The bill seeks to amend the Code of West Virginia by introducing a new article dedicated to managing local fiscal emergencies. It establishes a framework that empowers the State Auditor or a designee to limit local government powers, enforce financial reporting, and maintain fiscal integrity. Key definitions related to fiscal emergencies, such as "debt obligations," "default," and "deficit fund," are included, along with guidelines for identifying conditions that may trigger a fiscal watch or emergency. Local governments are required to submit a financial recovery plan within 90 days of a fiscal watch declaration, detailing corrective actions for identified financial issues. The State Auditor is granted the authority to declare a fiscal watch or emergency based on the financial practices of local governments.

Additionally, the bill outlines the process for the involuntary dissolution of municipalities that fail to operate effectively, allowing the Prosecuting Attorney or the State Auditor to petition for dissolution under specific circumstances. It modifies existing provisions regarding the forfeiture of municipal charters and the voluntary dissolution process, emphasizing the need for local governments to comply with financial recovery plans. The bill also details the steps for filing a petition for involuntary dissolution, including the responsibilities of the State Auditor as a special receiver post-dissolution, who will manage the municipality's assets and liabilities. Importantly, it prohibits municipalities from seeking federal bankruptcy relief without explicit permission from the State Auditor and Governor, ensuring oversight and accountability in local fiscal management.

Statutes affected:
Originating in Committee: 8-35-1, 8-35-2, 6-9D-1, 6-9D-2, 6-9D-2a, 6-9D-3, 6-9D-4, 6-9D-5, 6-9D-6, 6-9D-7, 6-9D-8, 6-9D-9, 6-9D-10, 6-9D-11, 6-9D-12, 8-35-3, 8-35-4, 8-35-5, 8-35-6
Engrossed Version: 8-35-1, 8-35-2, 6-9D-1, 6-9D-2, 6-9D-2a, 6-9D-3, 6-9D-4, 6-9D-5, 6-9D-6, 6-9D-7, 6-9D-8, 6-9D-9, 6-9D-10, 6-9D-11, 6-9D-12, 8-35-3, 8-35-4, 8-35-5, 8-35-6