SENATE BILL No. 1175

March 5, 2002, Introduced by Senator BYRUM and referred to the Committee on Finance.

A bill to amend 1975 PA 222, entitled

"Higher education loan authority act,"

by amending section 5 (MCL 390.1155), as amended by 1984 PA 259.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1 Sec. 5. (1) The authority may issue its bonds in the prin-

2 cipal amounts necessary to provide funds for achieving its pur-

3 poses under this act including the payment of interest on bonds

4 of the authority, the establishment of reserves to secure the

5 bonds, and other expenditures of the authority incident to and

6 necessary or convenient to carry out its purposes and powers.

7 The authority may issue refunding bonds when it considers refund-

8 ing expedient, whether the bonds to be refunded have or have not

9 matured. The proceeds of the refunding bonds shall be applied to

10 the purchase, redemption, or payment of the bonds refunded.

11 Except as otherwise expressly provided in a resolution

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1 authorizing bonds, an issue of bonds shall be a general

2 obligation of the authority to be satisfied out of revenues or

3 money or other property of the authority, subject to an agreement

4 with the holders of particular receipts, revenues, or other prop-

5 erty of the authority which THAT has been pledged or

6 mortgaged.

7 (2) Unless an exception from prior approval is available

8 pursuant to subsection (4), bonds BONDS issued by the authority

9 shall be approved by the municipal finance commission or its

10 successor agency but, except as provided by subsection (4),

11 shall ARE not otherwise be subject to the municipal finance

12 act, Act No. 202 of the Public Acts of 1943, as amended, being

13 sections 131.1 to 139.3 of the Michigan Compiled Laws. In deter-

14 mining whether a proposed issue of bonds should be approved, the

15 municipal finance commission or its successor agency shall

16 consider: REVISED MUNICIPAL FINANCE ACT, 2001 PA 34, MCL

17 141.2101 TO 141.2821.

18 (a) Whether the bonds conform to this act.

19 (b) Whether the probable revenues pledged for payment of the

20 bonds will be sufficient to pay the principal and interest when

21 due.

22 (3) The authority shall authorize its bonds by resolution.

23 The bonds shall bear interest at a rate or rates, which are fixed

24 for the term of the bonds or which are calculated upon a formula

25 to vary; be in the denominations; be in a form approved by the

26 authority; carry registration privileges; be executed in a

27 manner; be payable in a medium of payment; and at a place or

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1 places; be subject to terms of redemption; and be subject to

2 such ANY other terms and conditions as the resolution or reso-

3 lutions may provide. The bonds authorized pursuant to UNDER

4 this section may be sold by the authority at public or private

5 sale at a price determined by the authority. If the bonds are:

6 (a) Serial bonds or term bonds, or both, the bonds shall

7 bear a date, and, if serial bonds, shall be payable either semi-

8 annually or annually, and shall mature at a time or times, not

9 exceeding 40 years after the date of issue, as provided in the

10 resolution.

11 (b) Term loans, commercial paper, or other evidences of

12 indebtedness, the bonds shall bear a date or dates; and shall

13 mature at a time or times not exceeding 30 years after the date

14 of issue, as the resolution or resolutions shall provide.

15 (4) The requirement of subsection (2) for obtaining the

16 prior approval of the municipal finance commission or its succes-

17 sor agency before issuing bonds under this act shall be subject

18 to sections 10 and 11 of chapter III of Act No. 202 of the Public

19 Acts of 1943, being sections 133.10 and 133.11 of the Michigan

20 Compiled Laws, and the department of treasury shall have the same

21 authority as provided by section 11 of chapter III of Act No. 202

22 of the Public Acts of 1943 to issue an order providing or denying

23 an exception from the prior approval required by subsection (2)

24 for bonds authorized by this act.

25 (4) THE ISSUANCE OF BONDS AND NOTES UNDER THIS ACT IS

26 SUBJECT TO THE AGENCY FINANCING REPORTING ACT.

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