I 
115TH CONGRESS 
1ST SESSION H. R. 2325 
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 
MAY 3, 2017 
Mr. CONYERS (for himself, Mr. KILDEE, Mrs. LAWRENCE, Mr. CARTWRIGHT, 
Mr. VEASEY, Mr. COHEN, Ms. LEE, Mrs. WATSON COLEMAN, Ms. NOR-
TON, Ms. LOFGREN, Ms. JUDY CHU of California, Mr. NADLER, Mr. 
JOHNSON of Georgia, Ms. JACKSON LEE, Mr. CONNOLLY, Ms. EDDIE 
BERNICE JOHNSON of Texas, Mr. CUMMINGS, Ms. JAYAPAL, Mr. 
JEFFRIES, and Ms. BASS) introduced the following bill; which was re-
ferred to the Committee on the Judiciary 
A BILL 
To require the Attorney General to ensure that State-ap-
pointed emergency financial managers do not violate 
Constitutional protections and that they ensure public 
health and safety, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Emergency Financial 
Manager Reform Act of 2017’’. 
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SEC. 2. FINDINGS. 
The Congress finds the following: 
(1) Local government units are charged with 
providing critical law enforcement, educational train-
ing, public safety, and health services for the com-
munities they serve. 
(2) The mismanagement of Federal grant 
money, including conflicts of interest and abuse of 
discretion, undermines the ability of local govern-
ment units to provide these essential services. 
(3) The U.S. Government Accountability Office 
found that Federal grant management operations 
for local government units were adversely impacted 
in cases where unaccountable emergency financial 
managers were appointed. 
(4) The Federal Government has a strong in-
terest in preventing the mismanagement of Federal 
funds intended to support local law enforcement ef-
forts to protect health and safety by ensuring that 
local government units are accountable for such 
funds. 
(5) The appointment of an emergency financial 
manager may adversely impact voting rights when 
such appointment disproportionately affects minority 
communities whose local elected officials are dis-
placed by such financial manager. 
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(6) The appointment of an emergency financial 
manager can adversely impact public health and 
safety priorities, including the safety of public drink-
ing water systems, in instances where they are unac-
countable to local elected leaders. 
(7) Under article I, section 10, clause 1 of the 
U.S. Constitution, a State is prohibited from impair-
ing a contractual obligation. In addition, some State 
constitutions explicitly prohibit impairment of a col-
lective bargaining agreement and accrued financial 
benefits under a pension plan or a retirement sys-
tem. Such impairment is unconstitutional and a vio-
lation of law unless consented to by all parties. 
SEC. 3. SAFEGUARDS REGARDING STATE APPOINTMENT OF 
AN EMERGENCY FINANCIAL MANAGER. 
(a) REDUCTION OF BYRNE-JAG FUNDS.—The At-
torney General may withhold 5 percent of the funds that 
would otherwise be allocated to a State under the program 
under subpart 1 of part E of title I of the Omnibus Crime 
Control and Safe Streets Act of 1968 (42 U.S.C. 3750 
et seq.) for the fiscal year following any fiscal year in 
which an emergency financial manager is appointed by 
that State or continues in a previous appointment and— 
(1) the chief legal officer or other appropriate 
State official does not, by the date of the appoint-
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ment and every 18 months thereafter while the ap-
pointment remains in effect, submit to the Attorney 
General a certification that— 
(A) such appointment does not have the 
purpose nor will it have the effect of denying, 
abridging, or diluting the right to vote on ac-
count of race or color; and 
(B) the community for which the emer-
gency financial manager is appointed has been 
given an opportunity, by public notice issued si-
multaneously with the submission to the Attor-
ney General, to submit comments in full for a 
period of at least 30 days with regard to sub-
paragraph (A); 
(2) the Attorney General interposes an objec-
tion under paragraph (1)(A) by not later than 60 
days after submission of comments under paragraph 
(1)(B) and the emergency financial manager there-
after continues in the appointment; 
(3) such emergency financial manager is au-
thorized to make decisions affecting public health or 
safety of the residents or employees of a local gov-
ernment unit, including the disbursement of any 
emergency funds provided by any Federal or State 
entity for the purpose of addressing lead or other 
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contamination of drinking water in a public water 
system, without receiving prior approval from the 
governor of the State and appropriate local elected 
officials; 
(4) such emergency financial manager does not 
have adequate oversight in effect to ensure against 
conflicts of interest, mismanagement, and abuse of 
discretion by such emergency financial manager; 
(5) such emergency financial manager is au-
thorized to reject, modify, or terminate one or more 
terms and conditions of an existing collective bar-
gaining agreement without mutual consent as to 
such rejection, modification, or termination by all 
parties to the agreement; 
(6) such emergency financial manager is au-
thorized to reject, modify, or terminate one or more 
terms of an existing contract without mutual consent 
by all parties to the contract or without submitting 
such rejection, modification, or termination for ap-
proval by a bankruptcy court under title 11, United 
States Code; or 
(7) such emergency financial manager is ap-
pointed and members of the community under the 
jurisdiction of such appointment were not provided 
prior thereto— 
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(A) an opportunity, by public notice issued 
simultaneously with the submission to the At-
torney General required pursuant to paragraph 
(1) for a period of at least 30 days, to make 
public comment as to any conflicts of interest 
the proposed appointee may have, whether the 
proposed appointee has the requisite experience 
and financial acumen, and whether the pro-
posed appointee is empowered to propose 
sources of financial assistance, such as loans, 
grants, and revenue sharing; and 
(B) with the name of a State official to 
whom may be conveyed complaints about the 
appointee, including complaints about any con-
flicts of interest, mismanagement, or dereliction 
of duty. 
(b) REALLOCATION.—Amounts not allocated under 
the program referred to in subsection (a) to a State shall, 
to the extent practicable, be reallocated under that pro-
gram to the local government unit for which the emer-
gency financial manager is appointed. 
SEC. 4. DEFINITIONS. 
In this Act: 
(1) The term ‘‘emergency financial manager’’ 
means any person appointed by a State, including a 
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financial control board or commission, emergency 
manager, receiver, coordinator, or overseer that 
oversees or manages a local government unit. 
(2) The term ‘‘local government unit’’ includes 
cities, towns, municipalities, school board districts, 
law enforcement departments or any other body, de-
partment, or office which exercises authority over 
matters of local concern at the direction of local 
elected officials or governing bodies or the ap-
pointees of local elected officials or governing bodies. 
(3) The term ‘‘adequate oversight’’ means, in 
the case of an emergency financial manager— 
(A) a monthly, publically available report, 
reviewed and approved by the governor and ap-
propriate local elected officials, accounting for 
all financial activities of the emergency financial 
manager (including possible conflicts of inter-
est, mismanagement, and abuses of discretion) 
related to the duties of the emergency financial 
manager; and 
(B) an independent State-approved pub-
lically available audit of the emergency financial 
manager’s duty-related activities on an annual 
basis or, if the term of an emergency financial 
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manager is less than one year, at least one such 
audit. 
(4) The term ‘‘State’’ means any one of the 
several States. 
Æ 
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