Legislation watch
Mackinac Center for Public Policy
Capitol Building

2011 Senate Bill 865: Replace repealed "Emergency Manager" law

Public Act 436 of 2012

  1. Introduced by Sen. Phil Pavlov (R) on December 1, 2011, to authorize the appointment by the state of transition advisory boards for fiscally-failed local governments that have been “rehabilitated” and are coming out of a receivership managed by a state-appointed emergency manager. The boards would have veto power over budgets, union agreements and new borrowing.
    • Referred to the Senate Government Operations Committee on December 1, 2011.
      • Reported in the Senate on December 14, 2011, with the recommendation that the substitute (S-1) be adopted and that the bill then pass.
    • Substitute offered in the Senate on December 15, 2011, to replace the previous version of the bill with one that eliminates its previous provisions and leaves it as a "placeholder" or potential "vehicle" bill for extending the Emergency Manager law passed earlier in 2011; see Senate-passed version for details. The substitute passed by voice vote in the Senate on December 15, 2011.
  2. Passed 26 to 12 in the Senate on December 15, 2011, to pass a "shell" version of this bill with no substantive provisions, but which can be modified later to extend the Emergency Manager law passed earlier in 2011 the event it is suspended in 2012 pending a potential referendum in November. This possibility was triggered by a statewide petition drive reportedly orchestrated by government employee unions unhappy with the power given to emergency managers appointed under that new law to throw out collective bargaining agreements they believe a fiscally failed municipality cannot afford.
    Who Voted "Yes" and Who Voted "No"

  3. Received in the House on December 15, 2011.
    • Referred to the House Government Operations Committee on December 15, 2011.
      • Reported in the House on December 6, 2012, with the recommendation that the substitute (H-5) be adopted and that the bill then pass.
    • Substitute offered in the House on December 12, 2012. The substitute failed by voice vote in the House on December 12, 2012.
    • Substitute offered by Rep. Al Pscholka (R) on December 12, 2012, to adopt a substitute that contains a substantive proposal; see House-passed bill for details. The substitute passed by voice vote in the House on December 12, 2012.
    • Amendment offered by Rep. Maureen Stapleton (D) on December 12, 2012, to add additional reporting and procedural steps to the fiscal emergency process. The amendment passed by voice vote in the House on December 12, 2012.
    • Amendment offered by Rep. Maureen Stapleton (D) on December 12, 2012, to prohibit an emergency manager appointed to a fiscally-failed city from selling its municipal water system without a vote of the residents. The amendment failed by voice vote in the House on December 12, 2012.
    • Amendment offered by Rep. Maureen Stapleton (D) on December 12, 2012, to restrict the authority of an emergency manager to replace trustees of an underfunded municipal pension system to cases where the system is only 70 percent funded, rather than a proposed 80 percent threshold. The amendment failed by voice vote in the House on December 12, 2012.
    • Amendment offered by Rep. Maureen Stapleton (D) on December 12, 2012, to exempt Detroit from a provision giving an emergency manager the power to replace trustees of a city pension fund that is less than 80 percent funded. The amendment failed by voice vote in the House on December 12, 2012.
    • Amendment offered by Rep. Woodrow Stanley (D) on December 12, 2012, to strip out a provision that adds a modest appropriation, which under a state Supreme Court ruling several years ago has the effect of making the bill "referendum-proof". The amendment failed by voice vote in the House on December 12, 2012.
    • Amendment offered by Rep. Jon Switalski (D) on December 12, 2012, to increase the deadline for feeback from municipal officials that is part of the procedures for declaring a fiscal emergency that would trigger the proposed law. The amendment failed by voice vote in the House on December 12, 2012.
    • Amendment offered by Rep. Woodrow Stanley (D) on December 12, 2012, to establish that the state review team tasked with reviewing the finances of a fiscally failed city or school district prior to triggering the proposed law would be subject to the state Open Meetings Act and Freedom of Information Act. The amendment failed by voice vote in the House on December 12, 2012.
    • Amendment offered by Rep. Woodrow Stanley (D) on December 12, 2012, to style a public information meeting required as part of the financial emergency review process as a "hearing". The amendment failed by voice vote in the House on December 12, 2012.
    • Amendment offered by Rep. Maureen Stapleton (D) on December 12, 2012, to strip out a provision giving the state Treasurer the power to declare at his sole discretion that a fiscally failed city government that has entered a "consent agreement" proposed by bill has committed a "material breach" of that agreement. The amendment failed by voice vote in the House on December 12, 2012.
    • Amendment offered by Rep. Woodrow Stanley (D) on December 12, 2012, to exempt for five years a city or school district that has had an emergency manager appointed from the mandate in the Public Employment Relations Act (PERA) to engage in collective bargaining with government employee unions. The amendment failed by voice vote in the House on December 12, 2012.
    • Amendment offered by Rep. Jon Switalski (D) on December 12, 2012, to eliminate a hard deadline on a fiscally failed local government choosing the mediation alternative proposed by the bill, or else having an emergency manager appointed. The amendment failed by voice vote in the House on December 12, 2012.
    • Amendment offered by Rep. Jon Switalski (D) on December 12, 2012, to remove a provision that gives a state "emergency financial assistance loan board" the final say on an action proposed by an emergency manager which is disputed by the local government. The amendment failed by voice vote in the House on December 12, 2012.
    • Amendment offered by Rep. Woodrow Stanley (D) on December 12, 2012, to strip out a provision that gives an emergency manager the power to invalidate a government employee union contract provision. The amendment failed by voice vote in the House on December 12, 2012.
    • Amendment offered by Rep. Jim Townsend (D) on December 12, 2012, to strip out a provision that gives an emergency manager the power to invalidate a provision of a government employee union contract. The amendment failed by voice vote in the House on December 12, 2012.
    • Amendment offered by Rep. Jon Switalski (D) on December 12, 2012, to strip out a provision that includes among a emergency manager's duties creating a financial reform plan that may require invalidating provisions of a government employee union contract. The amendment failed by voice vote in the House on December 12, 2012.
    • Amendment offered by Rep. Woodrow Stanley (D) on December 12, 2012, to strip out a provison exempting fiscally-failed local governments and school districts that enter a financial reform consent agreement with the state from the law that forces locals and schools to engage in collective bargaining with unions, during the term of the consent agreement. The amendment failed by voice vote in the House on December 12, 2012.
    • Amendment offered by Rep. Jim Townsend (D) on December 12, 2012, to remove a requirement that a local government determined to be in a financial emergency to select one of the options offered by the bill even if it has voted with a two-thirds majority to appeal the determination. The amendment failed by voice vote in the House on December 12, 2012.
    • Amendment offered by Rep. Jim Townsend (D) on December 12, 2012, to revise a provision automatically ending a mediation effort if the state treasurer determines it will not generate sufficient savings to resolve the financial emergency, and instead just allow the treasurer to advise the local's governing board of this shortcoming. The amendment failed by voice vote in the House on December 12, 2012.
  4. Passed 63 to 46 in the House on December 12, 2012, to replace the Emergency Manager law passed in 2011 and repealed by a statewide referendum with a new law, which will give fiscally-failed cities or school districts a choice of either entering a reform plan consent agreement with the state, entering mediation to create such a plan, being allowed to declare bankruptcy in federal court, or having an emergency manager appointed with powers similar to those that triggered the union-sponsored referendum (to invalidate unaffordable or unsustainable government union contracts). The replacement also adds a public information meeting requirement to the process; specifies procedures and conditions for exiting the financial emergency; explicitly gives a school EM authority over academic matters; and contains a modest appropriation that makes it "referendum-proof".
    Who Voted "Yes" and Who Voted "No"

