Bill Text: MI HB5570 | 2011-2012 | 96th Legislature | Introduced
Bill Title: State financing and management; bonds; municipal bond authority; allow to create an emergency loan board loan. Amends secs. 3, 7, 8 & 13 of 1985 PA 227 (MCL 141.1053 et seq.). TIE BAR WITH: HB 5566'12, HB 5567'12, HB 5568'12, HB 5569'12
Spectrum: Partisan Bill (Republican 5-0)
Status: (Passed) 2012-08-15 - Assigned Pa 288'12 With Immediate Effect [HB5570 Detail]
Download: Michigan-2011-HB5570-Introduced.html
HOUSE BILL No. 5570
April 24, 2012, Introduced by Reps. Rogers, Denby, Pscholka, Ouimet and Hughes and referred to the Committee on Local, Intergovernmental, and Regional Affairs.
A bill to amend 1985 PA 227, entitled
"Shared credit rating act,"
by amending sections 3, 7, 8, and 13 (MCL 141.1053, 141.1057,
141.1058, and 141.1063), sections 3, 7, and 8 as amended by 2005 PA
93 and section 13 as amended by 1997 PA 27.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 3. As used in this act:
(a)
"Authority" means the Michigan municipal bond finance
authority
created in section 4.by Executive
Reorganization Order
No. 2010-2, MCL 12.194.
(b)
"Board" means the board of trustees directors of the
authority. established
in section 5.
(c) "Bonds" means bonds of the authority issued under this act
with a maturity greater than 3 years.
(d) "Capitalization grant" means the federal grant made to
this state by the United States environmental protection agency for
either of the following purposes:
(i) For the purpose of establishing a state water pollution
control revolving fund, as provided in title VI of the federal
water pollution control act, 33 USC 1381 to 1387.
(ii) For the purpose of establishing a state drinking water
revolving fund, as provided in section 1452 of the public health
service act, 42 USC 300j-12.
(e) "Community water supply" means a community water supply as
defined in part 54 of the natural resources and environmental
protection act, 1994 PA 451, MCL 324.5401 to 324.5418.
(f) "Emergency loan board loan" means a loan made by the state
of Michigan to a governmental unit pursuant to the emergency
municipal loan act, 1980 PA 243, MCL 141.931 to 141.942.
(g) (f)
"Federal safe drinking water
act" means title XIV of
the public health service act, chapter 373, 88 Stat. 1660.
(h) (g)
"Federal water pollution
control act" means 33 USC
1251 to 1387.
(i) (h)
"Fully marketable form"
means a municipal obligation
duly executed and accompanied by all of the following:
(i) An approving legal opinion of a bond counsel approved by
the authority and of nationally recognized standing in the field of
municipal law.
(ii) Closing documents in a form and substance satisfactory to
the authority. The executed municipal obligation need not be
printed or lithographed nor be in more than 1 denomination.
(iii) Evidence that the pledge for payment of the municipal
obligation will be sufficient to pay the principal of and interest
on the municipal obligation when due.
(iv) For purposes of a project funded under section 16a, an
order of approval issued by the department of environmental quality
under part 53 of the natural resources and environmental protection
act,
1994 PA 451, MCL 324.5301 to 324.5316 324.5317. The order
shall state that the project proposed by the governmental unit has
been approved for assistance by the department of environmental
quality.
(v) For purposes of a community water supply or a noncommunity
water supply funded under section 16b, an order of approval issued
by the department of environmental quality under part 54 of the
natural resources and environmental protection act, 1994 PA 451,
MCL 324.5401 to 324.5418. The order shall state that the community
water supply or the noncommunity water supply proposed by the
governmental unit has been approved for assistance by the
department of environmental quality.
(j) (i)
"Governmental unit" means
this state, a county, city,
township, village, school district, intermediate school district,
community college, public university, authority, district, any
other body corporate and politic or other political subdivision,
any agency or instrumentality of the foregoing, or any group self-
insurance pool formed pursuant to 1951 PA 35, MCL 124.1 to 124.13.
