HOUSE BILL No. 5370


     October 31, 2001, Introduced by Reps. Vander Roest, George, Lipsey, Stewart, Kuipers, Schauer, Pappageorge and Mead and referred to the
Committee on Commerce.


        A bill to amend 1913 PA 380, entitled

   "An act to regulate gifts of real and personal property to
   cities, villages, townships, and counties, and the use of the
   those gifts; and to validate all such gifts made before the
   enactment of this act,"

   by amending the title and section 2 (MCL 123.872), as amended by

   1985 PA 9.

               THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

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                                    TITLE

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           An act to regulate gifts of real and personal property to

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      cities, villages, townships, and counties, and the use of  the

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      those gifts AND OTHER FUNDS; and to validate all such gifts made

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      before the enactment of this act.

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           Sec. 2.  (1) To provide a means and method to encourage and

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      assist businesses in locating and expanding in this state, and if

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      not prohibited by the terms of the grant, a city, village,



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      township, or county may use a federal, state, or local grant or

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      the proceeds of a federal, state, or local grant to make a

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      secured or unsecured loan or to make a grant to a private person,

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      to a corporation or other business association, to a city, vil-

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      lage, township, or county, or to an instrumentality of a city,

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      village, township, or county.  A COUNTY MAY MAKE A GRANT FROM ITS

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      GENERAL FUND TO AN ORGANIZATION THAT IS EXEMPT FROM TAXATION

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      UNDER SECTION 501(c)(3) OF THE INTERNAL REVENUE CODE OF 1986 TO

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      ESTABLISH A REVOLVING LOAN FUND TO MAKE LOANS TO A PRIVATE

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      PERSON, CORPORATION, OR OTHER BUSINESS ASSOCIATION FOR THE PUR-

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      POSES DESCRIBED IN THIS SECTION.

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           (2) A loan or grant made  pursuant to  UNDER subsection (1)

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      may be used for local public improvements or to encourage and

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      assist businesses in locating or expanding in this state, to pre-

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      serve jobs in this state, to encourage investment in the communi-

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      ties in this state, or for other public purposes.

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           (3) The right to repayment of a loan made under subsection

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      (1) may be assigned by a city, village, township, or county to an

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      entity, agency, or authority created pursuant to law, or to a

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      private corporation or association created to make and administer

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      loans made under subsection (1).

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           (4) A city, village, township, or county may receive loans

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       pursuant to  UNDER subsection (1) and issue loan revenue bonds

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      secured by the repayment of loans made under subsection (1).  For

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      the purposes specified in subsection (2), bonds issued pursuant

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      to this section shall be approved by the department of treasury

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      before their issuance, but shall not otherwise be subject to the



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      provisions of the municipal finance act,  Act No. 202 of the

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      Public Acts of 1943, being sections 131.1 to 139.3 of the

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      Michigan Compiled Laws  1943 PA 202, MCL 131.1 TO 139.3.  In

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      determining whether the issuance of the bonds shall be approved,

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      the department of treasury shall take into consideration the

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      following:

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           (a) Whether the bonds conform to the provisions of law.

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           (b) Whether the probable revenue and properties pledged for

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      payment of the bonds will be sufficient to pay the principal of

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      and interest on the bonds when due.

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           (c) Whether the amount of the proposed issue is sufficient

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      or excessive for the purpose for which the bonds are to be

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      issued.

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           (5) The loan revenue bonds shall not be general obligations

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      of the city, village, township, or county issuing the loan reve-

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      nue bonds.  The loan revenue bonds are declared to be issued for

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      an essential public and governmental purpose, and, together with

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      interest on those bonds and income from those bonds, shall be

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      exempted from all taxes.



















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