House Introduced Bill 5833

HOUSE BILL No. 5833


     May 23, 2000, Introduced by Rep. Jelinek and referred to the Committee on Education.


        A bill to amend 1961 PA 108, entitled

   "An act to provide for loans by the state of Michigan to school
   districts for the payment of principal and interest upon school
   bonds; to prescribe the terms and conditions of the loans and the
   conditions upon which levies for bond principal and interest
   shall be included in computing the amount to be so loaned by the
   state; to prescribe the powers and duties of the superintendent
   of public instruction and the state treasurer in relation to such
   loans; to provide for the repayment of such loans; to provide
   incentives for repayment of such loans; to provide for other mat-
   ters in respect to such loans; and to make an appropriation,"

   by amending the title and sections 1, 2, 3, 4, 4a, 5, 6, 7, 8, 9,

   9b, 10, 10a, 11, and 12 (MCL 388.951, 388.952, 388.953, 388.954,

   388.954a, 388.955, 388.956, 388.957, 388.958, 388.959, 388.959b,

   388.960, 388.960a, 388.961, and 388.962), the title and sections

   6 and 9 as amended and section 9b as added by 1991 PA 65, sec-

   tions 2, 4, and 11 as amended by 1992 PA 228, section 3 as

   amended by 1985 PA 25, section 4a as amended by 1991 PA 22,

   section 5 as amended by 1983 PA 124, and section 10 as amended



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   and section 10a as added by 1989 PA 6, and by adding sections 1a,

   9c, 10b, 10c, and 11a; and to repeal acts and parts of acts.

               THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 1
                                    TITLE

 2
           An act to PRESCRIBE THE PROCEDURES, TERMS, AND CONDITIONS

 3
      FOR THE QUALIFICATION OF SCHOOL BONDS; TO provide for loans by

 4
      the state of Michigan to school districts for the payment of

 5
      principal and interest upon school bonds; to prescribe the terms

 6
      and conditions of the loans and the conditions upon which levies

 7
      for bond principal and interest shall be included in computing

 8
      the amount to be so loaned by the state; to prescribe  the 

 9
      CERTAIN powers and duties of the  superintendent of public

10
      instruction and the  state treasurer in relation to such loans;

11
      to provide for the repayment of such loans;  to provide incen-

12
      tives for repayment of such loans  TO PROVIDE FOR CERTAIN FEES;

13
      TO PROVIDE FOR CERTAIN GRANTS; to provide for other matters in

14
      respect to such loans; and to make an appropriation.

15
           Sec. 1.  (1) The purpose of this act is to implement section

16
      16 of article  9  IX of the  1963 Michigan  STATE
   constitution  ,

17
      hereinafter referred to as section 16  OF 1963.

18
           (2) THIS ACT SHALL BE KNOWN AND MAY BE CITED AS THE "SCHOOL

19
      BOND QUALIFICATION AND LOAN ACT".

20
           (3) AS USED IN THIS ACT:

21
           (A) "ADJUSTED TAXABLE VALUE" MEANS THE VALUATION ON WHICH

22
      DEBT MILLAGE FOR QUALIFIED BONDS CAN BE LEVIED, AS LAST EQUALIZED

23
      BY THE STATE.  NOT LATER THAN JUNE 30 OF EACH YEAR, THE STATE

24
      TREASURER SHALL ISSUE A TREASURY BULLETIN CONTAINING THE CURRENT



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                                   3

 1
      ADJUSTMENTS TO EQUALIZED TAXABLE VALUE TO CALCULATE ADJUSTED

 2
      TAXABLE VALUE.

 3
           (B) "ADJUSTED TAXABLE VALUE PER MEMBERSHIP PUPIL" MEANS A

 4
      SCHOOL DISTRICT'S ADJUSTED TAXABLE VALUE FOR THE CALENDAR YEAR

 5
      ENDING IN THE CURRENT STATE FISCAL YEAR DIVIDED BY THE SCHOOL

 6
      DISTRICT'S MEMBERSHIP, AS CALCULATED UNDER THE STATE SCHOOL AID

 7
      ACT, 1979 PA 94, MCL 388.1601 TO 388.1772, FOR THE SCHOOL YEAR

 8
      ENDING IN THE CURRENT STATE FISCAL YEAR.

 9
           (C) "BOND PURPOSE" MEANS THE PURPOSE FOR THE USE OF BOND

10
      PROCEEDS AS STATED IN THE OFFICIAL BALLOT SUBMITTED TO THE SCHOOL

11
      ELECTORS OF THE SCHOOL DISTRICT.

12
           (D) "CAPITAL EXPENDITURES" MEANS EXPENDITURES FOR WHICH

13
      BONDS MAY BE ISSUED BY A SCHOOL DISTRICT UNDER SECTION 1351A OF

14
      THE REVISED SCHOOL CODE, 1976 PA 451, MCL 380.1351A.

15
           (E) "COMPLETION OF A PROJECT" MEANS ALL CAPITAL EXPENDITURE

16
      ACTIVITIES AS IDENTIFIED WITHIN A SCHOOL DISTRICT'S APPLICATION

17
      FOR QUALIFICATION OF BONDS HAVE BEEN COMPLETED TO A DEGREE THAT

18
      THE FACILITY HAS BEEN CERTIFIED, IN CONFORMANCE WITH EXISTING

19
      INDUSTRY AND LEGAL STANDARDS, AS BEING READY TO BE OCCUPIED OR

20
      USED FOR THE PURPOSE FOR WHICH IT IS INTENDED.

21
           (F) "GENERAL PRICE LEVEL INDEX" MEANS THAT TERM AS DEFINED

22
      IN SECTION 33 OF ARTICLE IX OF THE STATE CONSTITUTION OF 1963.

23
           (G) "PROJECT" MEANS AN INDIVIDUAL SCHOOL FACILITY OR LOCA-

24
      TION IDENTIFIED FOR CAPITAL EXPENDITURES AS DESCRIBED WITHIN A

25
      SCHOOL DISTRICT'S APPLICATION FOR QUALIFICATION OF BONDS.

26
           (H) "QUALIFIED BONDS" MEANS GENERAL OBLIGATION BONDS OF A

27
      SCHOOL DISTRICT ISSUED ON OR AFTER JANUARY 1, 1964 FOR CAPITAL



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                                   4

 1
      EXPENDITURES, INCLUDING REFUNDING BONDS, THAT ARE QUALIFIED UNDER

 2
      THIS ACT FOR STATE LOANS TO SCHOOL DISTRICTS, AS DEFINED IN SEC-

 3
      TION 16 OF ARTICLE IX OF THE STATE CONSTITUTION OF 1963.

 4
           (I) "QUALIFIED DEBT SERVICE" MEANS DEBT SERVICE ON QUALIFIED

 5
      BONDS.

 6
           (J) "QUALIFIED MILLAGE" MEANS MILLAGE LEVIED TO PAY DEBT

 7
      SERVICE ON QUALIFIED BONDS.

 8
           (K) "SCHOOL BOND LOAN FUND" MEANS THAT FUND AS CREATED UNDER

 9
      1961 PA 112, MCL 388.981 TO 388.985.

10
           (l) "STATE TREASURER" MEANS THE STATE TREASURER OR HIS OR

11
      HER DESIGNEE.  THIS DESIGNATION SHALL BE MADE BY THE STATE TREA-

12
      SURER AND SHALL BE IN A WRITTEN INSTRUMENT SIGNED BY THE STATE

13
      TREASURER AND MAINTAINED IN A PERMANENT FILE.  FOR THE PURPOSES

14
      OF ALL OTHER PROVISIONS OF THIS ACT, THE SIGNATURE OF THE STATE

15
      TREASURER'S DESIGNEE SHALL HAVE THE SAME FORCE AND EFFECT AS THE

16
      SIGNATURE OF THE STATE TREASURER.

17
           (M) "TAXABLE VALUE PER MEMBERSHIP PUPIL" MEANS A SCHOOL

18
      DISTRICT'S TAXABLE VALUE FOR THE CALENDAR YEAR ENDING IN THE CUR-

19
      RENT STATE FISCAL YEAR DIVIDED BY THE SCHOOL DISTRICT'S MEMBER-

20
      SHIP, AS CALCULATED UNDER THE STATE SCHOOL AID ACT, 1979 PA 94,

21
      MCL 388.1601 TO 388.1772, FOR THE SCHOOL YEAR ENDING IN THE CUR-

22
      RENT STATE FISCAL YEAR.

23
           (N) "TOTAL INTEREST" MEANS THE TOTAL INTEREST INCURRED ON

24
      BONDS PLUS THE TOTAL INTEREST COST OF ANY SCHOOL BOND LOAN FUND

25
      BORROWINGS.

26
           SEC. 1A.  THE LEGISLATURE FINDS AND DECLARES ALL OF THE

27
      FOLLOWING:



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                                   5

 1
           (A) THE UTILIZATION OF THE SCHOOL BOND LOAN FUND BY SCHOOL

 2
      DISTRICTS HAS A MATERIAL IMPACT ON THE CREDIT AND FISCAL INTEG-

 3
      RITY OF THIS STATE.

 4
           (B) THE FIDUCIARY RESPONSIBILITY OF THE STATE TREASURER

 5
      INCLUDES THE PROTECTION OF THE CREDIT OF THIS STATE, THE FISCAL

 6
      INTEGRITY OF THIS STATE, AND THE FISCAL INTEGRITY OF SCHOOL

 7
      DISTRICTS.

 8
           (C) THE ABILITY OF THE STATE TO FULFILL THE REQUIREMENTS OF

 9
      SECTION 16 OF ARTICLE IX OF THE STATE CONSTITUTION OF 1963 MUST

10
      NOT BE COMPROMISED.

11
           Sec. 2.  (1) If the minimum amount  which  it would other-

12
      wise be necessary for a school district to levy in any year to

13
      pay principal and interest on its qualified bonds, including any

14
      necessary allowances for estimated tax delinquencies, exceeds

15
       13  7 mills  or the computed millage under subsection (2),

16
      whichever is less,  on each dollar of its  assessed valuation as

17
      last equalized by the state  ADJUSTED TAXABLE VALUE, then the

18
      school district may elect to borrow  all or any part  NOT MORE

19
      THAN 75% of the excess from  the  THIS state.  In that event
   

20
      HOWEVER, IF THAT MINIMUM AMOUNT IT WOULD OTHERWISE BE NECESSARY

21
      FOR A SCHOOL DISTRICT TO LEVY EXCEEDS 13 MILLS ON EACH DOLLAR OF

22
      ITS ADJUSTED TAXABLE VALUE, THEN THE SCHOOL DISTRICT MAY ELECT TO

23
      BORROW ALL OR ANY PART OF THE EXCESS FROM THIS STATE.  FURTHER,

24
      IF THE STATE TREASURER DETERMINES THAT A SCHOOL DISTRICT IS

25
      REQUIRED TO LEVY MORE THAN 7 MILLS ON EACH DOLLAR OF ITS ADJUSTED

26
      TAXABLE VALUE IN ORDER FOR THE SCHOOL DISTRICT TO BE ABLE TO PAY

27
      THE PRINCIPAL AND INTEREST ON ALL OF ITS QUALIFIED BONDS AND ON



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                                   6

