Bill Text: MI SB1171 | 2009-2010 | 95th Legislature | Introduced

---

Bill Title: Property tax; delinquent taxes; distribution and collections from surplus fund for county treasurer; prohibit. Amends secs. 87c & 87d of 1893 PA 206 (MCL 211.87c & 211.87d).

Spectrum: Moderate Partisan Bill (Democrat 9-1)

Status: (Introduced - Dead) 2010-02-24 - Referred To Committee On Finance [SB1171 Detail]

Download: Michigan-2009-SB1171-Introduced.html

---

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SENATE BILL No. 1171

 

 

February 24, 2010, Introduced by Senators WHITMER, BASHAM, CHERRY, ANDERSON, BRATER, SANBORN, JACOBS, GLEASON, BARCIA and HUNTER and referred to the Committee on Finance.

 

 

 

     A bill to amend 1893 PA 206, entitled

 

"The general property tax act,"

 

by amending sections 87c and 87d (MCL 211.87c and 211.87d), section

 

87c as amended by 2002 PA 165 and section 87d as amended by 1982 PA

 

503.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 87c. (1) A county that has created a fund pursuant to

 

section 87b by resolution of its board of commissioners and without

 

a vote of its electors may borrow money and issue its revolving

 

fund notes to establish or continue, in whole or in part, the

 

delinquent tax revolving fund and to pay the expenses of the

 

borrowing.

 

     (2) If a fund is created and a county determines to borrow

 

pursuant to this section, the county treasurer shall be the agent

 

for the county in connection with all transactions relative to the

 

fund.

 

     (3) If provided by separate resolution of the county board of

 

commissioners for any year in which a county determines to borrow

 

for the purposes provided in this section and subject to subsection

 

(15), there shall be payable from the surplus in the fund an amount

 

equal to 20% of the following amount to the county treasurer for

 

services as agent for the county and the remainder of the following

 

amount to the county treasurer's office for delinquent tax

 

administration expenses:

 

     (a) For any delinquent tax on which the interest rate before

 

sale exceeds 1% per month, 1/27 of the interest collected per

 

month.

 

     (b) For any delinquent tax on which the interest rate before

 

sale is 1% per month or less, 3/64 of the interest collected each

 

month.

 

     (4) The amount payable under subsection (3) to the county

 

treasurer for services as agent for the county shall not exceed 20%

 

of the county treasurer's annual salary, and any excess over this

 

limitation shall be payable to the county treasurer's office for

 

delinquent tax administration expenses. In addition, the total sum

 

payable under subsection (3) shall not exceed 5% of the total

 

budget of the treasurer's office for that year.

 

     (3) (5) In the resolution authorizing the borrowing and

 

issuance of notes, the delinquent taxes from which the borrowing is

 

to be repaid shall be pledged to the payment of the principal and

 

interest of the notes, and the proceeds of the collection of the

 

delinquent taxes pledged and the interest on the proceeds shall be

 

placed in a segregated fund or account and shall not be used for

 

any other purpose until the notes are paid in full, including

 

interest. The segregated fund or account shall be established as a

 

part of the delinquent tax revolving fund and shall be accounted

 

for separately on the books of the county treasurer.

 

     (4) (6) The proceeds of the notes shall be placed in and used

 

as the whole or part of the fund established pursuant to section

 

87b, after the expenses of borrowing have been deducted.

 

     (5) (7) The notes issued pursuant to this section shall comply

 

with all of the following:

 

     (a) Be in an aggregate principal amount not exceeding the

 

aggregate amount of the delinquent taxes pledged, exclusive of

 

interest.

 

     (b) Bear interest not exceeding 14.5% per annum.

 

     (c) Be in those denominations, and mature on the date not

 

exceeding 6 years after their date of issue, as the board of

 

commissioners by its resolution determines.

 

     (d) May be issued at an original issue discount not to exceed

 

2% of the face value of the note issued.

 

     (6) (8) The resolution authorizing issuance of the notes may

 

provide that all or part of the notes shall be subject to

 

prepayment and, if subject to prepayment, shall provide the amount

 

of call premium payable, if any, the number of days' notice of

 

prepayment that shall be given, and whether the notice shall be

 

written or published, or both. Otherwise, the notes shall not be

 

subject to prepayment.

 

     (7) (9) The sale and award of notes shall be conducted and

 

made by the treasurer of the county issuing them at a public or

 

private sale. If a public sale is held, the notes shall be

 

advertised for sale once not less than 5 days before sale in a

 

publication printed in the English language and circulated in this

 

state that carries as a part of its regular service notices of the

 

sales of municipal bonds and that has been designated in the

 

resolution as a publication complying with these qualifications.

 

The notice of sale shall be in the form designated by the county

 

treasurer. The notes may be sold subject to the option of the

 

county treasurer and the county treasurer may withhold a part of

 

the issue from delivery if, in his or her opinion, sufficient funds

 

are available before delivery of the notes to make full delivery

 

unnecessary to the purposes of the borrowing.

