Bill Text: MI HB6484 | 2009-2010 | 95th Legislature | Engrossed
Bill Title: State financing and management; bonds; use of capital outlay bond proceeds for certain transit infrastructure projects; allow. Amends sec. 1 of 1964 PA 183 (MCL 830.411) & adds sec. 8b.
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2010-11-30 - Referred To Committee On Appropriations [HB6484 Detail]
Download: Michigan-2009-HB6484-Engrossed.html
HB-6484, As Passed House, November 10, 2010
SUBSTITUTE FOR
HOUSE BILL NO. 6484
A bill to amend 1964 PA 183, entitled
"An act creating the state building authority with power to
acquire, construct, furnish, equip, own, improve, enlarge, operate,
mortgage, and maintain facilities for the use of the state or any
of its agencies; to act as a developer or co-owner of facilities as
a condominium project for the use of the state or any of its
agencies; to authorize the execution of leases pertaining to those
facilities by the building authority with the state or any of its
agencies; to authorize the payment of true rentals by the state; to
provide for the issuance of revenue obligations by the building
authority to be paid from the true rentals to be paid by the state
and other resources and security provided for and pledged by the
building authority; to authorize the creation of funds; to
authorize the conveyance of lands by the state or any of its
agencies for the purposes authorized in this act; to authorize the
appointment of a trustee for bondholders; to permit remedies for
the benefit of parties in interest; to provide for other powers and
duties of the authority; and to provide for other matters in
relation to the authority and its obligations,"
by amending sections 1 and 7 (MCL 830.411 and 830.417), as amended
by 2005 PA 67, and by adding section 8b.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. As used in this act:
(a) "Building authority" means the state building authority
created by this act.
(b) "State" means the legislative, executive, and judicial
branches of state government and includes institutions of higher
education.
(c) "Existing facilities" means all existing buildings and
other facilities, the sites for the buildings or facilities, and
furnishings or equipment for the buildings or facilities located on
real property acquired by the building authority under the terms of
this act.
(d) "Facilities" means furnishings or equipment, capital
maintenance improvements, existing facilities, and all new
buildings, parking structures and lots, rail transportation
projects, new fixed-guideway transit infrastructure projects, and
other facilities, the sites for the buildings, structures, or
facilities, and furnishings or equipment for the buildings,
structures, or facilities in any way acquired or constructed by the
building authority under this act.
(e) "True rental" means the rental required to be paid by the
state to the building authority under a lease between the state and
the building authority entered into under this act. The true rental
shall be paid by the state to the building authority or its
assignee periodically as specified in the lease with the building
authority and shall be in periodic amounts that do not exceed the
economic or market value to the state of the leased facilities. The
economic or market value to the state of the leased facilities
shall be determined by the state administrative board before the
execution of a lease by the state under this act by an appraisal
made by or for the state using commonly employed procedures that
will fairly determine economic or market value. When using
procedures commonly employed by appraisers, an appraisal may set
forth a range for the true rental that reflects variations that may
occur in the components upon which the appraisal is based. If a
lease is only for furnishings or equipment, the state
administrative board may employ an appraiser to determine the
economic or market value to the state of the furnishings or
equipment, or the state administrative board may approve an
alternative method to determine the economic or market value to the
state of the furnishings or equipment. The alternative method may
include the determination of the economic or market value to the
state by a person who is in the business of leasing furnishings or
equipment.
(f) "Board" means the board of trustees of the building
authority.
(g) "Bond" or "obligation" means a bond, note, or other debt
obligation issued by the building authority under section 8.
(h) "Institution of higher education" means a college or
university listed in section 4 or 5 of article VIII of the state
constitution of 1963 or described in section 6 of article VIII of
the state constitution of 1963 or a community or junior college
established under section 7 of article VIII of the state
constitution of 1963.
(i) "Equipment" means machinery, hardware, or any other type
of equipment or a group of integrally related equipment, which
shall meet all of the following:
(i) The equipment or the predominant portion of the group of
integrally related equipment is located in or is physically
connected to a state occupied building or facility or is located on
state owned property.
(ii) The portion of the group of integrally related equipment
that is not described in subparagraph (i) is integral to the
functioning of the integrally related equipment described in
subparagraph (i).
(iii) The projected useful life of the equipment is 5 years or
more.