 1
      LOANS MADE TO THE SCHOOL DISTRICT UNDER THIS ACT BY NOT LATER

 2
      THAN 60 MONTHS AFTER THE FINAL MATURITY DATE OF ALL OF THE SCHOOL

 3
      DISTRICT'S THEN OUTSTANDING QUALIFIED BONDS, TAKING INTO ACCOUNT

 4
      LOANS MADE TO THE SCHOOL DISTRICT UNDER THIS ACT FOR DEBT SERVICE

 5
      AND ANY LAWFUL SUBSIDIES THE STATE TREASURER REASONABLY EXPECTS

 6
      THE SCHOOL DISTRICT TO RECEIVE, THEN THE SCHOOL DISTRICT MUST

 7
      LEVY THAT ADDITIONAL MILLAGE, UP TO 13 MILLS, AS A CONDITION TO

 8
      RECEIVING A LOAN UNDER THIS ACT.  UPON A SHOWING OF COMPELLING

 9
      JUSTIFICATION BY THE SCHOOL DISTRICT, THE STATE TREASURER MAY

10
      EXTEND THE 60-MONTH PERIOD SPECIFIED IN THE PRECEDING SENTENCE TO

11
      A LONGER PERIOD NOT TO EXCEED 120 MONTHS.  IF A SCHOOL DISTRICT

12
      MEETS ALL OF THE APPLICABLE REQUIREMENTS AND CONDITIONS UNDER

13
      THIS SUBSECTION, the state shall loan the excess amount to the

14
      school district for the payment of principal and interest.  For

15
      bond issues sold before October 1, 1991 or bond issues sold

16
      exclusively to refund qualified bond issues sold before

17
      October 1, 1991, schools shall be allowed to borrow at least the

18
      percentage over 7 mills allowed them in the 1990-91 fiscal year.

19
      The school district shall levy not less than 12 mills or its

20
      equivalent for operating purposes. 

21
           (2)  The computed millage referred to in subsection (1) is

22
      the number of mills as computed by the state treasurer that the

23
      school district would have to levy in the year the computation is

24
      made and each succeeding year to be able to pay the principal and

25
      interest on all of its qualified bonds and loans made to the

26
      school district under this act, taking into account loans made to

27
      the school district under this act for debt service, by not later



   04903'99
                                   7

 1
      than 60 months after the final maturity date of all of its

 2
      qualified bonds outstanding as of the date of the computation,

 3
      but shall be not less than 7 mills.  The state treasurer shall

 4
      make the  computation  DETERMINATION UNDER SUBSECTION (1) based

 5
      on the following assumptions:

 6
           (a) An assumed interest rate on loans made under this act

 7
      equal to the PROJECTED average interest rate on school bond loan

 8
      fund notes and bonds over the  immediately preceding  NEXT

 9
      SUCCEEDING 5-year period.

10
           (b) A projected total  state equalized valuation  ADJUSTED

11
      TAXABLE VALUE for the school district that assumes  a state

12
      equalized valuation  AN ADJUSTED TAXABLE VALUE growth rate or

13
      decline rate equal to the school district's average yearly  state

14
      equalized valuation  ADJUSTED TAXABLE VALUE growth rate or

15
      decline rate over the immediately preceding 5-year period FOR THE

16
      NEXT SUCCEEDING 5-YEAR PERIOD AND THEREAFTER AT A GROWTH RATE

17
      EQUAL TO THE LESSER OF THAT RATE OR A RATE EQUAL TO THE MOST

18
      RECENT AVAILABLE 5-YEAR AVERAGE ANNUAL GENERAL PRICE LEVEL INDEX,

19
      BUT NOT MORE THAN 5% PER ANNUM.

20
           (3) Upon request made by a school district before June 1 of

21
      any year, the  superintendent of public instruction and the 

22
      state treasurer annually may  jointly  issue an order waiving all

23
      or a portion of the millage required to be levied by a school

24
      district to pay principal and interest on its qualified bonds

25
      pursuant to subsection (1) if  they find  THE STATE TREASURER

26
      FINDS all of the following:





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                                   8

 1
           (a) The school board of the school district has applied to

 2
      the department of  education  TREASURY for permission to levy

 3
      less than the millage required to be levied to pay the principal

 4
      and interest on its qualified bonds pursuant to subsection (1).

 5
           (b) The application specifies the number of mills the school

 6
      district requests permission to levy.

 7
           (c) The waiver will be financially beneficial to the state

 8
      or to the school district, or both.

 9
           (d) The waiver will not reduce the millage levied by the

10
      school district to pay principal and interest on qualified bonds

11
      under subsection (1) to less than 7 mills.

12
           (e) The school board, by resolution, has agreed to comply

13
      with all conditions that the  superintendent of public instruc-

14
      tion and the  state treasurer  consider are  CONSIDERS

15
      necessary.

16
           (4) FOR BOND ISSUES ISSUED BEFORE THE EFFECTIVE DATE OF THE

17
      AMENDATORY ACT THAT ADDED THIS SUBSECTION, A SCHOOL DISTRICT MAY

18
      BORROW UNDER THIS ACT AT LEAST THE AMOUNT IT WOULD HAVE BEEN

19
      ALLOWED TO BORROW UNDER THE PROVISIONS OF THIS ACT AS IN EFFECT

20
      IMMEDIATELY BEFORE THAT DATE.

21
           Sec. 3.  (1) As used in this act, "qualified bonds" means

22
      general obligation bonds of school districts issued for capital

23
      expenditures, including refunding bonds, issued as follows:

24
           (a) Before May 4, 1955.

25
           (b) On or after May 4, 1955 but before January 1, 1964, only

26
      if, and to the extent that, the bonds have been qualified





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                                   9

 1
      pursuant to section 27 or 28 of article X of the state

 2
      constitution of 1908 and implementing acts.

 3
           (c) On or after January 1, 1964, if the bonds are qualified

 4
      pursuant to section 16 of article IX of the state constitution of

 5
      1963 and this act.

 6
           (2)  All actions  heretofore  taken by the
   superintendent of

 7
      public instruction BEFORE THE 2000 AMENDATORY ACT THAT AMENDED

 8
      THIS SECTION in qualifying bonds pursuant to  sections 27 and 28

 9
      of article X of the state constitution of 1908 and implementing

10
      acts,  SECTION 16 OF ARTICLE IX OF THE STATE CONSTITUTION OF 1963

11
      are validated and all certificates of qualification  heretofore

12
      or hereafter  issued by the superintendent OF PUBLIC INSTRUCTION

13
      OR THE STATE TREASURER are conclusive as to the existence of

14
      facts entitling the bonds to be qualified as provided in the cer-

15
      tificates and as to the qualification and shall not be subject to

16
      attack in any proceeding.  Any certificate of qualification

17
      issued before January 1, 1964, qualifying bonds pursuant to sec-

18
      tion 28 of article X of the state constitution of 1908, and the

19
      act implementing that section, shall constitute qualification

20
      pursuant to section 16 of article IX of the state constitution of

21
      1963 and this act, for any bonds sold or delivered to the pur-

22
      chaser of the bonds on or after January 1, 1964.  Any bonds

23
      issued between May 4, 1955 and before January 1, 1964, that were

24
      partially qualified shall be considered to be 100% qualified

25
      bonds if they would be 100% qualifiable under this act.

26
           (3) Bonds issued for a purpose described in section 1274a of

27
      the school code of 1976, Act No. 451 of the Public Acts of 1976,



   04903'99
                                  10

 1
      being section 380.1274a of the Michigan Compiled Laws, shall be

 2
      considered general obligation bonds of school districts issued

 3
      for capital expenditures. 

 4
           Sec. 4.  (1) The  superintendent of public instruction

 5
      shall  STATE TREASURER SHALL NOT issue his or her certificate

 6
      qualifying an issue of bonds, upon application for a certificate

 7
      being made by the school district,  if the superintendent  UNLESS

 8
      THE STATE TREASURER finds ALL OF the following:

 9
           (a) That the last maturity date of the issue of bonds is not

10
      less than  10  15 years from the issuance date appearing on the

11
      bonds  subject to the following qualifications and exceptions:

12
      (i) Except for bonds issued for a purpose described in section

13
      1274a of the school code of 1976, Act No. 451 of the Public Acts

14
      of 1976, being section 380.1274a of the Michigan Compiled Laws,

15
      or as otherwise provided in this subparagraph,  if the ratio of

16
      debt to  valuation  ADJUSTED TAXABLE VALUE of the school district

17
      exceeds 4%;  ,  THAT the last maturity date of the issue of bonds

18
       shall be  IS not less than  15  25 years from the issuance
   date

19
      appearing on the bonds  ;  if the ratio of debt to  valuation
   

20
      ADJUSTED TAXABLE VALUE of the school district exceeds 7%;  ,  OR

21
      THAT the last maturity date of the issue of bonds  shall be  IS

22
      not less than  25  29 years from the issuance date appearing on

23
      the bonds  ; or  if the ratio of debt to  valuation 
   ADJUSTED

24
      TAXABLE VALUE of the school district exceeds 12%.  , the last

25
      maturity date of the issue of bonds shall be not less than 29

26
      years from the issuance date appearing on the bonds.  Regardless

27
      of the ratio of debt to  valuation  ADJUSTED TAXABLE VALUE of a



   04903'99
                                  11

 1
      school district, the state treasurer may authorize the last

 2
      maturity date of an issue of bonds of that school district to be

 3
       not less than 10  A LESSER NUMBER OF years from the issuance

 4
      date appearing on the bonds if the state treasurer determines it

 5
      is financially beneficial to  the  THIS state or to the school

 6
      district.  As used in this section, "ratio of debt to  valuation 

 7
      ADJUSTED TAXABLE VALUE" means that ratio arrived at by dividing

 8
      the total tax supported bonded indebtedness of the school dis-

 9
      trict outstanding as of the date of the filing of the application

10
      required by this act, including the bonds proposed to be quali-

11
      fied, by the  assessed valuation  ADJUSTED TAXABLE VALUE of the

12
      school district.  as last equalized by the state.  The refunding

13
      part of any proposed issue of bonds shall not be included in the

14
      total indebtedness of the school district for the purposes of

15
      this section.

16
            (ii) If the bonds are issued for a purpose described in

17
      section 1274a of Act No. 451 of the Public Acts of 1976, the last

18
      maturity of the issue of bonds may be less than 10 years from the

19
      issuance date appearing on the bonds but not less than the number

20
      of years approved by the superintendent of public instruction in

21
      the certificate of qualification.  The certificate of qualifica-

22
      tion of the superintendent of public instruction shall contain a

23
      certification and approval that the bonds are issued for such a

24
      purpose, which approval shall be final and conclusive and shall

25
      set forth the minimum number of years for the last maturity of

26
      the bonds. 





