MI HB6518

Amends the "Protecting Local Government Retirement and Benefits Act" to add definitions for "health care stipend" and clarifies existing definitions related to retirement benefits and local units of government.

Creates the "Local Unit Recovery Status Fund" within the state treasury to provide grants to county road commissions with underfunded retirement systems (health benefits less than 40% funded or pension benefits less than 60% funded).

County road commissions are eligible for grants if they adopt a corrective action plan approved by the municipal stability board that prohibits new retirement benefits (except health care stipends) to new employees, closes defined benefit plans to new hires, and commits to sustainable funding measures.

Establishes irrevocable trusts for retirement systems to receive and manage grant funds exclusively for paying retirement health benefits, with trustees having limited liability and funds being exempt from state taxation.

Requires that if a county road commission fails to meet its corrective action plan conditions, it must repay all grant money received plus interest to the state treasurer, and the board shall continue monitoring the entity.