The Michigan Senate gave final approval on Thursday to a bill that would give fiscally troubled local governments and school districts options to achieve solvency including bankruptcy.
The bill, which senators approved by a 23 to 15 vote, would replace Michigan's previous emergency manager laws, including a 2011 law that was repealed by voters in November.
The Michigan House approved the measure on Wednesday and the senators vote was to agree with the bill.
The state has been relying on a former, weaker law in the meantime to keep in place state-appointed managers for five cities and three school districts and consent agreements for three cities, including Detroit.
The new bill, which Governor Rick Snyder's Administration supports, would keep intact any ongoing review process like the one launched for Detroit this week, as well as existing consent agreements and appointed managers for Michigan local governments and school districts.
It would give the elected officials of local governments determined to be in a fiscal emergency the option to choose between municipal bankruptcy if the move is approved by the governor, an emergency manager, arbitration with a neutral party or a consent agreement.
(Reporting by Karen Pierog and David Bailey)