   04903'99
                                  12

 1
           (b) That the yearly principal maturity date  is not less

 2
      than 5 months after the major part of the taxes for the bonds

 3
      becomes by law a lien upon the property assessed  AND ANY INTER-

 4
      EST PAYMENT DATES ARE ESTABLISHED USING ONLY THE DATES OF MAY 1

 5
      AND NOVEMBER 1 AS PAYMENT DATES.  THIS REQUIREMENT MAY BE WAIVED

 6
      BY THE STATE TREASURER IF THE DISTRICT CAN PROVIDE COMPELLING

 7
      JUSTIFICATION FOR ALTERNATIVE DATES.  FOR SUCH A WAIVER TO BE

 8
      EFFECTIVE, IT MUST BE APPROVED BEFORE THE ISSUANCE OF THE BONDS.

 9
            (c) Except as otherwise provided in this subdivision, that

10
      the amount of principal maturing in any calendar year is not less

11
      than the amount of principal maturing in any prior calendar year

12
      and, except for bonds issued for a purpose described in section

13
      1274a of Act No. 451 of the Public Acts of 1976, if the ratio of

14
      debt to valuation of the school district exceeds 12%, that the

15
      first 10 principal maturities do not in the aggregate exceed 25%

16
      of the total principal amount of the bonds proposed to be

17
      qualified.  Regardless of the amount of principal maturing in any

18
      calendar year and regardless of the ratio of debt to valuation of

19
      the school district, the state treasurer may authorize principal

20
      maturities in any amount if the state treasurer determines it is

21
      financially beneficial to the state or to the school district.

22
      At the request of the school district, the state treasurer may

23
      grant that authorization as part of the procedure of preliminary

24
      qualification under subdivision (f). 

25
           (C)  (d)  That the  cost  COSTS of the project for
   which the

26
      bonds are to be issued,  is within reasonable standards of cost

27
      as established by the state board of education, which standards



   04903'99
                                  13

 1
      may vary as to different localities in accordance with any

 2
      variance in construction costs between localities  INCLUDING, BUT

 3
      NOT LIMITED TO, TOTAL INTEREST, BOND ISSUANCE COSTS, CONSTRUCTION

 4
      COSTS, AND PROFESSIONAL FEES, ARE DOCUMENTED IN A FORMAT PRE-

 5
      SCRIBED BY THE STATE TREASURER AND ARE CERTIFIED TO THE STATE

 6
      TREASURER TO BE REASONABLE ACCORDING TO COST PARAMETERS ESTAB-

 7
      LISHED BY THE STATE TREASURER UNDER SUBSECTION (3).  IF THE COSTS

 8
      EXCEED THESE PARAMETERS, THE STATE TREASURER MAY DENY THE APPLI-

 9
      CATION, MAY REQUIRE AN EXPLANATION OF THE VARIANCE, OR MAY

10
      REQUIRE THE SCHOOL DISTRICT TO OBTAIN AN INDEPENDENT EVALUATION

11
      OF COSTS TO BE COMPLETED BY A CONSULTANT MEETING QUALIFICATIONS

12
      SPECIFIED BY THE STATE TREASURER.

13
           (D)  (e) Except for bonds issued for a purpose described in

14
      section 1274a of Act No. 451 of the Public Acts of 1976, that 

15
      THAT there exists a need for the project based upon current and

16
      probable future enrollment,  and  that the project is designed to

17
      provide school facilities reasonably adequate to meet that need

18
      IN AN EFFICIENT AND EFFECTIVE MANNER BASED ON CRITERIA AS ESTAB-

19
      LISHED BY THE STATE TREASURER, AND THAT THIS NEED IS DOCUMENTED

20
      BY THE SCHOOL DISTRICT IN A STUDY OF THE SCHOOL DISTRICT'S FACIL-

21
      ITIES FILED WITH THE STATE TREASURER AS PART OF THE APPLICATION.

22
           (E)  (f) Subject to subsection (3), if  IF a bond issue

23
      requires an election, that  a  THE bond issue  that a school dis-

24
      trict wishes to qualify  has been given preliminary qualification

25
       prior to  BEFORE the official action of the SCHOOL board  of

26
      education  calling for the election on the bond issue; THAT THE

27
      BALLOT LANGUAGE WAS INCLUDED IN THE PRELIMINARY QUALIFICATION,



   04903'99
                                  14

 1
      PROVIDES A CLEAR STATEMENT OF THE PURPOSE FOR WHICH THE PROCEEDS

 2
      OF THE BONDS WILL BE USED, AND OTHERWISE COMPLIES WITH APPLICABLE

 3
      LAW; AND THAT THE SCHOOL DISTRICT CERTIFIES TO THE STATE TREA-

 4
      SURER BEFORE QUALIFICATION THAT THE SCHOOL DISTRICT PROVIDED TO

 5
      ITS SCHOOL ELECTORS APPROPRIATE DISCLOSURE, IN THE FORM INCLUDED

 6
      IN THE PRELIMINARY QUALIFICATION, OF THE FISCAL IMPACT OF THE

 7
      BOND PROPOSAL, INCLUDING THE ESTIMATED ANNUAL MILLAGE RATE TO BE

 8
      LEVIED WITH AND WITHOUT THE PROPOSED BOND ISSUE, THE MAXIMUM

 9
      PRINCIPAL AMOUNT TO BE BORROWED, THE NUMBER OF YEARS THE BONDS

10
      ARE EXPECTED TO BE OUTSTANDING, THE ESTIMATED TOTAL INTEREST COST

11
      THAT WILL BE INCURRED, AND THE ESTIMATED DURATION AND COST OF ANY

12
      SCHOOL BOND LOAN FUND BORROWINGS.

13
            (g) If the bonds are issued for a purpose described in sec-

14
      tion 1274a of Act No. 451 of the Public Acts of 1976, and if the

15
      bonds have not been approved by a majority of the school electors

16
      voting on the question, that the school district has demonstrated

17
      and the state treasurer has approved the method of payment for,

18
      and the ability to pay, the bonds and that the school district

19
      has received the prior approval of the department of treasury for

20
      the issuance of the bonds under the municipal finance act, Act

21
      No. 202 of the Public Acts of 1943, being sections 131.1 to 139.3

22
      of the Michigan Compiled Laws. 

