SENATE BILL No. 1630

November 12, 2008, Introduced by Senators ALLEN, CLARK-COLEMAN and CLARKE and referred to the Committee on Commerce and Tourism.

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. 3. As used in this act:

(a) "Authority" means a regional convention facility authority

created under section 4.

(b) "Board" means the board of directors of an authority.

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, 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 are conveyed to an

authority from a local government, which 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.

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. 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. 6. An authority created by 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.

Sec. 7. (1) An authority created by 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 the board shall be appointed for terms of 4

years, except of those who are first appointed, 2 members shall be

appointed for a term of 2 years, 2 members shall be appointed for a

term of 3 years, and remaining members shall be appointed for a

term of 4 years.

(3) A board member shall not hold any other public office for

which he or she shall receive compensation other than necessary

travel or other incidental expenses.

(4) A person who is not of good moral character or who has

been indicted or charged with, convicted of, pled guilty or nolo

contendere to, or forfeited bail concerning a felony or a

misdemeanor under the laws of this state, any other state, or the

United States or a local ordinance in any state that substantially

corresponds to a misdemeanor in that state shall not be appointed

or remain as a member of the board.

(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. 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 in the same manner as the

original appointment.

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) 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 with

reasonable care by the board.

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. The

board shall act by a unanimous vote of its membership entitled to

vote and shall meet regularly but not less than quarterly. An

authority member shall not designate another representative to

serve in his or her place on the authority.

(3) Each member of the board, the chief executive officer, and

each key employee as determined by the board shall file with the

secretary of state a financial disclosure statement listing all

assets and liabilities, property and business interests, and

sources of income of the member, chief executive officer, and each

key employee and any of their spouses. The financial disclosure

statement shall be under oath and shall be filed at the time of

employment and annually thereafter. Each employee of the board

shall file with the board a financial disclosure statement listing

all assets and liabilities, property and business interests, and

sources of income of the employee and his or her spouse.

(4) A member of the board, chief executive officer, or key

employee shall not hold any direct or indirect interest in, be

employed by, or enter into a contract for services with any entity

doing business with the authority for a period of 4 years after the

date his or her membership on the board terminates or his or her

employment with the board terminates.

(5) An employee of the board shall not acquire any direct or

indirect interest in, be employed by, or enter into a contract for

services with any entity doing business with the authority for a

period of 2 years after the date his or her employment with the

board is terminated.

Sec. 10. (1) Within not more than 60 days following

appointment 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 board.

(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, and shall be provided on an internet website operated by

the authority. 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. 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 comptroller general of the United States and

shall satisfy federal regulations relating to federal grant

compliance audit requirements.

(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) Except as otherwise provided in subsections (5) and (6),

competitive bids shall be secured before any purchase or sale, by

contract or otherwise, is made or before any contract is awarded

for construction, alterations, supplies, equipment, repairs, or

maintenance or for rendering any services to the authority and the

purchase shall be made from or the contract shall be awarded to the

lowest responsive and responsible bidder; or a sale to the highest

responsive and responsible bidder. The authority may reject any and

all such bids or proposals.

(5) All purchases and sales in excess of $25,000.00 shall be

awarded after advertising in a local newspaper of general

circulation in the area of the authority described in section 4(1)

at least 2 weeks before the bid opening. Bids shall be publicly

opened and read aloud at a date, time, and place designated in the

invitation to bid. Invitations to bid shall be sent at least 1 week

before the bid opening to at least 3 potential bidders who are

qualified technically and financially to submit bids, or a

memorandum shall be kept on file showing that less than 3 potential

bidders who are so qualified exist in the area of the authority

described in section 4(1) within which it is practicable to obtain

bids.

(6) Purchases or sales under $5,000.00 may be negotiated with

or without competitive bidding under procurement procedures as

promulgated and established by the authority.

(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, employees of

the authority, and consultants or management firms hired by 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.

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.

(9) An authority shall establish policies to ensure that the

authority shall not enter into a contract with a person who has

been convicted of a criminal offense incident to the application

for or performance of a state contract or subcontract. As used in

this subsection, if a person is a business entity, person includes

affiliates, subsidiaries, officers, directors, managerial

employees, and any person who, directly or indirectly, holds a

pecuniary interest in that business entity of 20% or more.

(10) An authority shall establish policies to ensure that the

authority shall not enter into a contract with a person who has

been convicted of a criminal offense, or held liable in a civil

proceeding, that negatively reflects on the person's business

integrity, based on a finding of embezzlement, theft, forgery,

bribery, falsification or destruction of records, receiving stolen

property, or violation of state or federal antitrust statutes. As

used in this subsection, if a person is a business entity, person

includes affiliates, subsidiaries, officers, directors, managerial

employees, and any person who, directly or indirectly, holds a

pecuniary interest in that business entity of 20% or more.

Sec. 12. Prior to the beginning of each fisca l year, the board

shall cause to be prepared a budget, 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 revenue of the authority from all sources for the

ensuing fiscal year. The board shall adopt that budget in

accordance with the uniform budget and accounting act, 1968 PA 2,

MCL 141.421 to 141.440a.

Sec. 13. (1) An authority shall have the powers and duties

provided in this act and the powers delegated to the authority by

other laws or executive orders, including, but not limited to, the

power to:

(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.

(d) Subject to section 11, 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.

(e) Subject to section 11, contract with a management firm,

either corporate or otherwise, to operate a convention facility,

under the supervision of the authority.

(f) 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.

(g) 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.

(h) 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.

(i) Issue bonds and notes as provided in this act.

(j) 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.

(k) Do all other things necessary or convenient to carrying

out the purposes for which the authority was established.

(2) Notwithstanding any other provision of law to the

contrary, an authority shall not have the power to impose or levy

taxes.

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) 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.

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) 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.

(4) The authority shall not assume any unfunded obligations of

the local government to provide pensions or retiree health

insurance. 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.

(5) 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.

(6) The exclusive right and authority to own, occupy, operate,

control, and use the convention facility shall include, but is not

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.

(7) 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.

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 for costs associated with

environmental contamination or remediation that exceeds costs

disclosed prior to the transfer or 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, beginning on September 1, 2008

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.

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 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 local 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.

(b) The agreement provides for cancellation or termination.

authority would become a party to such agreement by succession,

assignment, operation of law, or any other involuntary means.

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.

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. 21. For the purpose of acquiring, purchasing, improving,

enlarging, furnishing, equipping, reequipping, or repairing a

convention facility transferred pursuant to this act, 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 141.140. 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. 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) Appropriate and grant funds to the authority in

furtherance of the authority's purposes.

(b) 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.

the authority or with other local governments within the area of

the authority in furtherance of the authority's purposes.

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.

(b) The agreement is payable from general funds of the

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 is adjudged unconstitutional or ineffective,

no other section, subsection, paragraph, clause, or provision of

this act shall be considered 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