HOUSE BILL No. 5239

 

December 15, 2011, Introduced by Rep. Somerville and referred to the Committee on Local, Intergovernmental, and Regional Affairs.

 

     A bill to amend 1945 PA 327, entitled

 

"Aeronautics code of the state of Michigan,"

 

by amending sections 111, 112, 113, and 114 (MCL 259.111, 259.112,

 

259.113, and 259.114), as added by 2002 PA 90.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 111. (1) An authority created under or pursuant to this

 

chapter shall be directed and governed by a board consisting of 7

 

members.

 

     (2) The Subject to subsection (8), the members of a board of

 

an authority created under section 110(2) shall be appointed as

 

follows:

 

     (a) Two board members shall be appointed by the governor, with

 

1 board member appointed for an initial term of 6 years and 1 board

 

member appointed for an initial term of 8 years.

 

     (b) One board member shall be appointed by the legislative


 

body of the local government that owns the airport, for an initial

 

term of 4 years. Notwithstanding any other statute, law, ordinance,

 

or charter provision to the contrary, the board member appointed by

 

the legislative body may be a member of the legislative body of the

 

local government that owns the airport, but only while continuing

 

to serve as a member of the legislative body of that local

 

government.

 

     (c) Four board members shall be appointed by the local chief

 

executive officer of the local government that owns the airport,

 

with 1 board member appointed for an initial term of 4 years, 1

 

board member appointed for an initial term of 2 years, and 2 board

 

members appointed for an initial term of 6 years.

 

     (d) Each appointing entity shall file each appointment under

 

this subsection with the department. Each subsequent appointment by

 

an appointing entity to fill a vacancy on the board shall also be

 

filed with the department.

 

     (3) Upon incorporation of an authority pursuant to under

 

section 110(3), the local chief executive officer, with the consent

 

of the legislative body of the local government if the local chief

 

executive officer is not elected, shall appoint the members of the

 

board. Of the board members first appointed under this subsection,

 

1 board member shall be appointed for a term of 2 years, 2 board

 

members shall be appointed for terms of 4 years each, 3 board

 

members shall be appointed for terms of 6 years each, and 1 board

 

member shall be appointed for a term of 8 years.

 

     (4) A board member appointed pursuant to under subsection

 

(2)(b) or (c), or (3), or (8)(b) or (c) must be a citizen of the


 

United States and a resident of the local government that owns the

 

airport over which operational jurisdiction will be transferred to

 

an authority. A board member appointed pursuant to under subsection

 

(2)(a) or (8)(a) must be a citizen of the United States and a

 

resident of the area within the jurisdiction of the regional

 

planning commission created under 1945 PA 281, MCL 125.11 to

 

125.25, in which the airport over which operational jurisdiction

 

will be transferred is located. Except as permitted by subsection

 

(2)(b) or (8)(b), a person shall not be appointed under subsection

 

(2), or (3), or (8) as a board member if he or she is, or was

 

during the 12 months preceding the date of appointment, an elected

 

public official or employee of this state or an agency or

 

instrumentality of this state, a local government or an agency or

 

instrumentality of a local government, or the federal government or

 

an agency or instrumentality of the federal government.

 

     (5) A board member appointed pursuant to under subsection (2),

 

or (3), or (8), a chief executive officer, and chief financial

 

officer of an authority, shall, at time of appointment or hiring

 

and subject to subsection (6), meet all of the following

 

qualifications:

 

     (a) Neither the board member or the chief executive officer or

 

chief financial officer, nor the spouse or his or her siblings,

 

children or their spouses, parents, or siblings or their spouses of

 

the board member or the chief executive officer or chief financial

 

officer, are actively engaged or employed in any other business,

 

vocation, or employment of any civil aeronautics enterprise

 

connected with the airport under the control of the authority.


 

     (b) Neither the board member or the chief executive officer or

 

chief financial officer, nor the spouse or his or her siblings,

 

children or their spouses, parents, or siblings or their spouses of

 

the board member or the chief executive officer or chief financial

 

officer, have a combined 15% or greater direct pecuniary interest

 

in any civil aeronautics enterprise connected with the airport

 

under the control of the authority.