(j) "Party in interest" includes an owner of an obligation
issued under this act; a counterparty to an agreement relating to
security or management of payment, revenue, or interest rate
exposure, including, but not limited to, a bank, bond insurance
provider, or security firm, as its interest appears; and a trustee
or fiduciary duly designated by the building authority or otherwise
to act on behalf of 1 or more owners or counterparties.
(k) "Capital maintenance improvements" means an expenditure to
provide capital maintenance that is an asset depreciable under the
internal revenue code that is used by this state or an institution
of higher education.
Sec. 7. (1) The state may lease facilities from the building
authority for public purposes within the concepts provided in this
act, upon terms and conditions agreed upon and subject to the
limitations and provisions provided in section 6. Before execution,
a lease shall be approved by the state administrative board and,
except as provided in subsections (3) and (4), by concurrent
resolution of the legislature concurred in by a majority of the
members elected to and serving in each house. The votes and names
of the members voting shall be entered in the journal. The lease as
approved by the building authority and the administrative board,
and if required, the legislature or an institution of higher
education, may provide for a determinable true rental as a range as
permitted under section 1(e).
(2) If a lease is approved containing a true rental stated as
a range, then actual rental to be paid under the lease shall be
fixed at an amount certified by the appraiser and, after the
certification, shall be approved by the state administrative board
and the building authority. The appraiser shall not certify, and
the board and authority shall not approve, a true rental amount
unless the amount is fixed within or below the stated range. A
lease shall not be executed more than 3 years after its approval by
the legislature. The state shall pay to the building authority or
its assignee the true rental at the times, in the manner, and at
the place specified in the lease. The governor and the budget
director shall include in the annual budget of the state for each
year an amount fully sufficient to pay the true rental required to
be paid by the state to the building authority or its assignee
required by any lease under this act. If the lease is for an
institution of higher education, then in addition, the lease shall
be authorized by the institution of higher education and signed by
its authorized officers.
(3) The state, except institutions of higher education, may
lease from the building authority property that is comprised only
of furnishings or equipment if all of the following requirements
are met:
(a) Before a lease that is only for furnishings or equipment
is executed, the general form of the lease shall be approved by
concurrent resolution of the legislature concurred in by a majority
of the members elected to and serving in each house. The form of
the lease approved by the legislature need not contain a
description of the property to be leased or the rental or a rental
range. However, before the state executes the lease, the
description of the property to be leased and the rental shall be
approved by the state administrative board as provided in
subsection (2). The concurrent resolution of the legislature
approving the form of lease shall also approve a maximum amount of
furnishings and equipment that may be leased during the 2 years
following the approval of the lease pursuant to the form of lease
approved.
(b) A lease that is only for furnishings or equipment shall be
executed only if the furnishings or equipment are for use by a
state agency as determined under the management and budget act,
1984 PA 431, MCL 18.1101 to 18.1594.
(4)
Through September 30, 2007 2012, an institution of higher
education, this state, and the building authority may enter into a
lease for capital maintenance improvements if, before a lease that
is only for capital maintenance improvements is executed, the
general form of the lease is approved by concurrent resolution of
the legislature concurred in by a majority of the members elected
to and serving in each house. The form of the lease approved by the
legislature need not contain a description of the capital
maintenance improvements to be leased or the rental or a rental
range. However, before this state executes the lease, the
description of the capital maintenance improvements to be leased
and the rental shall be approved by the state administrative board.
(5) The building authority shall retain title to capital
maintenance improvements during the term of a lease approved under
subsection (4). The building authority shall not be required to
have any ownership interest in the structure to which a capital
maintenance improvement is made. Title to the capital maintenance
improvement shall be evidenced by a bill of sale.
(6) The actual rental to be paid under a lease approved under
subsection (4) for a capital maintenance improvement shall be
determined by an appraiser or by an alternate method and, after the
determination, shall be approved by the state administrative board
and the building authority. The state administrative board shall
approve any alternate method for determining actual rental, and an
alternate method may include a determination by a person or
business that is in the business of providing capital maintenance
improvements to institutions of higher education.
(7) The state shall pay to the building authority or its
assignee the true rental at the times, in the manner, and at the
place specified in the lease approved under subsection (4). The
governor and the budget director shall include in the annual budget
of the state for each year an amount fully sufficient to pay the
true rental required to be paid by this state to the building
authority or its assignee required by any lease under this act.
Sec. 8b. The board of the building authority may authorize up
to $100,000,000.00 of bond proceeds for facilities associated with
rail transportation projects or new fixed-guideway transit
infrastructure projects.
