April 24, 2012, Introduced by Reps. Stallworth and Durhal and referred to the Committee on Local, Intergovernmental, and Regional Affairs.
A bill to provide for the establishment of public lighting
infrastructure and housing stock inventory investment authorities
in certain cities; to provide for the powers and duties of a public
lighting infrastructure and housing stock inventory investment
authority; to provide for the powers and duties of certain
governmental officials; to provide for the issuance of bonds and
notes; to impose certain powers and duties upon state and local
departments, agencies, and officers; and to make appropriations.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act shall be known and may be cited as the
"public lighting infrastructure and housing stock inventory
investment authority act".
Sec. 3. As used in this act:
(a) "Asset improved" means a residential property that has
more value for a prospective homeowner than the homeowner's current
property and that has an appraised value that makes a mortgage
viable.
(b) "Authority" means a public lighting infrastructure and
housing stock inventory investment authority created under section
5.
(c) "Best value" means a contract and procurement process that
rewards the lowest responsible bids from locally headquartered
operations and that includes local workforce employment and
training plans.
(d) "Board" means the board of directors of an authority.
(e) "Business enterprise unit" means an internal or contracted
subdivision of an authority that establishes, implements, and
collects fees from pricing approved by the board for the provision
of their products and services, establishes percentage
contributions to the general fund of the qualified city, and that
does 1 or more of the following:
(i) Sells, distributes, and inspects commercial, residential,
and consumer exterior illumination products related to the
effective, efficient, and uniform delivery of electricity.
(ii) Buys, leases, and sells real property.
(iii) Manages the coordination of asset improved homeowner
relocation and wrap-around expense budget programs that are
designed to increase community reinvestment act loan underwriting
under the community reinvestment act of 1977, 12 USC 2901 to 2908,
population density, efficient delivery of city services, and
improved neighborhood stabilization and investment through targeted
abatement, rehabilitation, and remodeling resources that maintain
or increase property value and local resident wealth.
(f) "Chief executive officer" means the mayor of a qualified
city.
(g) "Legislative body" means the elected body of a qualified
city possessing the legislative power of the qualified city.
(h) "Qualified city" means a city with a population of more
than 600,000 according to the most recent federal decennial census.
(i) "Solid state lighting" means a light emitting diode (LED)
street lamp system.
(j) "Wrap-around expense budget" means a home mortgage plan
that includes down payment assistance, a credit-based fixed rate
mortgage, and a monthly payment that includes the payment of
property taxes, and includes 1 or more expenses not limited to
abatement, repair and remodeling, transportation, moving expenses,
and a forgivable second mortgage.
Sec. 5. (1) A qualified city may form a public lighting
infrastructure and housing stock inventory investment authority.
(2) The name of an authority formed under this section shall
include the name of the qualified city forming the authority and
the phrase "public lighting infrastructure and housing stock
inventory investment authority".
(3) An authority formed under this section shall be a
municipal public body corporate and politic and an authority
authorized by section 27 of article VII of the state constitution
of 1963 and shall possess the powers and duties necessary for
carrying out the purposes of its formation. The enumeration of
specific powers in this act shall not be construed as a limitation
on the general powers of the authority. The authority shall not be
an authority or agency of this state.
Sec. 7. (1) An authority created under this act shall be
directed and governed by a board of directors consisting of 5
voting members. The voting members of a board shall include all of
the following:
(a) One individual, appointed by the chief executive officer
of the qualified city, who is either of the following:
(i) An electrical engineer who is a professional engineer
licensed under article 20 of the occupational code, 1980 PA 299,
MCL 339.2001 to 339.2014.
(ii) A certified public accountant who is licensed as a
certified public accountant under article 7 of the occupational
code, 1980 PA 299, MCL 339.720 to 339.736.
(b) One individual, appointed by the chief executive officer
of the qualified city, representing the economic growth corporation
of the qualified city.
(c) Two individuals appointed by the chief executive officer
of the qualified city from a list of not more than 6 candidates
submitted by the governor.
(d) One individual, appointed by the legislative body of the
qualified city, who is either of the following:
(i) An attorney licensed to practice in this state.
