HOUSE BILL No. 5076

 

October 13, 2011, Introduced by Reps. Pettalia, Bumstead and Wayne Schmidt and referred to the Committee on Judiciary.

 

     A bill to amend 1968 PA 2, entitled

 

"Uniform budgeting and accounting act,"

 

by amending sections 16 and 18 (MCL 141.436 and 141.438), as

 

amended by 2000 PA 493.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 16. (1) Unless another method for adopting a budget is

 

provided by a charter provision in effect on April 1, 1980, the

 

legislative body of each local unit shall pass a general

 

appropriations act for all funds except trust or agency, internal

 

service, enterprise, debt service or capital project funds for

 

which the legislative body may pass a special appropriation act.

 

     (2) The general appropriations act shall set forth the total

 

number of mills of ad valorem property taxes to be levied and the

 

purposes for which that millage is to be levied. The amendatory act

 

that added this subsection shall be known and may be cited as "the


 

truth in budgeting act".

 

     (3) The general appropriations act shall set forth the amounts

 

appropriated by the legislative body to defray the expenditures and

 

meet the liabilities of the local unit for the ensuing fiscal year,

 

and shall set forth a statement of estimated revenues, by source,

 

in each fund for the ensuing fiscal year.

 

     (4) The general appropriations act shall be consistent with

 

uniform charts of accounts prescribed by the state treasurer or,

 

for local school districts and intermediate school districts, by

 

the state board of education.

 

     (5) This act shall not be interpreted to mandate the

 

development or adoption by a local unit of a line-item budget or

 

line-item general appropriations act.

 

     (6) The legislative body shall determine the amount of money

 

to be raised by taxation necessary to defray the expenditures and

 

meet the liabilities of the local unit for the ensuing fiscal year,

 

shall order that money to be raised by taxation, within statutory

 

and charter limitations, and shall cause the money raised by

 

taxation to be paid into the funds of the local unit.

 

     (7) Except as otherwise permitted by section 102 of the state

 

school aid act of 1979, 1979 PA 94, MCL 388.1702, or by other law,

 

the legislative body shall not adopt a general appropriations act

 

or an amendment to that act which causes estimated total

 

expenditures, including an accrued deficit, to exceed total

 

estimated revenues, including an available surplus and the proceeds

 

from bonds or other obligations issued under the fiscal

 

stabilization act, 1981 PA 80, MCL 141.1001 to 141.1011, or the


 

balance of the principal of these bonds or other obligations.

 

     (8) A general appropriations act, including any amendment to

 

that general appropriations act, is presumed to fund those

 

activities of a local unit mandated by law at a serviceable level.

 

     (9) Except as otherwise provided in this subsection, the chief

 

administrative officer of a local unit has exclusive standing to

 

bring suit against the legislative body of that local unit

 

concerning a general appropriations act, including any challenge as

 

to serviceable levels of funding for any department or branch of

 

that local unit, including a department or branch headed by another

 

elected or appointed official. A court funded by a local unit has

 

standing to bring a suit on its own behalf against the legislative

 

body of that local unit concerning a general appropriations act,

 

including any challenge as to serviceable levels of funding for

 

that court. The court hearing a suit shall consider the financial

 

ability of the local unit to pay when considering any challenge as

 

to serviceable levels of funding.

 

     (10) If any portion of this section or the application of this

 

section to any circumstance is found to be invalid by a court, the

 

invalidity shall not affect the remaining portions or application

 

of this section that can be given effect without the invalid

 

portion or application. The provisions of this section are

 

severable.

 

     Sec. 18. (1) A member of the legislative body, chief

 

administrative officer, administrative officer, or employee of the

 

local unit shall not create a debt or incur a financial obligation

 

on behalf of the local unit unless the debt or obligation is


 

permitted by law.

 

     (2) The chief administrative officer may cause the

 

appropriations made by the legislative body for the local unit and

 

its budgetary centers to be divided into allotments if the

 

allotments are based upon the periodic requirements of the local

 

unit and its budgetary centers.

 

     (3) Except as otherwise provided in section 19, an

 

administrative officer of the local unit shall not incur

 

expenditures against an appropriation account in excess of the

 

amount appropriated by the legislative body. The chief

 

administrative officer, an administrative officer, or an employee

 

of the local unit shall not apply or divert money of the local unit

 

for purposes inconsistent with those specified in the

 

appropriations of the legislative body.

 

     (4) No duties shall be delegated to the chief administrative

 

officer that diminish any charter or statutory responsibilities of

 

an elected or appointed official.

 

     (5) The administration, execution, and enforcement of a

 

general appropriations act approved by the legislative body of a

 

local unit are powers exclusively vested in the chief

 

administrative officer of that local unit.

 

     (6) Except as otherwise provided in this subsection, the

 

legislative body of a local unit has exclusive standing to bring

 

suit against the chief administrative officer of that local unit

 

concerning an action relating to the administration, execution, and

 

enforcement of a general appropriations act for any department or

 

branch of that local unit, including a department or branch headed


 

by another elected or appointed official. A court funded by a local

 

unit has standing to bring suit on its own behalf against the chief

 

administrative officer of that local unit concerning an action

 

relating to the administration, execution, and enforcement of a

 

general appropriations act for that court.

 

     (7) Notwithstanding any provision of law to the contrary, any

 

suit brought under subsection (6) or section 16(9) shall only be

 

brought in the Michigan court of appeals within 30 days after 1 of

 

the following:

 

     (a) The adoption of a general appropriations act.

 

     (b) An amendment to a general appropriations act or an action

 

relating to the administration, execution, and enforcement of that

 

general appropriations act, if the amendment or action constitutes

 

a basis for the suit.

 

     (8) The court's jurisdiction over and review of the issues

 

raised in a suit brought under subsection (7)(b) is limited to that

 

portion of the general appropriations act that is directly affected

 

by the amendment or action.

 

     (9) Unless an action brought under subsection (7) is timely

 

preserved for review by the Michigan court of appeals, litigation

 

of any issue as to a general appropriations act or any amendment to

 

that general appropriations act, or an action relating to the

 

administration, execution, and enforcement of that general

 

appropriations act, is barred.

 

     (10) The pendency of a claim in a suit under this section

 

shall not constitute a basis for expenditure of funds by any

 

department or branch of, or court funded by, the local unit in


 

excess of that authorized by a general appropriations act,

 

including an amendment to that general appropriations act.

 

     (11) If any portion of this section or the application of this

 

section to any circumstance is found to be invalid by a court, the

 

invalidity shall not affect the remaining portions or application

 

of this section that can be given effect without the invalid

 

portion or application. The provisions of this section are

 

severable.