February 6, 2008, Introduced by Reps. Hood, Virgil Smith, Polidori, Farrah, Robert Jones, Cushingberry, LeBlanc, Lemmons, Corriveau, Johnson, Hopgood, Condino, Accavitti, Tobocman, Constan, Clemente, Leland, Scott, Cheeks, Gonzales and Jackson and referred to the Committee on Regulatory Reform.
A bill to create and provide for the incorporation of certain
regional convention facility authorities; to provide for the
membership of the authorities; to provide for the powers and duties
of the authorities; to provide for the conveyance of ownership of
and operational jurisdiction over certain convention facilities to
authorities and to provide for the transfer of certain real and
personal property utilized as convention facilities to authorities;
to provide for the assumption of certain contracts, bonds, notes,
and other evidences of indebtedness and liabilities related to
convention facilities by authorities; to authorize the creation of
certain funds; to authorize expenditures from the funds; to finance
the acquisition of land and the development of certain convention
facilities and of public improvements or related facilities; to
authorize the establishment of certain sales-tax-free zones; to
provide for the issuance of bonds and notes; to authorize certain
investments; to provide for the transfer of public employees to the
employment of authorities; to provide for the allocation of
liabilities related to employee benefits; to protect certain rights
of local government employees; and to impose certain powers and
duties upon state and local departments, agencies, and officers.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act shall be known and may be cited as the
"regional convention facility authority act".
Sec. 2. The legislature finds that there exists in this state
a continuing need for programs to promote tourism and convention
business in order to assist in the prevention of unemployment and
the alleviation of the conditions of unemployment, to preserve
existing jobs, and to create new jobs to meet the employment
demands of population growth and that, to achieve these purposes,
it is necessary to assist and encourage local units of government
to acquire, construct, improve, enlarge, renew, replace, repair,
finance, furnish, and equip regional convention facilities and the
real property on which they are located, to refinance these
activities, and to enter into contracts and procure services
necessary and appropriate for the development and ongoing
management and operation of regional convention facilities.
Sec. 3. As used in this act:
(a) "Authority" means a regional convention facility authority
created under section 4 or incorporated under section 5.
(b) "Board" means the board of directors of an authority.
(c) "Convention facility" means all or any part of, or any
combination of, a convention hall, auditorium, arena, meeting
rooms, exhibition area, and related adjacent public areas that are
generally available to the public for lease on a short-term basis
for holding conventions, meetings, exhibits, and similar events,
together with real or personal property, and easements above, on,
or under the surface of real or personal property, used or intended
to be used for holding conventions, meetings, exhibits, and similar
events, together with appurtenant property, including covered
walkways, parking lots, or structures, necessary and convenient for
use in connection with the convention facility.
(d) "Develop" means to plan, acquire, construct, improve,
enlarge, maintain, renew, renovate, repair, replace, lease, equip,
furnish, market, promote, manage, or operate.
(e) "Fiscal year" means the state fiscal year, unless
otherwise established by the board.
(f) "Legislative body" means the elected body of a local
government having legislative powers.
(g) "Local chief executive officer" means the mayor or city
manager of a city or the county executive of a county or, if a
county does not have a county executive, the chairperson of the
county board of commissioners.
(h) "Local government" means a county or city.
(i) "Qualified city" means a city with a population of more
than 300,000.
(j) "Qualified county" means a county with a population of
more than 700,000 that contains a qualified city.
(k) "Qualified convention facility" means a publicly owned
convention facility having not less than 600,000 square feet of
usable exhibition area and located within a qualified county.
(l) "Transfer date" means the date that right, title, interest,
and ownership of a qualified convention facility or of a convention
facility are conveyed to an authority from a local government,
which in the case of a qualified convention facility shall occur
not later than the one hundred eightieth day after the legislative
body of the local government from which right, title, interest, and
ownership of a qualified convention facility are to be transferred
to the authority adopts a resolution authorizing and approving such
transfer as provided under section 4, and, in the case of a
convention facility, shall occur on the date agreed to by the local
government and the authority.
Sec. 4. (1) For a qualified convention facility in this state,
there is created an authority that shall be vested with powers
granted by this act to own and develop the qualified convention
facility. The authority shall become operative on the ninetieth day
after the effective date of this act or on the ninetieth day after
a convention facility becomes a qualified convention facility,
whichever occurs first. The area of the authority shall consist of
the qualified county in which the qualified convention facility is
located and each county bordering upon the qualified city or, if no
county borders upon the qualified city, then the county bordering
the qualified county having the greatest population among the
counties bordering the qualified county.
(2) Not later than the ninetieth day after the authority
becomes operative as provided in subsection (1), the legislative
body of the local government from which right, title, interest, and
ownership of a qualified convention facility are to be transferred
to the authority may, by resolution, authorize and approve the
transfer. If the legislative body of the local government from
which right, title, interest, and ownership of a qualified
convention facility are to be transferred to the authority does not
authorize and approve the transfer on or before the ninetieth day
after the authority becomes operative as provided in subsection
(1), a transfer shall not occur and the authority shall be
dissolved as a matter of law.
Sec. 5. (1) Two or more local governments may jointly
incorporate an authority under this act. Each local government, by
resolution, shall declare its intention to be an incorporating
member of an authority. In the resolution of intent, the
legislative body of the local government shall set a date for the
holding of a public hearing on the adoption of a proposed
resolution approving the articles of incorporation of the
authority. Notice of the public hearing shall be published once in
a newspaper of general circulation in the local government, not
less than 20 or more than 40 days before the date of the hearing.
The notice shall state the date, time, and place of the hearing. A
resident, taxpayer, or property owner of the local government or an
official from an overlapping taxing jurisdiction has the right to
be heard at the public hearing in regard to the incorporation of
the authority.
