SENATE BILL NO. 539


   April 27, 1999, Introduced by Senators BULLARD, STEIL, 
        HAMMERSTROM, JOHNSON, BENNETT, DUNASKISS, MC COTTER and 
        STILLE and referred to the Committee on Local, Urban and 
        State Affairs.



        A bill to amend 1846 RS 16, entitled

   "Of the powers and duties of townships, the election and duties
   of township officers, and the division of townships,"

   by amending section 110b (MCL 41.110b), as added by 1989 PA 77.

               THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 1         Sec. 110b.  (1) A township may do all of the following:

 2         (a) Establish a retirement system for its employees and pro-

 3    vide for financing, funding, and the payment of benefits in the

 4    same manner and to the same extent as permitted counties under

 5    section 12a of  Act No. 156 of the Public Acts of 1851,
             being

 6     section 46.12a of the Michigan Compiled Laws  1851
                       PA 156, MCL

 7    46.12A, or make contracts of insurance with an insurance company

 8    authorized to transact business within  the  THIS
             state.

 9         (b) Make arrangements with a prepayment plan authorized to

10    transact business within the state, insuring and covering its



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 1    elected or appointed officers and employees or any classes of

 2    elected or appointed officers and employees under policies of

 3    group insurance or prepayment plan contracts, or both, covering

 4    life, accident, health, hospitalization, and medical and surgical

 5    service and expense insurance, including hospitalization and med-

 6    ical and surgical service and expense for dependents of the offi-

 7    cers and employees.

 8         (C) ESTABLISH A CAFETERIA PLAN AUTHORIZED UNDER SECTION 125

 9    OF THE INTERNAL REVENUE CODE OF 1986 FOR ITS ELECTED OR APPOINTED

10    OFFICERS AND EMPLOYEES, ANY CLASSES OF ELECTED OR APPOINTED OFFI-

11    CERS AND EMPLOYEES, AND DEPENDENTS OF THE OFFICERS AND

12    EMPLOYEES.  AS USED IN THIS SUBDIVISION, "CAFETERIA PLAN" MEANS

13    THAT TERM AS DEFINED IN SECTION 125 OF THE INTERNAL REVENUE CODE

14    OF 1986.

15         (D)  (c)  Contract with a company that grants
             annuities or

16    pensions for the pensioning of the officers and employees and for

17    these purposes pay any part of the premiums or charges for insur-

18    ance, prepayment plan coverage, annuities, or pensions.

19         (2) Notwithstanding any other provision of law, the proper

20    disbursing officer of the township may deduct from an officer's

21    or employee's pay, salary, or compensation that part of the pre-

22    mium or charge  as  THAT is payable by the officer
             or employee.

23         (3) A contract of insurance or arrangement for prepayment

24    plan coverage procured  pursuant to  UNDER this
             section may pro-

25    vide that each elected or appointed officer or employee becoming

26    eligible for insurance or coverage becomes insured or covered

27    automatically when he or she becomes eligible, subject to any



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 1    actively-at-work requirements specified in the contract or

 2    arrangement.  If the insurance or coverage under the contract or

 3    arrangement requires contributions from the individual, any indi-

 4    vidual desiring not to be  so  insured or covered
             UNDER THE CON-

 5    TRACT OR ARRANGEMENT shall give written notice to his or her

 6    employing office that he or she desires not to be insured or cov-

 7    ered, and if the notice is received before the individual has

 8    become insured or covered under the contract or arrangement, he

 9    or she shall not be insured or covered.  If the notice is

10    received after the individual has become insured or covered, his

11    or her insurance or coverage under the contract or arrangement

12    shall cease as provided for in the contract or arrangement.

13         (4) This section does not affect the validity of a retire-

14    ment program or contract of group insurance or arrangement for

15    prepayment plan coverage entered into by the township before
              the

16     effective date of the amendatory act that added this section
                       

17    JUNE 20, 1989.

18         (5) The authority given under this section is in addition to

19    and not in derogation of any power existing in the township under

20    the laws of this state.  A township may exercise the powers

21    granted under this section by ordinance without THE necessity of

22    amending its charter.













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