HB 1166: Local government; zoning decisions shall not affect or be required for certain residential dwellings of 400 square feet or fewer; provide

The Senate Committee on State and Local Governmental Operations - General offered the following substitute to HB 1166:

A BILL TO BE ENTITLED

AN ACT

To amend Chapter 30 of Title 36 of the Official Code of Georgia Annotated, relating to general provisions regarding provisions applicable to municipal corporations only, so as to provide for conclusive evidence of termination or continuation of certain municipal corporations; to provide for a review commission for distressed municipalities; to provide for investigation of distressed municipalities; to provide for reports by a review commission; to provide for petition to appoint a receiver; to provide for certain hearings; to provide for the appointment of a receiver; to provide for the qualifications, powers, and duties of the receiver; to provide for certain restrictions on receivers; to provide for a recovery plan; to provide for extensions to a recovery plan; to provide for automatic end of a receivership; to provide for certain emergency assistance; to provide for a roster of certain entities and individuals; to provide for a definition; to provide for related matters; to repeal conflicting laws; and for other purposes.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:

SECTION 1.

Chapter 30 of Title 36 of the Official Code of Georgia Annotated, relating to general provisions regarding provisions applicable to municipal corporations only, is amended by revising Code Section 36-30-7.1, relating to inactive municipalities, as follows:

"36-30-7.1.

(a) On and after July 1, 1995, any Any municipal corporation in this state shall be deemed an inactive municipality and its charter shall be repealed by operation of law if the municipal corporation fails to meet any of the minimum standards provided in subsection

(b) of this Code section for determining an active municipality.

(b) An active municipality is any incorporated municipality in this state the governing body of which meets each of the following minimum standards:

(1) Provides at least three of the following services, either directly or by contract:

(A) Law enforcement;

(B) Fire protection (which may be furnished by a volunteer fire force) and fire safety;

(C) Road and street construction or maintenance;

(D) Solid waste management;

(E) Water supply or distribution or both;

(F) Waste-water treatment;

(G) Storm-water collection and disposal;

(H) Electric or gas utility services;

(I) Enforcement of building, housing, plumbing, and electrical codes and other similar codes;

(J) Planning and zoning; and

(K) Recreational facilities;

(2) Holds at least six regular, monthly or bimonthly, officially recorded public meetings within the 12 months next preceding the execution of the certificate required by subsection (c) of this Code section; and

(3) Qualifies for and holds a regular municipal election as provided by law, other than a municipality which has a governing authority comprised composed of commissioners or other members who are appointed by a judge of the superior court.

(c) Not later than July 1, 1994, each municipal corporation in this state shall file with the Department of Community Affairs either:

(1) A certification from the governing authority that the municipal corporation meets the minimum standards for determining an active municipality enumerated in subsection (b) of this Code section; or

(2) A certification from the governing authority that the municipal corporation does not meet the minimum standards for determining an active municipality enumerated in subsection (b) of this Code section, including a statement that the governing authority recognizes that its legal existence will under the provisions of this Code section be terminated as of July 1, 1995.

(d) After October 15, 1994, the Department of Community Affairs shall transmit to the governing authority of each municipal corporation in the state either:

(1) A statement confirming that the Department of Community Affairs has received from the municipal corporation the filing required by subsection (c) of this Code section, including a statement of which type of filing was received from that municipal corporation; or

(2) A statement that the Department of Community Affairs has not received from the municipal corporation the filing required by subsection (c) of this Code section, including a statement that the municipal corporation's legal existence will be terminated as of July 1, 1995, unless such filing is received by December 31, 1994.

(e) A municipal corporation which does not timely make the filing required by subsection

(c) of this Code section shall have a grace period until December 31, 1994, to make such filing. However, if such filing is not made by December 31, 1994, the legal status of the municipal corporation shall be the same as that of a municipal corporation which does not meet the minimum standards for determining an active municipality enumerated in subsection (b) of this Code section; and such municipal corporation shall cease to have legal existence as of July 1, 1995.

(f) As quickly as practicable after December 31, 1994, the Department of Community Affairs shall compile a listing of all municipal corporations in this state indicating those whose legal existence will be terminated as of July 1, 1995, and those whose legal existence will not be so terminated.

(c) A certified copy of such listing shall be the listing of all municipal corporations whose existence was terminated as of July 1, 1995, or whose legal existence had not been terminated on such date, which had been provided to the Secretary of State and shall be conclusive evidence, acceptable in any court and recordable in any public records, of the termination or continuation of existence of a municipal corporation. The Secretary of State shall transmit such a certified copy of the listing to the legislative counsel for publication in the Georgia Laws for the year 1995, and all All courts of this state may take judicial notice of the listing so published.

