The behind-the-scenes effort, which doesn't appear to involve Republican House leaders or GOP Gov. Rick Snyder, aims to keep a form of the contentious law on the books while acknowledging some of the critics' concerns, which include that it takes too much power from local leaders struggling with budget deficits.
Senate Majority Leader Randy Richardville told The Associated Press on Thursday the move is not an admission that the current law is flawed, but the new draft takes those concerns into account. He said he couldn't provide details about the alternative bill because the draft is under legal review.
"If something happened like that bill was overturned, I think the Legislature would have to be ready to respond and to still deal with the emergency," Richardville said. "You can eliminate the financial manager from the emergency financial manager legislation, but you can't remove the emergency."
The legislative tinkering is the latest twist in the battle over the law that went all the way to the Michigan Supreme Court last month. The state's highest court ruled a union-backed referendum to repeal the law can go on the ballot in November.
The law passed last year by the Legislature and signed by Snyder allows the governor to appoint people to run cities and school districts that are broke. Managers have sweeping authority to cut spending, sell assets and tear up contracts without the approval of elected officials.
The law has since been suspended until the election and replaced by the previous public act that gives emergency managers fewer powers. But that's also being contested — a lawsuit was filed this week by civil rights lawyers that claim the "old law is dead" because there is no legal framework to support it.
Emergency managers are operating in Benton Harbor, Flint, Pontiac and Ecorse, as well as in school districts in Detroit, Highland Park and Muskegon Heights.
Richardville said a replacement will be needed if the law is struck down.
"It's certainly a priority to make sure we help these communities out," he said. "We've had some real concerns that people in these communities could go without crucial services unless somebody was in there and given authority to fix things."
Meanwhile, a spokesman for Republican House Speaker Jase Bolger said that chamber's Republican leadership isn't working on a replacement bill and declined to speculate on whether it would also become a priority for the House if the law is repealed. Still, spokesman Ari Adler said Bolger is concerned about what happens to communities with financial emergencies if the law is repealed.
"Speaker Bolger supports Proposal 1, but ballot proposals are a time when voters have their chance to speak directly and it's important for legislators to listen to what they say with their votes," Adler said.
Likewise, Snyder is instead focusing on "making the strong case for why Public Act 4 is a critical and necessary tool," said his spokeswoman Sara Wurfel.
"We have an obligation to ensure continuity, prevent chaos and ensure health, safety and welfare of citizens, but can't work in hypotheticals and will have to cross that bridge if and when we come to it," she said.
Robert McCann, spokesman for Senate Democratic Leader Gretchen Whitmer, said Democrats would prefer a bipartisan approach "rather than an end-around" by Republicans.
"They haven't shown great concern for community input up to this point," McCann said. "If this one is different, I think it would be a step in the right direction."
The Michigan Legislature has one session scheduled in October then doesn't reconvene until after the Nov. 6 election.