SENATE BILL No. 859

November 29, 2001, Introduced by Senator JOHNSON and referred to the Committee on

Finance.

A bill to amend 1967 (Ex Sess) PA 7, entitled

"Urban cooperation act of 1967,"

by amending section 7 (MCL 124.507), as amended by 1985 PA 10.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1 Sec. 7. (1) An interlocal agreement may provide for a sepa-

2 rate legal or administrative entity to administer or execute the

3 agreement which may be a commission, board, or council consti-

4 tuted pursuant to the agreement. The entity shall be a public

5 body, corporate or politic for the purposes of this act. The

6 governing body of each public agency shall appoint a member of

7 the commission, board, or council constituted pursuant to the

8 agreement. That member may be removed by the appointing govern-

9 ing body at will. The administrative or legal entity shall not

10 be operated for profit. No part of its earnings shall inure to

11 the benefit of a person other than the public agencies which

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1 THAT created it. Upon termination of the interlocal agreement,

2 title to all property owned by the entity shall vest in the

3 public agencies which THAT incorporated it.

4 (2) A separate legal or administrative entity created by an

5 interlocal agreement shall possess the common power specified in

6 the agreement and may exercise it in the manner or according to

7 the method provided in the agreement. The entity may be, in

8 addition to its other powers, authorized in its own name to make

9 and enter into contracts, to employ agencies or employees, to

10 acquire, construct, manage, maintain, or operate buildings,

11 works, or improvements, to acquire, hold, or dispose of property,

12 to incur debts, liabilities, or obligations which THAT, except

13 as expressly authorized by the parties, do not constitute the

14 debts, liabilities, or obligations of any of the parties to the

15 agreement, to cooperate with a public agency, an agency or

16 instrumentality of that public agency, or another legal or admin-

17 istrative entity created by that public agency under this act, to

18 make loans from the proceeds of gifts, grants, assistance funds,

19 or bequests pursuant to the terms of the interlocal agreement

20 creating the entity, and to form other entities necessary to fur-

21 ther the purpose of the interlocal agreement. The entity may sue

22 and be sued in its own name.

23 (3) No separate legal or administrative entity created by an

24 interlocal agreement shall possess the power or authority to levy

25 any type of tax within the boundaries of any governmental unit

26 participating in the interlocal agreement, or to issue any type

27 of bond in its own name, except as provided in subsection (4),

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1 or to in any way indebt a governmental unit participating in the

2 interlocal agreement.

3 (4) A separate legal or administrative entity created by an

4 interlocal agreement with the power to receive and administer

5 grants, gifts, bequests, or assistance funds may be authorized by

6 the interlocal agreement to borrow money and to issue bonds or

7 notes in its name for local public improvements or for economic

8 development purposes as set forth in the interlocal agreement.

9 These bonds or notes shall be secured solely by revenues derived

10 from repayments of loans made from the proceeds of the grants,

11 gifts, bequests, or assistance funds, and shall not be general

12 obligations of the entity or of the public agencies which incor-

13 porated the entity. Bonds or notes issued pursuant to this sub-

14 section shall be approved by the department of treasury before

15 their issuance but shall not otherwise be subject to the provi-

16 sions of the municipal finance act, Act No. 202 of the Public

17 Acts of 1943, being sections 131.1 to 139.3 of the Michigan

18 Compiled Laws. In determining whether the issuance of the bonds

19 or notes shall be approved, the department of treasury shall take

20 into consideration the following:

21 (a) Whether the bonds or notes conform to the provisions of

22 law.

23 (b) Whether the probable revenue and properties pledged for

24 the payment of the bonds or notes will be sufficient to pay the

25 principal of and interest on the bonds or notes when due.

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1 (c) Whether the amount of the proposed issue is sufficient

2 or excessive for the purpose for which the bonds or notes are to

3 be issued.

4 (5) Bonds or notes issued under the provisions of subsection

5 (4) are declared to be issued for an essential public and govern-

6 mental purpose, and, together with interest on those bonds or

7 notes and income from those bonds or notes, shall be exempted

8 from all taxes.

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