HB-4696, As Passed Senate, August 18, 2009
March 25, 2009, Introduced by Rep. Coulouris and referred to the Committee on Commerce.
A bill to amend 1984 PA 270, entitled
"Michigan strategic fund act,"
by amending section 23 (MCL 125.2023), as amended by 2002 PA 556.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 23. (1) The fund may borrow money and issue bonds or
notes for the following purposes:
(a) To provide sufficient funds for achieving the fund's
purposes and objectives including, but not limited to, amounts
necessary to pay the costs of acquiring a project or part of a
project; to make loans for the costs of a project or part of a
project; to make loans pursuant to section 7(r) for an export
related transaction; for making grants; for providing money to
guarantee or insure loans, leases, bonds, notes, or other
indebtedness; for making working capital loans; for all other
expenditures of the fund incident to and necessary or convenient to
carry out the fund's purposes, objectives, and powers; and for any
combination of the foregoing. The cost of a project may include
administrative costs including, but not limited to, engineering,
architectural, legal, and accounting fees that are necessary for
the project.
(b) To refund bonds or notes of the fund issued under this
act, of the job development authority issued under former 1975 PA
301, of the Michigan economic development authority issued under
former 1982 PA 70, of an economic development corporation issued
under the economic development corporations act, 1974 PA 338, MCL
125.1601 to 125.1636, or of a municipality issued under the
industrial development revenue bond act of 1963, 1963 PA 62, MCL
125.1251 to 125.1267, by the issuance of new bonds, whether or not
the bonds or notes to be refunded have matured or are subject to
prior redemption or are to be paid, redeemed, or surrendered at the
time of the issuance of the refunding bonds or notes; and to issue
bonds or notes partly to refund the bonds or notes and partly for
any other purpose provided for by this section.
(c) To pay the costs of issuance of bonds or notes under this
act; to pay interest on bonds or notes becoming payable prior to
the receipt of the first revenues available for payment of that
interest as determined by the board; and to establish, in full or
in part, a reserve for the payment of the principal and interest on
the bonds or notes in the amount determined by the board.
(2) The bonds and notes, including, but not limited to,
commercial paper, shall be authorized by resolution adopted by the
board, shall bear the date or dates, and shall mature at the time
or times not exceeding 50 years from the date of issuance, as the
resolution may provide. The bonds and notes shall bear interest at
the rate or rates as may be set, reset, or calculated from time to
time, or may bear no interest, as provided in the resolution. The
bonds and notes shall be in the denominations, be in the form,
either coupon or registered, carry the registration privileges, be
transferable, be executed in the manner, be payable in the medium
of payment, at the place or places, and be subject to the terms of
prior redemption at the option of the fund or the holders of the
bonds and notes as the resolution or resolutions may provide. The
bonds and notes of the fund may be sold at public or private sale
at the price or prices determined by the fund. For purposes of 1966
PA 326, MCL 438.31 to 438.33, this act and other acts applicable to
the fund shall regulate the rate of interest payable or charged by
the fund, and 1966 PA 326, MCL 438.31 to 438.33, does not apply.
Bonds and notes may be sold at a discount.
(3) Bonds or notes may be 1 or more of the following:
(a) Made the subject of a put or agreement to repurchase by
the fund or others.
(b) Secured by a letter of credit or by any other collateral
that the resolution may authorize.
(c) Reissued by the fund once reacquired by the fund pursuant
to any put or repurchase agreement.
(4) The fund may authorize by resolution any member of the
board to do 1 or more of the following:
(a) Sell and deliver, and receive payment for notes or bonds.
(b) Refund notes or bonds by the delivery of new notes or
bonds whether or not the notes or bonds to be refunded have
matured, are subject to prior redemption, or are to be paid,
redeemed, or surrendered at the time of the issuance of refunding
bonds or notes.
(c) Deliver notes or bonds, partly to refund notes or bonds
and partly for any other authorized purposes.
(d) Buy notes or bonds so issued at not more than the face
value of the notes or bonds.
(e) Approve interest rates or methods for fixing interest
rates, prices, discounts, maturities, principal amounts,
denominations, dates of issuance, interest payment dates,
redemption rights at the option of the fund or the holder, the
place of delivery and payment, and other matters and procedures
necessary to complete the transactions authorized.
(5) Except as may otherwise be expressly provided by the fund,
every issue of its notes or bonds shall be general obligations of
the fund payable out of revenues, properties, or money of the fund,
subject only to agreements with the holders of particular notes or
bonds pledging particular receipts, revenues, properties, or money
as security for the notes or bonds.
(6) The notes or bonds of the fund are negotiable instruments
within the meaning of and for all the purposes of the uniform
commercial code, 1962 PA 174, MCL 440.1101 to 440.11102, subject
only to the provisions of the notes or bonds for registration.
(7) Bonds or notes issued by the fund are not subject to the
terms of the revised municipal finance act, 2001 PA 34, MCL
141.2101 to 141.2821. The bonds or notes issued by the fund are not
required to be registered. A filing of a bond or note of the fund
is not required under the uniform securities act, 1964 PA 265, MCL
451.501 to 451.818, or the uniform securities act (2002), 2008 PA
551, MCL 451.2101 to 451.2703.