23
           (F) THAT THE SCHOOL DISTRICT CAN MEET THE REQUIREMENTS OF

24
      SECTION 2 USING THE ASSUMPTIONS CONTAINED IN THAT SECTION AND

25
      CONSIDERING ANY LAWFUL SUBSIDY THAT THE SCHOOL DISTRICT MAY REA-

26
      SONABLY EXPECT TO BE RECEIVED.





   04903'99
                                  15

 1
           (G) THAT THE SCHOOL DISTRICT CERTIFIES TO THE STATE

 2
      TREASURER THAT IT HAS COMPLIED WITH ALL LEGAL REQUIREMENTS

 3
      APPLICABLE TO ALL PRIOR VOTED BOND ISSUES AND WILL DO SO WITH

 4
      RESPECT TO THE BOND ISSUE BEING QUALIFIED.

 5
           (H) IF THE BOND ISSUE REQUIRES AN ELECTION, THAT THE SCHOOL

 6
      DISTRICT CERTIFIES THAT IT WILL NOT EXPEND PROCEEDS OF THE BOND

 7
      ISSUE FOR PURPOSES NOT DESCRIBED IN THE BALLOT PROPOSAL APPROVING

 8
      THE BOND ISSUE UNLESS OTHERWISE PERMITTED BY LAW TO DO SO.

 9
           (I) THAT QUALIFICATION OF THE ISSUE WILL NOT HAVE AN ADVERSE

10
      FINANCIAL IMPACT ON THIS STATE OR THE SCHOOL DISTRICT BASED ON

11
      PARAMETERS ESTABLISHED BY THE STATE TREASURER UNDER SUBSECTION

12
      (3).  IF THE STATE TREASURER DETERMINES THAT THE BOND ISSUE DOES

13
      NOT MEET THIS REQUIREMENT, THE STATE TREASURER MAY APPROVE THAT

14
      PART OF THE BOND ISSUE THAT DOES MEET THIS REQUIREMENT.

15
           (J) THAT THE SCHOOL DISTRICT AGREES TO COMPLETE EACH PROJECT

16
      IN ACCORDANCE WITH THE PLANS FOR THE PROJECT THAT WERE SUBMITTED

17
      IN THE SCHOOL DISTRICT'S APPLICATION FOR PRELIMINARY QUALIFICA-

18
      TION OF BONDS AND APPROVED IN THE BOND ELECTION, IF APPLICABLE,

19
      WITH ONLY THOSE CHANGES AS ARE PERMITTED BY, OR APPROVED BY, THE

20
      STATE TREASURER IN ACCORDANCE WITH THE PROCEDURES ESTABLISHED BY

21
      THE STATE TREASURER UNDER SUBSECTION (3).

22
           (K) THAT, AS OF THE DATE THE APPLICATION IS FILED, THE TOTAL

23
      OUTSTANDING PRINCIPAL AMOUNT OF DEBT OF THE SCHOOL DISTRICT,

24
      INCLUDING THE BONDS PROPOSED TO BE QUALIFIED, WILL NOT EXCEED 20%

25
      OF THE ADJUSTED TAXABLE VALUE OF THE SCHOOL DISTRICT FOR THE MOST

26
      RECENT COMPLETED FISCAL YEAR.  THIS REQUIREMENT MAY BE WAIVED BY

27
      THE STATE TREASURER IF THE SCHOOL DISTRICT CAN PROVIDE COMPELLING



   04903'99
                                  16

 1
      JUSTIFICATION FOR THE WAIVER.  FOR SUCH A WAIVER TO BE EFFECTIVE,

 2
      THE WAIVER MUST BE APPROVED BEFORE THE PRELIMINARY QUALIFICATION

 3
      OF THE BONDS.

 4
           (l) THAT QUALIFIED BONDS ISSUED FOR AN ASSET WITH A USEFUL

 5
      LIFE OF LESS THAN 30 YEARS WILL NOT BE ISSUED FOR A TERM THAT IS

 6
      LONGER THAN THE USEFUL LIFE OF THE ASSET COMPUTED FROM THE DATE

 7
      THE ASSET IS PLACED IN SERVICE.

 8
           (M) THAT PRINCIPAL AMORTIZATION OF THE BOND ISSUE WILL BE

 9
      SCHEDULED SO THAT AMORTIZATION OF BONDS IS COMPLETED CONCURRENTLY

10
      WITH RESPECT TO ALL ASSET CLASSIFICATIONS WITHIN THE FINANCED

11
      PROJECTS AS DETERMINED BY THE STATE TREASURER BASED ON CRITERIA

12
      ESTABLISHED BY THE STATE TREASURER UNDER SUBSECTION (3).

13
           (N) THAT THE SCHOOL DISTRICT CERTIFIES THROUGH ITS APPLICA-

14
      TION FOR FINAL QUALIFICATION THAT IT AGREES TO ALL OF THE

15
      FOLLOWING:

16
           (i) EXCEPT TO THE EXTENT OTHERWISE REQUIRED TO MAINTAIN THE

17
      TAX EXEMPT STATUS OF THE BOND ISSUE, TO ESTABLISH A COMMON DEBT

18
      RETIREMENT FUND FOR ALL ITS EXISTING AND PROPOSED QUALIFIED BOND

19
      ISSUES TO THE EXTENT ALLOWABLE UNDER STATE AND FEDERAL LAW.

20
           (ii) IF MORE THAN 1 QUALIFIED DEBT RETIREMENT FUND IS

21
      REQUIRED, TO ALLOCATE THE SCHOOL DISTRICT'S TOTAL DEBT RETIREMENT

22
      MILLAGE AMONG THE VARIOUS QUALIFIED DEBT RETIREMENT FUNDS SO AS

23
      TO MINIMIZE THE AMOUNT OF FUNDS BORROWED FROM THE SCHOOL BOND

24
      LOAN FUND.

25
           (iii) TO MAINTAIN ITS BONDED CAPITAL PROJECTS ACCOUNTING

26
      RECORDS IN A MANNER THAT PROVIDES FOR THE COMPARISON OF ACTUAL





   04903'99
                                  17

 1
      EXPENDITURES TO BUDGETED AMOUNTS AS PRESENTED IN ITS APPLICATION

 2
      FOR QUALIFICATION OF BONDS.

 3
           (iv) TO SUBMIT A FINAL REPORT OF BONDING ACTIVITY EXPENDI-

 4
      TURES, IN A FORMAT AS PRESCRIBED BY THE STATE TREASURER, THAT HAS

 5
      BEEN AUDITED IN ACCORDANCE WITH SECTION 1351A OF THE REVISED

 6
      SCHOOL CODE, 1976 PA 451, MCL 380.1351A.  IF THIS AUDIT OR ANY

 7
      OTHER LAWFUL REVIEW BY THE STATE TREASURER IDENTIFIES EXPENDI-

 8
      TURES THAT WERE IMPROPERLY CHARGED TO A CAPITAL PROJECTS FUND

 9
      FINANCED FROM QUALIFIED BOND PROCEEDS, THE SCHOOL DISTRICT SHALL

10
      REIMBURSE THE CAPITAL PROJECTS FUND OR ITS SUCCESSOR DEBT RETIRE-

11
      MENT FUND FOR THE AMOUNT OF IMPROPER EXPENDITURES.

12
           (v) TO COMPLETE DEBT SERVICE TRANSACTIONS INCLUDING, BUT NOT

13
      LIMITED TO, TAX COLLECTION, LOAN APPLICATIONS, AND DEBT SERVICE

14
      PAYMENTS, FOR ALL OF ITS QUALIFIED BONDS IN ACCORDANCE WITH PRO-

15
      CEDURES PRESCRIBED BY THE STATE TREASURER.

16
           (2)  For refunding bonds issued to refund bonds issued

17
      before May 4, 1955, the superintendent of public instruction

18
      shall issue the certificate of qualification if the superinten-

19
      dent finds that the refunding bonds comply with the requirements

20
      set forth in subsection (1)(c).  For refunding bonds issued to

21
      refund bonds  issued on or after May 4, 1955,  or issued to

22
      refund loans from the state made under the authority of this act,

23
      the  superintendent  STATE TREASURER shall issue the certificate

24
      of qualification if the  superintendent  STATE TREASURER finds

25
      that the refunding bonds comply with the requirements set forth

26
      in subsection  (1)(c)  (1)(B), (C), AND (N), TO THE EXTENT THOSE

27
      PROVISIONS ARE APPLICABLE TO REFUNDING BONDS, and also that the



   04903'99
                                  18

 1
      refunding bonds are being issued to refund loans from the state

 2
      made under the authority of this act or that the bonds represent-

 3
      ing the original indebtedness  either  were qualified  or satis-

 4
      fied the requirements for qualification set forth in

 5
      subsection (1)(d) and (e) in effect when issued or would have

 6
      satisfied the requirements set forth in subsection (1)(d) and (e)

 7
      had those requirements been in effect when the bonds were issued 

 8
      UNDER THIS ACT.  Refunding bonds issued to refund loans from the

 9
      state made under the authority of this act shall be considered as

10
      refunding bonds for all purposes including section 16 of article

11
      IX of the state constitution of 1963.

12
           (3)  The requirement of subsection (1)(f) does not apply to

13
      a bond issue that is approved by the school district electors

14
      between December 31, 1990 and July 1, 1991 and that is in part

15
      ineligible for qualification.  A series of bonds for such a bond

16
      issue may be qualified by the superintendent of public instruc-

17
      tion if it is limited to either a project or projects eligible

18
      for qualification or refunding of obligations issued for a pur-

19
      pose described in section 1274a of Act No. 451 of the Public Acts

20
      of 1976, or both.  THE STATE TREASURER SHALL DEVELOP AND PUBLISH

21
      IN 1 OR MORE TREASURY BULLETINS ALL OF THE FOLLOWING:

22
           (A) COST PARAMETERS AS DESCRIBED IN SUBSECTION (1)(C).

23
           (B) PARAMETERS FOR DETERMINING ADVERSE FINANCIAL IMPACT AS

24
      DESCRIBED IN SUBSECTION (1)(I).

25
           (C) PROCEDURES FOR APPROVAL OF CHANGES IN PROJECTS AS

26
      DESCRIBED IN SUBSECTION (1)(J).





   04903'99
                                  19

 1
           (D) CRITERIA FOR DETERMINING PROPER AMORTIZATION AS

 2
      DESCRIBED IN SUBSECTION (1)(M).

 3
           (E) ANY OTHER CRITERIA THE STATE TREASURER CONSIDERS NECES-

 4
      SARY TO EVALUATE COMPLIANCE WITH SUBSECTION (1).

 5
           (4) IN DETERMINING WHETHER A BOND ISSUE OR APPLICATION MEETS

 6
      THE REQUIREMENTS OF SUBSECTION (1), THE STATE TREASURER SHALL NOT

 7
      REQUIRE COMPLIANCE WITH ANY REQUIREMENT ESTABLISHED BY THE STATE

 8
      TREASURER UNDER SUBSECTION (3) THAT IS PUBLISHED LESS THAN 30

 9
      DAYS BEFORE THE DATE THE APPLICATION IS RECEIVED BY THE STATE

10
      TREASURER.

11
           Sec. 4a. (1) Subject to subsection (2), an unexpended bal-

12
      ance of the proceeds of sale of any school district bonds

13
       heretofore or hereafter issued,  remaining after completion of

14
       the project, to the extent of  ALL PROJECTS AUTHORIZED IN THAT

15
      BOND ISSUE SHALL BE APPLIED FIRST TO REPAYMENT OF ANY AMOUNT OWED

16
      TO THE SCHOOL BOND LOAN FUND FOR THAT BOND ISSUE AND THEN TO THE

17
      PAYMENT OR PREPAYMENT OF PRINCIPAL ON THAT BOND ISSUE.  HOWEVER,

18
      IF PERMISSION IS GRANTED IN WRITING BY THE STATE TREASURER, SOME

19
      OR ALL OF THE UNEXPENDED BALANCE, NOT TO EXCEED 15% of the amount

20
      of the BOND issue,  or, for a fourth class school district

21
      located in a county with a population of not more than 27,000, to

22
      the extent of 40% of the amount of the issue, with the approval

23
      of the electors in the case of bonds issued before August 28,

24
      1964,  may be used for  school construction, equipment and site

25
      acquisition and development if that use is approved by the super-

26
      intendent of public instruction, and any remaining balance shall

27
      be paid immediately into the bond and interest redemption fund



   04903'99
                                  20

 1
      established for the bonds and shall be used either for the

 2
      redemption of callable bonds, or, before the first call date

 3
      only, for purchasing the bonds on the open market at not more

 4
      than the fair market value or used to reduce the amount required

 5
      to be levied to meet current principal and interest on the bonds

 6
      as they become due.  Any unexpended balance of the proceeds of

 7
      sale of any school district bonds heretofore or hereafter issued,

 8
      remaining after payment in full of the principal of and interest

 9
      on the bonds, may be used to increase or continue expenditures

10
      for any of the projects or purposes for which the bonds were ini-

11
      tially authorized and issued, even though all projects for which

12
      the bonds were initially authorized and issued have not been

13
      completed.  This section shall apply unless allocations of speci-

14
      fied amounts for stated projects or purposes were contained in

15
      the ballot question by which the bonds were initially authorized,

16
      in which case the use must be approved by the superintendent of

17
      public instruction  CAPITAL EXPENDITURES.

18
           (2) The  superintendent of public instruction  STATE

19
      TREASURER shall not approve  a  THE use of  the  AN
   unexpended

20
      balance of the proceeds of any school district bonds FOR ADDI-

21
      TIONAL CAPITAL EXPENDITURES as authorized under subsection (1)

22
      unless he or she finds that the school district seeking approval

23
      has demonstrated a compelling justification for  not immediately

24
      paying all of the unexpended balance into the bond and interest

25
      redemption fund established for the bonds  THAT USE.

26
            (3) As used in this section, "fourth class school district"

27
      means a school district organized as a school district of the



   04903'99
                                  21

 1
      fourth class under the school code of 1976, Act No. 451 of the

 2
      Public Acts of 1976, being sections 380.1 to 380.1852 of the

 3
      Michigan Compiled Laws. 

 4
           Sec. 5.  All certificates of qualification shall be kept in

 5
      a permanent file in the office of the  superintendent of public

 6
      instruction  STATE TREASURER and copies  thereof  OF THESE

    7 CERTIFICATES shall be delivered to the school district.  and to

 8
      the office of the municipal finance commission or its successor

 9
      agency.  Applications  A SCHOOL DISTRICT SHALL APPLY for  such

10
      certificates shall be made  PRELIMINARY QUALIFICATION AND FOR A

11
      CERTIFICATE OF QUALIFICATION on forms prepared and supplied by

12
      the  superintendent of public instruction and he or she  STATE

13
      TREASURER.  THE STATE TREASURER shall prescribe reasonable rules

14
      and regulations in respect  thereto  TO THE APPLICATIONS.  If

15
       prior to the issuance of bonds, the  A school district does not

16
      secure  such  A certificate of qualification from the

17
       superintendent of public instruction  STATE TREASURER BEFORE THE

18
      ISSUANCE OF BONDS, it shall be  deemed  CONSIDERED to have waived

19
      the right to have  such  THOSE bonds  so  qualified.

