SENATE BILL No. 977

December 13, 2001, Introduced by Senator DE BEAUSSAERT and referred to the Committee

on Finance.

A bill to amend 1957 PA 185, entitled

"An act to authorize the establishing of a department and board

of public works in counties; to prescribe the powers and duties

of any municipality subject to the provisions of this act; to

authorize the incurring of contract obligations and the issuance

and payment of bonds or notes; to provide for a pledge by a

municipality of its full faith and credit and the levy of taxes

without limitation as to rate or amount to the extent necessary;

to validate obligations issued; and to prescribe a procedure for

special assessments and condemnation,"

by amending sections 11, 12, and 25 (MCL 123.741, 123.742, and

123.755).

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1 Sec. 11. (1) The acquirement of a water supply, sewage dis-

2 posal or refuse system, or the making of a lake improvements or

3 erosion control systems, or the improvement, enlargement, or

4 extension thereof OF ANY OF THESE may be financed in any BY 1

5 OR MORE of the following methods: , or any combination thereof:

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1 (a) By the issuance of revenue bonds under the provisions

2 of Act No. 94 of the Public Acts of 1933, as amended, being

3 sections 141.101 to 141.139 of the Michigan Compiled Laws

4 REVENUE BOND ACT OF 1933, 1933 PA 94, MCL 141.101 TO 141.140, or

5 any other applicable act.

6 (b) By the issuance of bonds in anticipation of payments to

7 become due under contracts whereby WHERE 1 or more municipali-

8 ties agree to pay to the county operating under this act certain

9 sums toward the cost of the acquisition, improvement, enlarge-

10 ment, or extension of a project which THAT may be made under

11 this act.

12 (c) By the issuance of bonds in anticipation of the payment

13 of special assessments made by the board of public works.

14 (d) By moneys MONEY advanced by a county operating under

15 this act under agreements with a municipality or municipalities

16 for the repayment of the same MONEY.

17 (e) By moneys MONEY advanced, from time to time, prior

18 to BEFORE or during construction of a project, by a public or

19 private corporation, firm, or individual, in which event the

20 county operating under this act shall reimburse the person, firm,

21 or corporation, with interest not to exceed 8% per annum or with-

22 out interest as may be agreed, when funds are available

23 therefor FOR THAT PURPOSE. The obligation of the county to

24 make the reimbursement may be evidenced by a contract or note,

25 which THE contract or note may be made payable out of the pay-

26 ments to be made by municipalities, under contracts as described

27 in section 12 or 15, or out of the proceeds of bonds issued

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1 pursuant to UNDER this act by the county or out of any other

2 available funds. , but the THE contract or note shall not be

3 deemed to be an obligation within the meaning of the provisions

4 of Act No. 202 of the Public Acts of 1943, as amended, being sec-

5 tions 131.1 to 138.2 of the Michigan Compiled Laws IS SUBJECT TO

6 THE REVISED MUNICIPAL FINANCE ACT, 2001 PA 34, MCL 141.2101 TO

7 141.2821.

8 (2) Bonds issued under this act shall be authorized by an

9 ordinance or a resolution approved by the board of public works

10 and adopted by the county board of commissioners of the county

11 operating under this act. The county board of commissioners is

12 authorized by a 3/5 vote of its members elect, to pledge the full

13 faith and credit of the county for the prompt payment of the

14 principal of and interest on any bonds issued pursuant to this

15 act. The county's full faith and credit may be pledged to the

16 payment of principal and interest on revenue bonds issued

17 pursuant to UNDER subsection (1)(a). If it becomes necessary

18 for the county operating under this act to advance any moneys

19 MONEY, other than its share of the cost of the project, for the

20 payment of principal and interest, then it shall be entitled to

21 reimbursement from any surplus from time to time existing in the

22 fund from which the principal and interest are primarily

23 payable. If the faith and credit of the county is pledged for

24 the payment of principal of and interest on any bonds issued

25 pursuant to UNDER this act, the county may, in the case of

26 insufficiency of funds primarily pledged for the payment, pay the

27 same FUNDS from its general fund or levy taxes without

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1 limitation as to rate or amount therefor in addition to any

2 other taxes that the county is authorized to levy but not in

3 excess of the rate or amount necessary to make up the

4 deficiency. The bonds shall be issued in the name of the county

5 and shall be executed by the chairman CHAIRPERSON of the county

6 board of commissioners and its county clerk, who shall also cause

7 their facsimile signatures to be affixed to the interest coupons

8 to be attached to the bonds. The county clerk shall also affix

9 to the bonds the seal of the county. Bonds issued under this

10 act shall be negotiable instruments and shall be serial bonds

11 payable annually, with the first maturity due not more than 5

12 years and the last maturity not more than 40 years from the date

13 thereof. The foregoing provisions THIS SUBSECTION shall apply

14 to special assessment bonds as well as other bonds. Annual

15 maturity payable after 5 years from the date of the bonds shall

16 not be less than 1/4 of the amount of any subsequent maturity on

17 the same series of bonds. The bonds shall bear interest at not

18 more than the maximum rate permitted by Act No. 202 of the Public

19 Acts of 1943, as amended, payable semiannually except that the

20 first coupon may be for any number of months not exceeding 10.