(g)(d) Upon the termination of existence of a municipal corporation as provided for in this Code section, the existence of any local authority created by or for such municipal corporation shall likewise terminate on the same date. Upon the termination of any municipal corporation or local authority under this Code section, all assets, property, and legal rights and obligations of the municipal corporation or local authority shall devolve by operation of law upon the governing authority of the county in which the legal situs of the municipal corporation or local authority was located; provided, however, that this devolution of rights and obligations shall in no manner obligate the county to provide continued employment for any employee of the abolished municipal corporation or local authority. In the case of legal indebtedness of a municipal corporation or local authority devolving upon a county under this Code section, the county shall be authorized but not required to levy a special district tax, fee, or assessment within the formerly incorporated territory (or a portion thereof corresponding to any special district for which the indebtedness was incurred) for the purpose of retiring all or a portion of such indebtedness. Assets devolved to the county governing authority pursuant to this Code section which are deemed to be excess by the county shall be used to retire any indebtedness of the terminated municipal corporation or local authority. Property devolved to the county governing authority pursuant to this Code section which is deemed to be unnecessary by the county shall be sold and the proceeds from such sale used to retire any indebtedness of the terminated municipal corporation or local authority.

(h)(e)(1) Upon the termination of existence of a municipal corporation as provided in this Code section, the geographic area that was contained in the boundaries of the former municipal corporation may continue to be identified under the same name and style as the former municipal corporation, and for such purpose signs and other appropriate insignia may be erected for such identification.

(2) The Department of Community Affairs shall establish a designation of 'historic township' for communities created on or before 1900, provide for the establishment of unincorporated town councils, provide a procedure for converting such municipalities to townships, and for registration of such.

(i) At the session of the General Assembly held in the year 1996 only, a new charter may be granted to a municipal corporation which ceased to exist under the provisions of this Code section solely because of a failure to make the required filing with the Department of Community Affairs (not including any case where the municipal corporation failed to meet the minimum standards of an active municipality enumerated in subsection (b) of this Code section), without regard to the minimum standards for incorporation set out in Chapter 31 of this title. In such a case the local law granting the new charter shall have attached thereto, in lieu of the certificate otherwise required by Code Section 36-31-5, a certificate by the author of the bill stating that the requirements of this subsection are met by the municipal corporation being reincorporated. In any such case assets and property and rights and obligations which devolved upon the county shall be retransferred from the county back to the municipal corporation.

(j)(f) In any case in which the legal dissolution of a municipal corporation has not been certified under the provisions of subsection (f) (c) of this Code section but the municipal corporation does not in fact meet the minimum standards for determining an active municipality enumerated in subsection (b) of this Code section, any citizen of the municipal corporation or the county in which the legal situs of the municipal corporation is located may bring at any time on or after July 1, 1995, a declaratory judgment action for a declaration of the dissolution of the municipal corporation. Any such action shall be brought in the superior court of the county wherein the legal situs of the municipal corporation is located. If a judgment is entered declaring the dissolution of the municipal corporation, the court shall file a certified copy of the judgment with the Secretary of State and the legislative counsel. A copy of such judgment shall be published in the next publication of the annual session laws with the same status and effect provided for in subsection (f) (c) of this Code section; and a certified copy of the judgment from the court or the Secretary of State shall have the same status and effect as described in subsection (f) (c) of this Code section."

SECTION 2.

Said chapter is further amended by adding a new Code section to read as follows:

"36-30-7.2.

(a) As used in this Code section, the term 'distressed municipality' means any municipal corporation in this state, or an authority controlled directly or indirectly by such municipal corporation, which failed to meet any one of the minimum standards specified for an active municipality pursuant to subsection (b) of Code Section 36-30-7.1 or has met at least two of the following criteria:

(1) The municipality has failed to comply with the requirements of Code Section 36-81-7 for two consecutive years;

(2) The municipality has failed to prepare and approve an annual budget for two consecutive fiscal years pursuant to Code Section 36-81-5;

(3) The municipality has failed to make required payments to judgment creditors for 90 days beyond the date of the recording of the judgment;

(4) The municipality has contracted for one or more of the services listed in subsection (1) of paragraph (b) of Code Section 36-30-7.1, owes the contractor or other governing authority payments in excess of 12 months of contracted service price, and has failed to reach a written agreement or judicial disposition with such contractor or governing authority on repayment of such outstanding balance;

(5) The municipality's incurred debt exceeds the limits allowed by Article IX, Section V, Paragraph I of the Georgia Constitution;

(6) The municipality has defaulted in payment of principal or interest on any of its bonds or notes or in payment of rentals due any authority;

(7) The municipality has been unable to pay employees for 30 days;

(8) The municipality has failed to forward taxes withheld on the income of employees or has failed to transfer employer or employee contributions for social security for a period of at least 30 days; or