(2) After the public hearing, if the legislative body of the
local government intends to proceed with the incorporation of the
authority, it shall adopt, by majority vote of its members elected
and serving, a resolution approving of articles of incorporation of
the authority. The adoption of the resolution is subject to any
applicable statutory or charter provisions in respect to the
approval or disapproval by the local chief executive officer and
the adoption of an ordinance over his or her veto. The adoption of
articles of incorporation shall be evidenced by an endorsement on
the articles of incorporation by the clerk of each respective local
government in a form substantially as follows:
The foregoing articles of incorporation were adopted by an
affirmative vote of a majority of the members serving on the
governing or legislative body of __________________, __________ at
a meeting duly held on the _____ day of _____________, A.D., 20__.
(3) The articles of incorporation shall be published by the
person or persons designated in the articles at least once in a
newspaper designated in the articles and circulated within the area
of the authority. One printed copy of the articles of incorporation
shall be filed with the secretary of state and with the clerk of
each local government incorporating the authority by the person
designated to do so by the articles. The authority shall become
operative and the articles of incorporation effective at the time
provided in the articles of incorporation. The validity of the
incorporation shall be conclusively presumed unless questioned in a
court of competent jurisdiction within 60 days after the
publication of the articles of incorporation.
(4) The articles of incorporation shall state the name of the
authority; the names of the incorporating local governments; the
area of the authority; the purposes for which it is formed; the
power, duties, and limitations of the authority and its officers;
the composition and method of selecting its governing body and
officers; the person or persons charged with the responsibility of
causing the articles of incorporation to be published and the
printed copies of the articles of incorporation to be filed as
provided in this act; the method of amending the articles of
incorporation; and any other matters which the incorporators
consider advisable.
(5) A local government may become a member of an authority
incorporated under this section after the authority's formation
upon an approving resolution adopted by a majority vote of the
members elected to and serving on the legislative body of the local
government requesting membership and upon an approving resolution
adopted by a 2/3 vote of the members serving on the board of the
authority approving an amendment to the articles of incorporation
of the authority adding the local government. The amendment to the
articles of incorporation shall be executed by the clerk of the
local government which is being added and shall be filed and
published in the same manner as the original articles of
incorporation.
Sec. 6. An authority created by or incorporated under this act
shall be a public body corporate with power to sue and be sued in
any court of the state and shall be considered to be an agency and
instrumentality of this state. The authority shall possess all the
powers necessary to carry out the purposes of its formation and all
things incident to carrying out the purposes of its formation. The
authority shall be administered in the manner determined by the
board and as provided in this act or in its articles of
incorporation.
Sec. 7. (1) An authority created by or incorporated under this
act shall be directed and governed by a board consisting of an odd
number of board members. No board member shall be an employee or
official of any local government or of this state. For purposes of
this subsection, "local government" shall include any county,
township, city, or village.
(2) The members of a board of an authority created under
section 4 shall be appointed by the following appointing
authorities:
(a) One board member by the governor of this state.
(b) Three board members by the local chief executive officer
of a qualified city, 1 of which shall be a representative of the
convention and tourism industry.
(c) One board member by the local chief executive officer of
each county within the area of the authority which is not a
qualified county.
(d) One board member by the local chief executive officer of
each qualified county.
(e) If necessary to fulfill the requirement that the board
consist of an odd number of members, 1 member by the local chief
executive officers listed in subdivisions (b) to (d), jointly.
(3) Except as otherwise provided in this subsection, members
of the board of an authority created pursuant to section 4 shall be
appointed for a term of 4 years or until their successors are
appointed and qualified. A board member first appointed under
subsection (2)(a) of this act shall be appointed for an initial
term of 1 year; the 3 board members first appointed under
subsection (2)(b) of this act shall be appointed for initial terms
of 1, 2, and 3 years and in making the appointment, the local chief
executive officer shall indicate the initial term applicable to
each appointee; and a board member first appointed under subsection
(2)(c) or (d) of this act shall be appointed for an initial term of
3 years; and in each case until their successors are appointed and
qualified.
(4) The members of a board of an authority incorporated
pursuant to section 5 shall be appointed, and shall serve for
initial terms, as set forth in the articles of incorporation.
Thereafter, the members of a board of an authority incorporated
pursuant to section 5 shall serve for 4-year terms or until their
successors are appointed and qualified.
(5) The expiration date of the term of office of a member of
the board shall be on December 31 of the year in which the term is
to expire, provided that the articles of incorporation of an
authority incorporated under section 5 may establish a different
date for the expiration of terms of board members. If a member of
the board is unable to complete his or her term of office, a
successor shall be appointed to fill the vacancy for the remainder
of the term. A member of the board may resign by written notice to
the authority. The resignation is effective upon its receipt by the
secretary or chairperson of the authority or at a subsequent time
as set forth in the notice of resignation.
(6) Notwithstanding any law or charter provision to the
contrary, appointments by a local chief executive officer under
this act shall not be subject to the approval by the legislative
Sec. 8. (1) Upon appointment to a board under this act and
upon taking and the filing of the constitutional oath of office, a
member of the board shall enter office and exercise the duties of
the office to which he or she is appointed.
(2) A vacancy on a board shall be filled in the same manner as
the original appointment for the balance of the unexpired term.
(3) The appointing authority for any board member may remove a
board member appointed by the appointing authority for cause.
(4) Members of a board may be reimbursed by an authority for
actual and necessary expenses incurred for attendance at meetings
or in the discharge of their official duties. The members of the
board shall not be compensated for service to the authority.
Sec. 9. (1) Members of a board and officers and employees of
the authority are subject to 1968 PA 317, MCL 15.321 to 15.330, and
1973 PA 196, MCL 15.341 to 15.348. A member of the board or an
officer, employee, or agent of the authority shall discharge the
duties of his or her position in a nonpartisan manner, in good
faith, and with the degree of diligence, care, and skill that an
ordinarily prudent person would exercise under similar
circumstances in a like position. In discharging his or her duties,
a member of the board or an officer, employee, or agent of the
authority, when acting in good faith, may rely upon any of the
following:
(a) The opinion of counsel for the authority.
