HB-4992, As Passed House, December 8, 2015

SUBSTITUTE FOR

HOUSE BILL NO. 4992

A bill to amend 1909 PA 278, entitled

"The home rule village act,"

by amending section 24b (MCL 78.24b), as amended by 2002 PA 277.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 24b. (1) The governing body of a village may provide by

resolution for the acquisition or financing of energy conservation

improvements to be made to village facilities or infrastructure and

may pay for the improvements or the financing or refunding of the

improvements from operating funds of the village or from the

savings that result from the energy conservation improvements.

Energy conservation improvements may include, but are not limited

to, heating, ventilating, or air-conditioning system improvements,

fenestration improvements, roof improvements, the installation of

any insulation, the installation or repair of heating, ventilating,

or ~~air conditioning~~ air-conditioning controls, and entrance or exit

way closures, information technology improvements associated with

an energy conservation improvement, and municipal utility

improvements associated with an energy conservation improvement.

(2) The governing body of a village may acquire, finance, or

refund 1 or more of the energy conservation improvements described

in subsection (1) by installment contract, which may include a

lease-purchase agreement described in subsection (5), or may borrow

money and issue notes for the purpose of securing funds for the

improvements or may enter into contracts in which the cost of the

energy conservation improvements is paid from a portion of the

savings that result from the energy conservation improvements.

These contractual agreements may provide that the cost of the

energy conservation improvements are paid only if the energy

savings are sufficient to cover their cost. An installment

contract, a lease-purchase agreement described in subsection (5),

or notes issued pursuant to this subsection shall extend for a

period of time not to exceed 10 20 years from the date of

installation of the energy conservation improvement. Notes issued

pursuant to this subsection shall be full faith and credit, tax

limited obligations of the village, payable from tax levies and the

general fund as pledged by the governing body of the village. The

notes are subject to the revised municipal finance act, 2001 PA 34,

MCL 141.2101 to 141.2821. A lease-purchase agreement issued

pursuant to this subsection shall not be subject to the revised

municipal finance act, 2001 PA 34, MCL 141.2101 to 141.2821, and

shall not be a municipal security or a debt as those terms are

defined in that act. This subsection does not limit in any manner

the borrowing or bonding authority of a village as provided by law.

(3) If energy conservation improvements are made as provided

in this section, the governing body of a village shall report the

following information to the department of treasury within 60 days

of the completion of the improvements:

(a) Name of each facility to which an improvement is made and

a description of the conservation improvement.

(b) Actual energy consumption during the 12-month period

before completion of the improvement.

(d) Estimated annual energy savings.

(4) If energy conservation improvements are made as provided

in this section, the governing body of a village shall report to

the department of treasury, by July 1 of each of the 5 years after

the improvements are completed, only the actual annual energy

consumption of each facility to which improvements are made. The

forms for the reports required by this section shall be furnished

by the department of treasury.

(5) An installment contract described in this section may

include a lease-purchase agreement, which may be a multiyear

contractual obligation that provides for automatic renewal unless

positive action is taken by the legislative body to terminate that

contract. Payments under a lease-purchase agreement shall be a

current operating expense subject to annual appropriations of funds

by the legislative body and shall obligate the legislative body

only for those sums payable during the fiscal year of contract

execution or any renewal year thereafter. The legislative body may

make payments under a lease-purchase agreement from any legally

available funds or from a combination of energy or operational

savings, capital contributions, future replacement costs avoided,

or billable revenue enhancements that result from energy

conservation improvements, provided that the legislative body has

determined that those funds are sufficient to cover, in aggregate

over the full term of the contractual agreement, the cost of the

energy conservation improvements. The lease-purchase agreement will

terminate immediately and absolutely and without further obligation

on the part of the legislative body at the close of the fiscal year

in which it was executed or renewed or at such time as appropriated

and otherwise unobligated funds are no longer available to satisfy

the obligations of the legislative body under the lease-purchase

agreement. During the term of the lease-purchase agreement, the

legislative body shall be the vested owner of the energy

conservation improvements and may grant a security interest in the

energy conservation improvements to the provider of the lease-

purchase agreement. Upon the termination of the lease-purchase

agreement and the satisfaction of the obligations of the

legislative body, the provider of the lease-purchase agreement

shall release its security interest in the energy conservation

improvements.

Enacting section 1. This amendatory act takes effect 90 days

after the date it is enacted into law.