20
           Sec. 6.  (1)  In  FOR any school district THAT OWES AN

21
      EXISTING BALANCE DUE TO THE SCHOOL BOND LOAN FUND OR where the

22
      amount necessary to be levied in any year for principal and

23
      interest on qualified bonds, including any necessary allowance

24
      for estimated tax delinquencies but excluding any funds pledged

25
      to and available for the payment of the principal and interest,

26
      exceeds that amount stipulated in section 2, the school district,

27
      on or before 60 days  prior to  BEFORE the time of the



   04903'99
                                  22

 1
      certification of its tax levy to the assessing officer, shall

 2
      file with the  superintendent of public instruction and the

 3
      municipal finance commission or its successor agency a prelimi-

 4
      nary application for a loan from the state in the amount of any

 5
      part of such excess over that amount stipulated in section 2

 6
      which it does not propose to levy in such year  STATE TREASURER

 7
      AN ANNUAL LOAN ACTIVITY APPLICATION THAT PROVIDES AN ESTIMATE OF

 8
      THE AMOUNT TO BE BORROWED FROM OR REPAID TO THE SCHOOL BOND LOAN

 9
      FUND DURING THAT SCHOOL FISCAL YEAR.  If the excess over that

10
      amount stipulated in section 2 is reached or increased by reason

11
      of bonds authorized by resolution of the SCHOOL board  of

12
      education  of the school district within the 60-day period,  an

13
      original or amended application shall be filed within that

14
      period.  An application shall set forth the amount of the last

15
      state equalized valuation of the school district and, for each of

16
      the 5 years immediately preceding the application, the amount of

17
      principal and interest on qualified bonds necessary to be levied

18
      upon the tax roll of that year, the amount of any moneys on hand

19
      pledged to and available for the payment of the principal and

20
      interest, the probable delinquency in tax collections at the

21
      times the principal and interest will become due, the estimated

22
      amount of the loan which will be required from the state, and any

23
      other pertinent facts which may be required to be included in the

24
      application by the superintendent of public instruction  THE DOC-

25
      UMENTATION SUBMITTED AT THE TIME OF FINAL QUALIFICATION IS CON-

26
      SIDERED TO MEET THIS ACTIVITY APPLICATION REQUIREMENT.





   04903'99
                                  23

 1
           (2) THE ANNUAL LOAN ACTIVITY APPLICATION REQUIRED UNDER

 2
      SUBSECTION (1) SHALL BE SUBMITTED IN A FORMAT PRESCRIBED BY THE

 3
      STATE TREASURER AND SHALL PROVIDE THE ADJUSTED TAXABLE VALUE,

 4
      DEBT SERVICE, AND ANY OTHER INFORMATION NECESSARY TO DETERMINE

 5
      THE PROPER REQUIRED MILLAGE LEVY AS PRESCRIBED IN SECTION 2.  THE

 6
      APPLICATION SHALL INCLUDE A RESOLUTION PASSED BY THE SCHOOL BOARD

 7
      AUTHORIZING A DESIGNATED SCHOOL DISTRICT OFFICIAL TO COMPLETE ALL

 8
      NECESSARY DOCUMENTS TO OBTAIN A LOAN FROM THE SCHOOL BOND LOAN

 9
      FUND OR FOR MAKING REPAYMENT TO THE SCHOOL BOND LOAN FUND FOR THE

10
      YEAR.

11
           (3) The  superintendent of public instruction  STATE

12
      TREASURER shall examine  the  AN ANNUAL LOAN ACTIVITY application

13
      and shall  request the state treasurer to compute  DETERMINE the

14
       computed  millage REQUIRED under section  2(2), if applicable,
   

15
      2 as soon as possible and notify the school district of any erro-

16
      neous statements or assumptions in the application  and  within

17
      the 60-day period.  shall approve or deny the preliminary appli-

18
      cation in whole or in part and shall notify the school district

19
      of his or her action.  The school district shall include in its

20
      tax levy  any  THE amount  otherwise  required to be levied
   for

21
      the payment of principal and interest on qualified bonds for

22
      which it does not secure approval for a state loan  as aforesaid 

23
      UNDER SECTION 2.

24
           Sec. 7.  (1) If a loan from the state  shall become  BECOMES

25
      necessary for the payment of principal and interest on qualified

26
      bonds in accordance with  such approved preliminary application 

27
      A SCHOOL DISTRICT'S SCHOOL BOND LOAN FUND ANNUAL LOAN ACTIVITY



   04903'99
                                  24

 1
      APPLICATION UNDER SECTION 6, or for any reason pursuant to  said 

 2
      section 16 of article  9  IX of the STATE CONSTITUTION OF 1963

 3
       constitution  and this act, then the school district shall file

 4
      with the  superintendent of public instruction a supplemental

 5
      application (or an original application, if no preliminary appli-

 6
      cation has been filed), setting forth the amount of the tax col-

 7
      lections to the date of said application, an estimate of probable

 8
      collections prior to the time when such principal and interest

 9
      will become due and the amount of the loan necessary from the

10
      state.  Such supplemental or original  STATE TREASURER AN APPLI-

11
      CATION FOR A LOAN UNDER THIS ACT AND A CONFIRMATION OF THE FINAL

12
      LOAN AMOUNT IN THE FORMAT PRESCRIBED BY THE STATE TREASURER.

13
      THIS application shall be made not less than 30 days  prior to 

14
      BEFORE the time when the proceeds of the loan will be necessary

15
      in order to pay maturing principal or interest or both.  Upon

16
      receipt of such supplemental or original application, it shall be

17
      the duty of the superintendent of public instruction, after

18
      auditing the same, to forward to the state treasurer a statement

19
      setting forth the amount to be loaned to the school district for

20
      the payment of principal and interest and the date on or before

21
      which such loan shall be made.  He shall also prepare the proper

22
      voucher as a basis for the issuance of the necessary warrant in

23
      accordance with state accounting practices.  Upon receipt of such

24
      statement and warrant, it shall be the duty of the state trea-

25
      surer to loan to the school district from "the school bond loan

26
      fund" the amount set forth in the statement of the superintendent

27
      of public instruction on or before the date specified therein.



   04903'99
                                  25

 1
      The state treasurer upon the making of said loan shall obtain

 2
      from the school district a receipt for the amount so loaned,

 3
      which receipt shall specify  THE SCHOOL DISTRICT SHALL FILE A

 4
      CONFIRMATION OF FINAL LOAN AMOUNT NOT LESS THAN 10 DAYS BEFORE

 5
      THE TIME WHEN PROCEEDS OF THE LOAN WILL BE NECESSARY IN ORDER TO

 6
      PAY MATURING PRINCIPAL OR INTEREST OR BOTH.  THE STATE TREASURER

 7
      MAY WAIVE THE REQUIREMENT FOR SUBMISSION OF THE APPLICATION FOR

 8
      LOAN FOR A SCHOOL DISTRICT THAT HAS DEMONSTRATED THE CAPABILITY

 9
      TO MEET THE REQUIREMENTS OF SECTION 2 AND HAS BEEN RESPONSIBLE IN

10
      THE DISCHARGE OF ITS DEBTS IN AN ORDERLY AND BUSINESSLIKE

11
      MANNER.

12
           (2) UPON RECEIPT OF AN APPLICATION FOR LOAN, THE STATE TREA-

13
      SURER SHALL EXAMINE DOCUMENTS AND NOTIFY THE SCHOOL DISTRICT OF

14
      ANY ERRONEOUS STATEMENTS.  UPON RECEIPT OF A CONFIRMATION OF LOAN

15
      AMOUNT, THE STATE TREASURER SHALL LOAN TO THE SCHOOL DISTRICT

16
      FROM THE SCHOOL BOND LOAN FUND THE AMOUNT DETERMINED BY THE STATE

17
      TREASURER IN ACCORDANCE WITH THIS ACT ON OR BEFORE THE DATE SPEC-

18
      IFIED THEREIN.

19
           (3) WITH RESPECT TO A LOAN MADE TO A SCHOOL DISTRICT UNDER

20
      THIS SECTION OR ANY OTHER PROVISION OF THIS ACT, THE SCHOOL DIS-

21
      TRICT IS CONSIDERED TO HAVE AGREED TO the terms of repayment in

22
      accordance with the provisions of  said  section 16 of article

23
       9  IX of the STATE CONSTITUTION OF 1963  constitution  and
   this

24
      act.  Upon receipt by  any  THE school district of  such 
   THE

25
      loan,  it shall be the duty of  the treasurer  thereof to 
   OF THE

26
      SCHOOL DISTRICT SHALL cause the  same  PROCEEDS to be deposited





   04903'99
                                  26

 1
      in the debt retirement fund and used solely for the payment of

 2
      principal and interest on qualified bonds.

 3
           Sec. 8.  (1) If for any reason  any  A school district will

 4
      be or is unable to pay the principal and interest on its quali-

 5
      fied bonds when due, then the school district shall borrow and

 6
      the state shall loan to it an amount sufficient to enable the

 7
      school district to make the payment.  Any  A school district

 8
       which  THAT finds that it will be or is unable to pay  such
    THE

 9
      principal or interest ON ITS QUALIFIED BONDS when due shall

10
       forthwith  PROMPTLY make application for the necessary loan and

11
      the state shall, in time to prevent default in  such  THE pay-

12
      ment, make  such  THE loan and obtain a receipt  therefor as pro-

13
      vided in section 7 of this act  FOR THE LOAN.  In the event

14
      that 

15
           (2) UPON NOTIFICATION ACCEPTABLE TO THE STATE TREASURER FROM

16
      THE AGENT OR OFFICER CHARGED WITH MAKING PAYMENT OF BOND PRINCI-

17
      PAL OR INTEREST THAT THE SCHOOL DISTRICT HAS NOT DEPOSITED SUFFI-

18
      CIENT FUNDS TO PAY THE PRINCIPAL OR INTEREST ON ANY QUALIFIED

19
      BOND WHEN DUE, WHETHER OR NOT AN APPLICATION FOR A LOAN TO PAY

20
      THE PRINCIPAL OR INTEREST HAS BEEN MADE OR APPROVED, THE STATE

21
      TREASURER SHALL PROMPTLY PAY FUNDS TO THAT AGENT OR OFFICER TO BE

22
      USED TO PAY THE PRINCIPAL OR INTEREST ON THE QUALIFIED BOND WHEN

23
      DUE.  IF the principal or interest on any qualified bond is not

24
      paid when due upon proper  presentation of the bond or interest

25
      coupon to the agent or  NOTIFICATION FROM THE officer charged

26
      with making payment,  thereof (irrespective of  whether OR NOT an

27
      application for a loan to pay  such  THE principal or interest



   04903'99
                                  27

 1
      has been made or  approved)  APPROVED, the state treasurer shall

 2
       forthwith  PROMPTLY pay  such  THE principal or interest
   TO THE

 3
      BONDHOLDER upon presentation of the bond or coupon to  him  THE

 4
      STATE TREASURER.  Any amount  so  paid by the state treasurer

 5
       shall be deemed  UNDER THIS SUBSECTION IS CONSIDERED a loan made

 6
      to the school district pursuant to the requirements of  said 

 7
      section 16 of article  9  IX of the STATE CONSTITUTION OF 1963

 8
       constitution  and this act, and the school district shall give a

 9
      receipt  therefor  FOR THE AMOUNT LOANED and repay  such 
   THE

10
      loan in the same manner as  hereinbefore  provided IN THIS ACT

11
      with respect to other loans  :  Provided, That any  UNDER THIS

12
      ACT.  ANY funds of the school district  which  THAT are or become

13
      available in its hands or in the hands of the paying agent or

14
      officer for payment of the principal or interest  which  THAT has

15
      been paid by the state treasurer UNDER THIS SUBSECTION shall

16
       forthwith  PROMPTLY be remitted to the state treasurer and

17
      applied toward repayment of  said  THE loan UNDER THIS SECTION.

