2012 Senate Bill 1129 / Public Act 329

Authorize local “pension obligation bonds”

Introduced in the Senate

May 15, 2012

Introduced by Sen. Patrick Colbeck (R-7)

To allow local governments to borrow money to cover unfunded employee pension liabilities, if the local has closed its traditional “defined benefit” pension system to new employees. Unlike other local government borrowing (usually called “bonding” or “selling bonds”), no vote of the people would be required, unless lenders (bond buyers) are given a “full faith and credit” repayment promise.

Referred to the Committee on Appropriations

June 14, 2012

Reported without amendment

With the recommendation that the substitute (S-2) be adopted and that the bill then pass.

Substitute offered

The substitute passed by voice vote

Passed in the Senate 25 to 11 (details)

To allow local governments to borrow money to cover unfunded employee pension liabilities, if the local has closed its traditional “defined benefit” pension system to new employees. Unlike other local government borrowing (usually called “bonding” or “selling bonds”), no vote of the people would be required.

Received in the House

June 14, 2012

Referred to the Committee on Appropriations

Sept. 27, 2012

Reported without amendment

With the recommendation that the substitute (H-1) be adopted and that the bill then pass.

Substitute offered

The substitute passed by voice vote

Amendment offered by Rep. Richard LeBlanc (D-18)

To allow local governments with lower credit ratings than the "AA" rating required by the bill to also incur "pension obligation" debt.

The amendment failed by voice vote

Passed in the House 77 to 30 (details)

To allow local governments to borrow money to cover unfunded employee pension liabilities, if the local has closed its traditional “defined benefit” pension system to new employees. Unlike other local government borrowing (usually called “bonding” or “selling bonds”), no vote of the people would be required. The bill would also allow new debt to cover future retiree health care benefits, while nevertheless stating that these are not an enforceable obligation.

Received in the Senate

Sept. 27, 2012

Passed in the Senate 26 to 9 (details)

To concur with the House-passed version of the bill.

Received in the House

Sept. 27, 2012

Motion to reconsider by Rep. Kate Segal (D-62)

The motion passed by voice vote

Passed in the House 80 to 28 (details)

To allow local governments to borrow money to cover unfunded employee pension liabilities, if the local has closed its traditional “defined benefit” pension system to new employees. Unlike other local government borrowing (usually called “bonding” or “selling bonds”), no vote of the people would be required.

Signed by Gov. Rick Snyder

Oct. 9, 2012