HB-6205, As Passed House, June 11, 2008
June 5, 2008, Introduced by Rep. Byrnes and referred to the Committee on Appropriations.
A bill to amend 1975 PA 222, entitled
"Higher education loan authority act,"
by amending section 5 (MCL 390.1155), as amended by 2002 PA 547.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec.
5. (1) The authority may issue its bonds in the principal
amounts
necessary to provide funds money
for achieving its purposes
under this act, including, but not limited to, the payment of
interest on bonds of the authority, the establishment of reserves,
including 1 or more reserve funds described in subsection (6), to
secure the bonds, and the payment of other expenditures of the
authority incident to and necessary or convenient to carry out its
purposes and powers. The authority may issue refunding bonds when
it considers refunding expedient, whether the bonds to be refunded
have or have not matured. The authority shall apply the proceeds of
the
refunding bonds shall be applied to the purchase, redemption,
or payment of the bonds refunded. Except as otherwise expressly
provided
in a resolution authorizing bonds, an issue of bonds shall
be
is a general obligation of the authority to be
satisfied out of
revenues or money or other property of the authority, subject to an
agreement with the holders of particular receipts, revenues, or
other property of the authority that has been pledged or mortgaged.
(2) Bonds issued by the authority under this section are not
subject to the revised municipal finance act, 2001 PA 34, MCL
141.2101 to 141.2821.
(3)
The authority shall authorize its bonds under this section
by resolution. The bonds shall bear interest at a rate or rates,
which are fixed for the term of the bonds or which are calculated
upon a formula to vary; be in the denominations; be in a form
approved by the authority; carry registration privileges; be
executed in a manner; be payable in a medium of payment; and at a
place or places; be subject to terms of redemption; and be subject
to any other terms and conditions as the resolution or resolutions
may provide. The bonds authorized under this section may be sold by
the authority at public or private sale at a price determined by
the authority. If the bonds are:
(a) Serial bonds or term bonds, or both, the bonds shall bear
a date, and, if serial bonds, shall be payable either semiannually
or annually, and shall mature at a time or times, not exceeding 40
years after the date of issue, as provided in the resolution or
resolutions.
(b) Term loans, commercial paper, or other evidences of
indebtedness,
the bonds shall bear a date or dates,
; and shall
mature at a time or times not exceeding 30 years after the date of
issue,
as provided in the resolution or resolutions. shall
provide.
(4)
The issuance of bonds and notes under this act section is
subject to the agency financing reporting act, 2002 PA 470, MCL
129.171 to 129.177.
(5) For the purpose of more effectively managing its debt
service, the authority may enter into an interest rate exchange or
swap, hedge, or similar agreement with respect to its bonds or
notes, on the terms and payable from the sources and with the
security,
if any, as determined established
by a resolution of the
authority.
(6) The authority may establish 1 or more special funds as
reserve funds. All of the following apply to a reserve fund
established under this section:
(a) The authority shall pay into a reserve fund money
appropriated to that reserve fund; proceeds of the sale of bonds to
the extent provided in the resolution or resolutions of the
authority authorizing the issuance of the bonds; and any other
money received by or available to the authority for the purpose of
the reserve fund from any other source, including, but not limited
to, a transfer of all or any portion of the authority's
unencumbered net assets to the reserve fund.
(b) The authority shall establish by resolution a minimum
balance for a reserve fund. Except as otherwise provided by
resolution of the authority, the authority shall not withdraw money
from a reserve fund if that withdrawal would reduce the balance of
the reserve fund to an amount less than the minimum balance
established under this subdivision for the reserve fund, except for
payment of any debt service on the bonds secured by the reserve
fund when due if the authority does not have other money available
to make that payment.
(c) Money in a reserve fund shall be used only to provide
security for bonds issued by the authority, including the pledge of
all or any portion of the reserve fund to secure all or any portion
of the bonds of the authority.
(d) If at any time a reserve fund is exhausted, on or before
September 1 the chairperson of the authority shall certify to the
governor and the state budget director the amount, if any,
necessary to restore the balance of the reserve fund to an amount
equal to the minimum balance required under subdivision (b) for
that reserve fund, and the governor and the state budget director
shall include an appropriation to the authority for that reserve
fund, in the amount certified by the chairperson, in the annual
budget submitted to the legislature for the next state fiscal year.