 

     (c) The board member or the chief executive officer or chief

 

financial officer would not be considered to have a conflict of

 

interest under 1968 PA 318, MCL 15.301 to 15.310, in respect to any

 

contract or subcontract involving the airport if the board member

 

or the chief executive officer or chief financial officer were

 

considered a state officer under 1968 PA 318, MCL 15.301 to 15.310.

 

     (6) A board member who, at any time during his or her term of

 

service, becomes in violation of subsection (5)(b) shall have 30

 

days to divest, or arrange for the divestment of, the interest that

 

caused the violation. If the board member or his or her relative is

 

still in violation of subsection (5)(b) after the expiration of the

 

30-day period, the entity that appointed that board member shall

 

remove the board member from office.

 

     (7) Notwithstanding any law or charter provision to the

 

contrary, appointments by a local chief executive officer under

 

subsection (2) shall are not be subject to the approval by the

 

legislative body of the local government.

 

     (8) The board of an authority appointed under subsection (2)

 

that exists on the date of the 2012 amendatory act that amended

 

this section is dissolved effective 30 days after the effective


 

date of the 2012 amendatory act that amended this section and shall

 

be replaced 30 days after the effective date of the 2012 amendatory

 

act that amended this section with a board whose members are

 

appointed as follows:

 

     (a) Two board members shall be appointed by the governor, with

 

1 board member appointed for an initial term of 6 years and 1 board

 

member appointed for an initial term of 8 years.

 

     (b) Four board members shall be appointed by the legislative

 

body of the local government that owns the airport, with 1 board

 

member appointed for an initial term of 4 years, 1 board member

 

appointed for an initial term of 2 years, and 2 board members

 

appointed for an initial term of 6 years. Notwithstanding any other

 

statute, law, ordinance, or charter provision to the contrary, a

 

board member appointed by the legislative body may be a member of

 

the legislative body of the local government that owns the airport,

 

but only while continuing to serve as a member of the legislative

 

body of that local government.

 

     (c) One board member shall be appointed by the local chief

 

executive officer of the local government that owns the airport for

 

an initial term of 4 years.

 

     (d) Each appointing entity shall file each appointment under

 

this subsection with the department. Each subsequent appointment by

 

an appointing entity to fill a vacancy on the board shall also be

 

filed with the department.

 

     (9) (8) The board shall appoint a chief executive officer who

 

shall be an ex officio member, without vote, of the board and shall

 

not be considered in determining the presence of a quorum, who


 

shall have professional qualifications commensurate with the

 

responsibility of the jobs to be performed by such officials. The

 

board may enter into a contract with the chief executive officer

 

for a commercially reasonable length of time commensurate with the

 

length of time for contracts of airport chief executive officers,

 

directors, or managers with similar responsibilities at other

 

airports or airport authorities within or without this state with a

 

comparable number of annual enplanements.

 

     (10) (9) The chief executive officer shall appoint a chief

 

financial officer who shall be the treasurer of the authority, who

 

shall have professional qualifications commensurate with the

 

responsibility of the jobs to be performed by such officials.

 

Notwithstanding any law or charter provision to the contrary, it

 

shall be is the duty and right of the chief financial officer of

 

the authority to receive all money belonging to the authority, or

 

arising or received in connection with the airport over which

 

operational jurisdiction has been transferred to the authority,

 

from whatever source derived. Money of the authority shall be

 

deposited, invested, and paid by the chief financial officer only

 

in accordance with policies, procedures, ordinances or resolutions

 

adopted by the board. Upon the approval date, the authority shall

 

be is considered to be the owner of all money or other property

 

then or thereafter received by the treasurer of the local

 

government or deposited in the treasury of a local government to

 

the credit of the airport for which operational jurisdiction has

 

been transferred to the authority. The authority shall be is

 

entitled to all interest and other earnings on those funds on and


 

after the latter of the effective date of this chapter March 26,

 

2002 or the date on which the authority is created or incorporated.

 

The treasurer of any local government receiving or having custody

 

of money or other property belonging to an authority under this

 

chapter shall promptly transfer the money and other property to the

 

custody of the chief financial officer of the authority. The chief

 

financial officer shall provide the board with copies of all

 

reports made by the chief financial officer to the chief executive

 

officer.

