SB-0437, As Passed House, March 5, 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SENATE BILL No. 437

 

 

June 18, 2013, Introduced by Senator NOFS and referred to the Committee on Local Government and Elections.

 

 

 

     A bill to amend 1967 (Ex Sess) PA 7, entitled

 

"Urban cooperation act of 1967,"

 

by amending sections 5, 7, and 9 (MCL 124.505, 124.507, and

 

124.509), section 5 as amended by 2011 PA 263 and section 7 as

 

amended by 2002 PA 445.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 5. (1) A joint exercise of power pursuant to this act

 

shall be made by contract or contracts in the form of an interlocal

 

agreement which may provide for:

 

     (a) The purpose of the interlocal agreement or the power to be

 

exercised and the method by which the purpose will be accomplished

 

or the manner in which the power will be exercised.

 

     (b) The duration of the interlocal agreement and the method by

 


which it may be rescinded or terminated by any participating public

 

agency prior to the stated date of termination.

 

     (c) The precise organization, composition, and nature of any

 

separate legal or administrative entity expressly created in the

 

interlocal agreement with the powers designated to that entity.

 

     (d) The manner in which the parties to the interlocal

 

agreement will provide for financial support from the treasuries

 

that may be made for the purpose set forth in the interlocal

 

agreement, payments of public funds that may be made to defray the

 

cost of such purpose, advances of public funds that may be made for

 

the purposes set forth in the interlocal agreements and repayment

 

of the public funds, and the personnel, equipment, or property of 1

 

or more of the parties to the agreement that may be used in lieu of

 

other contributions or advances.

 

     (e) The manner in which funds may be paid to and disbursed by

 

any separate legal or administrative entity created pursuant to the

 

interlocal agreement.

 

     (f) A method or formula for equitably providing for and

 

allocating revenues, including, in the case of an authorized

 

undertaking that is publicly owned at the time the interlocal

 

agreement is entered into or becomes publicly owned during the time

 

the interlocal agreement is in effect, revenues derived by or

 

payable to any participating party or any other public agency which

 

revenues directly or indirectly result from that undertaking,

 

whether the revenues are in the form of ad valorem taxes on real or

 

personal property, taxes on income, specific taxes or funds made

 

available by the state in lieu of ad valorem property taxes or

 


local income taxes, any other form of taxation, assessment, levy,

 

or impost, or any money paid under or which revert from a tax

 

increment financing plan. The interlocal agreement may also provide

 

a method or formula equitably providing for and allocating revenues

 

derived from a federal or state grant or loan, or from a gift,

 

bequest, grant, or loan from a private source. The interlocal

 

agreement may also provide for a method or formula for equitably

 

allocating and financing the capital and operating costs, including

 

payments to reserve funds authorized by law and payments of

 

principal and interest on obligations. Each method or formula shall

 

be established by the participating parties to the interlocal

 

agreement on a ratio of full valuation of real property, on the

 

basis of the amount of services rendered or to be rendered, on the

 

basis of benefits received or conferred or to be received or

 

conferred, or on any other equitable basis, including the levying

 

of taxes or assessments on the entire area serviced by the parties

 

to the interlocal agreement, subject to such limitations as may be

 

contained in the constitution and statutes of this state, to pay

 

those capital and operating costs.

 

     (g) The public agency that will function as the employer of

 

personnel and staff needed for the joint exercise of power.

 

     (h) The fixing and collecting of charges, rates, rents, fees,

 

loan repayments, loan interest rates, or other charges on loans,

 

where appropriate, and the making and promulgation of necessary

 

rules and regulations and their enforcement by or with the

 

assistance of the participating parties to the interlocal

 

agreement.

 


     (i) The manner in which purchases shall be made and contracts

 

entered into.

 

     (j) The acquisition, ownership, custody, operation,

 

maintenance, lease, or sale of real or personal property.

 

     (k) The disposition, division, or distribution of any property

 

acquired through the execution of such interlocal agreement.

 

     (l) The manner in which, after the completion of the purpose of

 

the interlocal agreement, any surplus money shall be returned.

 

     (m) The acceptance of gifts, grants, assistance funds, or

 

bequests and the manner in which those gifts, grants, assistance

 

funds, or bequests may be used for the purpose set forth in the

 

interlocal agreement.