 

     (8) (10) The notes are full faith and credit obligations of

 

the county issuing them and, subject to section 87d, if the

 

proceeds of the taxes pledged are not sufficient to pay the

 

principal and interest of the notes when due, the county shall

 

impose a general ad valorem tax without limitation as to rate or

 

amount on all taxable property in the county to pay the principal

 

and interest and may reimburse itself from delinquent taxes

 

collected.

 

     (9) (11) If the resolution provides and subject to section

 

87d, the notes may be designated general obligation tax notes.

 

     (10) (12) Notwithstanding any other provisions of this section

 

and section 87d, all the following apply:

 

     (a) Interest on the notes may be payable at any time provided

 

in the resolution, and may be set, reset, or calculated as provided

 

in the resolution.

 

     (b) Notes issued under this section may have 1 or more of the

 

following attributes:

 

     (i) Made the subject of a put or agreement to repurchase by the

 

county treasurer.

 

     (ii) Secured by a letter of credit issued by a bank under an

 

agreement entered into by the county treasurer or by any other

 

collateral that the resolution may authorize.

 

     (iii) Callable as set forth in the resolution.

 

     (iv) Reissued by the county treasurer once reacquired by the

 

county treasurer under any put or repurchase agreement.

 

     (c) The county treasurer may by order do 1 or more of the

 

following:

 

     (i) Authorize the issuance of renewal notes.

 

     (ii) Refund or refund in advance notes by the issuance of new

 

notes, whether the notes to be refunded have or have not matured.

 

     (iii) Issue notes partly to refund notes and partly for any

 

other purposes authorized by this act.

 

     (iv) Buy and sell any notes issued under this section.

 

     (d) Renewal, refunding, or advance refunding notes shall

 

comply with all of the following:

 

     (i) Shall be sold and the proceeds applied to the purchase

 

redemption or payment of the notes to be renewed or refunded.

 

     (ii) Shall not be subject to the revised municipal finance act,

 

2001 PA 34, MCL 141.2101 to 141.2821.

 

     (iii) May be sold or resold at a public or private sale.

 

     (iv) May pledge the delinquent taxes pledged in the issue to be

 

refunded in advance after the original issue is defeased by the

 

advance refunding issue.

 

     (e) Notes may be issued secured by a second lien on delinquent

 

taxes, interest, and county property tax administration fees

 

already the subject of a first lien because of the issuance of a

 

prior note issue.

 

     (f) Any notes issued may be secured in whole or in part under

 

a trust or escrow agreement, which agreement may also govern the

 

issuance of renewal notes, refunding notes, and advance refunding

 

notes. The agreement may authorize the trustee or escrow agent to

 

make investments of any type authorized in the agreement.

 

     (11) (13) The notes issued under this section and interest on

 

the notes shall be payable in lawful money of the United States of

 

America and shall be exempt from all taxation by this state or a

 

taxing authority in this state.

 

     (12) (14) The notes issued under this section may be made

 

payable at a bank or trust company, or may be made registrable as

 

to principal or as to principal and interest under the terms and

 

conditions specified in the authorizing resolution or by the county

 

treasurer when awarding the notes.

 

     (15) A county treasurer elected or appointed to office after

 

October 1, 1999 is not eligible for the payment under subsection

 

(3) for services as agent for the county unless that county

 

treasurer held office on October 1, 1999 and has not vacated that

 

office after October 1, 1999.

 

     (13) (16) Notwithstanding 1966 PA 293, MCL 45.501 to 45.521, a

 

county operating under a home rule charter shall not be restricted

 

by the provisions of the home rule charter in connection with the

 

powers granted to the county to issue notes by sections 87b and 87d

 

and this section. The treasurer of a county described in this

 

subsection, notwithstanding any charter provisions to the contrary,

 

shall have all of the powers granted to county treasurers by

 

sections 87b and 87d and this section.

 

     (17) Notwithstanding the provisions of 1947 PA 261, MCL 45.451

 

to 45.457, the provisions of this section shall control the

 

entitlement of the county treasurer to the fee provided for in this

 

section.

 

     (14) (18) If the treasurer authorizes on the order authorizing

 

the notes, any notes issued may be secured in whole or in part

 

under a trust or escrow agreement. That agreement may authorize the

 

trustee or escrow agent to make investments of any type authorized

 

in the agreement.

 

     (15) (19) Notes issued under this act are exempt from the

 

revised municipal finance act, 2001 PA 34, MCL 141.2101 to

 

141.2821.