18
           Sec. 9.  (1) Except as provided in this section, section 2,

19
      and section 10a,  any  A school district having received 1 or

20
      more loans from  "the  THE school bond loan  funds" under sec-

21
      tions 27 and 28 of article X of the state constitution of 1908 or

22
      section 16 of article IX of the state constitution of 1963 and

23
      implementing acts  FUND shall continue to levy on its tax rolls

24
      not less than  13 mills  THE MILLAGE RATE LEVIED BY THE SCHOOL

25
      DISTRICT DURING THE MOST RECENT YEAR IN WHICH THE SCHOOL DISTRICT

26
      WAS RECEIVING A LOAN FROM THE SCHOOL BOND LOAN FUND or the

27
       computed  millage RATE REQUIRED under section  2(2)  2,



   04903'99
                                  28

 1
      whichever is  less  GREATER, on each dollar of its  assessed

 2
      valuation as last equalized by the state  ADJUSTED TAXABLE VALUE,

 3
      exclusive of any levy for unqualified bonds or for school operat-

 4
      ing purposes, until all loans made to the school district by the

 5
      state are repaid with interest at rates to be annually determined

 6
      by the state treasurer.  Except as provided in this section,

 7
      these rates shall represent  not more than  the PROJECTED average

 8
      interest rate TO BE paid by the state on obligations issued under

 9
       sections 27 and 28 of article X of the state constitution of

10
      1908 and  section 16 of article IX of the state constitution of

11
      1963 and implementing acts PROJECTED TO BE OUTSTANDING OVER THE

12
      NEXT SUCCEEDING 5-YEAR PERIOD, AS DETERMINED BY THE STATE

13
      TREASURER, and, except to the extent required to maintain the

14
      tax-exempt status of bonds or notes issued by the state pursuant

15
      to this act and  Act No. 112 of the Public Acts of 1961, being

16
      sections 388.981 to 388.985 of the Michigan Compiled Laws  1961

17
      PA 112, MCL 388.981 TO 388.985, not less than that PROJECTED

18
      average interest rate, computed to the nearest 1/8 of 1%.  The

19
      state treasurer shall annually certify to the several borrowing

20
      SCHOOL districts the rate of interest to be currently collected.

21
      The proceeds of each  such  levy shall be used first for the pay-

22
      ment of the minimum principal and interest requirements on the

23
      qualified bonds that  shall  become due before the next tax col-

24
      lection, and any balance INCLUDING ANY ANNUAL EXCESS shall be

25
      paid to the state until the principal and interest due the state

26
      are paid.  THE SCHOOL DISTRICT SHALL CALCULATE THE AMOUNT OF

27
      EXCESS, IF ANY, AFTER THE COMPLETION OF EACH SEMIANNUAL DEBT



   04903'99
                                  29

 1
      SERVICE PAYMENT AND SHALL REMIT THE UNENCUMBERED PORTION TO THE

 2
      STATE WITHIN 30 DAYS AFTER THE COMPLETION OF THE SEMIANNUAL DEBT

 3
      SERVICE PAYMENT.  THE INTEREST PAYMENT OR ACCRUAL REQUIRED BY

 4
      THIS SECTION AND THIS ACT MAY BE REDUCED AS PROVIDED BY ANY

 5
      LAWFUL SUBSIDY.

 6
           (2) Before the adoption of a resolution approving annexation

 7
      and transfer of a school district to be divided pursuant to

 8
      part 10a of the  school code of 1976, Act No. 451 of the Public

 9
      Acts of 1976, being sections 380.941 to 380.949 of the Michigan

10
      Compiled Laws  REVISED SCHOOL CODE, 1976 PA 451, MCL 380.941 TO

11
      380.949, the superintendent of public instruction and the state

12
      treasurer may issue a joint order determining that, upon division

13
      of a school district pursuant to part 10a of the  school code of

14
      1976  REVISED SCHOOL CODE, the divided SCHOOL district or any

15
      other school district affected by the division, or all, may cease

16
      levying on its tax rolls for all or a portion, as shall be deter-

17
      mined in the joint order by the superintendent of public instruc-

18
      tion and the state treasurer, of the amount required by subsec-

19
      tion (1) for repayment of all or a portion of the principal of or

20
      interest on, or both, the loans received before the issuance of

21
      the joint order from the school bond loan fund for a number of

22
      years to be determined in the joint order by the superintendent

23
      of public instruction and the state treasurer, not to exceed 5

24
      years, beginning with the first tax levy after the election

25
      approving the division or until the bonded indebtedness of the

26
      district for which loans have been received has been paid in full

27
      or provision for the payment has been made, whichever occurs



   04903'99
                                  30

 1
      first.  During the period in which the levy is waived pursuant to

 2
      this subsection, the school district payments due to the state

 3
      pursuant to subsection (1) from that waived levy shall be

 4
      waived.  After expiration of the period of waiver, each school

 5
      district shall levy each year for repayment of loans an amount

 6
      designated in the order of the  superintendent of public instruc-

 7
      tion and the  state treasurer, which amount, when added to the

 8
      amount required for debt service, shall not be more than the

 9
      amount required by subsection (1) until all loans to the school

10
      district by the state are repaid with interest at rates to be

11
      determined annually by the state treasurer.  A school district

12
      determining not to levy for loan repayment during the following

13
      year shall notify before December 15 of each year the state trea-

14
      surer of its determination not to levy and shall supply the

15
       superintendent of public instruction or the  state treasurer

16
      with any additional related information the  superintendent of

17
      public instruction or the  state treasurer  shall require 

18
      REQUIRES.

19
           (3) During any year in which a school district levy is

20
      waived UNDER THIS SECTION, an amount equal to the annual interest

21
      for that year on the amount owed by the school district to the

22
      school bond loan fund shall be added to the amount of loans to

23
      the school district by the state.

24
           (4) Any repayment of principal or interest that was waived

25
      pursuant to subsection (2) shall be transferred to the general

26
      fund.  if general fund revenue supplements were required to pay

27
      obligations issued under sections 27 and 28 of article X of the



   04903'99
                                  31

 1
      state constitution of 1908 or section 16 of article IX of the

 2
      state constitution of 1963 during the period of the waiver. 

 3
           Sec. 9b.  To receive a loan under this act,  or a general

 4
      fund incentive payment under section 9a,  a school district shall

 5
      agree to take actions and to refrain from taking actions as nec-

 6
      essary to maintain the tax-exempt status of bonds or notes issued

 7
      by the state pursuant to this act and  Act No. 112 of the Public

 8
      Acts of 1961, being sections 388.981 to 388.985 of the Michigan

 9
      Compiled Laws  1961 PA 112, MCL 388.981 TO 388.985.  The state

10
      treasurer shall take the actions permitted by law that are neces-

11
      sary to maintain the tax-exempt status of obligations issued by

12
      school districts to provide the funds to repay a loan made under

13
      this act.

14
           SEC. 9C.  A SCHOOL DISTRICT THAT HAS AN EXISTING BALANCE DUE

15
      TO THE SCHOOL BOND LOAN FUND SHALL INCLUDE IN ITS AUDIT REPORT

16
      FILED UNDER SECTION 5 OF CHAPTER III OF THE MUNICIPAL FINANCE

17
      ACT, 1943 PA 202, MCL 133.5, A REVIEW OF ITS SCHOOL BOND LOAN

18
      ACTIVITIES AND QUALIFIED BOND DEBT RETIREMENT ACTIVITIES.  THIS

19
      REVIEW SHALL PROVIDE AN OPINION ON THE SCHOOL DISTRICT'S COMPLI-

20
      ANCE WITH THE REQUIREMENTS OF THIS ACT REGARDING BORROWING AND

21
      REPAYMENT OF THE SCHOOL BOND LOAN FUND.  THIS OPINION SHALL BE

22
      INCLUDED IN THE SCHOOL DISTRICT'S ANNUAL AUDIT REPORT UNDER THIS

23
      SECTION.

24
           Sec. 10.  (1) Except as provided in section 10a, if a school

25
      district that has 1 or more loans pursuant to either this act or

26
       Act No. 151 of the Public Acts of 1955, as amended, being

27
      sections 388.931 to 388.938 of the Michigan Compiled Laws  1955



   04903'99
                                  32

 1
      PA 151, MCL 388.931 TO 388.938, or both, fails to levy at least

 2
      the amount specified in section 2 or section 9, as applicable,

 3
      upon its  state equalized valuation  ADJUSTED TAXABLE VALUE for

 4
      debt retirement purposes for qualified bonds and for repayment of

 5
      a state loan made under this act while any part of the loan is

 6
      unpaid, FAILS TO PROPERLY ALLOCATE ITS MILLAGE BETWEEN DEBT SERV-

 7
      ICE ACCOUNTS, or defaults in its agreement to repay a loan or any

 8
      installment of a loan,  money  THE SCHOOL DISTRICT SHALL INCREASE

 9
      PAYMENTS TO THE SCHOOL BOND LOAN FUND BY THE AMOUNT OF THE

10
      DEFAULT DURING THE NEXT TAX YEAR THROUGH AN INCREASE IN THE

11
      ANNUAL DEBT SERVICE MILLAGE LEVY ABOVE THE AMOUNT THAT WOULD HAVE

12
      BEEN REQUIRED BY STATUTE TO MEET THAT YEAR'S DEBT SERVICE NEEDS,

13
      OR THE PREVIOUS YEAR'S DEBT LEVY, WHICHEVER IS GREATER.  THE

14
      SCHOOL DISTRICT MAY USE OTHER METHODS OF REIMBURSING THE SCHOOL

15
      BOND LOAN FUND INCLUDING A TRANSFER OF GENERAL FUNDS, IF APPROVED

16
      BY THE STATE TREASURER. MONEY shall not be distributed to the

17
      school district out of the state school aid fund until satisfac-

18
      tory arrangements have been made with the  superintendent of

19
      public instruction  STATE TREASURER for the payment of the amount

20
      in default.