 

     (n) The making of claims for federal or state aid payable to

 

the individual or several participants on account of the execution

 

of the interlocal agreement.

 

     (o) The manner of responding for any liabilities that might be

 

incurred through performance of the interlocal agreement and

 

insuring against any such liability.

 

     (p) The adjudication of disputes or disagreements, the effects

 

of failure of participating parties to pay their shares of the

 

costs and expenses, and the rights of the other participants in

 

such cases.

 

     (q) The manner in which strict accountability of all funds

 

shall be provided for and the manner in which reports, including an

 

annual independent audit, of all receipts and disbursements shall

 

be prepared and presented to each participating party to the

 

interlocal agreement.

 


     (r) The manner of investing surplus funds or proceeds of

 

grants, gifts, or bequests to the parties to the interlocal

 

agreement under the control of a legal or administrative entity

 

created under section 7.

 

     (s) Any other necessary and proper matters agreed upon by the

 

participating public agencies.

 

     (2) The public agencies that are parties to a contract entered

 

into pursuant to this act have the responsibility, authority, and

 

right to manage and direct on behalf of the public the functions or

 

services performed or exercised to the extent provided in the

 

contract.

 

     (3) The contents or language of a contract for a joint

 

exercise of power under this act shall be a permissive subject of

 

collective bargaining between a public agency and a bargaining

 

representative of its employees. If a public agency and a

 

bargaining representative of its employees engage in collective

 

bargaining before the contract for a joint exercise of power is

 

approved and that public agency and that bargaining representative

 

reach an agreement on issues that would obligate the public agency

 

that will function as an employer in the joint exercise of power,

 

the contract for that joint exercise of power shall include those

 

obligations.

 

     (4) Nothing in this act creates an employment relationship

 

between the existing employees of a public agency and the proposed

 

joint exercise of power.

 

     (5) A joint exercise of power is effective through its

 

contract at least 180 days before the actual transfer of functions

 


or services. Before the effective date of the joint exercise of

 

power, the public agencies that are parties to the contract shall

 

affirm in writing to the joint exercise of power those employees

 

who will be transferred to the joint exercise of power.

 

     (6) If employees who are transferred to the joint exercise of

 

power are represented by a labor organization, those employees are

 

subject to their previous terms and conditions of employment until

 

those terms and conditions of employment are modified in accordance

 

with 1947 PA 336, MCL 423.201 to 423.217, or for 6 months after the

 

transfer to the joint exercise of power, whichever is earlier.

 

Negotiations on a collective bargaining agreement with a joint

 

exercise of power shall begin no later than 180 days before the

 

date the employees transfer to the joint exercise of power.

 

     (7) Subject to subsection (8), a representative of the

 

employees or group of employees in a public agency who previously

 

represented or was entitled to represent the employees or group of

 

employees in a public agency under 1947 PA 336, MCL 423.201 to

 

423.217, shall continue to represent the employees or group of

 

employees after those employees or group of employees are

 

transferred to the joint exercise of power.

 

     (8) This section does not limit the rights of employees, under

 

applicable law, to assert that a bargaining representative

 

protected by subsection (7) is no longer their representative. The

 

employees of the joint exercise of power are eligible as of the day

 

the joint exercise of power becomes effective through its contract

 

to choose their representative under 1947 PA 336, MCL 423.201 to

 

423.217. This subsection does not extend the time limits as

 


provided in subsection (5).

 

     (9) If multiple labor organizations assert the right to

 

represent all or part of the workforce of the joint exercise of

 

power or where a substantial portion of the transferred employees

 

were not previously represented, in the absence of a voluntary

 

mutual agreement, at the request of any party or on the initiative

 

of the Michigan employment relations commission, the Michigan

 

employment relations commission shall conduct a representation

 

election.

 

     (10) In the absence of a voluntary mutual agreement, the

 

workforce of the joint exercise of power shall be merged by using a

 

single seniority list for each of the same or similar

 

classifications. The single seniority list shall be composed of all

 

employees from each public agency employed or having recall rights

 

on the date of transfer and shall be used for purposes that

 

include, but are not limited to, initial assignments, layoffs,

 

recalls, and job bidding. Disputes concerning the single seniority

 

list or use of the single seniority list shall be heard by a single

 

arbitrator appointed by the Michigan employment relations

 

commission.

 

     (11) Nothing in this section requires a public agency or a

 

joint exercise of power to assume a collective bargaining agreement

 

between another public agency and its employees.