(ii) A mortgage lender. As used in this subparagraph, "mortgage
lender" means that term as defined in section 1a of the mortgage
brokers, lenders, and servicers licensing act, 1987 PA 173, MCL
445.1651a.
(2) The chief executive officer of the qualified city is the
chairperson of the board, but is a nonvoting member.
(3) Except as otherwise provided in this subsection, the
voting board members of the board shall be appointed for a term of
3 years. Initial appointments under subsection (1) shall be made
within 30 days of the creation of the authority. If a vacancy
occurs on the board, other than by expiration of a term, the
vacancy shall be filled in the same manner as the original
appointment for the remainder of the term. Board members may
continue to serve until a successor is appointed.
(4) Upon appointment to a board under this section, and upon
taking and filing of the oath of office required by section 1 of
article XI of the state constitution of 1963, a board member shall
enter office and exercise the duties of the office of board member.
(5) Board members shall serve without compensation but may be
reimbursed for actual and necessary expenses incurred while
attending board meetings or performing other authorized official
business of the authority.
Sec. 9. (1) Within not more than 30 days following the
appointment of members of a board, the board shall hold its first
meeting at a date and time determined by the chief executive
officer of the qualified city.
(2) The chief executive officer of the qualified city is the
chairperson of the board. At its first meeting, the board may elect
other officers as the board considers necessary. All officers,
except the chairperson, shall be elected annually by the board.
(3) A majority of the board members constitute a quorum for
the purpose of conducting business and exercising powers of the
authority. Official action may be taken by an authority upon the
vote of a majority of the board members present, unless the
authority bylaws require a larger number.
(4) The board shall adopt bylaws governing its procedures and
the holding of meetings.
(5) The business of the board 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. After
organization, a board shall adopt a schedule of regular meetings
and adopt a regular meeting date, place, and time. The board shall
meet weekly or more often as necessary. A special meeting of the
board may be called by the chairperson of the board or as provided
in the bylaws adopted by 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.
(6) A board shall keep a written or printed record of each
meeting, which record and any other document or record prepared,
owned, used, in the possession of, or retained by the authority 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.
(7) A board shall provide for a system of accounts for the
authority to conform to a uniform system required by law and for
the auditing of the accounts of the authority. The 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
also shall be in accordance with generally accepted government
auditing standards and shall satisfy federal regulations relating
to federal grant compliance audit requirements.
Sec. 11. (1) A board member 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 board member of an
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 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 member of a board is not 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 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
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 also may 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, 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.
(3) Board members are public servants subject to 1968 PA 317,
MCL 15.321 to 15.330, and are subject to any other applicable law
with respect to conflicts of interest. A board shall establish
policies and procedures requiring periodic disclosure of
relationships which may give rise to conflicts of interest. The
board shall require that a board member with a direct interest in
any matter before the authority disclose the board member's
interest and any reasons reasonably known to the board member why
the transaction may not be in the best interest of the public or
the authority before the board takes any action with respect to the
matter. The disclosure shall become part of the record of an
authority's proceedings.
(4) An authority shall establish an ethics manual governing
the conducting of authority business and the conduct of authority
officers. An authority shall establish policies that are no less
stringent than those provided for public officers and employees by
1973 PA 196, MCL 15.341 to 15.348, 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 board members of the authority. At a minimum,
the policies shall include compliance by each board member who
regularly exercises significant discretion over the award and
management of authority procurements with policies governing all of
the following:
(a) Immediate disclosure of the existence and nature of any
financial interest that could reasonably be expected to create a
conflict of interest.
(b) Withdrawal by a board 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 board member.
(c) Annual public financial disclosure of significant
financial interests as provided under this act.
(5) The appointing authority of a board member may remove the
board member from office for gross neglect of duty, corrupt conduct
in office, or any other misfeasance or malfeasance in office.
(6) A member of the board of an authority 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 2 years after the date his or her
membership on the board terminates.
Sec. 13. (1) Upon the appointment of the board, the chief
executive officer of the qualified city shall do both of the
following:
(a) Authorize the creation of a best value operating and
servicing agreement with the owner of the primary electric
distribution infrastructure that services the qualified city.
(b) Provide to the authority board a written statement of
executive direction concerning first year operations of the
authority.
