April 27, 2004, Introduced by Senators JOHNSON, BROWN, CROPSEY, PATTERSON, SIKKEMA, McMANUS, GILBERT, CASSIS, GARCIA, KUIPERS, BISHOP, GOSCHKA, TOY, STAMAS, BIRKHOLZ, JELINEK, HARDIMAN, GEORGE, VAN WOERKOM, SANBORN, HAMMERSTROM and ALLEN and referred to the Committee on Appropriations.
A bill to amend 1951 PA 51, entitled
"An act to provide for the classification of all public roads,
streets, and highways in this state, and for the revision of that
classification and for additions to and deletions from each
classification; to set up and establish the Michigan
transportation fund; to provide for the deposits in the Michigan
transportation fund of specific taxes on motor vehicles and motor
vehicle fuels; to provide for the allocation of funds from the
Michigan transportation fund and the use and administration of
the fund for transportation purposes; to set up and establish the
truck safety fund; to provide for the allocation of funds from
the truck safety fund and administration of the fund for truck
safety purposes; to set up and establish the Michigan truck
safety commission; to establish certain standards for road
contracts for certain businesses; to provide for the continuing
review of transportation needs within the state; to authorize the
state transportation commission, counties, cities, and villages
to borrow money, issue bonds, and make pledges of funds for
transportation purposes; to authorize counties to advance funds
for the payment of deficiencies necessary for the payment of
bonds issued under this act; to provide for the limitations,
payment, retirement, and security of the bonds and pledges; to
provide for appropriations and tax levies by counties and
townships for county roads; to authorize contributions by
townships for county roads; to provide for the establishment and
administration of the state trunk line fund, critical bridge
fund, comprehensive transportation fund, and certain other funds;
to provide for the deposits in the state trunk line fund,
critical bridge fund, comprehensive transportation fund, and
certain other funds of money raised by specific taxes and fees;
to provide for definitions of public transportation functions and
criteria; to define the purposes for which Michigan
transportation funds may be allocated; to provide for Michigan
transportation fund grants; to provide for review and approval of
transportation programs; to provide for submission of annual
legislative requests and reports; to provide for the
establishment and functions of certain advisory entities; to
provide for conditions for grants; to provide for the issuance of
bonds and notes for transportation purposes; to provide for the
powers and duties of certain state and local agencies and
officials; to provide for the making of loans for transportation
purposes by the state transportation department and for the
receipt and repayment by local units and agencies of those loans
from certain specified sources; and to repeal acts and parts of
acts,"
by amending section 18b (MCL 247.668b), as amended by 2002 PA
498.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
1 Sec. 18b. (1) The
Subject to subsection (13), the state
2 transportation commission may borrow money and issue notes or
3 bonds for the following purposes:
4 (a) To pay all or any portion of or to make loans, grants, or
5 contract payments to pay all or any portion of any capital costs
6 for the purposes described in section 9 of article IX of the
7 state constitution of 1963.
8 (b) To pay the principal or the principal and interest on
9 notes and, if the state transportation commission considers
10 refunding to be expedient, to refund bonds payable from money in
11 the state trunk line fund or the comprehensive transportation
12 fund or received or to be received from the motor vehicle highway
13 fund or the Michigan transportation fund regardless of when the
14 refunded bonds were issued, by the issuance of new bonds, whether
15 or not the bonds to be refunded have matured or are subject to
1 prior redemption or are to be paid, redeemed, or surrendered at
2 the time of issuance of the refunding bonds; and to issue new
3 bonds partly to refund bonds or pay notes then outstanding and
4 partly for any other transportation purpose authorized by this
5 act.
6 (c) To pay all costs relating to the issuance of the bonds or
7 notes described in this section, including, but not limited to,
8 legal, engineering, accounting, and consulting services, interest
9 on bonds or notes for such
the period as determined by the
10 state transportation commission in the resolution authorizing the
11 bonds or notes and a reserve for payment of principal, interest,
12 and redemption premiums on the bonds or notes in an amount
13 determined by the state transportation commission in the
14 resolution authorizing the bonds or notes.
15 (2) The refunding bonds described in subsection (1)(b) shall
16 be sold and the proceeds and the earnings or profits from the
17 investment of those proceeds applied in whole or in part to the
18 purchase, redemption, or payment of the principal or the
19 principal and interest of the bonds to be refunded and the
20 refunding bonds issued by the state transportation commission
21 under subsection (1)(b) and the costs described in subsection
22 (1)(c). Refunding notes or bonds shall be considered to be
23 issued for the same purpose or purposes for which the notes or
24 bonds to be refunded were issued.