(b) The report of an independent appraiser selected by the
board.
(c) Financial statements of the authority represented to the
member of the board, officer, employee, or agent to be correct by
the officer of the authority having charge of its books of account
or stated in a written report by the state auditor general or a
certified public accountant, or a firm of certified accountants, to
reflect the financial condition of the authority.
(2) A board shall organize and make its own policies and
procedures and shall adopt bylaws governing its operations. A
majority of the members of a board constitute a quorum for
transaction of business, notwithstanding the existence of 1 or more
vacancies on the board. Except as otherwise provided in this act,
actions taken by the board shall be by a majority vote of the
members present at a meeting of the board. The authority shall meet
at the call of the chairperson and as may be provided in the
bylaws.
(3) A member of the board or an officer, appointee, or
employee of the authority shall not be subject to personal
liability when acting in good faith within the scope of his or her
authority or on account of liability of the authority, and the
board may indemnify a member of the board or an officer, appointee,
or employee of the authority against liability arising out of the
discharge of his or her official duties. An authority may indemnify
and procure insurance indemnifying members of the board and other
officers and employees of the authority from personal loss or
accountability for liability asserted by a person with regard to
bonds or other obligations of the authority, or from any personal
liability or accountability by reason of the issuance of the bonds
or other obligations or by reason of any other action taken or the
failure to act by the authority. The authority may also purchase
and maintain insurance on behalf of any person against any
liability asserted against the person and incurred by the person in
any capacity or arising out of the status of the person as a member
of the board or an officer or employee of the authority, whether or
not the authority would have the power to indemnify the person
against that liability under this section. An authority, pursuant
to bylaw, contract, agreement, or resolution of its board, may
obligate itself in advance to indemnify persons.
Sec. 10. (1) Within not more than 60 days following
appointment of a majority of the members of a board, the board
shall hold its first meeting and organize by electing a
chairperson, a vice-chairperson, a secretary, and additional
officers of the board as the board considers necessary. All
officers of the board shall be elected annually by the board. All
officers of the board, other than the treasurer, who shall be the
chief financial officer of the authority, must be members of the
(2) The business which a board may perform shall be conducted
at a public meeting of the board held in compliance with the open
meetings act, 1976 PA 267, MCL 15.261 to 15.275. Public notice of
the time, date, and place of the meeting shall be given in the
manner required by the open meetings act, 1976 PA 267, MCL 15.261
to 15.275. A board shall adopt rules consistent with the open
meetings act, 1976 PA 267, MCL 15.261 to 15.275, governing its
procedures and the holding of meetings.
(3) A board may adopt a corporate seal.
Sec. 11. (1) After organization, a board shall adopt a
schedule of regular meetings and adopt a regular meeting date,
place, and time. The board chairperson shall call a special meeting
as provided in the rules of procedure of the board or upon request
of 2 members of the board. Notice of a special meeting shall be
given in the manner required by the open meetings act, 1976 PA 267,
MCL 15.261 to 15.275. A board shall keep a written or printed
record of each meeting, which record and any other writing
prepared, owned, used, in the possession of, or retained by the
board in the performance of an official function shall be made
available to the public in compliance with the freedom of
information act, 1976 PA 442, MCL 15.231 to 15.246.
(2) A board shall provide for a system of accounts to conform
to a uniform system required by law and for the auditing of the
accounts of the authority. A board shall obtain an annual audit of
the authority by an independent certified public accountant, and
report on the audit and auditing procedures, in the manner provided
by sections 6 to 13 of the uniform budgeting and accounting act,
1968 PA 2, MCL 141.426 to 141.433. The audit shall also be in
accordance with generally accepted government auditing standards as
promulgated by the United States general accounting office and
shall satisfy federal regulations relating to federal grant
(3) A board shall require of the treasurer and chief executive
officer of the authority a suitable bond of not less than
$50,000.00 by a responsible bonding company, and the cost of the
premium of the bond shall be paid by the authority.
(4) A board may appoint and fix the compensation of a chief
executive officer of the authority by a vote of not less than the
majority of the members of the board then serving. The board shall
prescribe those duties and responsibilities of the chief executive
officer of the authority that are in addition to the duties and
responsibilities imposed upon the chief executive officer of the
authority by this act. The chief executive officer of an authority
shall serve at the pleasure of the board, and the board may remove
or discharge the chief executive officer of the authority by a vote
of not less than the majority of the members of the board then
serving.
(5) The board shall provide for the purchase of, the
contracting for, and the providing of supplies, materials,
services, insurance, utilities, third-party financing, equipment,
printing, and all other items as needed by the authority, and shall
adopt a procurement policy for those purchases. The authority shall
not be required to solicit bids for professional services,
including, but not limited to, professional services in relation to
(6) The board may delegate its procurement authority to the
chief executive officer of the authority within dollar limitations
and for designated types of procurements as determined by the
board.
(7) An authority may enter into lease purchases or installment
purchases for periods not exceeding the anticipated useful life of
the items purchased. An authority may enter into a cooperative
purchasing agreement with the state or other public entities for
the purchase of goods, including, but not limited to, recycled
goods, and services necessary for the authority.
(8) An authority shall establish policies and coordinate
efforts for the authority to preclude the opportunity for and the
occurrence of transactions by the authority that would create a
conflict of interest involving members of the board and employees
of the authority. At a minimum, these policies to be established
for an authority shall include compliance by each member of the
board and employees of the authority who regularly exercise
significant discretion over the award and management of authority
procurements with policies governing the following:
(a) Annual public financial disclosure statements of
significant financial interests.
(b) Immediate disclosure of the existence and nature of any
financial interest that would reasonably be expected to create a
conflict of interest.
(c) Withdrawal by an employee or member from participation in
or discussion or evaluation of any recommendation or decision
involving an authority procurement that would reasonably be
expected to create a conflict of interest for that employee or
member.
