1. (1) A local governmental entity is in a state of financial emergency when any of the following conditions occurs:

   1. (a) Failure within the same fiscal year in which due to pay short-term loans from banks or failure to make bond debt service payments when due.

   2. (b) Failure to transfer at the appropriate time, due to lack of funds:

      1. Taxes withheld on the income of employees; or

      2. Employer and employee contributions for:

      a. Federal social security; or

      b. Any pension, retirement, or benefit plan of an employee.

   3. (c) Failure for one pay period to pay, due to lack of funds:

      1. Wages and salaries owed to employees; or

      2. Retirement benefits owed to former employees.

   4. (d) An unreserved or total fund balance or retained earnings deficit for which sufficient resources of the local governmental entity are not available to cover the deficit for 2 successive years.
   5. (e) Noncompliance of the local government retirement system with actuarial conditions provided by law.
2. (2) A local governmental entity shall notify the Governor and the Legislative Auditing Committee when one or more of the conditions specified in subsection (1) have occurred or will occur if action is not taken to assist the local governmental entity. In addition, any state agency must, within 30 days after the identification of the financial emergency, notify the Governor and the Legislative Auditing Committee when one or more of the conditions specified in subsection (1) have occurred or will occur if action is not taken to assist a local governmental entity.

3. (3) Upon notification that one or more of the conditions in subsection (1) exist, the Governor or his or her designee shall contact the local governmental entity to determine what actions have been taken by the local governmental entity to resolve the financial emergency. The Governor has the authority to implement measures as set forth in ss. 218.50-218.504 to resolve the financial emergency. Such measures may include, but are not limited to:

   1. (a) Requiring approval of the local governmental entity's budget by the Governor.
   2. (b) Authorizing a state loan to the local governmental entity and providing for repayment of same.
   3. (c) Prohibiting a local governmental entity from issuing bonds, notes, certificates of indebtedness, or any other form of debt until such time as it is no longer subject to this section.
   4. (d) Making such inspections and reviews of records, information, reports, and assets of the local governmental entity, in which inspections and reviews the appropriate local officials shall cooperate.
   5. (e) Consulting with the officials of the local governmental entity and the appropriate state agency regarding any steps necessary to bring the books of account, accounting systems, financial procedures, and reports into compliance with state requirements.
   6. (f) Providing technical assistance to the local governmental entity.

   7. (g) 1. Establishing a financial emergencies board to oversee the activities of the local governmental entity. The board, if established, shall be appointed by the Governor. The Governor shall select a chair and such other officers as are necessary. The board shall adopt such rules as are necessary for conducting board business. The board may:

      a. Make such reviews of records, reports, and assets of the local governmental entity as are needed.

      b. Consult with the officials of the local governmental entity and appropriate state officials regarding any steps necessary to bring the books of account, accounting systems, financial procedures, and reports of the local governmental entity into compliance with state requirements.

      c. Review the operations, management, efficiency, productivity, and financing of functions and operations of the local governmental entity.

      2. The recommendations and reports made by the board must be submitted to the Governor for appropriate action.

   8. (h) Requiring and approving a plan, to be prepared by the appropriate state agency in conjunction with the local governmental entity, prescribing actions that will cause the local governmental entity to no longer be subject to this section. The plan must include, but need not be limited to:

      1. Provision for payment in full of all payments due or to come due on debt obligations, pension payments, and all payments and charges imposed or mandated by federal or state law and for all judgments and past due accounts, as priority items of expenditures.

      2. Establishment of a basis of priority budgeting or zero-based budgeting, so as to eliminate low-priority items that are not affordable.

      3. The prohibition of a level of operations which can be sustained only with nonrecurring revenues.

4. (4) During the financial emergency period, the local governmental entity may not seek application of laws under the bankruptcy provisions of the United States Constitution except with the prior approval of the Governor.

History.--s. 8, ch. 79-183; s. 54, ch. 89-169; s. 1180, ch. 95-147; s. 27, ch. 96-324; s. 29, ch. 97-96.