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HOUSE BILL No. 4176
HOUSE BILL No. 4176HOUSE BILL No. 4176
February 1, 2011, Introduced by Rep. Nathan and referred to the Committee on Local,
Intergovernmental, and Regional Affairs.
A bill to amend 1990 PA 72, entitled
"Local government fiscal responsibility act,"
by amending section 40 (MCL 141.1240).
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 40. (1) In consultation
1 with the school board, the2
emergency financial manager shall develop, and may from time to3
time amend, a written financial plan for the school district. The4
financial plan shall provide for both of the following:5
(a) Conducting the operations of the school district within6
the resources available according to the emergency financial7
manager's revenue estimate.8
(b) The payment in full of the scheduled debt service9
requirements on all bonds and notes of the school district and all10
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other uncontested legal obligations.(2) FOR A WRITTEN FINANCIAL 1 PLAN DEVELOPED OR AMENDED AFTER
2 THE EFFECTIVE DATE OF THIS SECTION, THE WRITTEN FINANCIAL PLAN
3 SHALL INCLUDE A SCHOOL DISTRICT IMPROVEMENT PLAN FOR THE SCHOOL
4 DISTRICT AND A BUDGET FOR IMPLEMENTATION OF THE SCHOOL DISTRICT
5 IMPROVEMENT PLAN. ALL OF THE FOLLOWING APPLY TO THE DEVELOPMENT AND
6 IMPLEMENTATION OF THE SCHOOL DISTRICT IMPROVEMENT PLAN:
7 (A) THE BOARD OF THE SCHOOL DISTRICT SHALL DEVELOP THE SCHOOL
8 DISTRICT IMPROVEMENT PLAN, AND A PROPOSED BUDGET FOR IMPLEMENTATION
9 OF THE PLAN, WITH INPUT FROM THE LOCAL TEACHER BARGAINING UNIT AND
10 THE LOCAL SUPERINTENDENT.
11 (B) THE INTERMEDIATE SCHOOL DISTRICT SHALL PROVIDE TECHNICAL
12 ASSISTANCE AND EXPERTISE TO THE BOARD.
13 (C) THE BOARD SHALL SUBMIT THE SCHOOL DISTRICT IMPROVEMENT
14 PLAN AND PROPOSED PLAN BUDGET TO THE EMERGENCY FINANCIAL MANAGER.
15 (D) BEFORE THE SCHOOL DISTRICT IMPROVEMENT PLAN AND PLAN
16 BUDGET ARE INCLUDED IN THE WRITTEN FINANCIAL PLAN, THEY MUST BE
17 APPROVED BY THE BOARD OF THE SCHOOL DISTRICT, BY THE INTERMEDIATE
18 BOARD OF THE INTERMEDIATE SCHOOL DISTRICT, AND BY THE EMERGENCY
19 FINANCIAL MANAGER.
20 (3)
(2) After the initial development of the financial plan21
required by subsection (1), the emergency financial manager in22
consultation with the school board shall regularly reexamine the23
plan, and if the emergency financial manager reduces his or her24
revenue estimates, he or she shall modify the financial plan to25
26 MANAGER SHALL SUBMIT TO THE EDUCATION FINANCIAL EMERGENCY
27 RESOLUTION BOARD CREATED UNDER SECTION 38 QUARTERLY PROGRESS
conform to revised revenue estimates. THE EMERGENCY FINANCIAL3
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REPORTS THAT DETAIL THE STATUS OF THE IMPLEMENTATION 1 OF ALL ASPECTS
2 OF THE FINANCIAL PLAN, INCLUDING THE STATUS OF THE IMPLEMENTATION
3 OF THE SCHOOL IMPROVEMENT PLAN REQUIRED UNDER SUBSECTION (2).
4 (4)
(3) The financial plan shall be in a form, and shall5
contain that information for each year the plan is in effect, that6 IS REQUIRED UNDER THIS SECTION AND THAT
the school district's7
emergency financial manager specifies.8 (5)
(4) The emergency financial manager shall make public the9
10 UNDER SUBSECTION (3)
plan or modified plan AND THE QUARTERLY PROGRESS REPORTS REQUIRED. This subsection shall not be construed to11
mean that the emergency financial manager must receive public12
approval before he or she implements the financial plan or any13
modification to the plan.14
Enacting section 1. This amendatory act does not take effect15
unless Senate Bill No.____ or House Bill No.____ (request no.16 00567'11 TAV
HOUSE BILL No. 4177
HOUSE BILL No. 4177HOUSE BILL No. 4177
February 1, 2011, Introduced by Rep. Nathan and referred to the Committee on Local,
Intergovernmental, and Regional Affairs.