Sec. 12. Prior to the beginning of each fiscal year, the board
shall cause to be prepared a budget containing an itemized
statement of the estimated current operational expenses and the
expenses for capital outlay including funds for the operation and
development of a convention facility under the jurisdiction of the
board, including the amount necessary to pay the principal and
interest of any outstanding bonds or other obligations of the
authority maturing during the ensuing fiscal year or which have
previously matured and are unpaid, and an estimate of the estimated
revenue of the authority from all sources for the ensuing fiscal
year. The board shall adopt that budget as shall be deemed
necessary in accordance with the uniform budget and accounting act,
1968 PA 2, MCL 141.421 to 141.440a.
Sec. 13. (1) An authority may do all things necessary or
convenient to carry out the purposes, objectives, and provisions of
this act and the purposes, objectives, and powers delegated to the
authority or the board by other laws or executive orders,
including, without limitation, all of the following:
(a) Adopt bylaws for the regulation of its affairs and alter
the bylaws at its pleasure.
(b) Sue and be sued in its own name.
(c) Develop a convention facility.
(d) Make and enter into all contracts and agreements necessary
or incidental to the performance of its duties and execution of its
powers under this act with any federal, state, or local
governmental agency or with any other person, public or private,
upon terms and conditions acceptable to the authority.
(e) Bargain collectively and enter into agreements with labor
organizations pursuant to 1947 PA 336, MCL 423.201 to 423.217.
(f) Contract with a management firm, either corporate or
otherwise, to operate a convention facility, under the supervision
of the authority.
(g) Solicit, receive, and accept from any source gifts,
grants, loans, or contributions of money, property, or other things
of value, and other aid or payment, or participate in any other way
in a federal, state, or local government program.
(h) Make application for and receive loans, grants,
guarantees, or other financial assistance in aid of a convention
facility from any state, federal, county, or municipal government
or agency or from any other source, public or private, including
financial assistance for purposes of planning, constructing,
improving, and operating the convention facility.
(i) Procure insurance or become a self-funded insurer against
loss in connection with the property, assets, or activities of the
authority.
(j) Invest money of the authority under 1943 PA 20, MCL 129.91
to 129.96, and, subject to the limitations provided in this act,
under the public employee retirement system investment act, 1965 PA
314, MCL 38.1132 to 38.1140m, and deposit money of the authority in
accordance with law.
(k) Engage, on a contract basis, the services of private
consultants, managers, legal counsel, and auditors for rendering
professional or technical assistance and advice payable out of any
money of the authority.
(l) Indemnify and procure insurance indemnifying members of the
board from personal loss or accountability for liability asserted
by a person with regard to bonds or other obligations of the
authority, or from any personal liability or accountability by
reason of the issuance of the bonds or other obligations or by
reason of any other action taken or the failure to act by the
authority.
(m) Establish and maintain an office and employ and fix
compensation for personnel of the authority.
(n) Hire a chief executive officer.
(o) Hold, clear, remediate, improve, maintain, manage,
control, sell, exchange, lease, as lessor or lessee, and obtain or
grant easements and licenses on property that the authority
acquires. A sale, exchange, lease, or other disposition of
authority property shall be to a person or persons for a project or
projects involving a convention facility. Property acquired by the
authority and later determined by the authority to be not necessary
for a convention facility may be sold or otherwise disposed of as
surplus property. Temporary or permanent easements or licenses or
other appropriate interests in property acquired by the authority
may be conveyed or granted by the authority for utility, vehicular,
or pedestrian traffic facilities or related purposes not
inconsistent with this act.
(p) Issue bonds and notes as provided in this act.
(q) Assume and perform the obligations and covenants of a
local government related to the convention facility.
(r) Take by grant, purchase, devise, or lease, or by the
exercise of the right of eminent domain, or otherwise acquire and
hold, real and personal property, in fee simple or any lesser
interest or easement, as an authority may deem necessary either for
the construction of any part of a convention facility or for the
efficient operation or for the extension of a convention facility
acquired or constructed or to be acquired or constructed under this
act, and, except as otherwise provided by this act, hold in its
name, lease, and dispose of all real and personal property owned by
or under the operational jurisdiction of the authority. If land is
acquired by condemnation, the provisions of the uniform
condemnation procedures act, 1980 PA 87, MCL 213.51 to 213.75, or
any successor statute shall be adopted and used for the purpose of
instituting and prosecuting the condemnation proceedings. For the
purpose of making surveys and examinations relative to any
condemnation proceedings, it shall be lawful to enter upon any
land, doing no unnecessary damage. The acquisition of any lands by
an authority for a convention facility in furtherance of the
purposes of the authority, and the exercise of any other powers
herein granted to the authority, are hereby declared as a matter of
legislative determination to be public, governmental, and municipal
functions, purposes, and uses exercised for a public purpose and
matters of public necessity.
(s) Adopt and enforce in the courts of the state reasonable
rules and regulations for the orderly, safe, efficient, and
sanitary operation and use of a convention facility owned by the
authority or under its operational jurisdiction, including
penalties of a misdemeanor punishable by imprisonment for up to 1
year for a specific violation of the rules and regulations.
franchises, or other arrangements with any person or persons for
terms not exceeding 50 years, for 1 or more of the following
purposes:
(i) Granting the privilege of using or improving or having
access to all or any portion of a convention facility for
commercial purposes.
(ii) Granting the privilege of naming or placing advertising on
or in all or any portion of a convention facility.
(iii) Granting the privilege of supplying goods, commodities,
things, services, or facilities at a convention facility or any
portion of a convention facility.
(iv) Making available services to be furnished by the authority
at a convention facility, or any portion of a convention facility,
that are under the operational jurisdiction of the authority.
(u) Contract with law enforcement agencies for the purpose of
providing security and law enforcement functions at a convention
facility.
