Summary — HB 4005 (Michigan): Repeal of the Local Financial Stability and Choice Act (2012 PA 436)
Status and sponsors
- Bill number: HB 4005 (Michigan)
- Title: Repeal — “Local financial stability and choice act” (repeals 2012 PA 436; MCL 141.1541–141.1575)
- Filed/introduced: electronically reproduced 01/14/2025; introduced March 2025 (filed by Rep. Brenda Carter per bill text)
- Committee referral: Referred to Committee on Finance
- Text as introduced: single enacting section repealing 2012 PA 436 (MCL 141.1541–141.1575)
Purpose and intent
- The bill would repeal the entire Local Financial Stability and Choice Act (2012 Public Act 436), a Michigan statute that establishes state statutory authority and processes for responding to financially distressed local units of government and school districts.
Key substance of the bill
- Enacting section: “The local financial stability and choice act, 2012 PA 436, MCL 141.1541 to 141.1575, is repealed.”
- The introduced version contains no additional transitional or implementation provisions.
What 2012 PA 436 (the repealed law) did — (context for impact)
- PA 436 created a statutory framework for state intervention in financially distressed municipalities and school districts, including mechanisms for:
- Appointment of emergency managers or other state receivership officials;
- State oversight, restructuring authority, and tools to modify or terminate contracts and take other actions intended to restore fiscal stability;
- Procedures for fiscal audits, financial review, and (in practice or dispute) steps that could lead to restructuring of obligations.
- Repeal would remove that statutory authority and the mechanisms described above from Michigan law.
Who would be affected
- Local governments within Michigan (cities, villages, townships, counties) and local school districts that, under PA 436, could be subject to state financial oversight or emergency management.
- Local elected officials, municipal employees, creditors, vendors, and unions that participated in or were affected by emergency manager actions or oversight processes established under PA 436.
- State agencies that implemented or monitored PA 436 processes.
Procedural and timing considerations
- As introduced, the bill simply repeals PA 436; it contains no explicit transitional language addressing existing emergency manager appointments, active receiverships, ongoing contracts modified under PA 436, or pending litigation.
- Because the bill as introduced offers no implementation details, repeal could raise legal and operational questions about how to treat existing orders, agreements, or municipal actions taken under PA 436.
- Fiscal impacts are not specified in the bill text; repeal could have variable budgetary effects for local governments and the State depending on the number and status of active interventions at the time of repeal.
Notes
- HB 4005 numbering is used for different bills in other jurisdictions (unrelated Florida and Illinois bills surfaced in source materials). This summary addresses the Michigan bill that repeals 2012 PA 436 (MCL 141.1541–141.1575).