(2) No later than June 1 of each year, the chief executive
officer of the qualified city shall provide to the board an annual
statement of executive direction.
Sec. 15. (1) No later than September 1 of each year, the board
shall, in collaboration with the chief executive officer of the
qualified city, prepare and submit to the legislative body of the
qualified city a proposed annual operating plan. The proposed
annual operating plan shall include, but is not limited to, all of
the following:
(a) The chief executive officer's statement of executive
direction.
(b) Staffing requirements.
(c) Payroll and expense budget.
(d) Revenue source and operating expense forecasts.
(e) Progress objectives relating to the creation of a single
solid state lighting electric distribution system.
(f) Schedules and budget relating to a single electric
distribution system integration.
(g) Schedules and budget relating to street pole and lamp
installation, upgrades, repair, maintenance, decommissioning, and
removal.
(h) Schedules and budget relating to electric distribution
line clearance.
(i) Progress goals relating to electric distribution line
clearance.
(j) Progress and plans relating to the acquisition,
reallocation, transfer, disencumbering, assignment, or sale of
nonoperating and nonessential public lighting department
facilities, equipment, and resources in a manner that reduces
financial liability without decreasing services and creates greater
operating efficiency for the authority.
(k) Goals relating to the review and establishment of exterior
industrial, commercial, and residential illumination standards,
lighting products, community supports, rebates, and enforcement
programs to compliment a solid state street lighting, lamping, and
public safety plan that is based on population and activity
density.
(l) Business enterprise unit descriptions, objectives, budgets,
and revenue and expense forecasts.
(m) Best value objectives.
(n) Neighborhoods in the qualified city selected for the
public housing stock inventory investment program, the
participating community reinvestment act lenders, and plans for
program candidate identification, screening, and education.
(2) No later than December 31 of each year, the legislative
body of the qualified city may propose amendments to the proposed
annual operating plan.
(3) No later than February 1 of each year, the board shall
provide a written report to the legislative body of the qualified
city that clearly states a reason for the inclusion or rejection of
each proposed amendment to the annual operating plan.
(4) No later than March 1 of each year, the board shall
prepare and submit to the chief executive officer of the qualified
city a final operating plan that includes an appendix that clearly
states each amendment to the annual operating plan proposed by the
legislative body of the qualified city and the board's reason for
the inclusion or rejection of each proposed amendment to the annual
operating plan.
(5) No later than March 31 of each year, the chief executive
officer of the qualified city shall present to the public the
annual operating plan for the authority.
Sec. 17. (1) The board shall prepare and submit a monthly
progress report to the chief executive officer of the qualified
city.
(2) The board shall appear before the legislative body of the
qualified city once a month and provide to the legislative body of
the qualified city the monthly progress report submitted to the
chief executive officer of the qualified city under subsection (1).
(3) No later than July 1 of each year, the board shall prepare
and present an annual report to the governor, the legislature, and
the United States secretary of energy concerning the operation of
the for the preceding year. In addition, the board shall prepare
and present to the governor, the legislature, and the United States
secretary of energy a needs forecast relating to the creation of a
single electric distribution system, advancing solid state
lighting, and tax credits supporting sustainable upgrades and
progress.
Sec. 19. The board shall do both of the following:
(a) Enter into a best value operating and servicing agreement
with the owner of the primary electric distribution infrastructure
serving the qualifying city to create a single electric
distribution system.
(b) Develop and operate a public housing stock inventory
investment program that matches inventory with first-time home
buyers and low-loan balance homeowners using a wrap-around expense
budget.
Sec. 21. The board may do any of the following:
(a) Issue bonds related to land acquisition, demolition and
clearance, economic development, public lighting infrastructure
maintenance, and project upgrades.
(b) Coordinate the authority's wrap-around expense budget
program with the qualifying city's lead abatement and low-income
energy efficiency and weatherization programs.
(c) Operate internal or contracted business enterprise units.
(d) Solicit and receive money, contributions, or other aid
from, but not limited to, nonprofit foundations.
Sec. 23. A business enterprise unit operated by a board shall
make contributions to the general fund of the qualified city.