For purposes of a project funded under section 16a, governmental
unit includes an Indian tribe that has jurisdiction over
construction and operation of a project qualifying under 33 USC
1329. For purposes of a community water supply or a noncommunity
water supply funded under section 16b, governmental unit includes a
community water supplier. A governmental unit does not include a
self-insurance pool unless the self-insurance pool has filed a
certification by an independent actuary that the reserves set aside
under section 7a of 1951 PA 35, MCL 124.7a, are adequate for the
payment of claims. A school district shall include a public school
academy established under the revised school code, 1976 PA 451, MCL
380.1 to 380.1852. Funds loaned to a public school academy or a
school district may not be used to finance the purchase,
construction, lease, or renovation of property owned, directly or
indirectly, by any officer, board member, or employee of that
public school.
(k) (j)
"Municipal obligation"
means a bond or note or
evidence of debt issued by a governmental unit for a purpose
authorized by law. A municipal obligation includes loan repayment
obligations from a school district to this state with respect to a
qualified loan made under a school loan act that is assigned or
otherwise transferred by this state to the authority. A municipal
obligation includes an emergency loan board loan that is assigned
or otherwise transferred by this state to the authority.
(l) (k)
"Noncommunity water
supply" means a noncommunity water
supply as defined in part 54 of the natural resources and
environmental protection act, 1994 PA 451, MCL 324.5401 to
324.5418.
(m) (l) "Notes"
means an obligation of the authority issued as
provided in this act, including commercial paper, with a maturity
of 3 years or less.
(n) (m)
"Project" means a sewage
treatment works project or a
nonpoint source project, or both, as defined in part 53 of the
natural resources and environmental protection act, 1994 PA 451,
MCL
324.5301 to 324.5316.324.5317.
(o) (n)
"Reserve fund" means a
bond reserve fund or note
reserve fund created and established under section 16.
(p) (o)
"Revenues" means all
fees, charges, money, profits,
payments of principal of or interest on municipal obligations and
other investments, gifts, grants, contributions, and all other
income derived or to be derived by the authority under this act.
(q) (p)
"School loan act" means
an act to implement section 16
of article IX of the state constitution of 1963, including, but not
limited
to, former 1961 PA 108, MCL 388.951 to 388.963, 1961 PA
112, MCL 388.981 to 388.985, and the school bond qualification,
approval, and loan act, 2005 PA 92, MCL 388.1921 to 388.1939. For a
qualified
bond, as defined in former 1961 PA 108, MCL 388.951 to
388.963,
with a certificate of qualification
from the state
treasurer
issued prior to the effective date of the amendatory act
that
added this subdivision July
20, 2005, "school loan act"
means
former
1961 PA 108. ,
MCL 388.951 to 388.963. For a
qualified bond
as defined in the school bond qualification, approval, and loan
act, 2005 PA 92, MCL 388.1921 to 388.1939, with a certificate of
qualification or approval issued by the state treasurer on or after
the
effective date of the school bond qualification, approval, and
loan
act July 20, 2005, school loan act means the school bond
qualification, approval, and loan act, 2005 PA 92, MCL 388.1921 to
388.1939.
(r) (q)
"Water supplier" means a
water supplier as defined in
part 54 of the natural resources and environmental protection act,
1994 PA 451, MCL 324.5401 to 324.5418.
Sec. 7. The board has all of the following powers:
(a) To adopt bylaws for the regulation of its affairs.
(b) To adopt an official seal.
(c) To maintain a principal office at a place within this
state.
(d) To sue and be sued in its own name and to plead and be
impleaded.
(e) To loan money to a governmental unit, or to a nonprofit
corporation, trust, or similar entity for the benefit of a public
school academy, at a rate or rates as the authority determines and
to purchase and sell, and to commit to purchase and sell, municipal
obligations pursuant to this act.
(f) To borrow money and issue negotiable revenue bonds and
notes pursuant to this act.
