I 

114TH CONGRESS 

2D SESSION H. R. 4754 

To require the Attorney General to ensure that State-appointed emergency 

financial managers do not violate Constitutional protections and that 

they ensure public health and safety, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 16, 2016 

Mr. CONYERS (for himself, Mrs. LAWRENCE, Mr. KILDEE, Mr. CLYBURN, Mr. 

BUTTERFIELD, Mr. GRIJALVA, Mr. ELLISON, Mr. NADLER, Ms. LOFGREN, Ms. JACKSON LEE, Mr. COHEN, Mr. JOHNSON of Georgia, Ms. 

JUDY CHU of California, Mr. DEUTCH, Ms. BASS, Ms. DELBENE, Ms. 

MAXINE WATERS of California, Mr. LARSON of Connecticut, Mr. GRAYSON, Mr. DOGGETT, Mr. AL GREEN of Texas, Mr. MCGOVERN, Mrs. 

WATSON COLEMAN, Ms. PLASKETT, Mr. CARTWRIGHT, Mr. HASTINGS, 

Mr. CUMMINGS, Ms. FUDGE, Ms. EDDIE BERNICE JOHNSON of Texas, 

Mr. RUSH, Ms. BROWN of Florida, and Mr. FATTAH) introduced the following bill; which was referred to the Committee on the Judiciary 

A BILL 

To require the Attorney General to ensure that State-appointed emergency financial managers do not violate 

Constitutional protections and that they ensure public 

health and safety, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Emergency Financial 

3 Manager Reform Act of 2016’’. 

4 SEC. 2. FINDINGS. 

5 The Congress finds the following: 

6 (1) Local government units are charged with 

7 providing critical law enforcement, educational train8 ing, public safety, and health services for the com9 munities they serve. 

10 (2) The mismanagement of Federal grant 

11 money, including conflicts of interest and abuse of 

12 discretion, undermines the ability of local govern13 ment units to provide these essential services. 

14 (3) The U.S. Government Accountability Office 

15 found that Federal grant management operations 

16 for local government units were adversely impacted 

17 in cases where unaccountable emergency financial 

18 managers were appointed. 

19 (4) The Federal Government has a strong in20 terest in preventing the mismanagement of Federal 

21 funds intended to support local law enforcement ef22 forts to protect health and safety by ensuring that 

23 local government units are accountable for such 

24 funds. 

25 (5) The appointment of an emergency financial 

26 manager may adversely impact voting rights when 


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1 such appointment disproportionately affects minority 

2 communities whose local elected officials are dis3 placed by such financial manager. 

4 (6) The appointment of an emergency financial 

5 manager can adversely impact public health and 

6 safety priorities, including the safety of public drink7 ing water systems, in instances where they are unac8 countable to local elected leaders. 

9 (7) Under article I, section 10, clause 1 of the 

10 U.S. Constitution, a State is prohibited from impair11 ing a contractual obligation. In addition, some State 

12 constitutions explicitly prohibit impairment of a col13 lective bargaining agreement and accrued financial 

14 benefits under a pension plan or a retirement sys15 tem. Such impairment is unconstitutional and a vio16 lation of law unless consented to by all parties. 

17 SEC. 3. SAFEGUARDS REGARDING STATE APPOINTMENT OF 

18 AN EMERGENCY FINANCIAL MANAGER. 

19 (a) REDUCTION OF BYRNE-JAG FUNDS.—The At20 torney General may withhold 5 percent of the funds that 

21 would otherwise be allocated to a State under the program 

22 under subpart 1 of part E of title I of the Omnibus Crime 

23 Control and Safe Streets Act of 1968 (42 U.S.C. 3750 

24 et seq.) for the fiscal year following any fiscal year in 


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1 which an emergency financial manager is appointed by 

2 that State or continues in a previous appointment and— 

3 (1) the chief legal officer or other appropriate 

4 State official does not, by the date of the appoint5 ment and every 18 months thereafter while the ap6 pointment remains in effect, submit to the Attorney 

