Protecting Employees and Retirees in Municipal Bankruptcies Act of 2017

To amend chapter 9 of title 11 of the United States Code to improve protections for employees and retirees in municipal bankruptcies. 1. Short title This Act may be cited as the Protecting Employees and Retirees in Municipal Bankruptcies Act of 2017 2. Determination of Municipality Eligibility to be a debtor Under Chapter 9 (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 creditors (B) in subparagraph (C) by striking impracticable impossible (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 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 . 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 (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 .

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 municipality bankruptcy cases. In addition, the bill expands protections for employees and retirees in cases of municipal bankruptcy. Specifically, if a municipal bankruptcy 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.