HB-4704, As Passed House, November 6, 2013HB-4704, As Passed Senate, October 31, 2013

SENATE SUBSTITUTE FOR

HOUSE BILL NO. 4704

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 county mandated by law at a serviceable level.

(9) An elected official who heads a branch of county

government or the chief judge of a court funded by a county has

standing to bring a suit against the legislative body of that

county concerning a general appropriations act, including any

challenge as to serviceable levels of funding for that branch of

county government or that court. If a court and the legislative

body of a county are involved in mediation, before the chief judge

of that court brings a suit on the court's own behalf against the

legislative body of the county under this subsection, a mediator

shall certify in writing that the parties are unable to resolve the

issues by mediation. The court hearing a suit shall consider the

financial ability of the county 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, including, but not limited to,

the charter responsibility of a legislative body to approve the

making of contracts by the local unit.

(5) The enforcement of a general appropriations act approved

by the legislative body of a county is a power vested in the chief

administrative officer of that county.

(6) An elected official who heads a branch of county

government or the chief judge of a court funded by a county has

standing to bring suit against the chief administrative officer of

that county concerning an action relating to the enforcement of a

general appropriations act for that branch of county government or

that court. If a court and the chief administrative officer of a

county are involved in mediation, before the chief judge of that

court brings a suit on the court's own behalf against the chief

administrative officer of the county under this subsection, a

mediator shall certify in writing that the parties are unable to

resolve the issues by mediation.

(7) Except as otherwise provided in subsection (8) and

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 60 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 enforcement of that general appropriations act, if

the amendment or action constitutes a basis for the suit.

(8) If a court is involved in mediation under subsection (6)

or section 16(9) during the 60-day period to bring a suit in the

Michigan court of appeals provided for in subsection (7), any suit

brought on the court's behalf under subsection (6) or section 16(9)

shall only be brought in the Michigan court of appeals within 90

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 enforcement of that general appropriations act, if

the amendment or action constitutes a basis for the suit.

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

raised in a suit brought under subsection (7)(b) or (8)(b) is

limited to that portion of the general appropriations act that is

directly affected by the amendment or action.

(10) The jurisdiction of the court of appeals over a suit

brought under subsection (6) or section 16(9) is exclusive and that

jurisdiction or any judicial duties inherent in that jurisdiction

shall not be transferred to any other court. However, the court of

appeals may request the supreme court to assign a retired judge

under section 226 of the revised judicature act of 1961, 1961 PA

236, MCL 600.226, to assist the court of appeals by resolving

discovery issues, reviewing the evidence, making proposed findings

of fact and conclusions of law, and performing any other necessary

related judicial duties.

(11) Unless an action brought under subsection (7) or (8) 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 enforcement of that general appropriations act, is barred.

(12) 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 county in excess

of that authorized by a general appropriations act, including an

amendment to that general appropriations act.

(13) 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