(v) Establish and fix, or authorize the chief executive
officer to establish and fix, a schedule of rents, admission fees,
or other charges for occupancy, use of, or admission to any
convention facility operated by the authority and provide for the
collection and enforcement of those rents, admission fees, or other
charges.
(w) Do all other acts and things necessary or convenient to
carrying out the purposes for which the authority was established.
(2) An authority created under section 4 may make payments to
counties of the state to compensate for diminished payments to
counties under section 10 of the state convention facility
development act, 1985 PA 106, MCL 207.630, resulting from increased
disbursements under section 9 of the state convention facility
development act, 1985 PA 106, MCL 207.629, to pay for obligations
of the authority. Any payment made under this subsection shall not
exceed an amount which, with interest earnings thereon, is equal to
the diminution in payments under section 10 of the state convention
facility development act, 1985 PA 106, MCL 207.630, resulting from
increased disbursements under section 9 of the state convention
facility development act, 1985 PA 106, MCL 207.629, to pay for
obligations of the authority. An authority making payments under
this subsection may by resolution establish a trust and place all
or a portion of such payments into the trust in lieu of full,
immediate payments directly to counties entitled to such payments.
(3) The resolution establishing the trust shall include all of
the following:
(a) The designation of a person or persons who shall act as
the trust's investment fiduciary.
(b) A restriction of withdrawals from the trust solely for
payments to counties of the state to compensate for diminished
payments to such counties under section 10 of the state convention
facility development act, 1985 PA 106, MCL 207.630, resulting from
increased disbursements under section 9 of the state convention
facility development act, 1985 PA 106, MCL 207.629, to pay for
obligations of the authority and the payment of the expenses of
administration of the trust.
(4) An investment fiduciary shall invest the assets of the
trust in accordance with an investment policy adopted by the board
that complies with section 13 of the public employee retirement
system investment act, 1965 PA 314, MCL 38.1133. However, the
investment fiduciary shall discharge his or her duties solely in
the interest of the authority. The authority may invest the trust's
assets in the investment instruments and subject to the investment
limitations governing the investment of assets of public employee
retirement systems under the public employee retirement system
investment act, 1965 PA 314, MCL 38.1132 to 38.1140m.
(5) Notwithstanding any other provision of law to the
contrary, an authority shall not have the power to impose or levy
taxes.
Sec. 13a. The board of an authority created under section 4 of
this act may, by resolution, establish a sales-tax-free zone,
within which sales of tangible personal property are exempt from
taxation under section 4gg of the general sales tax act, 1933 PA
167, MCL 205.54gg. A resolution creating a sales-tax-free zone
shall contain a detailed description of the boundaries of the
sales-tax-free zone, which shall not exceed the boundaries of the
qualified convention facility owned by the authority.
Sec. 14. (1) The chief executive officer of an authority shall
supervise, and be responsible for, the day-to-day operation of the
convention facility, including the control, supervision,
management, and oversight of the convention facility, the issuance
of bonds and notes approved by the board, the negotiation and
establishment of compensation and other terms and conditions of
employment for employees of the authority, the negotiation,
supervision, and enforcement of contracts entered into by the
authority, and the supervision of contractors of the authority in
their performance of their duties. The chief executive officer of
an authority shall have the power and authority to execute and
deliver, and to delegate signatory power for, contracts, leases,
obligations, and other instruments as have been approved by the
board or for which power to approve has been delegated to the chief
executive officer of the authority.
(2) The chief executive officer of an authority shall have all
powers as are incident to the performance of his or her duties that
are prescribed by this act or by the board. All actions of the
chief executive officer of an authority shall be in conformance
with the policies of the board and in compliance with law.
(3) The chief executive officer of an authority may appoint a
chief financial officer who may also act as treasurer of the
Sec. 15. (1) On the transfer date, all right, title, and
interest in the convention facility owned by the local government
are conveyed and transferred to the authority, and the authority
acquires, succeeds to, and assumes the exclusive right,
responsibility, and authority to own, occupy, operate, control, and
use the convention facility from and after the transfer date,
including all lands, buildings, improvements, structures,
easements, rights of access, and all other privileges and
appurtenances pertaining to the convention facility, subject only
to those restrictions imposed by this act. The officers of the
local government conveying the convention facility to the authority
shall execute such instruments of conveyance, assignment, and
transfer as may, in the authority's judgment, be necessary or
appropriate to accomplish the foregoing.
(2) On the transfer date, the authority acquires and succeeds
to all rights, title, and interests in and to the fixtures,
equipment, materials, furnishings, and other personal property of
the local government owned and used for purposes of the convention
facility. The officers of the local government conveying the
convention facility to the authority shall execute such instruments
of conveyance, assignment, and transfer as may, in the authority's
judgment, be necessary or appropriate to accomplish the foregoing.
(3) The authority may, in its sole discretion, by resolution,
assume, accept, or become liable for any or all of the lawful
agreements, obligations, promises, covenants, commitments, and
other requirements of the local government conveying the convention
facility in respect of the convention facility, but excepting
certain unfunded pension and postretirement benefit obligations of
the local government, and the authority shall perform all of the
duties and obligations and shall be entitled to all of the rights
of the local government in respect of the convention facility under
any agreements expressly assumed and accepted by the authority
pursuant to this act, ordinances, and resolutions and under law.
(4) There shall be transferred to the authority all licenses,
permits, approvals, or awards related to the convention facility,
all grant agreements, grant preapplications, the right to receive
the balance of any funds payable under the agreements, the right to
receive any amounts payable to the local government on the transfer
date and amounts paid to the local government after the transfer
date, as well as the benefit of contracts and agreements, and all
of the local government's duties, liabilities, responsibilities,
and obligations as owner of the convention facility, except for any
obligations or liabilities which are contested in good faith by,
or, as of the transfer date, unknown to, the authority.
(5) The authority shall not assume any unfunded obligations of
the local government to provide pensions or retiree health
insurance. Upon request by the authority, the local government
shall provide the authority with a statement of the amount of such
unfunded obligations, determined by a professional actuary
acceptable to the authority.
