April 26, 2005, Introduced by Senators GARCIA, KUIPERS, BISHOP and CASSIS 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,
local 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:
Sec.
18b. (1) The Subject to
subsection (13), the state
transportation commission may borrow money and issue notes or bonds
for the following purposes:
(a) To pay all or any portion of or to make loans, grants, or
contract payments to pay all or any portion of any capital costs
for the purposes described in section 9 of article IX of the state
constitution of 1963.
(b) To pay the principal or the principal and interest on
notes and, if the state transportation commission considers
refunding to be expedient, to refund bonds payable from money in
the state trunk line fund or the comprehensive transportation fund
or received or to be received from the motor vehicle highway fund
or the Michigan transportation fund regardless of when the refunded
bonds were issued, by the issuance of new bonds, whether or not the
bonds to be refunded have matured or are subject to prior
redemption or are to be paid, redeemed, or surrendered at the time
of issuance of the refunding bonds; and to issue new bonds partly
to refund bonds or pay notes then outstanding and partly for any
other transportation purpose authorized by this act.
(c) To pay all costs relating to the issuance of the bonds or
notes described in this section, including, but not limited to,
legal, engineering, accounting, and consulting services, interest
on
bonds or notes for such the period as determined by the state
transportation commission in the resolution authorizing the bonds
or notes and a reserve for payment of principal, interest, and
redemption premiums on the bonds or notes in an amount determined
by the state transportation commission in the resolution
authorizing the bonds or notes.
(2) The refunding bonds described in subsection (1)(b) shall
be sold and the proceeds and the earnings or profits from the
investment of those proceeds applied in whole or in part to the
purchase, redemption, or payment of the principal or the principal
and interest of the bonds to be refunded and the refunding bonds
issued by the state transportation commission under subsection
(1)(b) and the costs described in subsection (1)(c). Refunding
notes or bonds shall be considered to be issued for the same
purpose or purposes for which the notes or bonds to be refunded
were issued.
(3) The notes or bonds authorized by this section shall be
issued only after authorization by resolution of the state
transportation
commission , which and
the authorization by
concurrent resolution of the legislature in subsection (13). The
state transportation commission resolution shall contain the
following:
(a) An irrevocable pledge providing for the payment of the
principal and interest on the notes or bonds from money which is
restricted as to use by section 9 of article IX of the state
constitution of 1963 and which is deposited or to be deposited in
the comprehensive transportation fund, in the case of bonds or
notes issued for comprehensive transportation purposes as defined
by law, or in the state trunk line fund, in the case of bonds or
notes issued for transportation purposes described in the second
paragraph of section 9 of article IX of the state constitution of
1963, or in the case of notes or bonds, if the resolution
authorizing the notes or bonds provides, from money received or to
be received by the state transportation department from the
proceeds of bonds or renewal notes to be issued after the date of
the resolution or from money received or to be received from the
proceeds of the grants described in subsection (9). If the
resolution authorizing the bonds or notes so provides, a portion of
the principal or interest on the bonds or notes may be secured by
an irrevocable pledge of money deposited in the comprehensive
transportation fund or the state trunk line fund, and the balance
of the principal and interest secured by an irrevocable pledge of
the proceeds of bonds or renewal notes or money received or to be
received from the proceeds of the grants described in subsection
(9).
(b) A brief statement describing the projects for which the
notes or bonds are to be issued and in the case of notes or bonds
to pay notes or refund bonds, a description of the notes or bonds
to be paid or refunded. For purposes of this section and section
18k, in connection with bonds issued to fund the loan program
established under section 11(6) to (11), the loan program shall
constitute the project, and it shall not be necessary to specify
the particular item or costs of a particular item to be financed
from any particular loan made under the loan program.
(c) The estimated cost of the projects or refunding or
refinancing.
(d) The detail of the notes or bonds including the date of
issue, maturity date or dates of the bonds or notes, the maximum
interest rate, the dates of payment of interest, the paying agents,
the transfer agent or agents, the provisions for registration, the
redemption provisions, and the manner of execution or, as provided
in subsection (11)(d), the limitations within which such detail may
be determined by the person designated by the commission.
(4) If after the issuance of notes or bonds, the state
transportation commission or the legislature determines that a
project for which the notes or bonds are to be issued should be
changed, the state transportation commission, by resolution,
adopted
after the 30 days' notice of intention to adopt the
resolution has been given to the appropriations committees of the
senate and the house of representatives, or after the legislature
has authorized bond issuance in a concurrent resolution under
subsection (13) shall amend the state transportation commission
resolution authorizing the bonds or notes to change the description
of the project or projects or to substitute a different project or
projects for the project for which the notes or bonds were issued
and shall make other revisions in the resolution authorizing the
notes or bonds with respect to cost as may be necessary to permit
the change in or substitution of a project or projects.