(g) To make and enter into contracts and other instruments
necessary or incidental to the performance of its duties and the
exercise of its powers. By rotating the services of legal counsel,
the authority shall seek to increase the pool of nationally
recognized bond counsel.
(h) To receive and accept from any source grants or
contributions of money, property, or other things of value,
excluding appropriations from the general fund of this state except
for appropriations to be used for the benefit of public schools,
except for appropriations to a reserve fund established under
section 16, except for appropriations to the state water pollution
control revolving fund established under section 16a and except for
appropriations to the state drinking water revolving fund
established under section 16b, and except for appropriations to the
school loan revolving fund established under section 16c, to be
used, held, and applied only for the purposes for which the grants
and contributions were made.
(i) To do all acts necessary or convenient to carry out the
powers expressly granted.
(j) To require that final actions of the board are entered in
the journal for the board and that all writings prepared, owned,
used, in the possession of, or retained by the board in the
performance of an official function be made available to the public
in compliance with the freedom of information act, 1976 PA 442, MCL
15.231 to 15.246.
(k) To engage the services of private consultants on a
contract basis for rendering professional and technical assistance
and advice.
(l) To investigate and assess the infrastructure needs of this
state, current methods of financing infrastructure rehabilitation
and improvements, and resources and financing options currently
available and potentially useful to improve this state's
infrastructure and lower the costs of those improvements.
(m) To indemnify and procure insurance indemnifying members of
the board from personal loss or accountability from liability
asserted by a person on bonds or notes of the authority or from any
personal liability or accountability by reason of the issuance of
the bonds or notes, or by reason of any other action taken or the
failure to act by the authority.
(n) To investigate and assess short-term and long-term
borrowing requirements for operating, capital improvements, and
delinquent taxes.
(o) To provide assistance, as that term is defined in section
5301 of the natural resources and environmental protection act,
1994 PA 451, MCL 324.5301, to any municipality for a revolving fund
project and to perform all functions necessary or incident to
providing that assistance and to the operation of the state water
pollution control revolving fund established under section 16a.
(p) To enter into agreements with the federal government to
implement the establishment and operation of the state water
pollution control revolving fund established under section 16a
pursuant to the provisions of the federal water pollution control
act and the rules and regulations promulgated under that act.
(q) To provide assistance, as that term is defined in part 54
of the natural resources and environmental protection act, 1994 PA
451, MCL 324.5401 to 324.5418, to any governmental unit for a
revolving fund community water supply or noncommunity water supply
and to perform all functions necessary or incident to providing
that assistance and to the operation of the state drinking water
revolving fund established under section 16b, including, but not
limited to, using funding allocated in the federal safe drinking
water act for any of the purposes authorized in section 5417(c) of
the natural resources and environmental protection act, 1994 PA
451, MCL 324.5417.
(r) To enter into agreements with the federal government to
establish and operate the state drinking water revolving fund under
section 16b pursuant to the provisions of the federal safe drinking
water act and the rules and regulations promulgated under that act.
(s) To enter into agreements with the state treasurer to act
as this state's agent to implement the establishment and operation
of the school loan revolving fund established under section 16c,
including provisions relating to the return to this state of
contributions made by this state for deposit in the school loan
revolving fund that are no longer needed for school loan revolving
fund purposes.
(t) To enter into agreements with the state treasurer for the
purchase, assignment, or transfer of emergency loan board loans and
the repurchase, reassignment, or transfer of those loans.
Sec. 8. (1) The authority may lend money to a governmental
unit through the purchase by the authority of municipal obligations
of the governmental unit in fully marketable form. The authority
may authorize and issue its bonds or notes payable solely from the
revenues or funds available to the authority, and to otherwise
assist governmental units.
