2011 Senate Bill 865 / 2012 Public Act 436

Replace repealed "Emergency Manager" law

Introduced in the Senate

Dec. 1, 2011

Introduced by Sen. Phil Pavlov (R-25)

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 Committee on Government Operations

Dec. 14, 2011

Reported without amendment

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

Dec. 15, 2011

Substitute offered

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 <a href="http://www.michiganvotes.org/2011-SB-157">Emergency Manager law</a> passed earlier in 2011; see Senate-passed version for details.

The substitute passed by voice vote

Passed in the Senate 26 to 12 (details)

To pass a "shell" version of this bill with no substantive provisions, but which can be modified later to extend the <a href="http://www.michiganvotes.org/2011-SB-157">Emergency Manager law</a> 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.

Received in the House

Dec. 15, 2011

Referred to the Committee on Government Operations

Dec. 6, 2012

Reported without amendment

With the recommendation that the substitute (H-5) be adopted and that the bill then pass.

Dec. 12, 2012

Substitute offered

The substitute failed by voice vote

Substitute offered by Rep. Al Pscholka (R-79)

To adopt a substitute that contains a substantive proposal; see House-passed bill for details.

The substitute passed by voice vote

Amendment offered by Rep. Maureen Stapleton (D-4)

To add additional reporting and procedural steps to the fiscal emergency process.

The amendment passed by voice vote

Amendment offered by Rep. Maureen Stapleton (D-4)

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

Amendment offered by Rep. Maureen Stapleton (D-4)

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

Amendment offered by Rep. Maureen Stapleton (D-4)

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

Amendment offered by Rep. Woodrow Stanley (D-34)

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

Amendment offered by Rep. Jon Switalski (D-25)

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

Amendment offered by Rep. Woodrow Stanley (D-34)

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

Amendment offered by Rep. Woodrow Stanley (D-34)

To style a public information meeting required as part of the financial emergency review process as a "hearing".

The amendment failed by voice vote

Amendment offered by Rep. Maureen Stapleton (D-4)

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

Amendment offered by Rep. Woodrow Stanley (D-34)

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

Amendment offered by Rep. Jon Switalski (D-25)

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

Amendment offered by Rep. Jon Switalski (D-25)

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

Amendment offered by Rep. Woodrow Stanley (D-34)

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

Amendment offered by Rep. Jim Townsend (D-26)

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

Amendment offered by Rep. Jon Switalski (D-25)

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

Amendment offered by Rep. Woodrow Stanley (D-34)

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

Amendment offered by Rep. Jim Townsend (D-26)

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

Amendment offered by Rep. Jim Townsend (D-26)

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

Passed in the House 63 to 46 (details)

To replace the <a href="http://www.michiganvotes.org/2011-HB-4214">Emergency Manager law</a> 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".

Motion by Rep. Jim Stamas (R-98)

To give immediate effect.

The motion passed 64 to 45 (details)

Received in the Senate

Dec. 12, 2012

Dec. 13, 2012

Substitute offered by Sen. Bert Johnson (D-2)

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 (details)

Amendment offered by Sen. Bert Johnson (D-2)

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 (details)

Passed in the Senate 23 to 15 (details)

To replace the <a href="http://www.michiganvotes.org/2011-HB-4214">Emergency Manager law</a> 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".

Motion

To give the bill immediate effect.

The motion passed 26 to 12 (details)

Signed by Gov. Rick Snyder

Dec. 26, 2012