 

     Sec. 7. (1) An interlocal agreement may provide for a separate

 

legal or administrative entity to administer or execute the

 

agreement which may be a commission, board, or council constituted

 

pursuant to the agreement. The If an interlocal agreement does not

 


expressly provide for a separate legal entity, then a separate

 

legal entity shall not be created. If an interlocal agreement does

 

expressly provide for a separate legal entity, the entity shall be

 

a public body, corporate or politic for the purposes of this act.

 

The governing body of each public agency shall appoint a member of

 

the commission, board, or council constituted pursuant to the

 

agreement. That member may be removed by the appointing governing

 

body at will. The administrative or separate legal entity shall not

 

be operated for profit. No part of its earnings shall inure to the

 

benefit of a person other than the public agencies that created it.

 

Upon termination of the interlocal agreement, title to all property

 

owned by the entity shall vest in the public agencies that

 

incorporated it.

 

     (2) A separate legal or administrative entity created by an

 

interlocal agreement shall possess the common power specified in

 

the agreement and may exercise it in the manner or according to the

 

method provided in the agreement. The separate legal entity may be,

 

in addition to its other powers, authorized in its own name to also

 

make and enter into contracts; , to employ agencies or employees; ,

 

to acquire, construct, manage, maintain, or operate buildings,

 

works, or improvements; , to acquire, hold, or dispose of property;

 

, to incur debts, liabilities, or obligations that, except as

 

expressly authorized by the parties, do not constitute the debts,

 

liabilities, or obligations of any of the parties to the agreement;

 

, to cooperate with a public agency, an agency or instrumentality

 

of that public agency, or another legal or administrative entity

 

created by that public agency under this act; , to make loans from

 


the proceeds of gifts, grants, assistance funds, or bequests

 

pursuant to the terms of the interlocal agreement creating the

 

entity; , and to form other entities necessary to further the

 

purpose of the interlocal agreement. The separate legal entity may

 

sue and be sued in its own name.

 

     (3) No separate legal or administrative entity created by an

 

interlocal agreement shall possess the power or authority to levy

 

any type of tax within the boundaries of any governmental unit

 

participating in the interlocal agreement, or to issue any type of

 

bond in its own name, or to in any way indebt a governmental unit

 

participating in the interlocal agreement.

 

     (4) A separate legal or administrative entity created by an

 

interlocal agreement may be authorized by the interlocal agreement

 

to borrow money and to issue bonds or notes in its name for local

 

public improvements or for economic development purposes as

 

provided in the interlocal agreement.

 

     (5) The entity created by the interlocal agreement shall not

 

borrow money or issue bonds or notes for a sum that, together with

 

the total outstanding bonded indebtedness of the entity, exceeds 2

 

mills of the taxable value of the taxable property within the local

 

governmental units participating in the interlocal agreement as

 

determined under section 27a of the general property tax act, 1893

 

PA 206, MCL 211.27a.

 

     (6) Bonds or notes issued under this act are a debt of the

 

entity created by the interlocal agreement and not of the

 

participating local governmental units.

 

     (7) Bonds or notes issued under this act are declared to be

 


issued for an essential public and governmental purpose and,

 

together with interest on those bonds or notes and income from

 

those bonds or notes, are exempt from all taxes.

 

     (8) Bonds or notes issued under this act are subject to the

 

revised municipal finance act, 2001 PA 34, MCL 141.2101 to

 

141.2821.

 

     Sec. 9. (1) All of the privileges and immunities from

 

liability, and exemptions from laws, ordinances, and rules, and all

 

pensions, relief, disability, workmen's worker's compensation, and

 

other benefits which that apply to the activity of officers,

 

agency, or employees of any public agents or employees of any

 

public agency when performing their respective functions within the

 

territorial limits for their respective agencies shall apply to the

 

same degree and extent to the performance of such those functions

 

and duties of such those officers, agents, or employees

 

extraterritorially under the provisions of any such interlocal

 

agreement.

 

     (2) An interlocal agreement does not relieve a public agency

 

of any obligation or responsibility imposed upon it by law except

 

to the extent of actual and timely performance thereof by 1 or more

 

of the parties to the agreement or any legal or administrative

 

entity created by the agreement in which case the performance may

 

be offered in satisfaction of the obligation or responsibility.