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Michigan Gets New Emergency Management Law

DEC 31, 2012 9:58am ET
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Michigan Gov. Rick Snyder last week signed into law a bill for fiscally distressed governments, replacing a controversial former law that voters overturned in a November ballot referendum.

The new law, Public Act 436, is set to take effect on March 27, 2013. It restores many of the state's former powers to control governments that are found to be in a state of financial emergency, including an emergency manager's authority to terminate or amend labor contracts. The new law also allows local officials to request to file for Chapter 9 bankruptcy, an option that the state has never allowed.

"This legislation demonstrates that we clearly heard, recognized and respected the will of the voters," Snyder said last week as he signed the bill into law. "It builds in local control and options while also ensuring the tools to protect communities and school districts' residents, students and taxpayers."

The bill was passed during the recent lame-duck session, only weeks after the November repeal. A spokesman for the group that drove the repeal said a new legal challenge was likely, according to local news reports.

There are currently eight local governments, including three school districts, that have state-appointed emergency managers in Michigan.

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