(5) Before October 1, 1979, the total amount of bonds and
notes issued pursuant to this section for comprehensive
transportation purposes as defined by law shall not exceed an
amount as will be serviced as to maximum principal and interest
requirements by a sum equal to the amount deposited to the credit
of the general transportation fund for the fiscal year ending
September 30, 1977. After September 30, 1979, the total amount of
bonds and notes issued pursuant to this section for comprehensive
transportation purposes as defined by law shall not exceed an
amount as will be serviced, out of state funds only, as to maximum
annual principal and interest requirements by an amount equal to
50% of the total amount of money from taxes, the use of which money
is restricted by section 9 of article IX of the state constitution
of 1963, and which money is deposited in the state treasury to the
credit of the comprehensive transportation fund during the state
fiscal year immediately preceding the issuance of the bonds or
notes.
(6) The total amount of bonds and notes issued pursuant to
this section for transportation purposes described in the second
paragraph of section 9 of article IX of the state constitution of
1963 shall not exceed an amount as will be serviced as to the
maximum principal and interest requirements by a sum equal to 50%
of the total of the amount of money received from taxes, the use of
which is restricted by section 9 of article IX of the state
constitution of 1963 and which is deposited in the state treasury
to the credit of the state trunk line fund during the state fiscal
year immediately preceding the issuance of the bonds or notes.
(7) The principal or principal and interest or the portion of
principal or interest of bonds or notes which are issued in
anticipation of the issuance of bonds or renewal notes or of
federal grants as provided in subsection (9) and which do not
pledge for their payment money in the state trunk line fund or the
comprehensive transportation fund or money received or to be
received by the state transportation department from the Michigan
transportation fund or the motor vehicle highway fund shall not be
considered to be principal and interest requirements subject to the
limitation set forth in subsections (5) and (6). The principal of
and interest on notes or bonds refunded or for the refunding of
which refunding bonds have been sold, whether the bonds to be
refunded are to be retired at the time of delivery of the refunding
bonds or not, shall not be considered to be principal and interest
requirements subject to the limitation set forth in subsections (5)
and (6).
(8) In computing the maximum annual principal and interest
requirements under subsection (6), the total outstanding maximum
annual contributions required to be made by the state highway
commission and the state transportation commission pursuant to
contracts entered into under the authorization of section 18d,
which contributions are pledged to the payment of bonds issued
under section 18d, shall be included in the amount.
(9)
The Subject to
subsection (13), the state
transportation
commission may borrow money and issue notes or bonds in
anticipation of the receipt of grants from the United States of
America
or any agency or instrumentality thereof of the United
States and may pledge for the payment of the principal, interest,
and
redemption premiums on such the notes or bonds 1 or more of
the following:
(a) The proceeds of any grant and any investment earnings or
gain on the grant.
(b) If deemed advisable by the state transportation
commission, money which is restricted as to use by section 9 of
article IX of the state constitution of 1963, and which is
deposited or to be deposited in the comprehensive transportation
fund, in the case of bonds or notes issued for comprehensive
transportation purposes as defined by law, or in the state trunk
line fund, in the case of bonds or notes issued for transportation
purposes described in the second paragraph of section 9 of article
IX of the state constitution of 1963.
(c) If deemed advisable by the state transportation
commission, money received or to be received by the state from the
sale of the bonds or notes described in this section to be issued
after the issuance of the notes or bonds described in this
subsection
and any investment earnings or gain thereon on the
notes or bonds.
(10) Bonds or notes may be issued under this section as
separate issues or series with different dates of issuance, but the
aggregate
of the bonds or notes shall be subject to the limitations
set
forth in of
this section.
(11)
The After the
legislature has approved the issuance of
bonds or notes under subsection (13), the state transportation
commission in determining to issue bonds or notes may do 1 or more
of the following:
(a) Authorize and enter into insurance contracts, agreements
for lines of credit, letters of credit, commitments to purchase
obligations, remarketing agreements, reimbursement agreements, and
any other transactions to provide security to assure timely payment
of any bonds or notes.
