Reps Introduce Bills to Reform Emergency Manager Law

Liberati and Chang seek adjustments to Local Financial Stability Act
Monday, November 30, 2015

LANSING — State Representatives Frank Liberati (D-Allen Park) and Stephanie Chang (D-Detroit) announced today that they have introduced legislation that would amend the Local Financial Stability and Choice Act (commonly referred to as the emergency financial manager statute).

House Bill 5089, introduced by Liberati, would leave in place the two-year budget established by the emergency financial manager (EFM), but would return all other governing authority to a local body once receivership has been terminated by the governor. Currently, all orders and ordinances implemented by an EFM are not allowed to be amended for a period of one year after receivership has been terminated and the Receivership Transition Advisory Board (RTAB) dismissed.

“There is no doubt that the city of Allen Park has been through some very tough times, and we are finally at a point where the city is well on track to having receivership terminated.” Liberati said. “We believe that once the governor has determined that a local body may govern itself without fear of state intervention, home rule should be given back—not just piecemeal authority.” 

House Bill 5100, introduced by Chang, would prevent an appointed EFM from being appointed as a voting member to the RTAB of the same entity for which she or he has served as the EFM. The legislation allows for the EFM to be appointed as a non-voting member, to serve in an advisory capacity and as a source of valuable institutional knowledge.

“In talking with city leaders in Ecorse, I believe these changes are necessary to ensure smooth transitions back to local governance from any emergency manager’s tenure,” said Chang.

Liberati and Chang serve districts with municipalities operating under the purview of an EFM or an RTAB. Both members look forward to working with their colleagues of the Michigan House of Representatives to pass this much-needed reform.