7 General a certification that— 

8 (A) such appointment does not have the 

9 purpose nor will it have the effect of denying, 

10 abridging, or diluting the right to vote on ac11 count of race or color; and 

12 (B) the community for which the emer13 gency financial manager is appointed has been 

14 given an opportunity, by public notice issued si15 multaneously with the submission to the Attor16 ney General, to submit comments in full for a 

17 period of at least 30 days with regard to sub18 paragraph (A); 

19 (2) the Attorney General interposes an objec20 tion under paragraph (1)(A) by not later than 60 

21 days after submission of comments under paragraph 

22 (1)(B) and the emergency financial manager there23 after continues in the appointment; 

24 (3) such emergency financial manager is au25 thorized to make decisions affecting public health or 


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1 safety of the residents or employees of a local gov2 ernment unit, including the disbursement of any 

3 emergency funds provided by any Federal or State 

4 entity for the purpose of addressing lead or other 

5 contamination of drinking water in a public water 

6 system, without receiving prior approval from the 

7 governor of the State and appropriate local elected 

8 officials; 

9 (4) such emergency financial manager does not 

10 have adequate oversight in effect to ensure against 

11 conflicts of interest, mismanagement, and abuse of 

12 discretion by such emergency financial manager; 

13 (5) such emergency financial manager is au14 thorized to reject, modify, or terminate one or more 

15 terms and conditions of an existing collective bar16 gaining agreement without mutual consent as to 

17 such rejection, modification, or termination by all 

18 parties to the agreement; 

19 (6) such emergency financial manager is au20 thorized to reject, modify, or terminate one or more 

21 terms of an existing contract without mutual consent 

22 by all parties to the contract or without submitting 

23 such rejection, modification, or termination for ap24 proval by a bankruptcy court under title 11, United 

25 States Code; or 


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1 (7) such emergency financial manager is ap2 pointed and members of the community under the 

3 jurisdiction of such appointment were not provided 

4 prior thereto— 

5 (A) an opportunity, by public notice issued 

6 simultaneously with the submission to the At7 torney General required pursuant to paragraph 

8 (1) for a period of at least 30 days, to make 

9 public comment as to any conflicts of interest 

10 the proposed appointee may have, whether the 

11 proposed appointee has the requisite experience 

12 and financial acumen, and whether the pro13 posed appointee is empowered to propose 

14 sources of financial assistance, such as loans, 

15 grants, and revenue sharing; and 

16 (B) with the name of a State official to 

17 whom may be conveyed complaints about the 

18 appointee, including complaints about any con19 flicts of interest, mismanagement, or dereliction 

20 of duty. 

21 (b) REALLOCATION.—Amounts not allocated under 

22 the program referred to in subsection (a) to a State shall, 

23 to the extent practicable, be reallocated under that pro24 gram to the local government unit for which the emer25 gency financial manager is appointed. 


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1 SEC. 4. DEFINITIONS. 

2 In this Act: 

3 (1) The term ‘‘emergency financial manager’’ 

4 means any person appointed by a State, including a 

5 financial control board or commission, emergency 

6 manager, receiver, coordinator, or overseer that 

7 oversees or manages a local government unit. 

8 (2) The term ‘‘local government unit’’ includes 

9 cities, towns, municipalities, school board districts, 

10 law enforcement departments or any other body, de11 partment, or office which exercises authority over 

12 matters of local concern at the direction of local 

13 elected officials or governing bodies or the ap14 pointees of local elected officials or governing bodies. 

15 (3) The term ‘‘adequate oversight’’ means, in 

16 the case of an emergency financial manager— 

17 (A) a monthly, publically available report, 

18 reviewed and approved by the governor and ap19 propriate local elected officials, accounting for 

20 all financial activities of the emergency financial 

21 manager (including possible conflicts of inter22 est, mismanagement, and abuses of discretion) 

23 related to the duties of the emergency financial 

24 manager; and 

25 (B) an independent State-approved pub26 lically available audit of the emergency financial 


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1 manager’s duty-related activities on an annual 

2 basis or, if the term of an emergency financial 

3 manager is less than one year, at least one such 

4 audit. 

5 (4) The term ‘‘State’’ means any one of the 

6 several States. 

Æ 


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