Bill Text: MI SB0561 | 2013-2014 | 97th Legislature | Introduced
Bill Title: Counties; employees and officers; powers and duties of county treasurers; retain if an emergency manager is appointed for the county. Amends secs. 10, 12 & 27 of 2012 PA 436 (MCL 141.1550 et seq.) & adds sec. 10a.
Spectrum: Moderate Partisan Bill (Republican 5-1)
Status: (Introduced - Dead) 2013-10-01 - Referred To Committee On Local Government And Elections [SB0561 Detail]
Download: Michigan-2013-SB0561-Introduced.html
SENATE BILL No. 561
October 1, 2013, Introduced by Senators BRANDENBURG, GREGORY, ROBERTSON, PROOS, SCHUITMAKER and JONES and referred to the Committee on Local Government and Elections.
A bill to amend 2012 PA 436, entitled
"Local financial stability and choice act,"
by amending sections 10, 12, and 27 (MCL 141.1550, 141.1552, and
141.1567) and by adding section 10a.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 10. (1) An emergency manager shall issue to the
appropriate local elected and appointed officials and employees,
agents, and contractors of the local government the orders the
emergency 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,
including an educational 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 elected and appointed
officials and employees, agents, and contractors of the local
government to whom it is issued. Local elected and appointed
officials and employees, agents, and contractors of the local
government shall take and direct those actions that are necessary
and advisable to maintain compliance with the financial and
operating plan.
(2) If an order of the emergency manager under subsection (1)
is not 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 local elected or appointed
official or employee, agent, or contractor of the local government
from access to the local government's office facilities, electronic
mail, and internal information systems.
(3) This section is subject to section 10a.
Sec. 10a. If an emergency manager is appointed for a county,
the county treasurer of that county retains all of his or her
powers and duties as provided by law, including, but not limited
to, all of the powers and duties provided under the following:
(a) Sections 35 to 48 of 1846 RS 14, MCL 48.35 to 48.48.
(b) The general property tax act, 1893 PA 206, MCL 211.1 to
211.155.
Sec. 12. (1) An emergency manager may take 1 or more of the
following additional actions with respect to a local government
that is in receivership, notwithstanding any charter provision 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 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.
(k) Subject to section 19, 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 treasurer
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.
(l) Act as sole agent of the local government in collective
bargaining with employees or representatives and approve any
contract or agreement.
(m) If a municipal government's pension fund is not
actuarially funded at a level of 80% or more, according to the most
recent governmental accounting standards board's applicable
standards, at the time the most recent comprehensive annual
financial report for the municipal government or its pension fund
was due, the emergency manager may remove 1 or more of the serving
trustees of the local pension board or, if the state treasurer
appoints the emergency manager as the sole trustee of the local
pension board, replace all the serving trustees of the local
pension board. For the purpose of determining the pension fund
level under this subdivision, the valuation shall exclude the net
value of pension bonds or evidence of indebtedness. The annual
actuarial valuation for the municipal government's pension fund
shall use the actuarial accrued liabilities and the actuarial value
of assets. If a pension fund uses the aggregate actuarial cost
method or a method involving a frozen accrued liability, the
retirement system actuary shall use the entry age normal actuarial
cost method. If the emergency manager serves as sole trustee of the
local pension board, all of the following apply:
(i) The emergency manager shall assume and exercise the
authority and fiduciary responsibilities of the local pension board
including, to the extent applicable, setting and approval of all
actuarial assumptions for pension obligations of a municipal
government to the local pension fund.
(ii) The emergency manager shall fully comply with the public
employee retirement system investment act, 1965 PA 314, MCL 38.1132
to
38.1140m, 38.1141, and section 24 of article IX of the state
constitution of 1963, and any actions taken shall be consistent
with the pension fund's qualified plan status under the federal
internal revenue code.
(iii) The emergency manager shall not make changes to a local
pension fund without identifying the changes and the costs and
benefits associated with the changes and receiving the state
treasurer's approval for the changes. If a change includes the
transfer of funds from 1 pension fund to another pension fund, the
valuation of the pension fund receiving the transfer must be
actuarially funded at a level of 80% or more, according to the most
recent governmental accounting standards board's applicable
standards, at the time the most recent comprehensive annual
financial report for the municipal government was due.
(iv) The emergency manager's assumption and exercise of the
authority and fiduciary responsibilities of the local pension board
shall end not later than the termination of the receivership of the
municipal government as provided in this act.
(n) 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.
(o) 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.
