March 2, 2016, Introduced by Reps. Cox, Tedder, LaVoy, Lane, McCready, Bumstead, Lauwers, Leutheuser, Singh, Chirkun and Poleski and referred to the Committee on Financial Liability Reform.
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, 4b,
and 4c.
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) "Independent professional trustee" means a person that has
expert knowledge, extensive experience, or both, with respect to
economics, finance, institutional investments, administration of
public or private health and welfare benefit plans, executive
management, benefits administration, or actuarial science. An
independent professional trustee does not include any of the
following:
(i) A bankruptcy trust beneficiary.
(ii) A current or former employee of the public corporation
that was responsible for funding the bankruptcy trust.
(iii) An employee of an affiliate of the public corporation.
(f) (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.
(g) "Nonindependent trustee" means a bankruptcy trust
beneficiary or a current or former employee of the public
corporation that was responsible for funding the bankruptcy trust.
(h) "Plan for adjustment" means a plan for the adjustment of
debts entered and approved by a federal bankruptcy court for a
public corporation.
(i) (c)
"Public corporation"
means any a county, city,
village, township, authority, district, board, or commission in
this state.
(j) (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.
(k) (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. As
used in this subsection, "appointing authority" is the authority
identified by the court or the plan for adjustment.
(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,
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 vote of 2/3 of the voting members
serving, may 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 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. The board of trustees shall send a copy of the
summary annual report by first-class mail to each bankruptcy trust
beneficiary at the bankruptcy trust beneficiary's last known
address.
Sec. 4b. (1) Subject to a plan for adjustment and section 4c,
if a bankruptcy trust provides for the compensation of the members
of the board of trustees, all of the following apply:
(a) A member of the board may be compensated only for
attending a meeting of the board in person. However, by a vote of
2/3 of the voting members serving, a member may be compensated for
attending a meeting telephonically.
(b) The compensation of a member of the board must not exceed
the cap imposed under a court order, including a plan for
adjustment, if any.
(c) For a member who is a nonindependent trustee, the
compensation must be reasonable for the services rendered in the
performance of his or her duties.
(d) Subject to the cap described in subdivision (b), the per-
meeting stipend of a member of the board other than a nonvoting ex
officio member must be calculated based on an hourly rate not to
exceed $25.00 per hour. For the first 2 years after the
establishment of a bankruptcy trust, a member shall not receive
more than 45 hours of compensation in any 1 month. Beginning 2
years after the establishment of the bankruptcy trust, a member who
is a bankruptcy trust beneficiary must not receive more than 24
hours of compensation in any 1 month. Subject to the cap described
in subdivision (b), by a vote of 2/3 of the voting members serving,
and subject to the vote of bankruptcy trust beneficiaries described
in section 4c, the board may increase the per-meeting stipend.
(e) Subject to the cap described in subdivision (b), if the
public corporation that was responsible for funding the bankruptcy
trust sponsors a retirement system, a bankruptcy trust beneficiary
is also a member of the retirement system, the retirement system's
governing board includes an elected retirant of the retirement
system, and the retirement system compensates its board members as
provided in section 8a(3) of the public employee retirement benefit
protection act, 2002 PA 100, MCL 38.1688a, the bankruptcy trust
shall compensate the bankruptcy trust beneficiary at no less than
the compensation given to the elected retirant.
(f) For a nonvoting ex officio member, the per-meeting stipend
must be calculated based on an hourly rate. The hourly rate must be
50% of the hourly rate paid described in subdivision (d).
(g) Subject to the cap described in subdivision (b), by a vote
of 2/3 of the voting members serving, an independent professional
trustee may be paid an annual retainer fee payable in equal monthly
installments.
(h) Subject to a court order, including a plan for adjustment,
by a majority vote of voting members serving, the board of trustees
may lower or eliminate the compensation of members of the board.
(i) A member of the board may decline compensation from the
bankruptcy trust.
(j) A member of the board who is a bankruptcy trust
beneficiary and who is employed full-time by the public corporation
that was responsible for funding the bankruptcy trust or by an
employee organization whose members are bankruptcy trust
beneficiaries shall serve without compensation.
(2) A member of the board of trustees may be reimbursed for
his or her actual and necessary expenses incurred in the
performance of his or her official duties while attending a meeting
of the board. The board, by a vote of 2/3 of the voting members
serving, may reimburse a member for the costs related to attending
an educational conference if the board determines the conference is
necessary.
Sec. 4c. (1) In addition to the method of removing a member of
the board of trustees as provided in section 4a, the removal of a
member of the board may be initiated by either of the following
methods:
(a) A petition signed by not less than 20% of the bankruptcy
trust beneficiaries.
(b) A proposal by an organization, including, but not limited
to, a union, that represents not less than 50% of the bankruptcy
trust beneficiaries.
(2) The compensation of members of the board of trustees as
provided in section 4b may be changed by either of the methods
described in subsection (1).
(3) A petition or proposal, as applicable, under subsection
(1) or (2) must be filed with the board of the retirement system
that administers the pension benefits of the bankruptcy trust
beneficiaries. The retirement system shall submit the ballot
question proposing the removal of a member of the board of trustees
or changing the compensation paid to members of the board of
trustees to the bankruptcy trust beneficiaries not less than 60
days after the filing of the petition or proposal, as applicable.
(4) If a majority of the voting bankruptcy trust beneficiaries
approve the ballot proposal described in subsection (3), the board
of trustees shall implement the ballot proposal within 14 days
after the election.
(5) The bankruptcy trust beneficiaries or organization that
filed a petition or proposal, as applicable, under subsection (3)
shall pay the costs of conducting an election under this section.
If the ballot proposal is approved under subsection (4), the
individuals or organization may be reimbursed for the cost of
conducting the election from the bankruptcy trust.