Protecting Employees and Retirees in Municipal Bankruptcies Act of 2017

Summary: Protecting Employees and Retirees in Municipal Bankruptcies Act of 2017 This bill amends federal bankruptcy law to: (1) heighten criteria with respect to a municipality's eligibility for municipal bankruptcy, and (2) revise provisions related to judicial procedure and review in&nbsp;municipality bankruptcy&nbsp;cases. In addition, the bill expands protections for employees and retirees in cases of municipal bankruptcy. Specifically, if&nbsp;a municipal bankruptcy&nbsp;plan modifies a collective bargaining agreement or retiree benefit, the covered employees' authorized representative must agree to the plan as a condition of the plan's confirmation by the court.  In general, the authorized representative shall be the labor organization that is signatory to the collective bargaining agreement. However, the bill establishes procedures for the court's appointment of a different representative under specified circumstances.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Protecting Employees and Retirees in 
Municipal Bankruptcies Act of 2017''.

SEC. 2. DETERMINATION OF MUNICIPALITY ELIGIBILITY TO BE A DEBTOR UNDER 
              CHAPTER 9 OF TITLE 11 OF THE UNITED STATES CODE.

    (a) Requirements.--Section 109(c) of title 11, United States Code, 
is amended--
            (1) in paragraph (5)--
                    (A) in subparagraph (B) by inserting ``(but with 
                respect to creditors who are employees or retirees of 
                such entity, the term `good faith' shall have the same 
                meaning as such term has in the National Labor 
                Relations Act)'' after ``creditors'' the first place it 
                appears,
                    (B) in subparagraph (C) by striking 
                ``impracticable'' and inserting ``impossible'', and
                    (C) in subparagraph (D) by striking the period at 
                the end and inserting a semicolon, and
            (2) by adding at the end the following:
``and establishes by clear and convincing evidence that it satisfies 
the requirements of this subsection.''.
    (b) Repeal of Limitation on Authority To Issue Stay Pending 
Appeal.--The first sentence of section 921(e) of title 11, United 
States Code, is amended by striking ``; nor'' and all that follows 
through ``appeal''.
    (c) Direct Immediate Appeal to Court of Appeals.--Section 158(d) of 
title 28, United States Code, is amended by adding at the end the 
following:
    ``(3) The appropriate court of appeals shall have jurisdiction of 
an appeal of a determination made by a bankruptcy court under section 
109(c) of title 11 that an entity is eligible to be a debtor under 
chapter 9 of title 11 and shall consider and determine such appeal on 
an expedited basis. Such appeal shall be a direct appeal to be reviewed 
and heard de novo on the merits. The doctrine of equitable mootness 
shall not apply to appeals under this paragraph.''.

SEC. 3. PROTECTING EMPLOYEES AND RETIREES.

    Section 943 of title 11, United States Code, is amended--
            (1) in subsection (b)--
                    (A) in paragraph (6) by striking ``and'' at the 
                end,
                    (B) by redesignating paragraph (7) as paragraph 
                (8), and
                    (C) by inserting after paragraph (6) the following:
            ``(7) in a case in which the plan modifies a collective 
        bargaining agreement, or modifies a retiree benefit, including 
        an accrued pension, retiree health, or other retirement benefit 
        otherwise protected by State or municipal law, or a retiree 
        benefit as defined in section 1114(a), in any manner otherwise 
        prohibited by nonbankruptcy law, the authorized representative 
        of the employees covered by such agreement, or the authorized 
        representative of individuals receiving the retiree benefits, 
        as the case may be, agrees to the plan; and'', and
            (2) by adding at the end the following:
    ``(c)(1) For purposes of this section, and except as provided in 
paragraphs (2) and (3), the authorized representative of those 
individuals receiving any retiree benefit covered by any collective 
bargaining agreement shall be the labor organization that is signatory 
to such agreement unless such organization no longer represents active 
employees in the bargaining unit the retirees belonged to when they 
were active employees. In such case, the labor organization that 
currently represents active employees in that bargaining unit shall be 
the authorized representative of such individuals.
    ``(2) Paragraph (1) shall not apply if--
            ``(A) such labor organization elects not to serve as the 
        authorized representative of such individuals; or
            ``(B) the court, upon a motion by a party in interest, 
        after notice and hearing, determines that different 
        representation of such individuals is appropriate.
    ``(3) In a case in which the labor organization referred to in 
paragraph (2) elects not to serve as the authorized representative of 
those individuals receiving any retiree benefits covered by any 
collective bargaining agreement to which that labor organization is 
signatory, or in a case where the court, pursuant to paragraph (2) 
finds different representation of such individuals appropriate, the 
court, upon a motion by a party in interest, and after notice and a 
hearing, shall order the United States trustee to appoint a committee 
of retired employees if the debtor seeks to modify or not pay the 
retiree benefits or if the court otherwise determines that it is 
appropriate, from among such individuals, to serve as the authorized 
representative of such individuals under this section. The party 
requesting such relief has the burden of proof.
    ``(d) For retired employees not covered by a collective bargaining 
agreement, the court, upon a motion by a party in interest, and after 
notice and a hearing, shall issue an order requiring the United States 
trustee to appoint a committee of retired employees if the debtor seeks 
to modify or not pay the retiree benefits, or if the court otherwise 
determines that it is appropriate, to serve as the authorized 
representative under this section of such employees. Such party has the 
burden of proof with respect to such motion.
    ``(e) To comply with an order issued under subsection (c)(3) or 
(d), notwithstanding any other provision of this chapter, the United 
States trustee shall appoint, on a proportional basis per capita based 
on organization membership, individuals chosen from among members of 
organizations that represent the retirees with respect to whom such 
order is entered.
    ``(f) Members of a committee appointed under subsection (c)(3) or 
(d) may not recommend modification of any right to a retiree benefit 
unless not less than \2/3\ of such members vote in support of such 
recommendation.''.