[Congressional Record (Bound Edition), Volume 162 (2016), Part 3]
[Extensions of Remarks]
[Page 3353]
[From the U.S. Government Publishing Office, www.gpo.gov]




   INTRODUCTION OF THE EMERGENCY FINANCIAL MANAGER REFORM ACT OF 2016

                                 ______
                                 

                         HON. JOHN CONYERS, JR.

                              of michigan

                    in the house of representatives

                       Wednesday, March 16, 2016

  Mr. CONYERS. Mr. Speaker, the Emergency Financial Manager Reform Act 
of 2016 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.
  Across our Nation, there are many cities in financial distress still 
struggling to recover from the Great Recession and other factors 
undermining their economic recovery. While most states work 
cooperatively with their cities to foster economic stability and 
growth, others such as my home state of Michigan, use draconian, 
autocratic laws that usurp local elected officials and replace them 
with unaccountable political appointees--typically known as emergency 
financial managers--who, through their vast powers, can jeopardize the 
health and safety of those who live and work in these struggling 
cities.
  In Michigan, for example, the root cause of the hazardous condition 
of Flint's lead-contaminated drinking water and the Detroit Public 
School System's buildings is the unaccountable emergency financial 
managers appointed by our Governor, Rick Snyder. This law and its 
implementation threaten not only our citizens' health and safety, but 
our fundamental Constitutional values and principles.
  In addition, extreme emergency financial manager laws frequently 
facilitate conflicts of interest and mismanagement and can be used to 
contravene important federal and state constitutional protections for 
collective bargaining agreements. They can authorize emergency 
financial managers to unilaterally reject collective bargaining 
agreements and other contractual obligations and thereby negate years 
of hard earned worker pension benefits. These are not just problems in 
Michigan, as it has been suggested that Atlantic City, which is also in 
financial distress, be taken over by an unaccountable emergency 
financial manager with broad powers similar to those available in 
Michigan.
  The Emergency Financial Manager Reform Act responds to these serious 
concerns by authorizing the Attorney General to reallocate five percent 
of the law enforcement 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 
it is determined that the state appointed emergency financial manager 
violates any one of seven common sense safeguards:
  Protection Against Discriminatory Impact on Voting--This provision 
requires the state that has appointed an emergency financial manager to 
submit a certification to the Attorney General (and every 18 months 
after such appointment if the tenure of the emergency financial manager 
continues beyond such period) that the appointment: (A) has neither the 
purpose nor the effect of denying, abridging, or diluting the right to 
vote on account of race or color; and (B) the community for which the 
emergency financial manager is sought to be appointed has had an 
opportunity to comment, on the impact of such appointment may have on 
voting rights.
  Protection Against States Ignoring Adverse Impacts on Voting Rights--
This provision requires the Attorney General to receive copies of all 
public comments submitted in response to the notice required above and 
to interpose an objection to the certification.
  Protection Against Harm to Public Health and Safety--This provision 
requires the emergency financial manager before making decisions 
affecting public health or safety, including the disbursement of any 
emergency funds provided by any federal or state entity for the purpose 
of addressing lead or other contamination of drinking water in a public 
water system, to receive prior approval from the governor and local 
elected officials.
  Protection Against Conflicts of Interest, Mismanagement, and Abuse of 
Discretion--This provision requires the emergency financial manager to 
have adequate oversight to ensure against conflicts of interest, 
mismanagement, and abuse of discretion.
  Protection Against Unilateral Rejection of Other Contracts--This 
provision provides that the emergency financial manager may not reject, 
modify, or terminate an existing contract without mutual consent or 
unless such rejection, modification, or termination is approved by a 
federal bankruptcy court.
  Protection Against Rejection of Collective Bargaining Agreements--
This provision provides that the emergency financial manager may not 
reject, modify, or terminate a collective bargaining agreement without 
mutual consent of the parties.
  Protection Against the Failure to Provide Public Notice and 
Opportunity to Comment--This provision ensures that the public--before 
an emergency financial manager is appointed--is provided notice and the 
opportunity to comment on whether the appointee has any conflicts of 
interest, whether he or she has the requisite experience and financial 
acumen, and whether the appointee is empowered to propose sources of 
financial assistance, such as loans, grants and revenue sharing. The 
public must also be given the name of a state official designated to 
received complaints from the public about the appointee's conflicts of 
interest, mismanagement, or dereliction of duty.
  The objective of the legislation is not to deny Byrne-JAG grant 
funds, but rather to incentivize the states to protect their citizens 
against these risks and abuses when emergency financial managers are 
appointed. However, if in the event the finds are withheld, they are 
directly reallocated to the local government for which an emergency 
financial manager is appointed.
  We can and must stand together to make sure that the unaccountable 
emergency financial managers responsible for these man-made disasters--
and the legal system that empowered them--are not permitted to inflict 
further harm on our citizens.

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