(8) A resolution authorizing notes or bonds may contain any or
all of the following covenants, which shall be a part of the
contract with the holders of the notes or bonds:
(a) A pledge of all or a part of the fees, charges, and
revenues made or received by the fund, or all or a part of the
money received in payment of lease rentals, or loans and interest
on the loans, and other money received or to be received to secure
the payment of the notes or bonds or of an issue of the notes or
bonds, subject to agreements with bondholders or noteholders as may
then exist.
(b) A pledge of all or a part of the assets of the fund,
including leases, or notes or mortgages and obligations securing
the same to secure the payment of the notes or bonds or of an issue
of notes or bonds, subject to agreements with noteholders or
bondholders as may then exist.
(c) A pledge of a loan, grant, or contribution from the
federal, state, or local government, or source in aid of a project
as provided for in this act.
(d) A pledge of money directly derived from payments from the
heritage trust fund created by the heritage trust fund act of 1982,
former 1982 PA 327.
(e) The use and disposition of the revenues and income from
leases, or from loans, notes, and mortgages owned by the fund.
(f) The establishment and setting aside of reserves or sinking
funds and the regulation and disposition of reserves or sinking
funds subject to this act.
(g) Limitations on the purpose to which the proceeds of sale
of the notes or bonds may be applied and limitations on pledging
those proceeds to secure the payment of other bonds or notes.
(h) Authority for and limitations on the issuance of
additional notes or bonds for the purposes provided for in the
resolution and the terms upon which additional notes or bonds may
be issued and secured. Additional bonds pledging money derived from
the heritage trust fund as provided in subdivision (d) may only be
issued if the issuance meets the requirements of section 204 of the
resolution adopted by the Michigan economic development authority
authorizing issuance of its bonds dated December 1, 1982, and any
requirement of former 1982 PA 70, provided that these requirements
do not apply if those bonds have been defeased.
(i) The procedure, if any, by which the terms of a contract
with noteholders or bondholders may be amended or abrogated, the
number of noteholders or bondholders who are required to consent to
an amendment or abrogation, and the manner in which the consent may
be given.
(j) Vest in a trustee or a secured party the property, income,
revenues, receipts, rights, remedies, powers, and duties in trust
or otherwise as the fund may determine necessary or appropriate to
adequately secure and protect noteholders and bondholders or to
limit or abrogate the rights of the noteholders and bondholders. A
trust agreement may be executed by the fund with any trustee who
may be located inside or outside this state to accomplish any of
the foregoing.
(k) Pay maintenance and repair costs of a project.
(l) The insurance to be carried on a project and the use and
disposition of insurance money and condemnation awards.
(m) The terms, conditions, and agreements upon which the
holder of the bonds, or a portion of the bonds, is entitled to the
appointment of a receiver by the circuit court. A receiver who is
appointed may enter and take possession of the project and maintain
it or lease or sell the project for cash or on an installment sales
contract and prescribe rentals and payments therefor and collect,
receive, and apply all income and revenues thereafter arising in
the same manner and to the same extent as the fund.
(n) Any other matters, of like or different character, which
in any way affect the security or protection of the notes or bonds.
(9) A pledge made by the fund is valid and binding from the
time the pledge is made. The money or property so pledged and
thereafter received by the fund is immediately subject to the lien
of the pledge without a physical delivery or further act. The lien
of a pledge is valid and binding as against parties having claims
of any kind in tort, contract, or otherwise against the fund and is
valid and binding as against the transfer of the money or property
pledged, irrespective of whether the parties have notice. Neither
the resolution, the trust agreement, nor any other instrument by
which a pledge is created need be recorded.
(10) A member of the board or a person executing the notes or
bonds is not liable personally on the notes or bonds and is not
subject to personal liability of accountability by reason of the
issuance of the notes or bonds.
(11) This state is not liable on notes or bonds of the fund,
and the notes or bonds shall not be considered a debt of this
state. The notes and bonds shall contain on their face a statement
indicating this fact.
(12) The notes and bonds of the fund are securities in which
the public officers and bodies of this state; municipalities and
municipal subdivisions; insurance companies, associations, and
other persons carrying on an insurance business; banks, trust
companies, savings banks, savings associations, and savings and
loan associations; investment companies; administrators, guardians,
executors, trustees, and other fiduciaries; and all other persons
who are authorized to invest in bonds or other obligations of this
state may properly and legally invest funds.
(13) The property of the fund and its income and operation is
exempt from all taxation by this state or any of its political
subdivisions, and all bonds and notes of the fund, the interest on
the bonds and notes, and their transfer are exempt from all
taxation by this state or any of its political subdivisions, except
for estate, gift, and inheritance taxes. The state covenants with
the purchasers and all subsequent holders and transferees of notes
and bonds issued by the fund under this act, in consideration of
the acceptance of and payment for the notes and bonds, that the
notes and bonds of the fund, issued pursuant to this act, the
interest on the notes and bonds, the transfer of the notes and
bonds, and all its fees, charges, gifts, grants, revenues,
receipts, and other money received or to be received and pledged to
pay or secure the payment of the notes or bonds shall at all times
be free and exempt from all state or local taxation provided by the
laws of this state, except for estate, gift, and inheritance taxes.
(14) The issuance of bonds and notes under this act is subject
to the agency financing reporting act, 2002 PA 470, MCL 129.171 to
129.177.
(15) For the purpose of more effectively managing its debt
service, the fund may enter into an interest rate exchange or swap,
hedge, or similar agreement with respect to its bonds or notes on
the terms and payable from the sources and with the security, if
any, as determined by a resolution of the board.