(6) All lawful actions, commitments, and proceedings of the
local government made, given, or undertaken before the transfer
date and assumed by the authority are ratified, confirmed, and
validated upon such assumption. All actions, commitments, or
proceedings of the local government in respect of the qualified
convention facility in the process of being undertaken by, but not
yet a commitment or obligation of, the local government in respect
of the convention facility may, from and after the date of
assumption by the authority under this section, be undertaken and
completed by the authority in the manner and at the times provided
in this act or other applicable law and in any lawful agreements
made by the local government before the date of assumption by the
authority under this section.
(7) The exclusive right and authority to own, occupy, operate,
control, and use the convention facility shall include, but not be
limited to:
(a) Ownership and operational jurisdiction over all real
property of the convention facility, subject to any liens of record
and legal restrictions and limitations on the use of the property.
(b) The local government's right, title, and interest in, and,
to the extent accepted by the authority, all of the local
government's responsibilities arising under leases and concessions
relating to, a convention facility.
(8) The transfers described under this section shall include,
but need not be limited to, all of the following:
(a) All contracts with licensees, franchisees, tenants,
concessionaires, and leaseholders.
(b) All operating financial obligations secured by revenues
and fees generated from the operations of the convention facility.
(c) All cash balances and investments relating to or resulting
from operations of the convention facility, all funds held under an
ordinance, resolution, or indenture related to or securing
obligations of the local government that have been assumed by the
authority, and all of the accounts receivable or choses in action
arising from operations of the convention facility.
(d) All office equipment, including, but not limited to,
computers, records and files, software, and software licenses
required for financial management, personnel management, accounting
and inventory systems, and general administration.
Sec. 16. (1) The transfer of the real and personal property
and operational jurisdiction over a convention facility to the
authority may not in any way impair any contracts with licensees,
franchisees, vendors, tenants, bondholders, or other parties in
privity with the local government that owned the convention
facility which has been transferred to an authority, provided such
contracts were not entered into or modified in violation of this
act.
(2) From and after the transfer date, a local government from
which a convention facility has been transferred shall be relieved
from all further costs and responsibility arising from or
associated with control, operation, development, and maintenance of
that convention facility, except to the extent that in any fiscal
year funds of the authority available for the purpose of paying the
cost of operating and maintaining a convention facility are
insufficient to pay such cost, in which case the local government
shall be responsible for the difference between the cost of
operating and maintaining a convention facility and the funds of
the authority available to pay such cost, or as otherwise required
under obligations retained by the local government under this act,
or as otherwise agreed by the local government. In addition, the
local government shall continue to be responsible for all costs
associated with local municipal services, including, but not
limited to, police, fire, and emergency medical services, without
any additional compensation from the authority.
(3) A local government that owns a convention facility which
shall be subject to transfer or owned a convention facility which
has been transferred to an authority pursuant to this act shall
comply with all of the following, before and following the
transfer:
(a) Refrain from any action to sell, transfer, or otherwise
dispose of a convention facility owned by the local government
other than to the authority or to increase the obligations in
respect of the convention facility, without the consent of the
authority.
(b) Refrain from any approval of or material modification to
any collective bargaining agreement in respect of local government
employees employed at or assigned to a convention facility or, for
employees not covered by collective bargaining agreements, to any
benefit plans in respect of such employees. Any such approval or
modification shall be null and void.
(c) Refrain from any action that, in the authority's judgment,
would impair the authority's exercise of the powers granted to the
authority under this act or that would impair the efficient
operation and management of the convention facility.
(d) Take all actions reasonably necessary to cure any defects
in title to a convention facility which shall be or has been
transferred under this act, including providing documents, records,
and proceedings in respect of title.
(e) At the request of an authority, grant any license,
easement, or right-of-way in connection with the convention
facility to the extent the authority has not been empowered to take
these actions.
(f) Upon creation or incorporation of an authority and prior
to the transfer date of the convention facility to the authority,
conduct operations, maintenance, and repair of the convention
facility in the ordinary and usual course of business.
(4) Any contract, agreement, lease, sale, disposition,
transfer, or other conveyance, easement, license, right,
obligation, debt, or liability assumed, approved, entered into,
amended, or modified in violation of this section shall be voidable
as a matter of law to the extent that the authority would otherwise
assume, become party to or transferee of, or otherwise be obligated
under such contract, agreement, lease, sale, disposition, transfer,
conveyance, easement, license, right, obligation, debt, or
liability.
(5) The chief executive officer of a local government from
which right, title, interest, and ownership of a qualified
convention facility are to be transferred to an authority shall
take all reasonable steps to cancel or terminate each and any
agreement to which the local government from which right, title,
interest, and ownership of a qualified convention facility are to
be transferred to an authority is a party and which meets all the
following criteria:
(a) The agreement relates to the qualified convention facility
and the authority has not expressly assumed or accepted the
agreement under section 15(3).
(b) The agreement provides for cancellation or termination.
(c) In the absence of such cancellation or termination, the
authority would become a party to such agreement by succession,
assignment, operation of law, or any other involuntary means.
Sec. 17. (1) The authority, as of the transfer date,
immediately shall assume and be bound by any existing collective
bargaining agreements applicable to employees of the local
government whose employment is transferred to the authority either
as a result of the authority's express assumption of the employees
or by application of section 15(3) for the remainder of the term of
the collective bargaining agreement. Local government employees
whose employment is not transferred to the authority shall be
reassigned within the local government, pursuant to the terms of
any applicable collective bargaining agreements. A representative
of the employees or a group of employees in the local government
who represents or is entitled to represent the employees or a group
of employees of the local government, pursuant to 1947 PA 336, MCL
423.201 to 423.217, shall continue to represent the employee or
group of employees after the employees transfer to the authority.
