SENATE BILL No. 978

December 13, 2001, Introduced by Senator LELAND and referred to the Committee on Finance.

A bill to amend 1945 PA 344, entitled

"An act to authorize counties, cities, villages and townships of

this state to adopt plans to prevent blight and to adopt plans

for the rehabilitation of blighted areas; to authorize assistance

in carrying out such plans by the acquisition of real property,

the improvement of such real property and the disposal of real

property in such areas; to prescribe the methods of financing the

exercise of these powers; and to declare the effect of this act,"

by amending sections 7a and 7b (MCL 125.77a and 125.77b), section

7a as amended by 1983 PA 32 and section 7b as amended by 1986

PA 320.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1 Sec. 7a. A municipality may issue bonds or notes from time

2 to time in its discretion to finance the undertaking of any

3 project authorized by this act including, without limiting the

4 generality thereof BUT NOT LIMITED TO, the payment of principal

5 and interest on advances or loans made for surveys and plans for

6 projects authorized by this act. , and may issue refunding bonds

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1 or notes for the payment or retirement of bonds or notes

2 previously issued by it either before or after the effective date

3 of this section. The bonds or notes shall be made payable, as to

4 both principal and interest, solely from the income, proceeds,

5 revenues, and funds of the municipality derived from or held in

6 connection with its undertaking and carrying out of projects

7 under this act. Payment of the bonds or notes both as to princi-

8 pal and interest, may be further secured by a pledge of any loan,

9 grant, or contribution due or to become due from the federal gov-

10 ernment or other source , in aid of projects of the municipal-

11 ity under this act. Bonds or notes issued under this section

12 shall not constitute an indebtedness within the meaning of con-

13 stitutional, statutory, or charter debt limitations or restric-

14 tions, and shall not be subject to other laws or charters relat-

15 ing to the authorization, issuance, or sale of bonds or notes

16 and may be issued without vote of the electors of the

17 municipality. Bonds or notes issued under this section are

18 declared to be issued for an essential public and governmental

19 purpose, and, together with interest thereon and income there-

20 from, shall be exempted from all taxes. Bonds or notes issued

21 under this section shall not require as a condition precedent to

22 their issuance approval of the municipal finance commission or

23 its successor agency. Bonds or notes issued under this section

24 shall be authorized by resolution or ordinance of the legislative

25 body of the municipality. and may be issued in 1 or more series

26 and shall bear such dates, be payable at such times, bear

27 interest at such rates, not exceeding the maximum rate permitted

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1 by the municipal finance act, Act No. 202 of the Public Acts of

2 1943, as amended, being sections 131.1 to 139.3 of the Michigan

3 Compiled Laws, be in such denominations, be in such form either

4 with or without coupons, carry such registration privileges, have

5 such rank or priority, be executed in such manner, be payable in

6 such medium of payment, at such places, and be subject to such

7 terms of redemption, with or without premium, be secured in such

8 manner, and have such other characteristics as may be provided by

9 the resolution or ordinance. The bonds or notes may be sold at

10 not less than par at public sale held after notice published

11 prior to the sale in a newspaper having a general circulation in

12 the municipality and in such other medium of publication as the

13 municipality may determine or may be exchanged for other bonds or

14 notes on the basis of par. The bonds or notes may be sold to the

15 federal government at private sale at not less than par, and, if

16 less than all of the authorized principal amount of the bonds or

17 notes is sold to the federal government, the balance may be sold

18 at private sale at not less than par at an interest cost to the

19 municipality of not to exceed the interest cost to the municipal-

20 ity of the portion of the bonds or notes sold to the federal

21 government. BONDS AND NOTES ISSUED UNDER THIS SECTION ARE

22 SUBJECT TO THE REVENUE BOND ACT OF 1933, 1933 PA 94, MCL 141.101

23 TO 141.140.

24 Sec. 7b. (1) For the purpose of providing funds to pay all

25 or part of the cost of any project undertaken under this act or

26 the net project cost of any project undertaken under this act

27 with federal financial assistance, a municipality may provide by

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1 resolution duly adopted by its legislative body and without vote

2 of the electors of the municipality for borrowing money and issu-

3 ing general obligation bonds of the municipality, which bonds

4 shall pledge the full faith and credit of the municipality.

