INDIANAPOLIS — An emergency manager appointed to bring a distressed local government back to solvency would get automatic oversight under the latest amendment to Senate Bill 105.
That’s the bill written by Sen. Ed Charbonneau, R-Valparaiso, that would reform the Indiana Distressed Unit Appeals Board and create a path to bankruptcy court for Hoosier cities and towns. Charbonneau says his bill is designed to help them avoid that fate.
He also says it’s not aimed at Gary, which is the only city to petition the DUAB.
As written, financially troubled local governments would petition the DUAB, which would appoint an emergency manager who would try to fix that government’s fiscal ills. Charbonneau’s original draft would give the DUAB an option of appointing a subcommittee to oversee the emergency manager.
The amendment adopted by the Senate Monday requires the DUAB to appoint that subcommittee. It was offered by Sen. Earline Rogers, D-Gary, and it passed easily.
Under the terms of Charbonneau’s bill, the emergency manager would assume the powers of a government’s executive and fiscal branches. The manager could also recommend a bankruptcy filing.
“There is a laundry list of what this emergency manager can do,” Rogers said.
Charbonneau said he supported Rogers’ amendment. He also thanked her and Democratic Sens. Lonnie Randolph of East Chicago and Tim Lanane of Anderson for helping form the bill. Lanane said he wanted to offer an amendment requiring local officials to sit on the subcommittee.
In the end, he said, it was found to be too prescriptive.
"This is not a state takeover,” Lanane said.
Charbonneau offered his own amendment which he said would shore up a creditor’s ability to intercept money at the state treasurer’s office owed to the creditor by a Hoosier city. That mechanism already exists in state law, he said.
Sen. Karen Tallian, D-Portage, asked whether that amendment would give a creditor the power to take an insolvent city or town to the DUAB. Charbonneau said it wouldn’t.
“This does not create anything new that doesn’t already exist,” Charbonneau said.