SENATE BILL No. 861

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

Finance.

A bill to amend 1986 PA 281, entitled

"The local development financing act,"

by amending section 14 (MCL 125.2164), as amended by 1996

PA 270.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1 Sec. 14. (1) By resolution of its board and subject to the

2 limitations set forth in this section, the authority may autho-

3 rize, issue, and sell its tax increment bonds to finance a devel-

4 opment program or to refund or refund in advance obligations

5 issued under this act. The bonds shall mature in 30 years or

6 less and are subject to the municipal finance act, Act No. 202

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

8 Michigan Compiled Laws REVISED MUNICIPAL FINANCE ACT, 2001

9 PA 34, MCL 141.2101 TO 141.2821. The authority may pledge for

10 debt service requirements the tax increment revenues to be

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1 received from an eligible property. The bonds issued under this

2 section shall be considered a single series for the purposes of

3 section 4 of chapter V of the municipal finance act, Act No. 202

4 of the Public Acts of 1943, being section 135.4 of the Michigan

5 Compiled Laws.

6 (2) The municipality by majority vote of the members of its

7 governing body may make a limited tax pledge to support the

8 authority's tax increment bonds or, if authorized by the voters

9 of the municipality, pledge its full faith and credit for the

10 payment of the principal of and interest on the authority's tax

11 increment bonds. The municipality may pledge as additional

12 security for the bonds any money received by the authority or the

13 municipality pursuant to section 10.

14 (3) Bonds and notes issued by the authority and the interest

15 on and income from those bonds and notes are exempt from taxation

16 by the state or a political subdivision of this state.

17 (4) Notwithstanding any other provision of this act, if the

18 state treasurer determines that an authority or municipality can

19 issue a qualified refunding obligation and the authority or

20 municipality does not make a good faith effort to issue the qual-

21 ified refunding obligation as determined by the state treasurer,

22 the state treasurer may reduce the amount claimed by the author-

23 ity or municipality under section 11a by an amount equal to the

24 net present value saving that would have been realized had the

25 authority or municipality refunded the obligation or the state

26 treasurer may require a reduction in the capture of tax increment

27 revenues from taxes levied by a local or intermediate school

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1 district or this state by an amount equal to the net present

2 value savings that would have been realized had the authority or

3 municipality refunded the obligation. This subsection does not

4 authorize the state treasurer to require the authority or munici-

5 pality to pledge security greater than the security pledged for

6 the obligation being refunded.

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