25 (3) The notes or bonds authorized by this section shall be
26 issued only after authorization by resolution of the state
27 transportation commission
, which and the authorization by
1 concurrent resolution of the legislature in subsection (13). The
2 state transportation commission resolution shall contain the
3 following:
4 (a) An irrevocable pledge providing for the payment of the
5 principal and interest on the notes or bonds from money which is
6 restricted as to use by section 9 of article IX of the state
7 constitution of 1963 and which is deposited or to be deposited in
8 the comprehensive transportation fund, in the case of bonds or
9 notes issued for comprehensive transportation purposes as defined
10 by law, or in the state trunk line fund, in the case of bonds or
11 notes issued for transportation purposes described in the second
12 paragraph of section 9 of article IX of the state constitution of
13 1963, or in the case of notes or bonds, if the resolution
14 authorizing the notes or bonds provides, from money received or
15 to be received by the state transportation department from the
16 proceeds of bonds or renewal notes to be issued after the date of
17 the resolution or from money received or to be received from the
18 proceeds of the grants described in subsection (9). If the
19 resolution authorizing the bonds or notes so provides, a portion
20 of the principal or interest on the bonds or notes may be secured
21 by an irrevocable pledge of money deposited in the comprehensive
22 transportation fund or the state trunk line fund, and the balance
23 of the principal and interest secured by an irrevocable pledge of
24 the proceeds of bonds or renewal notes or money received or to be
25 received from the proceeds of the grants described in
26 subsection (9).
27 (b) A brief statement describing the projects for which the
1 notes or bonds are to be issued and in the case of notes or bonds
2 to pay notes or refund bonds, a description of the notes or bonds
3 to be paid or refunded. For purposes of this section and section
4 18k, in connection with bonds issued to fund the loan program
5 established under section 11(6) to (11), the loan program shall
6 constitute the project, and it shall not be necessary to specify
7 the particular item or costs of a particular item to be financed
8 from any particular loan made under the loan program.
9 (c) The estimated cost of the projects or refunding or
10 refinancing.
11 (d) The detail of the notes or bonds including the date of
12 issue, maturity date or dates of the bonds or notes, the maximum
13 interest rate, the dates of payment of interest, the paying
14 agents, the transfer agent or agents, the provisions for
15 registration, the redemption provisions, and the manner of
16 execution or, as provided in subsection (11)(d), the limitations
17 within which such detail may be determined by the person
18 designated by the commission.
19 (4) If after the issuance of notes or bonds, the state
20 transportation commission or the legislature determines that a
21 project for which the notes or bonds are to be issued should be
22 changed, the state transportation commission, by resolution,
23 adopted after the 30
days' notice of intention to adopt the
24 resolution has been given to the appropriations committees of the
25 senate and the house of representatives, or after the legislature
26 has authorized bond issuance in a concurrent resolution under
27 subsection (13) shall amend the state transportation commission
1 resolution authorizing the bonds or notes to change the
2 description of the project or projects or to substitute a
3 different project or projects for the project for which the notes
4 or bonds were issued and shall make other revisions in the
5 resolution authorizing the notes or bonds with respect to cost as
6 may be necessary to permit the change in or substitution of a
7 project or projects.
8 (5) Before October 1, 1979, the total amount of bonds and
9 notes issued pursuant to this section for comprehensive
10 transportation purposes as defined by law shall not exceed an
11 amount as will be serviced as to maximum principal and interest
12 requirements by a sum equal to the amount deposited to the credit
13 of the general transportation fund for the fiscal year ending
14 September 30, 1977. After September 30, 1979, the total amount
15 of bonds and notes issued pursuant to this section for
16 comprehensive transportation purposes as defined by law shall not
17 exceed an amount as will be serviced, out of state funds only, as
18 to maximum annual principal and interest requirements by an
19 amount equal to 50% of the total amount of money from taxes, the
20 use of which money is restricted by section 9 of article IX of
21 the state constitution of 1963, and which money is deposited in
22 the state treasury to the credit of the comprehensive
23 transportation fund during the state fiscal year immediately
24 preceding the issuance of the bonds or notes.
