Sec. 26. (1) Elected and appointed officials of a local
government shall promptly and fully provide the assistance and
information necessary and properly requested by the state financial
authority, a review team, or the emergency manager in the
effectuation of their duties and powers and of the purposes of this
act. If the review team or emergency manager believes that an
official or employee of the local government is not answering
questions accurately or completely or is not furnishing information
requested, the review team or emergency manager may issue subpoenas
and administer oaths to the official or employee to furnish answers
to questions or to furnish documents or records, or both. If the
official or employee refuses, the review team or emergency manager
may bring an action in the circuit court in which the local
government is located or Ingham county circuit court, as determined
by the emergency manager, to compel testimony and furnish records
and documents. An action in mandamus may be used to enforce this
section.
(2) Failure of a local government official to abide by this
act shall be considered gross neglect of duty, which the review
team or emergency manager may report to the state financial
authority and the attorney general. Following review and a hearing
with a local government elected official, the state financial
authority may recommend to the governor that the governor remove
the elected official from office. If the governor removes the
elected official from office, the resulting vacancy in office shall
be filled as prescribed by law.
(3) An elected chief administrative officer or member of the
governing body of a local government serving and in office at the
time the local government is placed in receivership is not eligible
to be a candidate for election to public office for that local
government for a period of 10 years from the date the local
government is placed in receivership.
(4) Subject to section 30(2), a local government placed in
receivership under this act is not subject to section 15 of 1947 PA
336, MCL 423.215, for a period of 5 years from the date the local
government is placed in receivership or until the time the
receivership is terminated, whichever occurs first.
Sec. 27. (1) Before the termination of receivership and the
completion of the emergency manager's term, the manager shall
approve collective bargaining agreements and adopt and implement a
2-year budget for the local government commencing with the
termination of receivership.
(2) After the completion of the emergency manager's term and
the termination of receivership, the governing body of the local
government shall not amend the collective bargaining agreement
approved under subsection (1) or the 2-year budget adopted under
subsection (1) without the approval of the state financial
authority, and shall not revise any ordinance implemented by the
emergency manager during his or her term prior to 1 year after the
termination of receivership.
Sec. 28. This act is not construed to give the emergency
manager or the state financial authority the power to impose taxes,
over and above those already authorized by law, without the
approval at an election of a majority of the qualified electors
voting on the question.
Sec. 29. The state financial authority is authorized and
directed to issue bulletins or adopt rules as necessary to carry
out the purposes of this act. A rule adopted under this section
shall be adopted in accordance with the administrative procedures
act of 1969, 1969 PA 306, MCL 24.201 to 24.328.
Sec. 30. (1) An emergency financial manager appointed and
serving under state law prior to the effective date of this act
shall continue under this act as an emergency manager for the local
government and shall fulfill his or her duties and responsibilities
and exercise all of the powers granted under former 1988 PA 101 or
former 1990 PA 72. Except as provided in subsection (2), the
provisions of this act shall apply to any local government for
which an emergency financial manager is appointed and serving as of
the effective date of this act.
(2) For a local government for which an emergency manager is
serving as of the effective date of this act, the provisions of
section 26(4) shall not become applicable until 60 days after the
effective date of this act.
Sec. 31. If any portion of this act or the application of this
act to any person or circumstances is found to be invalid by a
court, the invalidity shall not affect the remaining portions or
applications of the act which can be given effect without the
invalid portion or application. The provisions of this act are
severable.
Enacting section 1. The local government fiscal responsibility
act, 1990 PA 72, MCL 141.1201 to 141.1291, is repealed.
Enacting section 2. This act does not take effect unless all
of the following bills of the 96th Legislature are enacted into
law:
(a) Senate Bill No. 154.
(b) Senate Bill No. 155.
(c) Senate Bill No. 156.
(d) Senate Bill No. 157.
(e) Senate Bill No. 158.