 

     Sec. 87d. (1) Notwithstanding section 87c(10), 87c(8), a

 

county which that determines to borrow pursuant to section 87c may

 

submit to its voters the question of issuing revolving fund notes

 

at any general or special election, which question shall provide

 

for the establishment of the revolving fund for a period not to

 

exceed 10 years and shall be in substantially the following form:

 

     "Shall the county of __________ establish or continue for

 

__________ years a delinquent tax revolving fund and, in connection

 

with that fund, borrow an amount not to exceed the delinquent taxes

 

pledged for repayment of the borrowing or borrowings, as may be

 

made each year, and issue its general obligation unlimited tax

 

notes, pledging the county's full faith and credit for the purpose

 

of providing money for the delinquent tax revolving fund?"

 

     (2) If a majority of the electors voting on the question vote

 

in favor of the question, the county may proceed to issue the notes

 

as provided for in this act, which notes may be designated general

 

obligation unlimited tax notes.

 

     (3) If a majority of the electors voting on the question vote

 

against the question, or if the question is not submitted, the

 

county may also issue the notes but only in accordance with

 

subsection (6).

 

     (4) In addition, this section shall validate a question

 

submitted to the electors before the effective date of this section

 

December 21, 1978 in which the electors were asked to approve the

 

issuance of general obligation tax notes secured by delinquent

 

taxes, regardless of how the question may have been phrased. The

 

defeat of the question shall require that the notes be issued as

 

nonvoted until a future question is approved by the electors.

 

     (5) A county may submit to its electors the question

 

authorized by this section once each calendar year.

 

     (6) If All of the following apply if nonvoted notes are issued

 

pursuant to section 87c:

 

     (a) The resolution authorizing the borrowing and issuance of

 

the notes shall establish the pledged delinquent taxes, the

 

interest thereon, on those taxes, and any amounts received in the

 

future from taxing units in the county because of the

 

uncollectibility of any delinquent taxes as funds pledged to note

 

repayment, which amounts shall be placed in a segregated fund and

 

used for no other purpose except to repay the notes and the

 

interest thereon. on those notes. The resolution shall provide that

 

the expenses of borrowing shall be repaid from the county property

 

tax administration fees on the pledged delinquent taxes and the

 

balance of the county property tax administration fees may be added

 

to the funds pledged to note repayment, if the resolution provides.

 

     (b) The notes shall be designated general obligation limited

 

tax notes.

 

     (c) The resolution may establish a special fund to secure the

 

notes referred to as a note reserve fund and shall pay into the

 

note reserve fund any proceeds of sale of the notes to the extent

 

provided in the resolution authorizing issuance of the notes. All

 

money in the note reserve fund, except as hereafter otherwise

 

provided in this subsection, shall be added to the funds pledged to

 

note repayment and shall be used solely for payment of principal

 

and interest on the notes for which the fund was established , or

 

the purchase of notes for which the fund was established. Money in

 

the note reserve fund shall first be withdrawn for payment of

 

principal and interest on notes before other county general funds

 

are used to make the payments. All income or interest earned by, or

 

increment to, the note reserve fund due to its investment or

 

reinvestment shall be deposited in the delinquent tax revolving

 

fund , when the notes for which the fund was established are

 

retired. The resolution shall provide that when the note reserve

 

fund is sufficient to retire the notes and accrued interest

 

thereon, on the notes, it may be so used for that purpose.

 

     (d) A resolution which that establishes a note reserve fund

 

may provide for an additional borrowing of an amount not to exceed

 

the amount of the reserve , and the county shall have the power to

 

borrow that additional amount.

 

     (e) The notes shall be the full faith and credit obligations

 

of the county issuing them. If the proceeds of the taxes and

 

interest and, when pledged, county property tax administration fees

 

, or note reserve fund are not sufficient to pay the principal and

 

interest , when due, the county shall pay the same principal and

 

interest from its general funds or any additional tax which that

 

may be levied within its constitutional and statutory debt limits ,

 

and the county may thereafter reimburse itself from delinquent

 

taxes collected. The county's obligation to pay from its general

 

funds shall be its first budget obligation and shall be provided

 

for in the borrowing resolution in the following language:

 

     "This note issue, in addition, shall be a general obligation

 

of the county of __________, secured by its full faith and credit,

 

which shall include this county's limited tax obligation, within

 

applicable constitutional and statutory limits, and its general

 

funds. The county budget shall provide that if the pledged

 

delinquent taxes and any other pledged amounts are not collected in

 

sufficient amounts to meet the payments of principal and interest

 

due on these notes, the county, before paying any other budgeted

 

amounts, will promptly advance from its general funds sufficient

 

money to pay that principal and interest."

 

     (7) If All of the following shall apply if coupon notes are

 

issued , pursuant to section 87c or this section:

 

     (a) Interest shall be payable semiannually or annually.

 

     (b) The coupons shall specify the source from which the notes

 

shall be payable, which may be by reference to the note itself.

 

     (c) The coupons shall contain the facsimile signature of the

 

county treasurer.