25 (6) The total amount of bonds and notes issued pursuant to
26 this section for transportation purposes described in the second
27 paragraph of section 9 of article IX of the state constitution of
1 1963 shall not exceed an amount as will be serviced as to the
2 maximum principal and interest requirements by a sum equal to 50%
3 of the total of the amount of money received from taxes, the use
4 of which is restricted by section 9 of article IX of the state
5 constitution of 1963 and which is deposited in the state treasury
6 to the credit of the state trunk line fund during the state
7 fiscal year immediately preceding the issuance of the bonds or
8 notes.
9 (7) The principal or principal and interest or the portion of
10 principal or interest of bonds or notes which are issued in
11 anticipation of the issuance of bonds or renewal notes or of
12 federal grants as provided in subsection (9) and which do not
13 pledge for their payment money in the state trunk line fund or
14 the comprehensive transportation fund or money received or to be
15 received by the state transportation department from the Michigan
16 transportation fund or the motor vehicle highway fund shall not
17 be considered to be principal and interest requirements subject
18 to the limitation set forth in subsections (5) and (6). The
19 principal of and interest on notes or bonds refunded or for the
20 refunding of which refunding bonds have been sold, whether the
21 bonds to be refunded are to be retired at the time of delivery of
22 the refunding bonds or not, shall not be considered to be
23 principal and interest requirements subject to the limitation set
24 forth in subsections (5) and (6).
25 (8) In computing the maximum annual principal and interest
26 requirements under subsection (6), the total outstanding maximum
27 annual contributions required to be made by the state highway
1 commission and the state transportation commission pursuant to
2 contracts entered into under the authorization of section 18d,
3 which contributions are pledged to the payment of bonds issued
4 under section 18d, shall be included in the amount.
5 (9) The Subject
to subsection (13), the state
6 transportation commission may borrow money and issue notes or
7 bonds in anticipation of the receipt of grants from the United
8 States of America or any
agency or instrumentality thereof of
9 the United States and may pledge for the payment of the
10 principal, interest, and
redemption premiums on such the notes
11 or bonds 1 or more of the following:
12 (a) The proceeds of any grant and any investment earnings or
13 gain on the grant.
14 (b) If deemed advisable by the state transportation
15 commission, money which is restricted as to use by section 9 of
16 article IX of the state constitution of 1963, and which is
17 deposited or to be deposited in the comprehensive transportation
18 fund, in the case of bonds or notes issued for comprehensive
19 transportation purposes as defined by law, or in the state trunk
20 line fund, in the case of bonds or notes issued for
21 transportation purposes described in the second paragraph of
22 section 9 of article IX of the state constitution of 1963.
23 (c) If deemed advisable by the state transportation
24 commission, money received or to be received by the state from
25 the sale of the bonds or notes described in this section to be
26 issued after the issuance of the notes or bonds described in this
27 subsection and any
investment earnings or gain thereon on the
1 notes or bonds.
2 (10) Bonds or notes may be issued under this section as
3 separate issues or series with different dates of issuance, but
4 the aggregate of the bonds or notes shall be subject to the
5 limitations set forth
in of this section.
6 (11) The After
the legislature has approved the issuance of
7 bonds or notes under subsection (13), the state transportation
8 commission in determining to issue bonds or notes may do 1 or
9 more of the following:
10 (a) Authorize and enter into insurance contracts, agreements
11 for lines of credit, letters of credit, commitments to purchase
12 obligations, remarketing agreements, reimbursement agreements,
13 and any other transactions to provide security to assure timely
14 payment of any bonds or notes.
15 (b) Authorize payment from the proceeds of the bonds or notes
16 or other funds available, of the cost of issuance, including, but
17 not limited to, fees for placement, fees or charges for
18 insurance, letters of credit, lines of credit, remarketing
19 agreements, reimbursement agreements, or purchase or sales
20 agreements or commitments, or other agreements to provide
21 security to assure timely payment of bonds or notes.
22 (c) Authorize principal and interest to be payable from 1 or
23 more of the following:
24 (i) Money described in subsection (3)(a).
25 (ii) Proceeds of bonds or notes.
26 (iii) Earning on proceeds of bonds or notes or other funds
27 held for payment of bonds or notes.
1 (iv) Proceeds of any other security provided to assure timely
2 payment of the bonds or notes.
