HB-5421, As Passed Senate, December 14, 2016

SENATE SUBSTITUTE FOR

HOUSE BILL NO. 5421

     A bill to amend 1999 PA 149, entitled

"Public employee health care fund investment act,"

by amending section 2 (MCL 38.1212) and by adding sections 4a and

4b.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 2. As used in this act:

     (a) "Bankruptcy trust" means a trust created by a court order,

including a plan for adjustment.

     (b) "Bankruptcy trust beneficiary" means an individual who is

eligible to receive health care benefits under a bankruptcy trust.

     (c) "Board of trustees" or "board" means the governing board

of a bankruptcy trust.

(d) (a) "Fund" means a public employee health care fund

created pursuant to under this act or a court order, including a

plan for adjustment, and used for the accumulation and investment

of funds for the purpose of funding health care for retired

employees of the public corporation.

(e) (b) "Investment fiduciary" means a person or persons who

do does any of the following:

     (i) Exercises any discretionary authority or control in the

investment of the fund's or trust's assets.

     (ii) Renders investment advice to a fund or trust for a fee or

other direct or indirect compensation.

     (f) "Plan for adjustment" means a plan for the adjustment of

debts entered and approved by a federal bankruptcy court for a

public corporation.

(g) (c) "Public corporation" means any a county, city,

village, township, authority, district, board, or commission in

this state.

(h) (d) "Qualified person" means a person or group of persons

an individual who are is eligible to receive health care benefits

and who are is designated as a qualified person by the public

corporation.

(i) (e) "Trust" means a trust created under the authority of a

state or federal law for the purpose of funding retiree health care

benefits.

     Sec. 4a. (1) A trustee of a bankruptcy trust serves at the

pleasure of the appointing authority. The appointing authority may,

after providing 30 days' notice to a trustee, remove the trustee

without cause. The appointing authority may immediately remove a

trustee for incompetence, dereliction of duty, malfeasance,

misfeasance, or nonfeasance in office, or any other good cause.

     (2) The board of trustees, by a vote of 2/3 of the voting

members serving, may, after providing 30 days' notice to a trustee,

request that the appointing authority remove the trustee if the

board determines that allowing the trustee to serve could cause

loss of confidence in the administration of the bankruptcy trust

and that removing the trustee is in the best interest of the

bankruptcy trust beneficiaries. The board, by a majority vote of

the voting members serving, may recommend that the appointing

authority immediately remove a trustee for incompetence,

dereliction of duty, malfeasance, misfeasance, or nonfeasance in

office, or any other good cause.

     (3) If there is a vacancy on the board of trustees, the

vacancy must be filled in a manner provided by the court or the

plan for adjustment.

     (4) The board of trustees shall meet at least quarterly.

     (5) The business that the board of trustees may perform shall

be conducted at a public meeting of the board held in compliance

with the open meetings act, 1976 PA 267, MCL 15.261 to 15.275.

     (6) A writing prepared, owned, used, in the possession of, or

retained by the board of trustees in the performance of an official

function is subject to the freedom of information act, 1976 PA 442,

MCL 15.231 to 15.246.

     (7) The board of trustees shall prepare and publish on a

public website a summary annual report that includes the bankruptcy

trust's administrative expenditures and expenditures related to a

member of the board attending educational conferences that are paid

by the bankruptcy trust, if any.

     (8) As used in this section, "appointing authority" is the

authority identified by the court or the plan for adjustment.

     Sec. 4b. Subject to a plan for adjustment, if a bankruptcy

trust provides for the compensation of the members of the board of

trustees, a member of the board may decline compensation from the

bankruptcy trust.

     Enacting section 1. It is the intent of the legislature that a

bankruptcy trust as defined in the amendatory act that added

section 4a to the public employee health care fund investment act,

1999 PA 149, MCL 38.1211 to 38.1216, must provide for the removal

and reappointment of members of the board of trustees, and the

legislature finds and declares that providing that removal and

appointment is necessary to the efficient operation and

administration of the bankruptcy trust for the benefit of

bankruptcy trust beneficiaries.

     Enacting section 2. If there is a conflict between the public

employee health care fund investment act, 1999 PA 149, MCL 38.1211

to 38.1216, and a plan for adjustment as defined in the amendatory

act that added section 4a to the public employee health care fund

investment act, 1999 PA 149, MCL 38.1211 to 38.1216, the plan for

adjustment must control.