Switch Subsidy Bill Passage Was A Senate Rules Violation

In their slobbering rush to deliver tax breaks for one very specific data center last Thursday, the Michigan Senate violated its own rules regarding the consideration of appropriations bills. The Knezek amendment to SB 616, S-1:

Enacting section 1. The legislature shall annually appropriate sufficient funds from the state general fund to the state school aid fund created in section 11 of article IX of the state constitution of 1963 to fully compensate for any loss of revenue to the state school aid fund resulting from the enactment of this amendatory act.

converted SB 616 into an appropriations bill according to the definition in Michigan’s 1963 Constitution, in its Article IV, Section 31.

Michigan Senate Rule 3.602 requires:

“Any bill requiring an appropriation to carry out its intended purpose shall be considered an appropriation bill (See Constitution Article IV, Section 31). Appropriations bills, when reported back to the Senate favorably by a committee other than the Committee on Appropriations, shall, together with amendments proposed by that committee, be referred to the Committee on Appropriations for consideration.

Senator Kowall moved a suspension of the Senate Rules after the noon recess on Thursday to bring nine bills on to Third Reading, including SB 616. From Senate Journal 106, page 1910: “be placed on their immediate passage at the head of the Third Reading of the Bills calendar.” was his motion. Senate Journal 106 indicates that his request was passed by a majority. This allowed final action and passage on SB 616 in the Senate that day.

Reading the record, it would appear that Senator Kowall was suspending Rule 3.207 to consider SB 616 and the eight other bills which had been placed on to ‘General Orders’ that morning for final passage under ‘Third Reading’, out of normal order. Senate Rule 3.207 requires a one day delay between the ‘Second Reading’ (‘General Orders’), and the ‘Third Reading’ (‘Final Action’). Suspending this prescribed one day delay is a common practice when time is of the essence.

Senator Kowall had already moved that morning, before recess, to place SB 616 and the same eight other bills then under ‘Committee Reports’ (‘First Reading’) under ‘General Orders’ (‘Second Reading’), so they could be on that day’s calendar. Also out of normal order, but again a common practice when time is of the essence.

But did either of Senator Kowall’s two suspension motions suspend Michigan Senate Rule 3.602?

Is Michigan Senate Rule 3.602 a fundamental rule as defined by Mason’s Manual of Legislative Procedure? Mason’s is the underlying body of rules adopted by the Michigan Senate when their own rules are mute on an issue.  Fundamental rules cannot be suspended according to Mason’s and all the other accepted bodies of parliamentary rules.

Parliamentary rules have long required that the object of a rules suspension must be specified, and nothing else can be done under the suspension. So in any reasonable reading of Senate Journal 106, Senator Kowall was suspending Senate Rule 3.207 to bring the nine bills up out of normal order, not Senate Rule 3.602 which required that appropriations bills be referred to the Committee on Appropriations. Evading the Committee on Appropriations would have required a second motion and Senate Journal 106 records no such second motion.

The normal motion to circumvent required committee consideration by a parliamentary body is a discharge motion, also not mentioned in Senator Kowall’s motions as written in the Senate Journal 106 record. A competent legislative tactician would, after Knezek’s amendment was approved, move that the bill be referred to the Committee on Appropriations, then move that the bill be discharged from the same committee.  Not done here.

So it is clear Senate Rule 3.602 was not suspended on the record and that SB 616 should have been referred to the Committee on Appropriations once Senator Knezek’s amendment converted it into an appropriations bill. Instead, the Senate leadership blatantly evaded Rule 3.602, passed SB 616, and hustled it over to the Michigan House. Very sloppy.

A good case can be made that Senate Rule 3.602 is fundamental in Michigan, because the Michigan Constitution of 1963 treats appropriations bills differently from non appropriations bills. Article II, Section 9 denies Michigan voters the right to reject public acts containing an appropriation by referendum. All other Michigan public acts are subject to rejection by a vote of the Michigan electorate. Small appropriations are a device that has been used regularly to prevent referendums in the past and may be why our Republican Senate adopted Democratic Senator Knezek’s amendment with enthusiasm.

This violation of Michigan Senate Rules may or may not matter in the legislative process now, as Mason’s Rules of Legislative Procedures waffles on this issue:

It has been held that public bodies can adopt rules, even by majority vote, that cannot be suspended or amended without a two-thirds vote, but it is also held by the courts that actions, taken in violation of procedural rules of parliamentary law and of adopted rules, are valid nevertheless, since failure to conform to the rules of this class suspended them by implication.

This implied suspension does not apply to violations of fundamental rules, which courts have universally held as nullifying the actions of parliamentary bodies.

News reports indicate that the other 28+ data centers now operating in Michigan are angry that the Michigan Legislature is providing an unique advantage to their impending competitor, Switch. Rightfully so. They are clearly on the receiving end of the Michigan Legislature picking winners and losers. No one likes to be a politically designated loser.

Further, no one has yet raised the issue of captive data centers owned by large enterprises across Michigan which process data for their owner exclusively. These captive operations are completely excluded from the SB 616/617/618 gravy train. These long-time Michigan corporations are likely to respond with lawsuits, or by dumping their captive operations (and those Michiganders there employed) by outsourcing IT work to the newly tax favored third party data centers. The dumped captive data center employees will certainly not sing the praises of our Senate.

The Senate’s fast and loose disregard for their own rules now gives all of Michigan’s existing data centers an opening for legal challenges. Should courts determine that this was a violation of a fundamental rule, Senate Bill 616 can indeed be overturned by the Michigan courts. Even if it is not, SB 616 may still be overturned. Since there is not claim of severability in SB 617 or SB 618, the Michigan tax code will then be a thoroughgoing mess.

At the very least, the Senate’s headlong rush to lavish benefits on one project will create long lasting acrimony in the IT community. Probably redirect a bunch of corporate campaign contributions as well.

Pandora’s box has been opened.

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