A bill to amend 1990 PA 72, entitled
"Local government fiscal responsibility act,"
by amending section 38 (MCL 141.1238).
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 38. (1) If the superintendent
1 of public instruction2
determines under section 35 or 36 that a school district has a3
financial emergency, the superintendent of public instruction,4
within 30 days after that determination, shall submit to the state5
board the names of nominees who shall be considered for appointment6
to serve as an emergency financial manager for the school district.7
From the list of nominees submitted to the state board, the state8
board shall submit to the governor the names of not more than 39
nominees who shall be considered for appointment to serve as an10
emergency financial manager for the school district. From the list11
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with the advice and consent of the
of nominees submitted to the governor, the governor shall appoint,1 senate, an emergency financial2
manager for the school district who shall hold office for a term3
4 BOARD CREATED UNDER SUBSECTION (4)
fixed by the governor EDUCATION FINANCIAL EMERGENCY RESOLUTION, but not to exceed 1 year. The5
appointment shall be by written contract and may be renewed on an6
7 THE EDUCATION FINANCIAL EMERGENCY RESOLUTION BOARD AND THE
8 EMERGENCY FINANCIAL MANAGER SHALL CONTAIN SPECIFIC CONTRACTUAL
9 REMEDIES FOR FAILURE OF THE EMERGENCY FINANCIAL MANAGER TO COMPLY
10 WITH THE REQUIREMENTS OF THIS ARTICLE.
11
annual basis for not more than 1 year. THE WRITTEN CONTRACT BETWEEN(2) An emergency financial manager appointed under this12
article shall be chosen solely on the basis of his or her13
competence in PUBLIC SECTOR fiscal matters and shall not have been14
either an elected or appointed official or employee of the school15
district for which he or she is appointed for not less than 5 years16
before the appointment. The emergency financial manager shall not17
be the superintendent of public instruction. The emergency18
financial manager need not be a resident of the school district for19
20 INDIVIDUAL SHALL NOT BE CONSIDERED TO BE COMPETENT IN PUBLIC SECTOR
21 FISCAL MATTERS UNLESS THE EDUCATION FINANCIAL EMERGENCY RESOLUTION
22 BOARD FINDS THAT HE OR SHE HAS DEMONSTRATED PREVIOUS PUBLIC SECTOR
23 EXPERIENCE, WHICH DOES NOT HAVE TO BE WITH A SCHOOL DISTRICT,
24 SHOWING THAT HE OR SHE IS QUALIFIED TO DO AT LEAST ALL OF THE
25 FOLLOWING:
26 (A) PREPARE AND ANALYZE A BUDGET OF A SIZE APPROPRIATE FOR A
27 SCHOOL DISTRICT THE SIZE OF THE AFFECTED SCHOOL DISTRICT.
which he or she is appointed. FOR THE PURPOSES OF THIS SECTION, AN3
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(B) REVIEW AND CREATE BOOKKEEPING AND 1 ACCOUNTING SYSTEMS OF A
2 TYPE APPROPRIATE FOR A SCHOOL DISTRICT THE SIZE OF THE AFFECTED
3 SCHOOL DISTRICT.
4 (C) CREATE A DEFICIT REDUCTION PLAN APPROPRIATE FOR A SCHOOL
5 DISTRICT THE SIZE OF THE AFFECTED SCHOOL DISTRICT.
6 (D) TAKE ACTIONS IN ACCORDANCE WITH THE UNIFORM BUDGETING AND
7 ACCOUNTING ACT, 1968 PA 2, MCL 141.421 TO 141.440A, AND IN
8 ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.
