SB-0437, As Passed House, March 5, 2014
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which it may be rescinded or terminated by any participating public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.