(p) Retain 1 or more persons or firms, which may be an
individual or firm selected from a list approved by the state
treasurer, 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 assure 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, the superintendent of
public instruction if the local government is a school district,
and each state senator and state representative who represents that
local government. The annual report of the local inspector shall be
posted on the local government's website within 7 days after the
report is submitted. The duties of a local auditor are to assure
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, assure
that local government operations are effective and efficient,
assure that financial information is accurate, reliable, and
timely, comply with policies, regulations, and applicable laws, and
assure assets are properly managed. At least annually, a report of
the local auditor shall be submitted to the emergency manager, the
state treasurer, the superintendent of public instruction if the
local government is a school district, and each state senator and
state representative who represents that local government. The
annual report of the local auditor shall be posted on the local
government's website within 7 days after the report is submitted.
(q) An emergency manager may initiate court proceedings in the
Michigan court of claims or in the circuit court of the county in
which the local government is located in the name of the local
government to enforce compliance with any of his or her orders or
any constitutional or legislative mandates, or to restrain
violations of any constitutional or legislative power or his or her
orders.
(r) Subject to section 19, if provided in the financial and
operating plan, or otherwise with the prior written approval of the
governor or his or her designee, sell, lease, convey, assign, or
otherwise use or transfer the assets, liabilities, functions, or
responsibilities of the local government, provided the use or
transfer of assets, liabilities, functions, or responsibilities for
this purpose does not endanger the health, safety, or welfare of
residents of the local government or unconstitutionally impair a
bond, note, security, or uncontested legal obligation of the local
government.
(s) 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.
(t) 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.
(u) Subject to section 19, authorize the borrowing of money by
the local government as provided by law.
(v) Approve or disapprove of the issuance of obligations of
the local government on behalf of the local government under this
subdivision. An election to approve or disapprove of the issuance
of obligations of the local government pursuant to this subdivision
shall only be held at the general November election.
(w) Enter into agreements with creditors or other persons or
entities for the payment of existing debts, including the
settlement of claims by the creditors.
(x) Enter into agreements with creditors or other persons or
entities 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.
(y) Enter into agreements with other local governments, public
bodies, or entities for the provision of services, the joint
exercise of powers, or the transfer of functions and
responsibilities.
(z) For municipal governments, enter into agreements with
other units of municipal 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 local
governments or public bodies for the consolidation of services.
(bb) 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. Consolidation
under this subdivision shall proceed as provided by law.
(cc) For municipal governments, with approval of the governor,
disincorporate or dissolve the municipal government and assign its
assets, debts, and liabilities as provided by law. The
disincorporation or dissolution of the local government is subject
to a vote of the electors of that local government if required by
law.
(dd) 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.
(ix) The state school aid act of 1979, 1979 PA 94, MCL 388.1601
to 388.1896.
(ee)
Take Subject to section
10a, 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 Subject
to section 10a, the power of
the emergency manager shall be superior to and supersede the power
of any of the foregoing officers or entities.
(ff) Remove, replace, appoint, or confirm the appointments to
any office, board, commission, authority, or other entity which is
within or 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, charter, and ordinance
shall be suspended and vested in the emergency manager.
(3) Except as otherwise provided in this subsection, any
contract involving a cumulative value of $50,000.00 or more is
subject to competitive bidding by an emergency manager. However, if
a potential contract involves a cumulative value of $50,000.00 or
more, the emergency manager may submit the potential contract to
the state treasurer for review and the state treasurer may
authorize that the potential contract is not subject to competitive
bidding.
(4) An emergency manager appointed for a city or village shall
not sell or transfer a public utility furnishing light, heat, or
power without the approval of a majority of the electors of the
city or village voting thereon, or a greater number if the city or
village charter provides, as required by section 25 of article VII
of the state constitution of 1963. In addition, an emergency
manager appointed for a city or village shall not utilize the
assets of a public utility furnishing heat, light, or power, the
finances of which are separately maintained and accounted for by
the city or village, to satisfy the general obligations of the city
or village.
Sec. 27. (1) The local elected and appointed officials and
employees, agents, and contractors 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 a local elected or appointed
official or employee, agent, or contractor 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 local
elected or appointed official or employee, agent, or contractor to
furnish answers to questions or to furnish documents or records, or
both. If the local elected or appointed official or employee,
agent, or contractor refuses, the review team or emergency manager
may bring an action in the circuit court in which the local
government is located or the Michigan court of claims, as
determined by the review team or 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) A local government placed in receivership under this act
is not subject to section 15(1) 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.
(4) Subsections (1) and (2) are subject to section 10a.