9 (E) REVIEW AND CREATE PROFIT AND PROFIT-LOSS STATEMENTS,
10 BALANCE SHEET STATEMENTS, CASH FLOW ANALYSES, CASH RECEIPTS
11 JOURNALS, ACCOUNTS PAYABLE, GENERAL LEDGERS, AND OTHER SIMILAR
12 FINANCIAL DOCUMENTS.
13
(3) Unless the legislature provides special funding, an14
emergency financial manager shall receive compensation and15
reimbursement for actual and necessary expenses from the school16
district as approved by the superintendent of public instruction17 EDUCATION FINANCIAL EMERGENCY RESOLUTION BOARD CREATED UNDER
18 SUBSECTION (4)
. In addition to staff otherwise authorized by law,19
with the approval of the superintendent of public instruction,20 EDUCATION FINANCIAL EMERGENCY RESOLUTION BOARD CREATED UNDER
21 SUBSECTION (4),
the emergency financial manager may appoint22
additional staff and secure professional assistance considered23
necessary to implement this article.24 (4) THERE IS CREATED AN EDUCATION FINANCIAL EMERGENCY
25 RESOLUTION BOARD WITHIN THE DEPARTMENT OF EDUCATION. ALL OF THE
26 FOLLOWING APPLY TO THIS BOARD:
27 (A) THIS BOARD SHALL CONSIST OF THE SUPERINTENDENT OF PUBLIC
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INSTRUCTION OR HIS OR HER DESIGNEE, THE 1 STATE TREASURER OR HIS OR
2 HER DESIGNEE, AND THE DIRECTOR OF THE DEPARTMENT OF TECHNOLOGY,
3 MANAGEMENT, AND BUDGET OR HIS OR HER DESIGNEE.
4 (B) THE ATTORNEY GENERAL, OR HIS OR HER DESIGNEE, SHALL SERVE
5 AS A NONVOTING MEMBER OF THE EDUCATION FINANCIAL EMERGENCY
6 RESOLUTION BOARD FOR THE SOLE PURPOSE OF PROVIDING LEGAL COUNSEL TO
7 THE EDUCATION FINANCIAL EMERGENCY RESOLUTION BOARD.
8 (C) FOR THE EDUCATION FINANCIAL EMERGENCY RESOLUTION BOARD'S
9 FUNCTIONS RELATED TO A PARTICULAR SCHOOL DISTRICT, THE PRESIDENT OF
10 THE SCHOOL BOARD OF THAT SCHOOL DISTRICT SHALL SERVE AS A NONVOTING
11 MEMBER OF THE EDUCATION FINANCIAL EMERGENCY RESOLUTION BOARD.
12 (D) THE SUPERINTENDENT OF PUBLIC INSTRUCTION, OR HIS OR HER
13 DESIGNEE, SHALL SERVE AS CHAIRPERSON OF THE EDUCATION FINANCIAL
14 EMERGENCY RESOLUTION BOARD.
15 (E) EXCEPT FOR BUDGETING, PROCUREMENT, AND RELATED FUNCTIONS
16 OF THE EDUCATION FINANCIAL EMERGENCY RESOLUTION BOARD THAT SHALL BE
17 PERFORMED UNDER THE DIRECTION AND SUPERVISION OF THE SUPERINTENDENT
18 OF PUBLIC INSTRUCTION, THE EDUCATION FINANCIAL EMERGENCY RESOLUTION
19 BOARD SHALL EXERCISE ITS PRESCRIBED STATUTORY POWERS, DUTIES, AND
20 FUNCTIONS INDEPENDENTLY OF THE DEPARTMENT OF EDUCATION.
21 (5) THE EDUCATION FINANCIAL EMERGENCY RESOLUTION BOARD SHALL
22 DO ALL OF THE FOLLOWING WITH RESPECT TO EACH SCHOOL DISTRICT THAT
23 HAS AN EMERGENCY FINANCIAL MANAGER APPOINTED UNDER THIS ARTICLE:
24 (A) DIRECTLY SUPERVISE THE EMERGENCY FINANCIAL MANAGER AND
25 OVERSEE ALL DAY-TO-DAY OPERATIONS OF THE EMERGENCY FINANCIAL
26 MANAGER.
27 (B) REVIEW AND APPROVE ALL COMPENSATION AND REIMBURSEMENTS
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MADE TO THE EMERGENCY FINANCIAL MANAGER 1 AND ALL APPOINTMENTS MADE
2 BY THE EMERGENCY FINANCIAL MANAGER.
3 (C) REVIEW ALL CONTRACTS ENTERED INTO BY THE EMERGENCY
4 FINANCIAL MANAGER, THE CONTRACTING PRACTICES OF THE EMERGENCY
5 FINANCIAL MANAGER, AND ALL OTHER DECISIONS OF AND ACTIONS TAKEN BY
6 THE EMERGENCY FINANCIAL MANAGER OR HIS OR HER STAFF.
7 (D) REVIEW ALL WRITTEN PLANS AND REPORTS DEVELOPED BY THE
8 EMERGENCY FINANCIAL MANAGER.
9 (6) THE EMERGENCY FINANCIAL MANAGER'S POWERS AND DUTIES UNDER
10 SECTIONS 39 TO 41A ARE SUBJECT TO OVERSIGHT BY THE EDUCATION
11 FINANCIAL EMERGENCY RESOLUTION BOARD UNDER THIS SECTION.00567'11) of the 96th Legislature is enacted into law.
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