SENATE BILL No. 1067

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

A bill to amend 1971 PA 182, entitled

"An act to permit a city or village owning and operating a public

utility to borrow money for a term not to exceed 5 years for the

purpose of purchasing, acquiring, constructing, improving,

enlarging, extending or repairing the facilities of the public

utility; to issue notes or other evidences of indebtedness there-

for; to repay such borrowing from the revenues of the utility; to

permit the pledging or assignment of bonds or other securities or

evidences of debt held as investments for said public utility to

secure such borrowings; and to provide other powers, rights and

duties,"

by amending sections 1 and 2 (MCL 460.461 and 460.462), section 2

as amended by 1983 PA 121.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1 Sec. 1. (1) A city or village owning and operating a public

2 utility, without vote of its electors and upon approval of its

3 legislative body, may borrow money and issue and sell its notes

4 or other evidences of indebtedness therefor in such THE form

5 and on such THE terms as it deems advisable for the purpose

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1 of purchasing equipment or fuel, or both, or of purchasing,

2 acquiring, constructing, improving, enlarging, extending, or

3 repairing the facilities of the public utility. Loans shall not

4 be made or notes or other evidences of indebtedness therefor

5 issued for a term exceeding 5 years. Notes or other evidences of

6 indebtedness relating to fuels or supplies shall not exceed a

7 term of 18 months.

8 (2) Notes or other evidences of indebtedness issued

9 pursuant to UNDER this act shall not be general obligations of

10 the city or village but shall be secured by and payable from the

11 unencumbered revenues of the utility and other pledges and

12 assignments authorized in this act. The city or village may

13 pledge or assign bonds or other securities or evidences of debt

14 held by it as investments for the public utility as security for

15 the loan and to guarantee the ITS repayment. thereof.

16 (3) BONDS, NOTES, OR OTHER EVIDENCES OF INDEBTEDNESS ARE

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

18 TO 141.140.

19 Sec. 2. If the funds to be borrowed are to be used for

20 providing interim financing for projects on which long-term

21 financing in the form of bonds or other evidences of debt are to

22 be sold, the approval of the long-term financing by the municipal

23 finance commission or its successor agency as authorized by the

24 municipal finance act, Act No. 202 of the Public Acts of 1943, as

25 amended, being sections 131.1 to 139.3 of the Michigan Compiled

26 Laws, or the existence of an unexpired exception from prior

27 approval of the municipal finance commission or its successor

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1 agency for the issuance of those bonds or evidences of debt for

2 which the funds borrowed pursuant to this act are providing

3 interim financing, is required before making the loan authorized

4 under section 1, but any borrowing herein authorized is not oth-

5 erwise subject to that act. Section 5(g) of Act No. 279 of the

6 Public Acts of 1909, as amended, being section 117.5 of the

7 Michigan Compiled Laws THE HOME RULE CITY ACT, 1909 PA 279, MCL

8 117.5, relative to notice of intention to issue AN obligation,

9 does not apply to any borrowing hereunder UNDER THIS ACT.

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