HOUSE BILL No. 5625


     February 12, 2002, Introduced by Rep. DeRossett and referred to the Committee on Tax Policy.


        A bill to amend 1994 PA 451, entitled

   "Natural resources and environmental protection act,"

   by amending section 4709 (MCL 324.4709).

               THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

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             Sec. 4709.  (1) The district may enter into contracts with

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        any municipality located within its territorial limits providing

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        for the acquisition, construction, improvement, enlargement,

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        extension, operation, and financing of a sewage disposal system

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        or water supply system.  A contract shall provide for the alloca-

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        tion and payment of the share of the total cost to be borne by

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        the municipality in annual installments for a period not exceed-

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        ing 40 years.  Each contracting municipality may pledge its full

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        faith and credit for the payment of the obligation in the manner

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        and times specified in the contract.   If a contracting

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        municipality pledges its full faith and credit, the municipality


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        shall include in its annual tax levy a sufficient amount so that

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        the estimated collections will be sufficient to promptly pay when

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        due the portion of the obligation falling due before the time of

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        the following year's tax collection.  The district shall make a

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        reasonable charge for its services  which  THAT it renders to the

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        users in order to cover the retirement of outstanding indebted-

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        ness, costs of operation, maintenance, and replacement of its

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        plants and reserves for capital improvements.  If there is excess

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        money in the treasury of the district after all of the contingen-

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        cies have been met, the excess shall be rebated to the contract-

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        ing municipalities in proportion to the total amount that the

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        municipality paid for services it has received from the

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        district.  No limitation in any statute or charter shall prevent

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        the levy and collection by each of the contracting municipalities

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        of the full amount of taxes necessary for the payment of the con-

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        tractual obligation.   If, at the time of making the annual tax

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        levy, there are other funds on hand earmarked for the payment of

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        the contractual obligation, then credit therefor may be taken

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        upon the annual levy for the payment of the obligation.  These

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        funds may be raised by each contracting municipality by the use

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        of 1 or more of the following methods:

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             (a) The levy of special assessments on property benefited by

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        the sewage disposal system or water supply system.  The proce-

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        dures relative to the levying and collection of the special

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        assessments shall conform as near as may be to applicable charter

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        or statutory provisions.





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             (b) The levy and collection of rates or charges to users and

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        beneficiaries of the service or services furnished by the sewage

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        disposal system or water supply system.

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             (c) From money received, or to be received, derived from the

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        imposition of taxes by this state, unless the money for this pur-

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        pose is expressly prohibited by the STATE constitution of  this

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        state  1963.

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             (d) From any other fund or funds that may be validly used

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        for the purpose.  The contract may provide for any and all mat-

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        ters relating to the acquisition, construction, operation, and

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        financing of the sewage disposal system or water supply system as

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        are considered necessary, including authorization to the district

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        to issue bonds secured by the full faith and credit pledges of

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        the contracting municipalities, as authorized in this part.  The

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        contract may provide for appropriate remedies in case of default,

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        including, but not limited to, the right of the municipalities to

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        authorize the county treasurer or other official charged with the

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        disbursement of funds derived from the state sales tax levy under

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        the general sales tax act,  Act No. 167 of the Public Acts of

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        1933, being sections 205.51 to 205.78 of the Michigan Compiled

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        Laws  1933 PA 167, MCL 205.51 TO 205.78, to withhold sufficient

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        funds to make up any default or deficiency in funds.

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             (2) A municipality desiring to enter into a contract with

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        the district under this section shall authorize, by resolution of

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        its governing body, the execution of the contract.  The resolu-

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        tion shall be published in 1 or more newspapers of general

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        circulation within the municipality, and the contract may be



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        executed without a vote of the electors upon the expiration of 30

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        days after the date of the publication unless, within the 30-day

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        period, a petition signed by not less than 10% of the registered

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        electors residing within the limits of the municipality is filed

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        with the clerk of the municipality requesting a referendum upon

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        the execution of the contract.  If this occurs, the contract

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        shall not be executed until approval by the vote of a majority of

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        the electors of the municipality qualified to vote and voting

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         thereon  at a general or special election to be held not more

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        than 90 days after the filing of the petition.  A special elec-

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        tion called for this purpose shall not be included in any statu-

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        tory or charter limitation as to the number of special elections

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        to be called within any period of time.  Signatures on any peti-

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        tion shall be verified by some person under oath, as the actual

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        signatures of the persons whose names are signed on the petition,

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        and the clerk of the municipality has the same power to reject

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        signatures as city clerks under section 25 of  Act No. 279 of the

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        Public Acts of 1909, being section 117.25 of the Michigan

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        Compiled Laws  THE HOME RULE CITY ACT, 1909 PA 279, MCL 117.25.

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        The number of registered electors in a municipality is determined

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        by the registration books as of the date of the filing of the

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        petition.

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             (3) To obtain funds to acquire, construct, improve, enlarge,

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        or extend the sewage disposal system or water supply system

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        authorized by this part, the district, after the execution of the

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        contract or contracts authorized by this part, upon ordinance or

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        resolution adopted by the district, may issue its negotiable



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        bonds secured by the full faith and credit pledges made by each

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        contracting municipality pursuant to authorization contained in

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        this part and the contracts entered into pursuant to this part.

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         The bonds shall be serial bonds with annual maturities, the

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        first of which shall fall due not more than 4 years from the date

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        of issuance, and the last of which shall fall due not more than

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        40 years from the date of issuance, and a maturity after 4 years

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        from date of issuance shall be not less than 1/4 the amount of

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        any subsequent maturity.  Except as otherwise provided in this

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        part, bonds  shall be issued and sold and subject to all other

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        applicable provisions of the municipal finance act, Act No. 202

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        of the Public Acts of 1943, being sections 131.1 to 139.3 of the

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        Michigan Compiled Laws  ARE SUBJECT TO THE REVISED MUNICIPAL

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        FINANCE ACT, 2001 PA 34, MCL 141.2101 TO 141.2821.  The ordinance

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        or resolution authorizing the issuance of the bonds shall include

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        the terms of the contracts.

























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