21
           (2) IF A SCHOOL DISTRICT FAILS TO PROCESS ANY REPORT, APPLI-

22
      CATION, CONFIRMATION, OR REPAYMENT WITHIN STATUTORY DEADLINES,

23
      THE SCHOOL DISTRICT SHALL PAY TO THE STATE TREASURER A SPECIAL

24
      HANDLING FEE OF $500.00 FOR THE FIRST OCCURRENCE AND $1,000.00

25
      FOR EACH SUBSEQUENT OCCURRENCE.  A SPECIAL HANDLING FEE MAY NOT

26
      BE PAID FROM DEBT RETIREMENT ACCOUNTS BUT IS DUE FROM THE SCHOOL

27
      DISTRICT'S GENERAL FUND 30 DAYS FROM THE DATE NOTICE IS GIVEN TO



   04903'99
                                  33

 1
      THE SCHOOL DISTRICT OF THE AMOUNT DUE.  IF A SCHOOL DISTRICT

 2
      FAILS TO PAY A SPECIAL HANDLING FEE, THE UNPAID SPECIAL HANDLING

 3
      FEE MAY BE DEDUCTED FROM SUBSEQUENT STATE SCHOOL AID PAYMENTS.

 4
      THE STATE TREASURER MAY WAIVE COLLECTION OF A SPECIAL HANDLING

 5
      FEE IF THE SCHOOL DISTRICT CAN PROVIDE COMPELLING JUSTIFICATION.

 6
           Sec. 10a.  Upon request made by a school district before

 7
      June 1 of any year, the  superintendent of public instruction and

 8
      the  state treasurer annually may  jointly  issue an order
   waiv-

 9
      ing all or a portion of the millage required to be levied by  a 

10
      THE school district pursuant to section 9(1) if he or she finds

11
      all of the following:

12
           (a) The school board of the school district has applied to

13
      the department of  education  TREASURY for permission to levy

14
      less than the millage required to be levied pursuant to

15
      section 9(1).

16
           (b) The application UNDER SUBDIVISION (A) specifies the

17
      number of mills the school district requests permission to levy.

18
           (c) The school board, by resolution, has agreed to transfer

19
      from available identified funds of the school district to the

20
      school debt retirement fund an amount equal to the amount that

21
      would have been raised by the levy of the millage requested to be

22
      waived.

23
           (d) The school board, by resolution, has agreed that the

24
      funds to be transferred to the school debt retirement fund shall

25
      be earmarked for the payment of state loans to the school dis-

26
      trict and for debt retirement purposes for qualified bonds before

27
      taxes are certified for the year the school board is requesting



   04903'99
                                  34

 1
      permission to levy less than the millage required to be levied

 2
      pursuant to section 9(1).

 3
           (e) The school board, by resolution, has agreed to comply

 4
      with all conditions that the  superintendent of public instruc-

 5
      tion and the  state treasurer  consider are  CONSIDERS

 6
      necessary.

 7
           SEC. 10B.  (1) THE STATE TREASURER SHALL AWARD PROJECT

 8
      GRANTS TO SCHOOL DISTRICTS AS PROVIDED UNDER THIS SECTION IN EACH

 9
      FISCAL YEAR FOR WHICH AN APPROPRIATION IS MADE OR APPROPRIATED

10
      FUNDS ARE AVAILABLE FOR THIS PURPOSE AND SHALL AWARD A REVOLVING

11
      LOAN FUND GRANT TO THE MICHIGAN MUNICIPAL BOND AUTHORITY AS PRO-

12
      VIDED UNDER THIS SECTION IN EACH FISCAL YEAR IN WHICH FUNDS ARE

13
      AVAILABLE FOR THAT PURPOSE.

14
           (2) TO BE ELIGIBLE FOR A PROJECT GRANT UNDER THIS SECTION, A

15
      SCHOOL DISTRICT MUST MEET ALL OF THE FOLLOWING:

16
           (A) THE SCHOOL DISTRICT MUST BE DETERMINED BY THE STATE

17
      TREASURER TO BE AMONG THE LOWEST 10% OF SCHOOL DISTRICTS IN TAX-

18
      ABLE VALUE FOR THE FISCAL YEAR IN WHICH THE SCHOOL DISTRICT

19
      APPLIES FOR THE PROJECT GRANT.

20
           (B) THE SCHOOL DISTRICT MUST APPLY TO THE STATE TREASURER

21
      FOR A PROJECT GRANT.  THIS APPLICATION SHALL BE PART OF THE

22
      SCHOOL DISTRICT'S APPLICATION FOR PRELIMINARY QUALIFICATION OF

23
      THE BOND ISSUE FINANCING THE PROJECT FOR WHICH THE GRANT IS

24
      SOUGHT.  THE APPLICATION MUST BE SUBMITTED BY THE SCHOOL DISTRICT

25
      AND RECEIVED BY THE STATE TREASURER NOT LATER THAN MARCH 1 OF THE

26
      FISCAL YEAR.





   04903'99
                                  35

 1
           (C) THE SCHOOL DISTRICT MUST OBTAIN APPROVAL FOR THE BOND

 2
      ISSUE FINANCING THE PROJECT FOR WHICH THE GRANT IS SOUGHT AT A

 3
      REGULAR OR SPECIAL SCHOOL ELECTION HELD ON THE SECOND MONDAY IN

 4
      JUNE OF THE FISCAL YEAR IN WHICH THE GRANT IS AWARDED.

 5
           (3) THE STATE TREASURER SHALL MAKE A WRITTEN PROJECT GRANT

 6
      AWARD TO EACH ELIGIBLE SCHOOL DISTRICT NOT LATER THAN AUGUST 1 OF

 7
      THE FISCAL YEAR IN WHICH THE PROJECT GRANT IS AWARDED.  THE WRIT-

 8
      TEN GRANT AWARD SHALL SPECIFY THE TOTAL AMOUNT OF THE PROJECT

 9
      GRANT TO THE SCHOOL DISTRICT.  THE AMOUNT OF THE PROJECT GRANT TO

10
      AN ELIGIBLE SCHOOL DISTRICT SHALL BE AN AMOUNT EQUAL TO 12.5% OF

11
      THE PRINCIPAL AMOUNT OF THE BOND ISSUE FINANCING THE PROJECT FOR

12
      WHICH THE GRANT IS AWARDED OR $5,000,000.00, WHICHEVER IS LESS.

13
      HOWEVER, IF THE AMOUNT APPROPRIATED FOR PROJECT GRANTS UNDER THIS

14
      SECTION FOR THE FISCAL YEAR IS NOT SUFFICIENT TO FULLY FUND ALL

15
      OF THE PROJECT GRANTS AS OTHERWISE CALCULATED, THEN THE AMOUNT OF

16
      EACH RECIPIENT SCHOOL DISTRICT'S PROJECT GRANT AWARD SHALL BE

17
      REDUCED ON AN EQUAL PERCENTAGE BASIS.

18
           (4) AFTER A PROJECT GRANT IS AWARDED, THE STATE TREASURER

19
      SHALL PROMPTLY SET ASIDE THE AMOUNT SPECIFIED IN THE WRITTEN

20
      GRANT AWARD FOR THE RECIPIENT SCHOOL DISTRICT.  THE STATE TREA-

21
      SURER SHALL DISBURSE PROJECT GRANT FUNDS TO THE SCHOOL DISTRICT

22
      DURING THE PROJECT TO HELP PAY THE COSTS OF THE PROJECT ACCORDING

23
      TO REQUISITION PROCEDURES ESTABLISHED BY THE STATE TREASURER.  IF

24
      THE STATE TREASURER DETERMINES IN WRITING THAT BONDS FINANCING

25
      THE PROJECT FOR WHICH A PROJECT GRANT IS AWARDED ARE NOT ISSUED

26
      OR DO NOT RECEIVE FINAL QUALIFICATION UNDER THIS ACT IN WHOLE OR

27
      IN PART WITHIN 6 MONTHS AFTER THE DATE OF THE AWARD, OR WITHIN A



   04903'99
                                  36

 1
      LONGER PERIOD IF SPECIFIED IN THE GRANT AWARD, OR THAT THE

 2
      PROJECT FOR WHICH THE PROJECT GRANT IS AWARDED IS NOT COMPLETED

 3
      IN WHOLE OR IN PART WITHIN A TIME PERIOD SPECIFIED IN THE GRANT

 4
      AWARD, A CORRESPONDING PORTION OF THE PROJECT GRANT SHALL LAPSE

 5
      AND SHALL NOT BE DISBURSED TO THE SCHOOL DISTRICT.  UPON COMPLE-

 6
      TION OF THE PROJECT FOR WHICH THE PROJECT GRANT IS AWARDED, ANY

 7
      PORTION OF THE PROJECT GRANT THAT HAS NOT BEEN REQUISITIONED BY

 8
      THE SCHOOL DISTRICT SHALL LAPSE AND SHALL NOT BE DISBURSED TO THE

 9
      SCHOOL DISTRICT.  ANY FUNDS THAT LAPSE UNDER THIS SUBSECTION

10
      SHALL NOT REVERT TO THE GENERAL FUND BUT SHALL REMAIN AVAILABLE

11
      TO BE USED FOR OTHER PROJECT GRANTS UNDER THIS SECTION.

12
           (5) A PROJECT GRANT UNDER THIS SECTION IS CONSIDERED TO BE

13
      APPROPRIATED AND ALLOCATED TO THE RECIPIENT SCHOOL DISTRICT IN

14
      THE FISCAL YEAR IN WHICH IT IS AWARDED REGARDLESS OF WHEN THE

15
      SCHOOL DISTRICT ACTUALLY RECEIVES THE MONEY.

16
           (6) NOT LATER THAN AUGUST 15 OF EACH FISCAL YEAR, THE STATE

17
      TREASURER SHALL DETERMINE IN WRITING WHETHER THERE ARE ANY FUNDS

18
      APPROPRIATED FOR THE PURPOSES OF THIS SECTION THAT HAVE NOT BEEN

19
      AWARDED AS PROJECT GRANTS AND THE AMOUNT OF THOSE FUNDS, AND

20
      SHALL AWARD THAT AMOUNT AS A REVOLVING FUND GRANT TO THE MICHIGAN

21
      MUNICIPAL BOND AUTHORITY TO BE USED FOR AID TO SCHOOL DISTRICTS

22
      AS SPECIFIED IN THIS SUBSECTION.  THE REVOLVING LOAN FUND GRANT

23
      AWARD SHALL SPECIFY THAT THE FUNDS AWARDED MAY BE USED BY THE

24
      MICHIGAN MUNICIPAL BOND AUTHORITY ONLY FOR THE PURPOSE OF FUNDING

25
      A REVOLVING LOAN FUND, OR A RESERVE FUND FOR SUCH A REVOLVING

26
      LOAN FUND, TO BE USED TO MAKE LOANS FOR CAPITAL PURPOSES TO ANY

27
      OF THE FOLLOWING:



   04903'99
                                  37

 1
           (A) SCHOOL DISTRICTS DETERMINED BY THE STATE TREASURER TO BE

 2
      AMONG THE LOWEST 1/3 OF SCHOOL DISTRICTS IN TAXABLE VALUE PER

 3
      MEMBERSHIP PUPIL FOR THE FISCAL YEAR IN WHICH THE LOAN IS MADE.

 4
           (B) PUBLIC SCHOOL ACADEMIES ESTABLISHED UNDER PART 6A OF THE

 5
      REVISED SCHOOL CODE, 1976 PA 451, MCL 380.501 TO 380.507.

 6
           (C) SCHOOL DISTRICTS IN WHICH AT LEAST 50% OF THE PUPILS IN

 7
      MEMBERSHIP FOR THE FISCAL YEAR IN WHICH THE LOAN IS MADE MEET THE

 8
      INCOME ELIGIBILITY CRITERIA FOR FREE OR REDUCED-PRICE LUNCH UNDER

 9
      THE NATIONAL SCHOOL LUNCH ACT, CHAPTER 281, 60 STAT. 230, AS

10
      DETERMINED BY THE DEPARTMENT OF EDUCATION.

11
           (7) THE STATE TREASURER MAY ESTABLISH AND CHARGE SCHOOL DIS-

12
      TRICTS REASONABLE FEES FOR THE ADMINISTRATION OF THIS SECTION.

13
           (8) THERE IS APPROPRIATED FROM THE STATE SCHOOL AID FUND FOR

14
      THE PURPOSES OF THIS SECTION THE AMOUNT OF $20,000,000.00 FOR THE

15
      2000-2001 FISCAL YEAR.  THE LEGISLATURE SHALL APPROPRIATE FUNDS

16
      FOR SUBSEQUENT FISCAL YEARS FOR THE PURPOSES OF THIS SECTION.

17
           (9) AS USED IN THIS SECTION:

