October 23, 2013, Introduced by Reps. Victory, Jacobsen, Howrylak and MacGregor and referred to the Committee on Financial Liability Reform.
A bill to amend 2005 PA 92, entitled
"School bond qualification, approval, and loan act,"
by amending section 5 (MCL 388.1925), as amended by 2012 PA 437.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 5. (1) A school district may apply to the state treasurer
for preliminary qualification of a proposed school bond issue by
filing an application in the form and containing the information
required by this act.
(2) An application for preliminary qualification of a school
bond shall contain all of the following information:
(a) The proposed ballot language to be submitted to the
electors.
(b) A description of the project or projects proposed to be
financed.
(c) A pro forma debt service projection showing the estimated
mills the school district will levy to provide revenue the school
district will use to pay the qualified bonds, any outstanding
qualified bonds, and any outstanding or projected qualified loans
of the school district. For the purpose of the pro forma debt
service projection, the school district may assume for the first 5
years following the date of the application the average growth or
decline in taxable value for the 5 years or such other period of
time requested by the school district if approved by the state
treasurer preceding the date of the application and the average
growth or decline rate for the 20 years immediately preceeding the
date of the application but not more than 3% or less than 0% growth
rate, for the remaining term of the proposed bonds.
(d) Evidence that the rate of utilization of each project to
be financed will be at least 85% for new buildings and 60% for
renovated facilities. If the projected enrollment of the district
would not otherwise support utilization at the rates described in
this subsection, the school district may include an explanation of
the actions the school district intends to take to address the
underutilization, including, if applicable, actions to close school
buildings or other actions designed to assure continued assured use
of the facilities being financed.
(e) Evidence that the cost per square foot of the project or
projects will be reasonable in light of economic conditions
applicable to the geographic area in which the school district is
located.
(f) Evidence that the school district will repay all
outstanding qualified bonds, the proposed qualified bonds, all
outstanding qualified loans, and all qualified loans expected to be
incurred with respect to all qualified bonds of the school
district, including the proposed qualified bond issue, not later
than the applicable final mandatory repayment date.
(g) The overall utilization rate of all school buildings in
the school district, excluding special education purposes.
(h) The total bonded debt outstanding of the school district
and the total taxable value of property in the school district for
the school district fiscal year in which the application is filed.
(i) A statement describing any environmental or usability
problems to be addressed by the project or projects.
(j) An architect's analysis of the overall condition of the
facilities to be renovated or replaced as a part of the project or
projects.
(k) An amortization schedule demonstrating that the weighted
average maturity of the qualified bond issue does not exceed 120%
of the average reasonably expected useful life of the facilities,
excluding land and site improvements, being financed or refinanced
with the proceeds of the qualified bonds, determined as of the
later of the date on which the qualified bonds will be issued or
the date on which each facility is expected to be placed in
service.
(l) An agreement that the school district will keep books and
records detailing the investment and expenditure of the proceeds of
the qualified bonds and, at the request of the state treasurer, the
school district will promptly, but not later than the date
specified in the request, which date shall be not less than 5
business days after the date of the request, submit information
requested by the state treasurer related to the detailed
information maintained by the school district as to the investment
and expenditure of the proceeds of its qualified bonds.
(m) Certification that each currently serving board member,
superintendent, and chief financial official of the school district
has participated in a financial training program about qualified
bonds approved by the department of treasury.