 

     Sec. 112. (1) Upon the expiration of the term of an initial

 

appointment under section 111(2), or (3), or (8), all full term

 

appointments shall be for a term of 6 years. The expiration date of

 

the term of office of a member of the board shall be on October 1

 

of the year in which the term is to expire, but a member of the

 

board shall hold office until the board member's successor is

 

appointed and qualified, or until resignation or removal. If a

 

member of the board is unable to complete his or her term of

 

office, a successor shall be appointed in the same manner as the

 

original appointment to complete the term. A member of the board

 

may resign by written notice to the authority. The resignation is

 

effective upon its receipt by the secretary or chairperson of the

 

authority or at a subsequent time as set forth in the notice of

 

resignation.

 

     (2) A member of the board may not be appointed to serve more

 

than 2 consecutive full terms. For purposes of this subsection, an

 

initial term under section 111(2) or (8) and an appointment to fill

 

a vacancy in a term with more than 3 years remaining count as full


 

terms.

 

     (3) The appointing entity for any board member appointed under

 

section 111(2), or (3), or (8) may only remove a board member

 

appointed by the appointing entity for cause.

 

     (4) Before assuming the duties of office, a member of the

 

board shall qualify by taking and subscribing to the constitutional

 

oath of office.

 

     Sec. 113. (1) Upon the appointment of at least 4 members of

 

the board under section 111(2) or (8), the board may hold its first

 

meeting. If less than 4 members of the board have been appointed

 

under section 111(2) or (8) within 30 days after the date on which

 

the authority is created, a majority of those board members

 

appointed may hold the first meeting of the board after the

 

expiration of that 30-day period. The first meeting of the board

 

shall not be held more than 60 days after the creation date of the

 

authority. Not later than 60 days after an authority is

 

incorporated under section 110(3), the board of the authority shall

 

hold its first meeting. At the first meeting, the board shall

 

organize by electing a chairperson, a vice-chairperson, a

 

secretary, and additional officers of the board as the board

 

considers necessary. All officers of the board shall be elected

 

annually by the board. All officers of the authority, except the

 

chief executive officer and the chief financial officer, must be

 

members of the board.

 

     (2) The business that the board 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. Public notice of


 

the time, date, and place of the meeting shall be given in the

 

manner required by the open meetings act, 1976 PA 267, MCL 15.261

 

to 15.275. A board shall adopt rules consistent with the open

 

meetings act, 1976 PA 267, MCL 15.261 to 15.275, governing its

 

procedures and the holding of meetings.

 

     (3) Except for those powers reserved or delegated to the chief

 

executive officer of an authority by this chapter or by the board,

 

the board shall not delegate any power of the board to any other

 

officer or committee of the authority except as provided in section

 

114(3). The board may withdraw from the chief executive officer any

 

power that the board had delegated to the chief executive officer.

 

     (4) Members of a board may be reimbursed by an authority for

 

actual and necessary expenses incurred in the discharge of their

 

official duties. The members of the board shall not be compensated

 

for service to the authority or attendance at any meetings.

 

     (5) A board may act only by resolution or ordinance. A

 

majority of the members of the board then in office, or of any

 

committee of the board, shall constitute a quorum for the

 

transaction of business. A vote of a majority of the members of the

 

board serving at the time of the vote is necessary to approve the

 

issuance by the authority of bonds, including special facilities

 

bonds, or other obligations payable from revenues, including

 

special facilities revenues, derived from the airport, or to

 

approve or amend the annual budget of the authority or hire, remove

 

or discharge, or set the salary of the chief executive officer.

 

Except as otherwise provided in this chapter, a vote of the

 

majority of the board members present at a meeting at which a


 

quorum is present constitutes the action of the board or of the

 

committee.

 

     Sec. 114. (1) After organization, a board shall adopt a

 

schedule of regular meetings and adopt a regular meeting date,

 

place, and time. The board shall meet not less than quarterly per

 

year. The board chairperson shall call a special meeting upon

 

request of 3 members of the board in the manner required by the

 

open meetings act, 1976 PA 267, MCL 15.261 to 15.275. A board shall

 

keep a written or printed record of each meeting, which record and

 

any other writing prepared, owned, used, in the possession of, or

 

retained by the board in the performance of an official function

 

shall be made available to the public in compliance with the

 

freedom of information act, 1976 PA 442, MCL 15.231 to 15.246.