(b) Authorize payment from the proceeds of the bonds or notes
or other funds available, of the cost of issuance, including, but
not limited to, fees for placement, fees or charges for insurance,
letters of credit, lines of credit, remarketing agreements,
reimbursement agreements, or purchase or sales agreements or
commitments, or other agreements to provide security to assure
timely payment of bonds or notes.
(c) Authorize principal and interest to be payable from 1 or
more of the following:
(i) Money described in subsection (3)(a).
(ii) Proceeds of bonds or notes.
(iii) Earning on proceeds of bonds or notes or other funds held
for payment of bonds or notes.
(iv) Proceeds of any other security provided to assure timely
payment of the bonds or notes.
(v) Proceeds of federal grants and other money described in
subsection (9).
(vi) Any combination of the sources described in subparagraphs
(i) to (v).
(d) Authorize or provide for a person designated by the state
transportation commission, but only within limitations which shall
be contained in the authorization resolution of the state
transportation commission, to do 1 or more of the following:
(i) Sell and deliver and receive payment for bonds or notes.
(ii) Refund bonds or notes by the delivery of new bonds or
notes, whether or not the bonds or notes to be refunded have
matured or are subject to redemption prior to maturity on the date
of delivery of the refunding bonds or notes.
(iii) Deliver bonds or notes partly to refund bonds or notes and
partly for any other authorized purposes.
(iv) Buy, hold without cancellation, or sell bonds or notes so
issued.
(v) Approve interest rates or methods for fixing interest
rates, prices, discounts, maturities, principal amounts,
denominations, dates of issuance, interest payment dates, optional
or mandatory redemption or tender rights and obligations to be
exercised by the state transportation commission or the holder, the
place of delivery and payment, and other matters and procedures
necessary to complete the transactions authorized.
(e) In connection with outstanding bonds, notes, or other
obligations issued under this act, or in connection with the
issuance or proposed issuance of bonds, notes, or other
indebtedness, the state transportation commission may authorize by
resolution the execution and delivery of agreements providing for
interest rate exchanges or swaps, hedges, or similar agreements.
The obligations of this state under the agreements, including
termination payments, may be made payable from and secured by a
pledge of the same sources of funds as the bonds, notes, or other
obligations in connection with which the agreements are entered
into, or from any other sources of funds available as a payment
source of bonds, notes, or other obligations issued under this act.
In calculating debt service on bonds, notes, and other obligations,
the payments and receipts under the agreements authorized by this
subsection, without regard to termination payments, and the payment
obligations under the bonds, notes, or other obligations in
connection with which the agreements are entered into, shall be
aggregated and treated as a single obligation.
(f) Bonds and notes issued under this act are not subject to
the revised municipal finance act, 2001 PA 34, MCL 141.2101 to
141.2821.
(g) The issuance of bonds and notes under this section is
subject to the agency financing reporting act.
(12) If
additionally secured as provided in this subsection
(11), the bonds or notes, notwithstanding other provisions of this
act, may be made payable or subject to purchase on demand or prior
to maturity at the option of the holder at the time and in the
manner as determined by the state transportation commission or the
designated person as provided in the resolution authorizing the
bonds or notes. Any bonds or notes authorized by this section may
bear no interest or interest at a rate or rates which may be
variable but which shall be subject to the limitations provided in
section 18e as provided in the resolution authorizing the
obligations. If bonds or notes are subject to payment or purchase
on demand or prior to maturity at the option of the holder, and the
obligation of the state to make payment or effect purchases on
demand or prior to maturity, at the option of the holder is limited
to the proceeds of 1 or more of the additional security devices
described in this subsection and is not payable from
constitutionally restricted funds deposited in the comprehensive
transportation fund or the state trunk line fund, for purposes of
computing maximum annual principal and interest requirements under
subsections (5) and (6), the principal and interest on the bonds or
notes subject to payment or purchase on demand or prior redemption
at the option of the holder shall be disregarded and the maximum
annual principal and interest requirements which would arise with
respect to the repayment of the proceeds of the additional security
device
shall be substituted therefor for
principal and interest
requirements.
(13) The notes and bonds authorized under this section shall
be issued only after the submittal of the resolution of the state
transportation commission to the legislature, which, by concurrent
resolution adopted by a majority vote of those elected to and
serving in each house, on a record roll call vote shall approve,
alter, amend, or reject the resolution of the state transportation
commission no later than 60 days after the submittal of the
resolution to the legislature. If the concurrent resolution of the
legislature alters or amends the resolution of the state
transportation commission, bonds or notes under this section shall
be issued in accordance with the altered or amended resolution.