To allow local governments to borrow money to establish a fund to cover up to 75 percent of the current unfunded actuarial liabilities created by past employee contracts that promised government workers pensions or post-retirement health care coverage without setting sufficient money aside for this. A vote of the people would not be required to authorize the new debt, but it would be subject to a referendum if a certain number of voters signed petitions. The proceeds of the borrowed money would be invested in the same way as pre-funded benefits (in the same way as pension funds, that is).   Official Text and Analysis.

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

To replace the previous version of the bill with one that somewhat limits the local government borrowing it would allow, and does not allow school districts and community colleges to do this kind of borrowing. This was replaced by another substitute adds additional restrictions.

To replace the previous version of the bill with one that that is more restrictive on goverment's ability to cover unfunded pension liabilites, and allows this only for government employee health care liabilities. It would require governments to adopt "defined contribution" type post-retirement benefit systems for all new employees as a condition of assuming this extra debt, and would require that the bonds be rated at least AA by one of the municipal rating agencies.

To raise the minumum bond rating for money borrowed to cover government retiree health care liabilities from AA to AAA. This would mean that local governments with less sound balance sheets and revenue prospects would be unable to engage in this kind of borrowing.

To strip out the provision that prohibits local governments that use this type of borrowing to cover retiree health care liabilities from giving new employees "defined benefit" post retirement pensions and health care coverage, but would allow "defined contribution" benefits. The provision would have prevented municipalites from adding even greater employee benefit liabilities after going into debt to cover existing liabilities.

To allow local governments to borrow money to establish a fund to cover up to 75 percent of the current unfunded actuarial liabilities created by past employee contracts that promised government workers lifetime health care coverage without setting sufficient money aside for this. A vote of the people would not be required to authorize the new debt, but it would be subject to a referendum if a certain number of voters signed petitions. The proceeds of the borrowed money would be invested in the same way as pension funds. Local governments would be allowed assume debt for this purpose up to the maximum allowed by state law, which is based on the maximum amount of property taxes they can impose.

(as agreed and proposed by the "Committee of the Whole), to replace the previous version of the bill with one that establishes some additional conditions for local government borrowing to cover unfunded retiree benefit liabilities. It requires that the local government itself to have a AA credit rating (rather than just the pension obligation bonds); allows bonding for up to 75 percent of the unfunded liability as of the date the bill’s effective date (rather than the date the borrowing plan is established); and requires approval in advance from the Department of Treasury.

To eliminate a requirement that before borrowing to cover retiree health care benefit liabilities a local government must "reduce" future health care costs (and liabilities), which would require greater co-pays from government employees, or going to a defined contribution plan for new employees. Instead, local governments would only have to "manage" health care costs.

The vote by which the bill was defeated.

To eliminate a requirement that before borrowing to cover retiree health care benefit liabilities a local government must "reduce" future health care costs (and liabilities), which would require greater co-pays from government employees, or going to a defined contribution plan for new employees. Instead, local governments would only have to "manage" health care costs.

To eliminate a requirement that before borrowing to cover retiree health care benefit liabilities a local government must "reduce" future health care costs (and liabilities), which would require greater co-pays from government employees, or going to a defined contribution plan for new employees. Instead, local governments would only have to "control" health care costs.

To allow local governments to borrow money to establish a fund to cover up to 75 percent of the current unfunded actuarial liabilities created by past employee contracts that promised government workers lifetime health care coverage without setting sufficient money aside for this. A vote of the people would not be required to authorize the new debt, but it would be subject to a referendum if a certain number of voters signed petitions. The proceeds of the borrowed money would be invested in the same way as pension funds.

The vote by which the bill was defeated.

To eliminate a requirement that before borrowing to cover retiree health care benefit liabilities a local government must "reduce" future health care costs (and liabilities), which would require greater co-pays from government employees, or going to a defined contribution plan for new employees. Instead, local governments would only have to "mitigate the increase in" health care costs.

To allow local governments to borrow money to establish a fund to cover up to 75 percent of the current unfunded actuarial liabilities created by past employee contracts that promised government workers lifetime health care coverage without setting sufficient money aside for this. A vote of the people would not be required to authorize the new debt, but it would be subject to a referendum if a certain number of voters signed petitions. The proceeds of the borrowed money would be invested in the same way as pension funds. Local governments would not have to reduce future health care costs before taking on this new debt, and would be allowed assume debt for this purpose up to the maximum allowed by state law, which is based on the maximum amount of property taxes they can impose. Note: The Senate defeated the bill twice, and only passed it when an Cassis and Whitmer amendment was added which eliminates a condition that a local government must "reduce" future health care costs (and liabilities), which would require greater co-pays from government employees, or going to a defined contribution plan for new employees. Instead, local governments would only have to "mitigate the increase in" health care costs.

To concur with the Senate-passed version of the bill, which eliminates a requirement that before borrowing to cover retiree health care benefit liabilities a local government must "reduce" future health care costs (and liabilities), which would require greater co-pays from government employees, or going to a defined contribution plan for new employees. Instead, local governments would only have to "mitigate the increase in" health care costs.