SENATE BILL No. 1062

February 5, 2002, Introduced by Senator GARCIA and referred to the Committee on Finance.

A bill to amend 1913 PA 380, entitled

"An act to regulate gifts of real and personal property to

cities, villages, townships, and counties, and the use of the

those gifts; and to validate all such gifts made before the

enactment of this act,"

by amending section 2 (MCL 123.872), as added by 1985 PA 9.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1 Sec. 2. (1) To provide a means and method to encourage and

2 assist businesses in locating and expanding in this state, and if

3 not prohibited by the terms of the grant, a city, village, town-

4 ship, or county may use a federal, state, or local grant or the

5 proceeds of a federal, state, or local grant to make a secured or

6 unsecured loan or to make a grant to a private person, to a cor-

7 poration or other business association, to a city, village, town-

8 ship, or county, or to an instrumentality of a city, village,

9 township, or county.

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1 (2) A loan or grant made pursuant to subsection (1) may be

2 used for local public improvements or to encourage and assist

3 businesses in locating or expanding in this state, to preserve

4 jobs in this state, to encourage investment in the communities in

5 this state, or for other public purposes.

6 (3) The right to repayment of a loan made under

7 subsection (1) may be assigned by a city, village, township, or

8 county to an entity, agency, or authority created pursuant to

9 law, or to a private corporation or association created to make

10 and administer loans made under subsection (1).

11 (4) A city, village, township, or county may receive loans

12 pursuant to subsection (1) and issue loan revenue bonds secured

13 by the repayment of loans made under subsection (1). For the

14 purposes specified in subsection (2), bonds issued pursuant to

15 this section shall be approved by the department of treasury

16 before their issuance, but shall not otherwise be subject to the

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

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

19 Michigan Compiled Laws. In determining whether the issuance of

20 the bonds shall be approved, the department of treasury shall

21 take into consideration the following: REVENUE BONDS ISSUED

22 UNDER THIS ACT ARE SUBJECT TO THE REVENUE BOND ACT OF 1933, 1933

23 PA 94, MCL 141.101 TO 141.140.

24 (a) Whether the bonds conform to the provisions of law.

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

26 payment of the bonds will be sufficient to pay the principal of

27 and interest on the bonds 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 are to be

3 issued.

4 The loan revenue bonds shall not be general obligations of the

5 city, village, township, or county issuing the loan revenue

6 bonds. The loan revenue bonds are declared to be issued for an

7 essential public and governmental purpose, and, together with

8 interest on those bonds and income from those bonds, shall be

9 exempted from all taxes.

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