[Congressional Record Volume 163, Number 76 (Wednesday, May 3, 2017)]
[Extensions of Remarks]
[Page E594]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   INTRODUCTION OF THE EMERGENCY FINANCIAL MANAGER REFORM ACT OF 2017

                                 ______
                                 

                         HON. JOHN CONYERS, JR.

                              of michigan

                    in the house of representatives

                         Wednesday, May 3, 2017

  Mr. CONYERS. Mr. Speaker, the Emergency Financial Manager Reform Act 
of 2017 is intended to ensure that state-appointed emergency financial 
managers for municipalities in fiscal distress do not violate 
Constitutional protections, ensure public health and safety, and are 
accountable stewards of taxpayer funds. The bill responds to problems 
presented when unaccountable emergency financial managers usurp local 
elected officials and unilaterally make decisions that jeopardize 
public health and safety.
  The bill accomplishes these objectives by authorizing the U.S. 
Attorney General to withhold ten percent of the funds that would 
otherwise be allocated to a state under the Edward Byrne Justice 
Assistance Grant Program (Byrne-JAG), which provides funding to states 
for law enforcement purposes, if the U.S. Attorney General determines 
that the state appointed an emergency financial manager who fails to 
meet any of the criteria as specified in the bill. These criteria, for 
example, include a requirement that the appropriate state official 
submit a certification to the U.S. Attorney General stating that the 
appointment of an emergency financial manager has neither the purpose 
nor the effect of denying or abridging the right to vote on account of 
race or color. Another condition specifies that the emergency financial 
manager receive prior approval from the governor of the state and the 
appropriate local elected officials before making decisions affecting 
public health or safety. A further condition protects the rights of 
employees under collective bargaining agreements from being impaired in 
violation of the U.S. Constitution.

               Section-by-Section Explanation of the Bill

       Section 1. Short Title. Section 1 sets forth the short 
     title of the bill as the Emergency Financial Manager Reform 
     Act of 2017.
       Section 2. Findings. Section 2 of the bill sets forth a 
     series of congressional findings explaining why this 
     legislation is necessary.
       Section 3. Safeguards Regarding State Appointment of an 
     Emergency Financial Manager. Subsection (a) of section 3 
     authorizes the U.S. Attorney General to withhold ten percent 
     of funds that would otherwise be allocated to a state under 
     the Byrne-JAG grant program for the following fiscal year if 
     the state has appointed an emergency financial manager and 
     any of the following criteria are not met:
       (1) The emergency financial manager is appointed and the 
     chief legal officer or other appropriate state official has 
     not prior thereto submitted a certification to the U.S. 
     Attorney General that such appointment has neither the 
     purpose nor the effect of denying or abridging the right to 
     vote on account of race or color and the U.S. Attorney 
     General has not interposed an objection within 60 days 
     following the submission of such certification.
       (2) The emergency financial manager is authorized to make 
     decisions affecting public health or safety of the residents 
     of a local government unit without receiving prior approval 
     from the governor of the state and the appropriate local 
     elected officials.
       (3) The emergency financial manager fails to have adequate 
     oversight to ensure against conflicts of interest, 
     mismanagement, and abuse of discretion by the emergency 
     financial manager. The bill, in section 4, defines adequate 
     oversight to mean that a monthly, publically-available report 
     accounting for all financial activities of the emergency 
     financial manager, including possible conflicts of interest, 
     mismanagement, and abuses of discretion. This report must be 
     reviewed and approved by the governor. In addition, adequate 
     oversight means that there must be an independent, state-
     approved, and publically-available annual audit of the 
     emergency financial manager's duty-related activities.
       (4) The emergency financial manager is authorized to 
     reject, modify, or terminate an existing collective 
     bargaining agreement without mutual consent of all parties to 
     such agreement.
       (5) The emergency financial manager is authorized to 
     reject, modify, or terminate an existing contract without 
     mutual consent of all parties to such contract or such 
     rejection, modification, or termination is approved by an 
     federal bankruptcy court.
       Subsection (b) provides that the amount of funding not 
     allocated under subsection (a) is to be reallocated to other 
     states that are not subject to any reduction under subsection 
     (a).
       Section 4. Definitions. Section 4 defines various terms 
     used in the bill.

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