 

     (2) A board shall provide for a system of accounts to conform

 

to a uniform system required by law and for the auditing at least

 

once a year of the accounts of the authority by an independent

 

certified public accountant selected by the audit committee

 

pursuant to subsection (3). A board shall meet any and all auditing

 

or financial reporting requirements imposed by law and shall file a

 

copy of its annual audit with the department and with the clerk of

 

the house of representatives and the secretary of the senate. An

 

authority shall provide the necessary reports to the local

 

government that owns the airport over which operational

 

jurisdiction has been transferred in a timely manner in order for

 

the local government to be able to comply with the reporting

 

requirements of the government finance officers association of the

 

United States and Canada. A board shall require of the chief


 

financial officer and chief executive officer of the authority a

 

suitable bond of not less than $100,000.00 by a responsible bonding

 

company, and the cost of the premium of the bond shall be paid by

 

the authority.

 

     (3) A board appointed under section 111(3) shall appoint an

 

audit committee consisting of 3 members of the board. With respect

 

to boards appointed pursuant to under section 111(2) or (8), the

 

board shall have a 3-member audit committee with each appointing

 

entity represented on the board designating 1 board member

 

appointee to serve on the audit committee. The audit committee

 

shall hold its first meeting within 60 days after the creation or

 

incorporation of the authority under this chapter. A majority of

 

members appointed and designated as audit committee members by an

 

appointing entity under this subsection may conduct the business of

 

the committee. The audit committee shall meet not less than 4 times

 

each year with the chief financial officer, the chief executive

 

officer of the authority, and the authority's independent public

 

auditors to review the reports related to the financial condition,

 

operations, performance, and management of the authority and

 

airport including, but not limited to, all contractors and

 

subcontractors, and may also order special investigations or

 

audits, the cost of which shall be reimbursed by the authority. The

 

audit committee shall also review the activities and reports of the

 

internal auditor of the authority who shall be appointed by the

 

chief executive officer of the authority. The audit committee of a

 

board appointed pursuant to under section 111(2) or (8) shall once

 

every 2 years, recommend 3 independent certified public accounting


 

firms that, in the judgment of the audit committee, possess

 

sufficient resources and qualifications to conduct annual financial

 

audits of the accounts of the authority. Not less that than 90 days

 

prior to before the first full fiscal year of the authority and the

 

last fiscal year of each subsequent contract period for which

 

financial audits will be conducted under section 114(2), the 3

 

recommendations of the audit committee shall be presented to the

 

legislative body of the local government that owns the airport over

 

which operational jurisdiction has been transferred pursuant to

 

under this chapter. From the 3 recommendations of the audit

 

committee, the legislative body of the local government may select,

 

not more than 30 days after receipt of the recommendations of the

 

audit committee, the independent certified public accounting firm

 

with whom the authority shall execute an agreement to conduct

 

annual financial audits for the succeeding 2 fiscal years of the

 

accounts of the authority. If the legislative body does not select

 

1 of the recommended independent certified public accounting firms

 

to conduct annual financial audits for the next 2 fiscal years of

 

the authority within 30 days after receipt of the recommendations

 

of the audit committee, the audit committee shall have the sole

 

power to select the independent certified public accounting firm

 

with whom the authority shall execute an agreement to conduct

 

annual financial audits of the accounts of the authority for the

 

next 2 fiscal years. The terms and conditions of a contract to be

 

entered into with the independent certified public accounting firm

 

selected by the legislative body of the local government shall be

 

exclusively established by the authority. The legislative body of


 

the local government shall not have the right or power to modify

 

any proposed terms and conditions of a contract between the

 

authority and an independent certified public accounting firm

 

recommended by the audit committee. Neither the legislative body

 

nor any member of the legislative body of the local government

 

shall impose any requirement, restriction or condition upon, or

 

solicit any agreement or contribution from, the independent

 

certified public accounting firm or any member or employee of the

 

independent certified public accounting firm, selected or

 

considered by the legislative body of the local government. No A

 

charter provision or resolution of the local government shall not

 

contradict, supplement, or expand this subsection. A person may not

 

prevent or prohibit the internal auditor or the audit committee

 

from carrying out or completing any audit or investigation. The

 

internal auditor and members of the audit committee shall be

 

protected under the whistleblowers' protection act, 1980 PA 469,

 

MCL 15.361 to 15.369.