3 (v) Proceeds of federal grants and other money described in
4 subsection (9).
5 (vi) Any combination of the sources described in
6 subparagraphs (i) to (v).
7 (d) Authorize or provide for a person designated by the state
8 transportation commission, but only within limitations which
9 shall be contained in the authorization resolution of the state
10 transportation commission, to do 1 or more of the following:
11 (i) Sell and deliver and receive payment for bonds or notes.
12 (ii) Refund bonds or notes by the delivery of new bonds or
13 notes, whether or not the bonds or notes to be refunded have
14 matured or are subject to redemption prior to maturity on the
15 date of delivery of the refunding bonds or notes.
16 (iii) Deliver bonds or notes partly to refund bonds or notes
17 and partly for any other authorized purposes.
18 (iv) Buy, hold without cancellation, or sell bonds or notes
19 so issued.
20 (v) Approve interest rates or methods for fixing interest
21 rates, prices, discounts, maturities, principal amounts,
22 denominations, dates of issuance, interest payment dates,
23 optional or mandatory redemption or tender rights and obligations
24 to be exercised by the state transportation commission or the
25 holder, the place of delivery and payment, and other matters and
26 procedures necessary to complete the transactions authorized.
27 (e) In connection with outstanding bonds, notes, or other
1 obligations issued under this act, or in connection with the
2 issuance or proposed issuance of bonds, notes, or other
3 indebtedness, the state transportation commission may authorize
4 by resolution the execution and delivery of agreements providing
5 for interest rate exchanges or swaps, hedges, or similar
6 agreements. The obligations of this state under the agreements,
7 including termination payments, may be made payable from and
8 secured by a pledge of the same sources of funds as the bonds,
9 notes, or other obligations in connection with which the
10 agreements are entered into, or from any other sources of funds
11 available as a payment source of bonds, notes, or other
12 obligations issued under this act. In calculating debt service
13 on bonds, notes, and other obligations, the payments and receipts
14 under the agreements authorized by this subsection, without
15 regard to termination payments, and the payment obligations under
16 the bonds, notes, or other obligations in connection with which
17 the agreements are entered into, shall be aggregated and treated
18 as a single obligation.
19 (f) Bonds and notes issued under this act are not subject to
20 the revised municipal finance act, 2001 PA 34, MCL 141.2101 to
21 141.2821.
22 (g) The issuance of bonds and notes under this section is
23 subject to the agency financing reporting act.
24 (12) If
additionally secured as provided in this subsection
25 (11), the bonds or notes, notwithstanding other provisions of
26 this act, may be made payable or subject to purchase on demand or
27 prior to maturity at the option of the holder at the time and in
1 the manner as determined by the state transportation commission
2 or the designated person as provided in the resolution
3 authorizing the bonds or notes. Any bonds or notes authorized by
4 this section may bear no interest or interest at a rate or rates
5 which may be variable but which shall be subject to the
6 limitations provided in section 18e as provided in the resolution
7 authorizing the obligations. If bonds or notes are subject to
8 payment or purchase on demand or prior to maturity at the option
9 of the holder, and the obligation of the state to make payment or
10 effect purchases on demand or prior to maturity, at the option of
11 the holder is limited to the proceeds of 1 or more of the
12 additional security devices described in this subsection and is
13 not payable from constitutionally restricted funds deposited in
14 the comprehensive transportation fund or the state trunk line
15 fund, for purposes of computing maximum annual principal and
16 interest requirements under subsections (5) and (6), the
17 principal and interest on the bonds or notes subject to payment
18 or purchase on demand or prior redemption at the option of the
19 holder shall be disregarded and the maximum annual principal and
20 interest requirements which would arise with respect to the
21 repayment of the proceeds of the additional security device shall
22 be substituted therefor
for principal and interest
23 requirements.
24 (13) The notes and bonds authorized under this section shall
25 be issued only after the submittal of the resolution of the state
26 transportation commission to the legislature, which, by
27 concurrent resolution adopted by a majority vote of those elected
1 to and serving in each house, on a record roll call vote shall
2 approve, alter, amend, or reject the resolution of the state
3 transportation commission no later than 60 days after the
4 submittal of the resolution to the legislature. If the
5 concurrent resolution of the legislature alters or amends the
6 resolution of the state transportation commission, bonds or notes
7 under this section shall be issued in accordance with the altered
8 or amended resolution.