21 BONDS ISSUED UNDER THIS SECTION ARE SUBJECT TO THE REVISED MUNIC-

22 IPAL FINANCE ACT, 2001 PA 34, MCL 141.2101 TO 141.2821. The bonds

23 and coupons shall be made payable in lawful money of the United

24 States of America and shall be exempt from all taxation by the

25 THIS state or by any taxing authority within the THIS state.

26 The county board of commissioners may authorize the board of

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1 public works to sell the bonds in accordance with the laws of

2 this state.

3 Sec. 12. (1) A county operating under this act and any 1 or

4 more municipalities including the county itself may enter into a

5 contract or contracts for the acquisition, improvement, enlarge-

6 ment, or extension of a water supply, a sewage disposal, or a

7 refuse system, or the making of lake improvements or erosion con-

8 trol systems and for the payment of the cost thereof COSTS by

9 the contracting municipalities, with interest, over a period not

10 exceeding 40 years.

11 (2) In the contract each contracting municipality may pledge

12 its full faith and credit for the payment of its obligations

13 under the contract. If the municipality has taxing power, it may

14 each year levy a tax in an amount which THAT will be sufficient

15 for the prompt payment of all or part of the contract obligations

16 due before the following year's tax collection. If the contract

17 or an unlimited tax pledge in support of the contract has been

18 approved by the electors, the tax may be in addition to any tax

19 which THAT the municipality may otherwise be authorized to levy

20 and may be imposed without limitation as to rate or amount but

21 shall not be in excess of the rate or amount necessary to pay the

22 contract obligation. IF THE CONTRACT OR UNLIMITED TAX PLEDGE IN

23 SUPPORT OF THE CONTRACT HAS BEEN APPROVED BY THE ELECTORS OF THE

24 MUNICIPALITY, THE CONTRACT IS SUBJECT TO THE REVISED MUNICIPAL

25 FINANCE ACT, 2001 PA 34, MCL 141.2101 TO 141.2821. For the pay-

26 ment of contractual obligations incurred pursuant to UNDER this

27 act, a township shall levy a tax only on the taxable property in

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1 the unincorporated areas of the township unless the township and

2 a village have agreed that a part of the capacity in the county

3 system allocated to the township by contract pursuant to this act

4 will be used to serve areas in a village located wholly or partly

5 within the township and the village has not itself agreed to pur-

6 chase the capacity in the county system. If a contracting munic-

7 ipality at the time of its annual tax levy has on hand in cash

8 any amount pledged to the payment of the current obligations for

9 which the tax levy is to be made, then the annual tax levy may be

10 reduced by that amount. For the purpose of obtaining the credit,

11 funds may be raised by a municipality in any BY USING 1 OR MORE

12 of the following methods:

13 (a) By service charges to users of the system or lake

14 improvements.

15 (b) By special assessment upon lands benefited.

16 (c) By the exaction of charges for the connection of proper-

17 ties, directly or indirectly, to the system or for the availabil-

18 ity of the system to serve properties, directly or indirectly, or

19 at a present or future time.

20 (d) By setting aside any state collected funds disbursed to

21 the municipality and usable therefor.

22 (e) By setting aside any other available money.

23 (3) For the purpose of obtaining the credit, municipalities

24 contracting for the acquisition, improvement, enlargement, or

25 extension of an erosion control system shall levy special assess-

26 ments upon all lands benefited to cover not less than 3/4 of the

27 total project cost contracted for by the local unit. A

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1 municipality may agree to raise all or any part of its contract

2 obligation by any of the methods provided in this section which

3 THAT are available. The powers in this act granted to any munic-

4 ipality shall be exercised by its governing body. A contract

5 entered into before May 12, 1959, which complies with this act,

6 is validated.

7 Sec. 25. (1) The board of public works may provide that the

8 assessments made on any roll shall be payable in 1 or more annual

9 installments, not exceeding 30. The board may vary the principal

10 amount of each installment but an installment shall not be less

11 than 1/4 of the amount of a subsequent installment. Annual

12 installments need not be extended upon the special assessment

13 roll until after confirmation.

14 (2) All unpaid installments shall bear interest from the

15 date fixed by the board of public works, payable annually, at a

16 rate to be set by the board at the time the special assessment is

17 established, which shall not exceed any of the following:

18 (a) If bonds are not issued, 8% per annum.

19 (b) If bonds are issued, the maximum rate permitted to be

20 charged under section 9 of chapter 3 of Act No. 202 of the

21 Public Acts of 1943, being section 133.9 of the Michigan Compiled

22 Laws THE REVISED MUNICIPAL FINANCE ACT, 2001 PA 34, MCL 141.2101

23 TO 141.2821.

24 (3) Installments of special assessments shall be spread as

25 provided in this act, 1 each year, upon the tax rolls upon which

26 county taxes are spread. The board of public works shall specify

27 the first year of this spread, which shall not be later than the

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1 year following that in which the roll was confirmed. The board

2 may provide the times and conditions upon which installments of

3 special assessments may be paid in advance of their due dates.

4 (4) BONDS ISSUED UNDER THIS ACT ARE SUBJECT TO THE REVISED

5 MUNICIPAL FINANCE ACT, 2001 PA 34, MCL 141.2101 TO 141.2821.

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