This subsection does not limit the rights of employees, pursuant to
applicable law, to assert that a bargaining representative
protected by this subsection is no longer their representative. The
rights and benefits protected by this subsection may be altered by
a future collective bargaining agreement or, for employees not
covered by collective bargaining agreements, by benefit plans as
established and adopted by the authority.
(2) Transferred employees shall not by reason of the transfer
have their accrued local government pension benefits or credits
diminished. If a transferring employee is not vested in his or her
local government pension rights at the time of transfer, his or her
posttransfer service with the authority shall be credited toward
vesting in any local government retirement system in which the
transferring employee participated prior to the transfer, but
posttransfer service with the authority shall not be credited for
any other purpose under the local government's retirement system,
except as provided in subsection (4).
(3) A transferred local government employee described in this
section or a person hired by the authority as a new employee after
the transfer date shall remain or become a participant in the local
government retirement system until the authority has established
its own retirement system or pension plan. During the period the
employee remains or is a participant in the local government
system, the employee's posttransfer service with the authority and
his or her posttransfer compensation from the authority shall be
counted in determining both eligibility for and the amount of
pension benefits that the employee will be eligible to receive from
the local government system or plan.
(4) If the local government maintains a retirement system that
provides for continuing participation and benefit accrual by local
government employees who transfer their employment to another
entity in conjunction with transfer of a local government function
to that entity, then the transferred employee may elect to remain a
participant in the local government retirement system in lieu of
participation in any retirement system or pension plan of the
authority. By electing to remain a participant in the local
government system, the employee's posttransfer service with the
authority and his or her posttransfer compensation from the
authority shall be counted in determining both eligibility for and
the amount of pension benefits that the employee will be eligible
to receive from the local government system or plan. Any election
to remain in a local government system or plan shall be made within
60 days following the date the authority has established its own
retirement system or pension plan and shall be irrevocable.
Employees eligible to make the election described in this
subsection shall be those employees who immediately before their
transfer date were participating in the local government system and
who agree to make any employee contributions required for
continuing participation in the local government system and also
agree to meet all requirements and be subject to all conditions
which, from time to time, apply to employees of the local
government who participate in the local government system.
(5) For each employee meeting the requirements of subsection
(4) who elects to remain a participant in the local government
retirement system, the authority shall, on a timely basis,
contribute, as applicable, to the trustees of that retirement
system an amount determined by the local government system's
actuary to be sufficient to fund the liability for all of that
employee's retirement and other postemployment benefits under the
system on a current basis, as those liabilities are accrued from
and after the transfer date.
Sec. 18. (1) The board by resolution may establish a
convention facility operating trust fund for the purpose of
accumulating funds to pay for the cost of operating and maintaining
a convention facility. Money for operating and maintaining a
convention facility, at the authority's discretion, may be provided
from this fund or any other money of the authority. The resolution
establishing the fund shall include all of the following:
(a) The designation of a person or persons who shall act as
the fund's investment fiduciary.
(b) A restriction of withdrawals from the fund solely for the
payment of reasonable operating and maintenance expenses of a
convention facility and the payment of the expenses of
administration of the fund.
(2) An investment fiduciary shall invest the assets of the
fund in accordance with an investment policy adopted by the board
that complies with section 13 of the public employee retirement
system investment act, 1965 PA 314, MCL 38.1133. However, the
investment fiduciary shall discharge his or her duties solely in
the interest of the authority. The authority may invest the fund's
assets in the investment instruments and subject to the investment
limitations governing the investment of assets of public employee
retirement systems under the public employee retirement system
investment act, 1965 PA 314, MCL 38.1132 to 38.1140m.
Sec. 19. (1) An authority may raise revenues to fund all of
its activities, operations, and investments consistent with its
purposes. The sources of revenue available to the authority may
include, but are not limited to, any of the following:
(a) Rents, admission fees, or other charges for use of the
convention facility which the authority may fix, regulate, and
collect.
(b) Federal, state, or local government grants, loans,
appropriations, payments, or contributions.
(c) The proceeds from the sale, exchange, mortgage, lease, or
other disposition of property that the authority has acquired.
(d) Grants, loans, appropriations, payments, proceeds from
repayments of loans made by the authority, or contributions from
public or private sources.
(e) Distributions from the convention facility development
fund of the state pursuant to the state convention facility
development act, 1985 PA 106, MCL 207.621 to 207.640.
(f) Investment earnings on the revenues described in
subdivisions (a) to (e).
(2) The revenues raised by an authority may be pledged, in
whole or in part, for the repayment of bonded indebtedness and
other expenditures issued or incurred by the authority.
Sec. 20. The authority may, but shall not be required to,
accept the transfer of ownership or operational jurisdiction of
other convention facilities within the area of the authority. The
terms and conditions of any such transfer shall be subject to the
approval of the board in its sole discretion.
Sec. 21. For the purpose of acquiring, purchasing,
constructing, improving, enlarging, furnishing, equipping,
reequipping, or repairing a convention facility transferred
pursuant to this act or hereafter acquired by the authority, the
authority may issue self-liquidating bonds of the authority in
accordance with and exercise all of the powers conferred upon
public corporations by the revenue bond act of 1933, 1933 PA 94,
MCL 141.101 to 141.139. Revenue bonds issued by the authority are
not a debt of any qualified county, county, qualified city, or this
state.
Sec. 22. (1) The authority may borrow money and issue
municipal securities in accordance with and exercise all of the
powers conferred upon municipalities by the revised municipal
finance act, 2001 PA 34, MCL 141.2101 to 141.2821.
(2) The authority may issue a municipal security which bears
no interest and appreciates as to principal amount if the municipal
security is rated investment grade by a nationally recognized
rating agency or has insurance for payment of the principal and
interest on the municipal security to the holders of the municipal
security. The municipal securities authorized by this subsection
shall be exempt from the limitations of section 305 of the revised
municipal finance act, 2001 PA 34, MCL 141.2305, excepting that the
accreted principal amount of the municipal security shall be
considered interest and shall be within the interest rate
limitations provided in section 305(1) of the revised municipal
finance act, 2001 PA 34, MCL 141.2305.