(2) Bonds and notes of the authority shall not be in any way a
debt or liability of this state and shall not create or constitute
any indebtedness, liability, or obligations of this state or be or
constitute a pledge of the faith and credit of this state but all
authority bonds and notes, unless funded or refunded by bonds or
notes of the authority, shall be payable solely from revenues or
funds pledged or available for their payment as authorized in this
act. Each bond and note shall contain on its face a statement to
the effect that the authority is obligated to pay the principal of
and the interest on the bond or note only from revenues or funds of
the authority and that this state is not obligated to pay the
principal or interest and that neither the faith and credit nor the
taxing power of this state is pledged to the payment of the
principal of or the interest on the bond or note.
(3) All expenses incurred in carrying out this act shall be
payable solely from revenues or funds provided or to be provided
under the provisions of this act, and nothing in this act shall be
construed to authorize the authority to incur any indebtedness or
liability on behalf of or payable by this state.
(4) Unless approved by a concurrent resolution of the
legislature and except as permitted by section 16a, 16b, or 16c,
the authority shall not provide preferential treatment in the rate
of interest for a particular municipal obligation purchased by the
authority that is based upon other than financial and credit
considerations and shall not forgive or relinquish all or part of
the interest or principal of a particular municipal obligation or
of municipal obligations of a particular purpose.
(5) The authority may purchase bonds issued by school
districts
that are qualified bonds under a school loan act. Except
as
provided in subsection (6), the principal amount of the
qualified
bonds purchased by the authority in any calendar year
shall
not exceed 7.5% of the principal amount of qualified bonds
issued
by school districts in the immediately preceding calendar
year.
The authority may also purchase or
accept by assignment from
this state municipal obligations that are loan repayment
obligations from a school district on a qualified loan made by this
state under a school loan act from the state or the state
treasurer. The authority may also purchase or accept by assignment
or transfer municipal obligations that are emergency loan board
loans. Municipal obligations acquired by the authority under this
subsection are not required to be in fully marketable form.
(6) In addition to qualified bonds purchased under subsection
(5), the authority may purchase qualified bonds issued by school
districts not later than September 30, 2004 to obtain funds to
repay all or a portion of the outstanding balance of a loan under
former
1961 PA 108 ,
MCL 388.951 to 388.963, on the
terms and
conditions and subject to the requirements provided by or pursuant
to a resolution of the authority. Bonds issued by the authority to
purchase school district qualified bonds under this subsection
shall be issued in an amount sufficient to provide and pay the
reasonable costs of issuance incurred by the school districts as
determined by or pursuant to a resolution of the authority.
Sec. 13. Within limitations that are stated in the issuance or
authorization resolution of the authority, the authority may
authorize
a member of the board, or the executive director of the
authority, or other personnel within the department of treasury
staffing and assisting the authority and designated by the board to
do 1 or more of the following:
(a) Sell and deliver, and receive payment for, notes or bonds.
(b) Refund notes or bonds by the delivery of new notes or
bonds whether or not the notes or bonds to be refunded have matured
or are subject to redemption.
(c) Deliver notes or bonds, partly to refund notes or bonds
and partly for any other authorized purpose.
(d) Buy notes or bonds so issued and resell those notes or
bonds.
(e) Approve interest rates or methods for fixing interest
rates, prices, discounts, maturities, principal amounts,
denominations, dates of issuance, interest payment dates,
redemption rights at the option of the authority or the holder, the
place of delivery and payment, and other matters and procedures
necessary to complete the transactions authorized.
(f) Direct the investment of money of the authority that the
authority has the power to invest.
(g) Create and manage investments on behalf of governmental
units and the state water pollution control revolving fund
established under section 16a and the state drinking water
revolving fund established under section 16b.
Enacting section 1. This amendatory act does not take effect
unless all of the following bills of the 96th Legislature are
enacted into law:
(a) Senate Bill No.____ or House Bill No. 5567(request no.
05368'12 *).
(b) Senate Bill No.____ or House Bill No. 5568(request no.
05369'12 *).
(c) Senate Bill No.____ or House Bill No. 5569(request no.
05370'12 *).
(d) Senate Bill No.____ or House Bill No. 5566(request no.
04142'11 *).
