Public Act 4 of 2011 (PA 4) is the Local Government and School District Fiscal Accountability Act. It is the third iteration of Michigan laws that allow the state to appoint an emergency manager who has authority over the financial decisions of a financially distressed local government, and it extends the authority of the appointed emergency manager to the non-financial operations of the local government. This act allows state appointed managers to assume the responsibility of locally elected officials, and grants those appointed managers more powers than locally elected officials have. Among the expanded powers granted to emergency managers under PA 4 are the authority to reject, modify, or terminate one or more of the terms of an existing contract and, under specified conditions, to reject, modify, or terminate one or more of the terms and conditions of a collective bargaining agreement.
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Article II Section IX of the Michigan Constitution reserves to the people the right to subject a law to referendum by gathering petitions signed by registered voters who number not less than five percent of the amount of votes cast for all candidates for governor at the last election. The State Board of Canvassers has ruled that sufficient signatures have been gathered and an initiated referendum petition to repeal Public Act 4 of 2011 was placed on the November 6, 2012 statewide ballot.
On August 8, when the state Board of Canvassers placed the issue repealing PA 4 of 2011 on the November 6, 2012 ballot (as it was directed to do by the Michigan Supreme Court), PA 4 was suspended, in accordance with Article II Section 9 of Michiganís Constitution. Should a majority of electors vote "Yes" on the referendum, the law will be reinstated. Should a majority of electors vote "No," PA 4 will be repealed. Public Act 4 of 2011 can be accessed at http://legislature.mi.gov/doc.aspx?2011-HB-4214.
It is the operative position of the state that the preceding iteration of the law, PA 72 of 1990, was revived when PA 4 was suspended: PA 72 was repealed when PA 4 became effective, but the repeal became ineffective when PA 4 was suspended. PA 72 does not allow emergency financial managers to abrogate contracts or collective bargaining agreements, nor does it provide certain other powers contained in PA 4.
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