(9) The municipality has accumulated and operated a deficit equal to 5 percent or more of its revenues for two consecutive fiscal years without adequate cash reserves. (b)(1) The Governor shall appoint a review commission upon written request from the majority of the Senators and Representatives whose districts include all or a portion of the geographical area of a municipal corporation alleging that the municipal corporation is a distressed municipality. Such request shall include the specific reasons for alleging such municipal corporation is a distressed municipality. The review commission shall be composed of the commissioner of community affairs and two municipal officials who are not located within the same county or counties as the alleged distressed municipality. The members of the review commission shall receive no compensation for their services, but shall be reimbursed for any expenses incurred in connection with the investigation. The funds necessary to conduct the investigation shall come from funds appropriated to the executive branch of government.

(2)(A) The review commission shall make a written report of its findings to the Governor within 14 days of appointment; provided, however, that the Governor may grant a review commission additional time to report. If the review commission finds that the municipal corporation is a distressed municipality, then the Governor shall review such findings and may direct the Attorney General to file a petition in the superior court of the judicial circuit of the alleged distressed municipality. Such petition shall name an individual to be appointed, and the superior court shall have no authority to appoint anyone other than the individual named in the petition. (B)(i) The receiver shall have a minimum of five years of experience in local legal, management, or budgetary matters and be a resident of this state. The receiver's compensation and reimbursement for actual and necessary expenses shall be paid by this state and compensation shall be established by the Attorney General; provided, however, that the Attorney General may seek and shall be entitled to reimbursement of any such expenses from the distressed municipality within five years of the end of the receivership.

(ii) A receiver appointed pursuant to this subsection shall not seek or hold a position as an elected or appointed public official within this state or as a political party officer during the term of the receivership and within one year of the receivership ending. The receiver shall also not receive any compensation, fee, or commission from the distressed municipality, or receive any fee or commission from the sale or lease of property or other financial transaction involving the distressed municipality.

(iii) A receiver shall not be personally liable for any obligations of the distressed municipality and shall enjoy sovereign immunity and official immunity and remain immune from any suit except as the General Assembly shall waive such immunities.

(C) The Attorney General shall serve the petition appointing a receiver upon the governing body of the distressed municipality and the chief executive officer of the distressed municipality. Additionally, the Attorney General shall publish notice of the filing of the petition in the legal organ of the county which is the legal situs of the municipality or in a newspaper having a general circulation in such county at least equal to that of the legal organ at least seven days before any hearing on such petition.

(c) The superior court shall conduct a hearing on the petition within 30 days of the Attorney General filing such petition. The court shall issue an order on the petition within 60 days of the filing of the petition, laying out findings of fact and a determination of whether a municipal corporation is a distressed municipality.

(d) If the superior court grants the petition and finds that the municipal corporation is a distressed municipality, such court's order shall:

(1) Set forth findings;

(2) Declare the distressed municipality to be in receivership;

(3) Appoint a receiver for a period not to exceed two years; provided, however, the Attorney General may request additional two-year extensions if further implementation of a recovery plan is necessary to bring the municipality out of distress; and

(4) Direct the receiver to develop a recovery plan pursuant to subsection (e) of this Code section within 30 days and submit such plan to the court, the Attorney General, the governing body of the distressed municipality, and if applicable, the chief executive officer of the distressed municipality.

(e)(1) The recovery plan developed by the receiver shall include:

(A) The continued provision of vital and necessary services;

(B) Payment of the financial obligations of the distressed municipality, including, but not limited to, debt obligations, municipal securities, lease rental obligation, legal obligations, and consensual modifications of existing obligations; and

(C) Timely deposit of required payments to the pension fund in which the distressed municipality participates.

(2) The recovery plan may provide for:

(A) The sale, lease, conveyance, assignment, or other use or disposition of the assets of the distressed municipality or authority;

(B) The approval, modification, rejection, renegotiation, or termination of contracts or agreement of the distressed municipality, except to the extent prohibited by the Constitutions of Georgia and of the United States;

(C) The execution of new contracts or agreements; and

(D) Other information the receiver deems appropriate.

(3) The recovery plan shall not and the receiver shall not be authorized to:

(A) Unilaterally adopt any form of taxation beyond what is authorized by law or the Constitution of Georgia;

(B) Unilaterally abrogate, alter, or otherwise interfere with a lien, charge, covenant, or relative priority that is held by a holder of a debt obligation of the distressed municipality and granted by contract, law, rule, or regulation governing debt obligations;

(C) Unilaterally impair or modify existing bonds, notes, municipal securities, or other lawful contractual or legal obligations of the distressed municipality; or

(D) Authorize the use of the proceeds of the sale, lease, conveyance, assignment, or other use or disposition of the assets of the distressed municipality without first applying such proceeds to the payment of outstanding debt obligations owed by the distressed municipality, subject to any lien, charge, covenant, restriction, contract, law, rule, or regulation that encumbers or is otherwise applicable to the assets. (f)(1) The court shall conduct a hearing on the recovery plan within 30 days of receiving such plan from the receiver. The court shall confirm the recovery plan within 60 days of receipt of such plan unless it finds by clear and convincing evidence that the plan is arbitrary, capricious, or wholly inadequate to alleviate the fiscal emergency in the distressed municipality.