 

     (4) A board shall appoint and fix the compensation of a chief

 

executive officer of the authority by a vote of not less than the

 

majority of the members of the board then serving. The board shall

 

prescribe those duties and responsibilities of the chief executive

 

officer of the authority that are in addition to the duties and

 

responsibilities imposed upon the chief executive officer of the

 

authority by this chapter. The chief executive officer of an

 

authority shall serve at the pleasure of the board and the board

 

may remove or discharge the chief executive officer of the

 

authority by a vote of not less than the majority of the members of


 

the board then serving. The chief executive officer of an authority

 

shall supervise, and be responsible for, all of the following:

 

     (a) The day-to-day operation of the airport, including the

 

control, supervision, management, and oversight of the functions of

 

the airport.

 

     (b) The issuance of bonds and notes approved by the board.

 

     (c) The negotiation and establishment of compensation and

 

other terms and conditions of employment for employees of the

 

authority.

 

     (d) The appointment, dismissal, discipline, demotion,

 

promotion, and classification of employees of the authority.

 

     (e) The negotiation, supervision, and enforcement of contracts

 

entered into by the authority, and the supervision of contractors

 

and subcontractors of the authority in their performance of their

 

duties.

 

     (f) The appointment of an internal auditor who shall have

 

professional qualifications commensurate with the responsibility of

 

the jobs to be performed by such an official, and who shall:

 

     (i) Report to the chief executive officer and provide

 

information to the board and its audit committee as required under

 

this chapter.

 

     (ii) Receive and investigate any allegations that false or

 

misleading information was received in evaluating the authority's

 

internal accounting and administrative control system.

 

     (iii) Conduct and supervise audits relating to financial

 

activities of the authority's operations.

 

     (iv) Recommend policies for activities to protect the


 

authority's assets and to prevent and detect fraud and abuse.

 

     (v) Conduct other audit and investigative activities as

 

assigned by the board, the audit committee, or the chief executive

 

committee.

 

     (vi) Adhere to appropriate professional and auditing standards.

 

     (vii) Provide to the audit committee on an annual basis a

 

report prepared by the internal auditor on the evaluation of the

 

authority's internal accounting and administrative control system.

 

For the period reviewed, the report shall include, but not be

 

limited to, both of the following:

 

     (A) A description of any material inadequacy or weakness

 

discovered in connection with the evaluation of the authority's

 

internal accounting and administrative control system and a time

 

schedule for correcting the internal accounting and administrative

 

control system, described in detail.

 

     (B) A listing of each audit or investigation performed by the

 

internal auditor pursuant to under this chapter.

 

     (5) The chief executive officer of an authority shall have the

 

power and authority to execute and deliver, and to delegate

 

signatory power for, contracts, leases, obligations, and other

 

instruments approved by the board or for which power to approve has

 

been delegated to the chief executive officer of the authority. The

 

chief executive officer of an authority shall have all powers

 

incident to the performance of his or her duties that are

 

prescribed by this chapter or by the board. The board may delegate

 

additional powers to the chief executive officer of the authority

 

not enumerated in this chapter. All actions of the chief executive


 

officer of an authority shall be in conformance with the policies

 

of the board and in compliance with law. The chief executive

 

officer of an authority shall attend the meetings of the board and

 

shall render to the board a regular report covering the activities

 

and financial condition of the airport. If the chief executive

 

officer of an authority is temporarily absent or disabled, the

 

chief executive officer of the authority may designate a qualified

 

person as acting chief executive officer of the authority to

 

perform the duties of the office. If the chief executive officer of

 

an authority fails or is unable to designate an acting chief

 

executive officer of the authority, the board shall designate an

 

acting chief executive officer of the authority for the period of

 

absence or disability of the chief executive officer of the

 

authority. The chief executive officer of the authority shall

 

furnish the board with information or reports governing the

 

operation of the airport as the board requires.

