SB-0865, As Passed Senate, December 15, 2011

SUBSTITUTE FOR

SENATE BILL NO. 865

     A bill to provide for the removal of a local government from

receivership; to provide for a receivership transition advisory

board; and to prescribe the powers and duties of the governor,

other state departments and officials, and officials and employees

of units of local government, including school districts.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 1. As used in this act:

     (a) "Emergency manager" means that term as defined in section

5(b) of the local government and school district fiscal

accountability act, 2011 PA 4, MCL 141.1505.

     (b) "Local government" means that term as defined in section

5(e) of the local government and school district fiscal

Senate Bill No. 865 as amended December 15, 2011

accountability act, 2011 PA 4, MCL 141.1505.

     Sec. 3. (1) If an emergency manager determines that the

financial emergency that he or she was appointed to manage has been

rectified, the emergency manager shall inform the governor <<and the

state treasurer>>.

     (2) If the governor disagrees with the emergency manager's

determination that the financial emergency has been rectified, the

governor shall inform the emergency manager and the term of the

emergency manager shall continue or the governor shall appoint a

new emergency manager as provided under section 15(8) of the local

government and school district fiscal accountability act, 2011 PA

4, MCL 141.1515.

     (3) If the governor agrees that the financial emergency has

been rectified, the emergency manager has adopted a 2-year budget

as required under section 27 of the local government and school

district fiscal accountability act, 2011 PA 4, MCL 141.1527, and

the financial conditions of the local government have been

corrected in a sustainable fashion as required under section 15(9)

of the local government and school district fiscal accountability

act, 2011 PA 4, MCL 141.1515, the governor may do either of the

following:

     (a) Remove the local government from receivership.

     (b) Appoint a receivership transition advisory board as

provided in section 5.

     Sec. 5. (1) Before removing a local government from

receivership, the governor may appoint a receivership transition

advisory board to monitor the affairs of the local government until

the receivership is terminated.

     (2) A receivership transition advisory board shall consist of

the state treasurer or his or her designee, the director of the

department of technology, management, and budget or his or her

designee, and, if the local government is a school district, the

superintendent of public instruction or his or her designee. The

governor also may appoint to a receivership transition advisory

board 1 or more other individuals with relevant professional

experience, including 1 or more residents of the local government.

     (3) A receivership transition advisory board serves at the

pleasure of the governor.

     (4) At its first meeting, a receivership transition advisory

board shall adopt rules of procedure to govern its conduct,

meetings, and periodic reporting to the governor. Procedural rules

required by this section are not subject to the administrative

procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328.

     (5) A receivership transition advisory board may do all of the

following:

     (a) Require the local government to annually convene a

consensus revenue estimating conference for the purpose of arriving

at a consensus estimate of revenues to be available for the ensuing

fiscal year of the local government.

     (b) Require the local government to provide monthly cash flow

projections and a comparison of budgeted revenues and expenditures

to actual revenues and expenditures.

     (c) Review proposed and amended budgets of the local

government. A proposed budget or budget amendment shall not take

effect unless approved by the receivership transition advisory

board.

     (d) Review requests by the local government to issue debt

under 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.

     (e) Review proposed collective bargaining agreements

negotiated under section 15(1) of 1947 PA 336, MCL 423.215. A

proposed collective bargaining agreement shall not take effect

unless approved by the receivership transition advisory board.

     (f) Review compliance by the local government with a deficit

elimination plan submitted under section 21 of the Glenn Steil

state revenue sharing act of 1971, 1971 PA 140, MCL 141.921.

     (g) Review proposed judgment levies before submission to a

court under section 6093 or 6094 of the revised judicature act of

1961, 1961 PA 236, MCL 600.6093 and 600.6094.

     (h) Perform any other duties assigned by the governor at the

time the receivership transition advisory board is appointed.

     Sec. 7. The governor may, upon his or her own initiative or

after receiving a recommendation from a receivership transition

advisory board, determine that the financial conditions of a local

government have not been corrected in a sustainable fashion as

required under section 15(9) of the local government and school

district fiscal accountability act, 2011 PA 4, MCL 141.1515, and

appoint a new emergency manager as provided under section 15(8) of

the local government and school district fiscal accountability act,

2011 PA 4, MCL 141.1515.