(2) The receiver shall notify the court of any modification to the recovery plan. The court may conduct a hearing on the modification plan within 30 days of receiving such plan. The court shall confirm the modification of the recovery plan within 60 days of receiving such plan unless it finds by clear and convincing evidence that the plan is arbitrary, capricious, or wholly inadequate to alleviate the fiscal emergency in the distressed municipality.

(g) Notwithstanding any other provision of law to the contrary, the receiver shall have the following powers and duties:

(1) To require the distressed municipality or authority to take actions necessary to implement the recovery plan;

(2) To modify the recovery plan as necessary to achieve the financial stability of the distressed municipality;

(3) To require the distressed municipality to negotiate intergovernmental agreements between itself and another political subdivision of this state to eliminate and avoid deficits, maintain sound budgetary practices, and avoid interruption of municipal services;

(4) To submit quarterly reports to the governing body and, if applicable, the chief executive officer of the distressed municipality and to the Attorney General. Such reports shall be posted on a publicly accessible website maintained by the distressed municipality;

(5) To require the distressed municipality to cause the sale, lease, conveyance, assignment, or other use or disposition of the distressed municipality's assets;

(6) To approve, disapprove, modify, reject, terminate, or renegotiate contracts and agreements with the distressed municipality except to the extent prohibited by the Constitutions of Georgia and of the United States;

(7) To direct the distressed municipality to take any other action to implement the recovery plan;

(8) To attend open and closed meetings of the governing body of the distressed municipality and make reports to the public on implementation of such plan;

(9) To employ financial or legal experts deemed necessary to develop and implement the recovery plan; provided, however, that notwithstanding any law to the contrary, the employment of such experts shall not be subject to any contractual competitive bidding procedures;

(10) To make a recommendation to the Attorney General that the municipality be disincorporated; and

(11) To make a recommendation to the Attorney General and the court that the municipality be removed from receivership.

(h)(1) A receiver appointed pursuant to this Code section shall have the power to issue orders to elected or appointed officials of the distressed municipality to implement any provision of the recovery plan and to refrain from taking any action which would interfere with the powers granted to the receiver or the goals of the recovery plan. Any such order shall be enforceable by bringing an action pursuant to Article 2 of Chapter 6 of Title 9; provided, however, that the court shall grant or deny the relief from such action within 14 days of the filing of any such action.

(2) Any elected or appointed official or other interested party of a distressed municipality may petition the court to enjoin any action of the receiver that is contrary to this Code section.

(i) Except as otherwise provided for in this Code section, the receivership shall expire two years after the appointment of the receiver.

(j) Notwithstanding any other provision of law to the contrary, if the Governor determines that the need for state assistance for, oversight of, or intervention for a distressed municipality is of an emergency nature such that a delay in action would cause material harm to the provision of public services or to the financial interests of this state, the Governor may direct the Department of Administrative Services to authorize an emergency procurement pursuant to Code Section 50-5-71, or to utilize existing state-wide contracts or prequalified vender rosters established pursuant to subsection (k) of this Code section to secure necessary staffing or professional services in an expeditious manner. Any such emergency procurement shall be reported to the chairpersons of the Senate Finance Committee and the House Committee on Ways and Means within ten business days. (k)(1) The Department of Administrative Services, in consultation with the state auditor and the Department of Community Affairs, shall establish and maintain a master state-wide contract roster for local government turnaround specialists pursuant to Code Section 50-5-57.

(2) To qualify for inclusion on such roster, a firm or individual shall demonstrate;

(A) Experience in providing fiscal recovery or financial advisory services to governmental entities of comparable complexity;

(B) Professional credentials in governmental accounting, public administration, or municipal finance, including, but not limited to, certified public accountants or equivalent licensure or certification; and

(C) No disqualifying conflicts of interest with this state or any of its political subdivisions.

(3) The Department of Administrative Services shall conduct a competitive solicitation to establish the initial roster and shall update such roster no less frequently than every three years. The Governor may utilize the roster to procure specialist services for any local government subject to emergency process pursuant to this Code section, using the expedited procurement process authorized pursuant to subsection (j) of this Code section."

SECTION 3.

All laws and parts of laws in conflict with this Act are repealed.