 

     (6) The authority shall establish contracting policies and

 

procedures providing for all of the following:

 

     (a) Except for the negotiated construction contracts permitted

 

under this subdivision, a contract shall not be awarded by an

 

authority or the chief executive officer of the authority for the

 

construction, repair, remodeling, or demolition of an airport

 

facility unless the contract is let pursuant to a procedure that

 

requires a competitive bidding. A negotiated construction contract

 

shall not be required to be let by competitive bidding if the board

 

or the chief executive officer of the authority with delegated

 

authority to enter into contracts determines that any of the


 

following apply:

 

     (i) The negotiated contract amount is less than $50,000.00.

 

However, if the contract amount, including change orders,

 

subsequently exceeds $50,000.00, the authority shall detail, in

 

writing, the reasons why the contract amount exceeded $50,000.00.

 

     (ii) As determined in writing by the board or the chief

 

executive officer with delegated authority to enter into contracts,

 

the contract is for emergency repair or construction necessitated

 

by a sudden, unforeseen occurrence or situation of a serious and

 

urgent nature and is not for convenience or expediency.

 

     (iii) As determined in writing by the board or the chief

 

executive officer with delegated authority to enter into contracts,

 

the repair or construction is necessary to ensure passenger safety

 

or otherwise protect life or property.

 

     (b) The authority shall establish policies and procedures for

 

hiring professional service contractors.

 

     (c) The authority shall utilize competitive bidding for all

 

purchases and all other contracts unless the board, or, if

 

authorized by the board to approve procurements, the chief

 

executive officer of the authority, determines and details in

 

writing the reason that competitive solicitation of bids or

 

proposals is not appropriate, that procurement by competitive bids

 

is not practicable to efficiently and effectively meet the

 

authority's needs, or that another procurement method is in the

 

public's best interests.

 

     (7) The authority may enter into lease purchases or

 

installment purchases for periods not exceeding the anticipated


 

useful life of the items purchased. The authority may enter into a

 

cooperative purchasing agreement with the state or other public

 

entities for the purchase of goods, including, but not limited to,

 

recycled goods, and services necessary for the authority.

 

     (8) The chief executive officer of an authority shall comply

 

with all federal and state contracting requirements pertaining to

 

disadvantaged business enterprises, minority business enterprises,

 

and other targeted business enterprises and shall seek to ensure

 

maximum participation of disadvantaged business enterprises,

 

minority business enterprises, and other targeted business

 

enterprises in contracting opportunities with the authority.

 

     (9) Members of the board and officers, appointees, and

 

employees of the authority are public servants under 1968 PA 317,

 

MCL 15.321 to 15.330, and are subject to any other applicable law

 

with respect to conflicts of interest. The board shall establish

 

policies and procedures requiring periodic disclosure of

 

relationships which may give rise to conflicts of interest. The

 

board shall require that a member of the board or a chief executive

 

officer or chief financial officer who has a direct interest in any

 

matter before the authority disclose the member's or officer's

 

interest and any reasons reasonably known to the member of the

 

board or officer why the transaction may not be in the best

 

interest of the public or the authority before the board takes any

 

action with respect to the matter. The disclosure shall become part

 

of the record of an authority's proceedings.

 

     (10) An authority shall establish an ethics manual governing

 

the conducting of airport business and the conduct of airport


 

employees. An authority shall establish policies that are no less

 

stringent than those provided for public officers and employees by

 

1973 PA 196, MCL 15.341 to 15.348, and coordinate efforts for the

 

authority to preclude the opportunity for and the occurrence of

 

transactions by the authority that would create a conflict of

 

interest involving members of the board and employees of the

 

authority. At a minimum, these policies shall include compliance by

 

each member of the board and employees of the authority who

 

regularly exercise significant discretion over the award and

 

management of authority procurements with policies governing all of

 

the following:

 

     (a) Immediate disclosure of the existence and nature of any

 

financial interest that would reasonably be expected to create a

 

conflict of interest.

 

     (b) Withdrawal by an employee or member from participation in

 

or discussion or evaluation of any recommendation or decision

 

involving an authority procurement that would reasonably be

 

expected to create a conflict of interest for that employee or

 

member.

 

     (11) An authority shall work collaboratively with appropriate

 

local governmental units in the implementation of any federally

 

sanctioned and funded programs for the mitigation of aircraft noise

 

and fuel fumes.