(3) An authority shall assume all of the outstanding
securities of a local government which were originally issued to
finance the acquisition or construction of, or improvements to, a
convention facility that has been transferred to the authority, and
the authority shall refund or defease such securities. If the
authority refunds the outstanding securities assumed under this
subsection, that refunding shall be deemed, as a matter of law, to
be necessary to eliminate requirements of covenants applicable to
the existing outstanding securities.
Sec. 23. (1) All bonds or other evidences of indebtedness
issued by an authority under this act, and the interest on the
bonds or other evidences of indebtedness, are free and exempt from
all taxation within this state, except for transfer and franchise
taxes.
(2) Except as otherwise provided in this subsection, the
property of the authority and its income and operations are exempt
from all taxes and special assessments of this state or a political
subdivision of this state. Property of the authority and its income
and operations that are leased to private persons are not exempt
from any tax or special assessment of this state or a political
subdivision of this state. Property of the authority is exempt from
any ad valorem property taxes levied under the general property tax
act, 1893 PA 206, MCL 211.1 to 211.155. An authority is an entity
of government for purposes of section 4a(1)(a) of the general sales
tax act, 1933 PA 167, MCL 205.54a.
Sec. 24. (1) The legislative body of any local government
within the area of the authority is hereby authorized to take 1 or
more of the following actions:
(a) Pledge its full faith and credit behind any obligation or
evidence of indebtedness of the authority.
(b) Advance funds to the authority for working capital and
other purposes of the authority on terms and conditions agreed to
by the authority and the local government.
(c) Appropriate and grant funds to the authority in
furtherance of the authority's purposes.
(d) Grant and convey to the authority real or personal
property of any kind or nature, or any interest in real or personal
property, for the carrying out of the authorized purposes of the
authority.
(e) Enter into cooperative agreements and arrangements with
the authority or with other local governments within the area of
the authority in furtherance of the authority's purposes.
(2) A pledge made pursuant to this section shall be at the
discretion of the legislative body of the local government and may
be subject to an agreement providing for terms and conditions of
the pledge and for repayment of any amount paid pursuant to the
pledge as the authority and the local government may determine
necessary and advisable.
(3) Any agreement by an authority to repay an advance made
pursuant to this section, and any obligation incurred to evidence
any obligation of the authority under that agreement, shall not be
subject to the revised municipal finance act, 2001 PA 34, MCL
141.2101 to 141.2821.
Sec. 25. (1) For the purpose of more effectively managing its
debt service, an authority may enter into an interest rate exchange
or swap, hedge, or similar agreement or agreements in connection
with the issuance or proposed issuance of obligations or other
evidences of indebtedness or in connection with its then-
outstanding obligations or other evidences of indebtedness.
(2) In connection with entering into an interest rate exchange
or swap, hedge, or similar agreement, the authority may create a
reserve fund for the payment thereof.
(3) An agreement entered into pursuant to this section shall
comply with all of the following:
(a) The agreement is not a debt of the authority entering into
the agreement for any statutory or charter debt limitation purpose.
authority or, subject to any existing contracts, from any available
money or revenue sources, including revenues that shall be
specified by the agreement, securing the obligation or evidence of
indebtedness in connection with which the agreement is entered
into.
Sec. 26. (1) Notwithstanding any other provisions of this act
or any other law, the provisions of all ordinances, resolutions,
and other proceedings of the local government in respect to any
outstanding bonds, notes, or any and all evidences of indebtedness
or liability assumed by an authority pursuant to this act, if any,
shall constitute a contract between the authority and the holders
of the bonds, notes, or evidences of indebtedness or liability, and
shall have their provisions enforceable against the authority or
any or all of its successors or assigns, by mandamus or any other
appropriate suit, action, or proceeding in law or in equity in any
court of competent jurisdiction in accordance with law.
(2) Bonds, notes, or any and all evidences of indebtedness or
liability that are assumed by an authority under this act shall be
payable solely from and secured solely by the sources of revenue
that were pledged to those bonds, notes, or evidences of
indebtedness or liability under the ordinance, resolution, or other
proceedings of the local government, and shall not constitute a
full faith and credit obligation of the authority.
(3) Nothing in this act or in any other law shall be held to
relieve the local government from which a convention facility has
been transferred from any bonded or other debt or liability
lawfully contracted by the local government, to which the full
faith and credit of the local government has been pledged and which
remains outstanding as of the transfer date, notwithstanding that
the proceeds of the debt or liability have been used by the local
government in support of the convention facility.
(4) Upon the transfer of a convention facility to an
authority, trustees, paying agents, and registrars for any
obligation of the local government that has been expressly assumed
by the authority pursuant to section 15 shall perform all of their
duties and obligations and provide all notices related to those
obligations as if the authority were the issuer of the obligations.
These trustees, paying agents, and registrars shall care for and
consider all revenues and funds pledged to secure obligations of
the local government that have been assumed by the authority
pursuant to section 15 as revenues and funds of the authority. The
authority shall indemnify and hold harmless these trustees, paying
agents, and registrars from liability incurred in compliance with
this subsection.
Sec. 27. If any section, subsection, paragraph, clause, or
provision of this act shall be adjudged unconstitutional or
ineffective, no other section, subsection, paragraph, clause, or
provision of this act shall on account thereof be deemed invalid or
ineffective, and the inapplicability or invalidity of any section,
subsection, paragraph, clause, or provision of this act in any 1 or
more instances or under any 1 or more circumstances shall not be
taken to affect or prejudice in any way its applicability or
validity in any other instance or under any other circumstance.
Enacting section 1. This act does not take effect unless all
of the following bills of the 94th Legislature are enacted into
law:
(a) Senate Bill No.____ or House Bill No. 5691(request no.
04082'07 ****).
(b) Senate Bill No.____ or House Bill No. 5692(request no.
05887'07 ****).