5 (2) As used in this section:

6 (a) "Cost of any project" means any or all of the following

7 items: Cost of land acquisition, demolition of buildings, land

8 and site improvements, plans, surveys, appraisals, and all other

9 costs relating to the acquisition, rehabilitation, financing, and

10 disposal of any project or any part of a project under the terms

11 of this act.

12 (b) "Net project cost" means that term as defined in FORMER

13 section 110 of the housing act of 1949, 42 U.S.C. 1460.

14 (3) The bonds may be issued and sold from time to time

15 during the progress of any project undertaken under this act, in

16 which event the maximum amount of bonds so issued shall not

17 exceed the estimated cost of any project undertaken under this

18 act or the estimated net cost of any project undertaken under

19 this act with federal assistance. The legislative body in the

20 resolution authorizing issuance of the bonds shall set forth the

21 estimate or the bonds may be issued when any project has been

22 completed. Bonds issued under this section shall be designated

23 "rehabilitation bonds". All bonds issued under this section

24 shall be ARE subject to the municipal finance act, Act No. 202

25 of the Public Acts of 1943, as amended, being sections 131.1 to

26 139.3 of the Michigan Compiled Laws REVISED MUNICIPAL FINANCE

27 ACT, 2001 PA 34, MCL 141.2101 TO 141.2821. It being the

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1 determination of this legislature that urban blight constitutes a

2 serious menace to public health, welfare, and safety of munici-

3 palities and their inhabitants and that the financing of projects

4 designed to prevent or eliminate urban blight is necessary for

5 the public health, welfare, and safety, the bonds authorized to

6 be issued under this section are declared to be issued for an

7 essential public and governmental purpose. The maximum principal

8 amount of bonds that may be authorized pursuant to UNDER this

9 section in any year shall not exceed an amount equal to 5% of the

10 assessed value of the real and personal property in the munici-

11 pality less the taxes actually levied for the year exclusive of

12 debt service tax levies and taxes levied pursuant to UNDER

13 other laws, and less budget bonds authorized for the year issued

14 or authorized to be issued and less any bonds authorized in

15 such THE year to be issued pursuant to UNDER sections 6a and

16 6b of Act No. 208 of the Public Acts of 1949, as amended, being

17 sections 125.946a and 125.946b of the Michigan Compiled Laws

18 1949 PA 208, MCL 125.946A AND 125.946B. For the purposes of this

19 section, the assessed value of real and personal property in

20 such a THE municipality shall include the assessed value equiv-

21 alent of money received during the municipality's fiscal year

22 from the department of treasury pursuant to sections 134,

23 136(1), 136(2), and 136(3) of the single business tax act, Act

24 No. 228 of the Public Acts of 1975, being sections 208.134 and

25 208.136 of the Michigan Compiled Laws. The assessed value equiv-

26 alent shall be calculated by dividing the money received by the

27 municipality's millage rate for the fiscal year. UNDER THE GLENN

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1 STEIL STATE REVENUE SHARING ACT OF 1971, 1971 PA 140, MCL 141.901

2 TO 141.921. All actions heretofore PREVIOUSLY taken by a munic-

3 ipality authorizing the issuance of bonds and all bonds

4 heretofore PREVIOUSLY issued by a municipality are hereby

5 validated. Any bonds authorized to be issued pursuant to UNDER

6 this section shall be sold not later than 3 full fiscal years

7 from the end of the fiscal year in which the bonds are authorized

8 to be issued. The maximum amount of bonds issued pursuant to

9 UNDER this section that may be outstanding at any one time shall

10 not, together with other outstanding indebtedness of the munici-

11 pality, exceed the maximum limitations on bonded indebtedness of

12 the municipality imposed by law.

13 (4) Except as otherwise provided in this act, the bonds

14 shall not be subject to the provisions of any other law or

15 charter provision relating to their issuance or sale.

16 (5) The legislative body of any municipality issuing bonds

17 pursuant to UNDER this section in the resolution authorizing

18 issuance of the bonds shall estimate the period of usefulness of

19 the planned improvements to be installed in the development area

20 after the project is completed. and the estimate shall consti-

21 tute the estimate of the period of usefulness required by section

22 3 of chapter V of the municipal finance act, Act No. 202 of the

23 Public Acts of 1943, as amended, being section 135.3 of the

24 Michigan Compiled Laws. The proceeds of sale of any bonds issued

25 pursuant to this section may be used to pay part or all of the

26 principal and interest on any notes or bonds issued pursuant to

27 this act.

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