  5. Motion by Rep. Jim Stamas (R) on December 12, 2012, to give immediate effect. The motion passed 64 to 45 in the House on December 12, 2012.
    Who Voted "Yes" and Who Voted "No"

  6. Received in the Senate on December 12, 2012.
    • Substitute offered by Sen. Bert Johnson (D) on December 13, 2012, to adopt a version of the bill that would reduce the powers of the state in reforming fiscally failed cities and school districts, and limit state involvement to two years. The substitute failed 12 to 26 in the Senate on December 13, 2012.
      Who Voted "Yes" and Who Voted "No"

    • Amendment offered by Sen. Bert Johnson (D) on December 13, 2012, to add a provision that would have the effect of ensuring that the bill can never go into effect. The amendment failed 12 to 26 in the Senate on December 13, 2012.
      Who Voted "Yes" and Who Voted "No"

  7. Passed 23 to 15 in the Senate on December 13, 2012, to replace the Emergency Manager law passed in 2011 and repealed by a statewide referendum with a new law, which will give fiscally-failed cities or school districts a choice of either entering a reform plan consent agreement with the state, entering mediation to create such a plan, being allowed to declare bankruptcy in federal court, or having an emergency manager appointed with powers similar to those that triggered the union-sponsored referendum (to invalidate unaffordable or unsustainable government union contracts). The replacement also adds a public information meeting requirement to the process; specifies procedures and conditions for exiting the financial emergency; explicitly gives a school EM authority over academic matters; and contains a modest appropriation that makes it "referendum-proof".
    Who Voted "Yes" and Who Voted "No"

  8. Motion in the Senate on December 13, 2012, to give the bill immediate effect. The motion passed 26 to 12 in the Senate on December 13, 2012.
    Who Voted "Yes" and Who Voted "No"

  9. Signed by Gov. Rick Snyder on December 26, 2012.

Comments