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Summary of Statutes Involving Local Units of Government
The following are summaries of Public Acts that concern units of local
government and their fiscal activities. Note: this is not a complete listing of
all acts containing information on local governments, just those that are often
referenced by the department of Treasury in meetings with local government
officials and state officials.
Public Act 2 of 1968, the Uniform Budgeting and Accounting Act
- Requires units of local government to maintain a uniform chart of
accounts for financial management and reporting purposes.
- Authorizes the Department of Treasury to perform internal control
reviews to ensure compliance with uniform chart of accounts.
- Requires units of local government to file with the Department of
Treasury annual financial and annual audit reports within 180 days of the
unit of local government's fiscal year end.
- Requires units of local government to follow uniform procedures with
regards to annual budget formulation, adoption, and monitoring.
Public Act 243 of 1980, the Emergency Municipal Loan Act
- Establishes the Local Emergency Financial Assistance Loan Board.
- Authorizes the Board to issue emergency loans to units of local
government that satisfy statutory criteria.
- Except in specific instances, units of local government are limited to a
maximum of $3 million in any one fiscal year of the unit of local government
and are limited to no more than five emergency loans during any ten-year
Public 80 of 1981, the Fiscal Stabilization Act
- Authorizes the State Administrative Board to approve the issuance of
bonds by units of local government to resolve accumulated operating
- The maximum amount of bonds issued by a unit of local government under
the Act cannot exceed three percent of the state-equalized valuation of real
and tangible personal property in the unit of local government for unlimited
general obligation debt or of limited tax general obligation bonds, or a
maximum principal amount of $125 million for all fiscal stabilization bonds.
- Fiscal Stabilization Act is intended to complement Emergency Municipal
Loan Act in that former is intended to address situations where accumulated
deficit exceeds what can be borrowed under the latter.
- Fiscal Stabilization Act also is intended to complement Revised
Municipal Finance Act in that former is intended to address situations where
deficit exceeds what can be funded through tax-anticipation notes issued
under the latter.
4 of 2011, the Local Government and School District Fiscal Accountability Act
- Authorizes the State Financial Authority to conduct preliminary reviews of
the financial conditions of units of local government upon the occurrence of
any one of 18 statutory conditions.
- Authorizes an appointed Financial Review Team to conduct a full review
of a local unit and report to the Governor whether a financial emergency
- If, after statutory due process has been accorded to local officials,
the Governor confirms the existence of a financial emergency, the Governor
then is required to declare the unit of local government to be in
receivership and to appoint an emergency manager.
- Act 4 is the only Michigan statute that authorizes municipalities
(albeit with State approval) to proceed under federal bankruptcy laws.
- PA 4 replaces PA 72 of 1990, the Local Government Fiscal Responsibility
Public Act 34 of 2001, the Revised Municipal Finance Act
- Requires units of local government to apply annually for qualified
status from the Department of Treasury in order to issue municipal
- Units of local government that receive qualified status may then issue
municipal securities throughout the course of that year without further
approval from the Department of Treasury, subject to certain post-issuance
- Units of local government that do not receive qualified status must
receive prior approval from the Department of Treasury for each proposed
- Authorizes the issuance of tax-anticipation notes and
- Public Act 279 of
1909, the Home Rule City Act (Section 36a only)
- Authorizes a city in which a financial emergency has been declared under
the Local Government Fiscal Responsibility Act to issue financial recovery
- Such bonds may be issued in an amount not to exceed 20 percent of the
assessed valuation of the city notwithstanding that cities otherwise are
limited to ten percent of assessed valuation for debt issuance purposes.
- Financial recovery bonds are subject to such terms and conditions as
approved by the Local Emergency Financial Assistance Loan Board.