Sec. 25. (1) A public housing stock inventory investment
program shall seek to improve a qualifying city's neighborhood
density and stability through increased residential mortgage
underwriting of authority screened and financially educated
borrowers who have been matched for participating mortgage lenders
on a fee basis with a property purchased or received by transfer
from the qualified city's inventory and placed in the wrap-around
expense budget program.
(2) An authority shall make internal or contracted business
enterprise unit program services available on a fee basis to
participating lenders that agree in the case of a default to return
an asset improved property unencumbered to the public housing stock
inventory investment program.
Sec. 27. (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) Revenue from its business enterprise units.
(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) Investment earnings on the revenues described in
subdivisions (a) to (d).
(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.
(3) The board by resolution may establish an enterprise
investment fund for the purpose of accumulating funds to pay for
the cost of supporting exterior residential property and commercial
business solid state lighting upgrades. Money for supplanting
portions of de-lamped areas with residential or commercial solid
state lighting, 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 the
enterprise investment fund and the payment of the expenses of
administration of the fund.
(4) 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.
(5) A financial obligation of an authority is a financial
obligation of the authority only and not a financial obligation of
this state or a qualified city. A financial obligation of the
authority shall not be transferred to this state or a qualified
city.
Sec. 29. (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 bond or municipal security that
bears no interest and appreciates as to principal amount. The bonds
or municipal securities authorized by this subsection shall be
exempt from section 305(2) and (3) of the revised municipal finance
act, 2001 PA 34, MCL 141.2305.
(3) All bonds, notes, 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.
(4) The issuance of bonds, notes, or other evidences of
indebtedness by an authority shall require approval of the board.
(5) 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 bonds, notes, or other
evidences of indebtedness or in connection with its then
outstanding bonds, notes, or other evidences of indebtedness.
(6) 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.
(7) 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 specified by the
agreement, securing the bonds, notes, or evidences of indebtedness
in connection with which the agreement is entered into.
(8) An authority upon approval by resolution of the board may
issue notes in anticipation of the proceeds of a proposed authority
bond issuance. The authority may pledge for the payment of the
principal, interest, or redemption premiums on the notes security
from 1 or more of the sources to secure the bonds and the proceeds
of the bonds to be issued to refund the notes. The pledge shall be
valid and binding from the time made. The security pledged and
received by an authority is immediately subject to the lien of the
pledge without physical delivery of the security or further action.
The lien is valid and binding against a person with a claim of any
kind against the authority whether or not the person has notice of
the pledge. Neither the resolution, trust indenture, nor any other
instrument creating a pledge must be filed or recorded to establish
and perfect a lien or security interest in the property pledged. In
the resolution, the authority shall declare the necessity of the
notes, the purpose of the notes, the principal amount of the notes
to be issued, and an estimated principal payment schedule for and
an estimated or maximum average annual interest rate on the notes.
The issuance and delivery of the notes shall be conclusive as to
the existence of the facts entitling the notes to be issued in the
principal amount of the notes and shall not be subject to attack.
The notes shall mature not more than the earlier of 3 years from
the date of issuance or 90 days after the expected date of issuance
of the bonds in anticipation of which the notes are issued and may
bear no interest or interest at a fixed or variable rate or rates
of interest per annum. The proceeds of notes issued under this
subsection shall be used only for the purpose to which the proceeds
of the bonds may be applied, the costs of issuance of the notes,
and the payment of principal and interest on the notes. Notes
issued under this section are exempt from the provisions of the
revised municipal finance act, 2001 PA 34, MCL 141.2101 to
141.2821.
Sec. 31. This state may maintain an annual loss reserve of
$50,000,000.00 for bad debt payments to an authority from any of
the following:
(a) A local government or school district that has entered
into a consent agreement under the local government and school
district fiscal accountability act, 2011 PA 4, MCL 141.1501 to
141.1531.
(b) A local government or school district that has an
emergency manager appointed for it under the local government and
school district fiscal accountability act, 2011 PA 4, MCL 141.1501
to 141.1531.
(c) A school district operating under the education
achievement authority.
Sec. 33. The legislature shall annually appropriate to each
authority created under this act $500,000.00 to the support the
administrative operations of the authority.