18
           (A) "FISCAL YEAR" MEANS THE STATE FISCAL YEAR COMMENCING

19
      OCTOBER 1 AND ENDING SEPTEMBER 30.

20
           (B) "MICHIGAN MUNICIPAL BOND AUTHORITY" MEANS THAT AUTHORITY

21
      CREATED IN THE SHARED CREDIT RATING ACT, 1985 PA 227,

22
      MCL 141.1051 TO 141.1078.

23
           (C) "STATE SCHOOL AID FUND" MEANS THAT FUND CREATED IN SEC-

24
      TION 11 OF ARTICLE IX OF THE STATE CONSTITUTION OF 1963.

25
           SEC. 10C.  (1) BEGINNING WITH 2000-2001, FOR EACH STATE

26
      FISCAL YEAR, THE STATE TREASURER SHALL COMPUTE A REDUCTION IN THE

27
      AMOUNT OF INTEREST OTHERWISE PAYABLE, ACCRUED, OR ACCRUABLE ON



   04903'99
                                  38

 1
      LOANS MADE UNDER THIS ACT FOR EACH SCHOOL DISTRICT WITH A LOAN

 2
      UNDER THIS ACT THAT IS DETERMINED BY THE STATE TREASURER TO BE

 3
      AMONG THE LOWEST 1/3 OF ALL SCHOOL DISTRICTS IN TAXABLE VALUE PER

 4
      MEMBERSHIP PUPIL.

 5
           (2) THE REDUCTION FOR EACH ELIGIBLE SCHOOL DISTRICT IN EACH

 6
      STATE FISCAL YEAR SHALL BE AN AMOUNT, AS COMPUTED BY THE STATE

 7
      TREASURER, EQUAL TO THE PRODUCT OF THE DIFFERENCE BETWEEN THE

 8
      SCHOOL DISTRICT'S ADJUSTED TAXABLE VALUE PER MEMBERSHIP PUPIL AND

 9
      THE ADJUSTED TAXABLE VALUE PER MEMBERSHIP PUPIL OF THE SCHOOL

10
      DISTRICT WITH THE LOWEST ADJUSTED TAXABLE VALUE PER MEMBERSHIP

11
      PUPIL NOT AMONG THE LOWEST 1/3 OF ALL SCHOOL DISTRICTS, TIMES THE

12
      NUMBER OF MEMBERSHIP PUPILS OF THE SCHOOL DISTRICT TIMES THE

13
      MILLAGE RATE LEVIED BY THE SCHOOL DISTRICT TO PAY DEBT SERVICE ON

14
      BONDS QUALIFIED UNDER THIS ACT AND LOANS MADE UNDER THIS ACT.

15
      HOWEVER, THE REDUCTION FOR ANY PARTICULAR SCHOOL DISTRICT SHALL

16
      NOT EXCEED THE LESSER OF $1,000,000.00 OR 100% OF THE INTEREST

17
      OTHERWISE PAYABLE, ACCRUED, OR ACCRUABLE DURING THE FISCAL YEAR

18
      ON LOANS MADE PURSUANT TO THIS ACT.  FURTHER, THE AGGREGATE OF

19
      ALL OF THESE REDUCTIONS IN ANY FISCAL YEAR SHALL NOT EXCEED

20
      $10,000,000.00, AND THE AMOUNT OF THE REDUCTION FOR EACH ELIGIBLE

21
      SCHOOL DISTRICT SHALL BE PRO RATED ON AN EQUAL PERCENTAGE BASIS

22
      AS NECESSARY TO COMPLY WITH THIS AGGREGATE LIMITATION.

23
           (3) THE AMOUNT OF A SCHOOL DISTRICT'S REDUCTION UNDER THIS

24
      SECTION SHALL BE CREDITED AGAINST THE AMOUNTS OF INTEREST OTHER-

25
      WISE PAYABLE, ACCRUED, OR ACCRUABLE BY THE SCHOOL DISTRICT ON

26
      LOANS MADE PURSUANT TO THIS ACT.





   04903'99
                                  39

 1
           (4) NOTWITHSTANDING ANY OTHER PROVISION OF THIS SECTION, A

 2
      SCHOOL DISTRICT SHALL NOT RECEIVE A REDUCTION UNDER THIS SECTION

 3
      IN ANY STATE FISCAL YEAR IN WHICH THE SCHOOL DISTRICT ELECTS TO

 4
      BORROW ADDITIONAL AMOUNTS PURSUANT TO SECTION 2(4).

 5
           (5) AS USED IN THIS SECTION, "LOAN" MEANS A LOAN TO PAY DEBT

 6
      SERVICE ON BONDS APPROVED AT AN ELECTION HELD AFTER THE EFFECTIVE

 7
      DATE OF THE AMENDATORY ACT THAT ADDED THIS SUBSECTION.  IF A

 8
      SCHOOL DISTRICT HAS ISSUED BONDS APPROVED UNDER THIS ACT THAT

 9
      WERE APPROVED AT AN ELECTION HELD BEFORE THAT DATE, THE REDUCTION

10
      SHALL BE PRORATED BASED ON THE RESPECTIVE DEBT SERVICE DUE IN THE

11
      FISCAL YEAR FOR WHICH THE CALCULATION IS MADE ON ALL QUALIFIED

12
      BONDS OF ALL SCHOOL DISTRICTS THAT WERE APPROVED AT AN ELECTION

13
      HELD BEFORE THAT DATE.

14
           Sec. 11.  (1)  Any  A school district applying for prelimi-

15
      nary qualification of bonds or final qualification of refunding

16
      bonds under this act shall pay a fee for the preliminary qualifi-

17
      cation of bonds  or  AND final qualification of BONDS, INCLUDING

18
      refunding bonds, which fee shall be used toward defraying the

19
      administrative expenses in connection with this act, WITH 1961

20
      PA 112, MCL 388.981 TO 388.985, and  Act No. 151 of the Public

21
      Acts of 1955, as amended, being sections 388.931 to 388.938 of

22
      the Michigan Compiled Laws  WITH 1955 PA 151, MCL 388.931 TO

23
      388.938.  The fee  A NONREFUNDABLE FEE OF $500.00 SHALL ACCOM-

24
      PANY AN APPLICATION FOR PRELIMINARY QUALIFICATION.

25
           (2) THE FEE FOR FINAL QUALIFICATION shall be paid to the

26
       superintendent of public instruction  STATE TREASURER within 30

27
      days after the money obtained through the sale of the preliminary



   04903'99
                                  40

 1
      qualified bonds or finally qualified refunding bonds has been

 2
      received by the treasurer of the SCHOOL board  of education  of

 3
      the school district.  The superintendent of public instruction

 4
      shall promulgate necessary rules in accordance with the adminis-

 5
      trative procedures act of 1969, Act No. 306 of the Public Acts of

 6
      1969, being sections 24.201 to 24.328 of the Michigan Compiled

 7
      Laws.  The amount of the fee FOR FINAL QUALIFICATION to be

 8
      charged to the school district shall be determined by the

 9
       superintendent of public instruction  STATE TREASURER.  The

   10 amount of the fee shall vary according to the amount of the bond

11
      issue,  except that it shall not be less than $100.00, and the 

12
      BASED ON A SCHEDULE PUBLISHED BY THE STATE TREASURER.  THE total

13
      amount to be charged to all school districts in any 1 fiscal year

14
      shall be approximately equal to the estimated administrative

15
      expenses in connection with this act for the same fiscal year.

16
           (3) Upon failure of any school district to pay the prelimi-

17
      nary qualification fee or final qualification  of refunding

18
      bonds  fee within the time specified, the  superintendent of

19
      public instruction  STATE TREASURER may withhold the amount of

20
      the fee from the payment of state school aid money next due the

21
      SCHOOL district.

22
           SEC. 11A.  ALL FEES COLLECTED UNDER THIS ACT SHALL BE DEPOS-

23
      ITED INTO A SEPARATE FUND ESTABLISHED WITHIN THE STATE TREASURY

24
      AND SHALL BE RESTRICTED TO ADMINISTERING AND ENFORCING THIS ACT.

25
      THE UNEXPENDED AND UNOBLIGATED BALANCE OF THIS FUND AT THE END OF

26
      THE FISCAL YEAR SHALL BE CARRIED FORWARD OVER TO THE SUCCEEDING





   04903'99
                                  41

 1
      FISCAL YEAR AND SHALL NOT REVERT TO THE GENERAL FUND BUT SHALL BE

 2
      AVAILABLE FOR REAPPROPRIATION FOR THE NEXT FISCAL YEAR.

 3
           Sec. 12.  Any  A person who  shall  knowingly 
   make any 

 4
      MAKES A false statement or  conceal any  CONCEALS A material

 5
      information for the purpose of obtaining QUALIFICATION OF A BOND

 6
      ISSUE UNDER THIS ACT OR FOR THE PURPOSE OF OBTAINING a loan under

 7
       the provisions of  this act, or  use  WHO KNOWINGLY USES
   ALL OR

 8
      PART OF the proceeds of a loan  or any portion thereof  OBTAINED

 9
      UNDER THIS ACT for any purpose not authorized by this act  shall

10
      be  IS guilty of a felony.

11
           Enacting section 1.  Sections 4b, 4c, and 9a of 1961 PA 108,

12
      MCL 388.954b, 388.954c, and 388.959a, are repealed.
































   04903'99          Final page.                            TAV