HOUSE BILL No. 5733 February 21, 2002, Introduced by Reps. Gilbert, Hummel, Julian and Stallworth and referred to the Committee on Transportation. A bill to amend 1951 PA 51, entitled "An act to provide for the classification of all public roads, streets, and highways in this state, and for the revision of that classification and for additions to and deletions from each clas- sification; to set up and establish the Michigan transportation fund; to provide for the deposits in the Michigan transportation fund of specific taxes on motor vehicles and motor vehicle fuels; to provide for the allocation of funds from the Michigan trans- portation fund and the use and administration of the fund for transportation purposes; to set up and establish the truck safety fund; to provide for the allocation of funds from the truck safety fund and administration of the fund for truck safety pur- poses; to set up and establish the Michigan truck safety commis- sion; to establish certain standards for road contracts for cer- tain businesses; to provide for the continuing review of trans- portation needs within the state; to authorize the state trans- portation commission, counties, cities, and villages to borrow money, issue bonds, and make pledges of funds for transportation purposes; to authorize counties to advance funds for the payment of deficiencies necessary for the payment of bonds issued under this act; to provide for the limitations, payment, retirement, and security of the bonds and pledges; to provide for appropria- tions and tax levies by counties and townships for county roads; to authorize contributions by townships for county roads; to pro- vide for the establishment and administration of the state trunk line fund, critical bridge fund, comprehensive transportation fund, and certain other funds; to provide for the deposits in the state trunk line fund, critical bridge fund, comprehensive 05318'01 * MRM 2 transportation fund, and certain other funds of money raised by specific taxes and fees; to provide for definitions of public transportation functions and criteria; to define the purposes for which Michigan transportation funds may be allocated; to provide for Michigan transportation fund grants; to provide for review and approval of transportation programs; to provide for submis- sion of annual legislative requests and reports; to provide for the establishment and functions of certain advisory entities; to provide for conditions for grants; to provide for the issuance of bonds and notes for transportation purposes; to provide for the powers and duties of certain state and local agencies and offi- cials; to provide for the making of loans for transportation pur- poses by the state transportation department and for the receipt and repayment by local units and agencies of those loans from certain specified sources; and to repeal acts and parts of acts," by amending sections 10, 11b, 18b, and 18e (MCL 247.660, 247.661b, 247.668b, and 247.668e), section 10 as amended by 2000 PA 188, section 11b as amended by 1992 PA 223, and sections 18b and 18e as amended by 1985 PA 201, and by adding section 11f; and to repeal acts and parts of acts. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 10. (1) A fund to be known as the Michigan transporta- 2 tion fund is established and shall be set up and maintained in 3 the state treasury as a separate fund. Money received and col- 4 lected under1927 PA 150, MCL 207.101 to 207.202THE MOTOR FUEL 5 TAX ACT, 2000 PA 403, MCL 207.1001 TO 207.1170, except a license 6 fee provided in that act, and a tax, fee, license, and other 7 money received and collected under sections 801 to 810 of the 8 Michigan vehicle code, 1949 PA 300, MCL 257.801 to 257.810, 9 except a truck safety fund fee provided in section 801(1)(k) of 10 THE MICHIGAN VEHICLE CODE, 1949 PA 300, MCL 257.801, and money 11 received under the motor carrier act, 1933 PA 254, MCL 475.1 to 12 479.43, shall be deposited in the state treasury to the credit of 13 the Michigan transportation fund. In addition, income or profit 05318'01 * 3 1 derived from the investment of money in the Michigan 2 transportation fund shall be deposited in the Michigan transpor- 3 tation fund. Except as provided in this act, no other money, 4 whether appropriated from the general fund of this state or any 5 other source, shall be deposited in the Michigan transportation 6 fund. Except as otherwise provided in this section, the legisla- 7 ture shall appropriate funds for the necessary expenses incurred 8 in the administration and enforcement of1927 PA 150,9MCL 207.101 to 207.202, 1933 PA 254, MCL 475.1 to 479.43THE 10 MOTOR FUEL TAX ACT, 2000 PA 403, MCL 207.1001 TO 207.1170, and 11 sections 801 to 810 of the Michigan vehicle code, 1949 PA 300, 12 MCL 257.801 to 257.810. Funds appropriated for necessary 13 expenses shall be based upon established cost allocation method- 14 ology that reflects actual costs.Beginning with the fiscal15year ending September 30, 1998 and the next 2 succeeding fiscal16years thereafter, funds appropriated for these administrative17expenses for all state agencies and departments, other than the18department, the commission, the department of environmental qual-19ity expedited permit processing program for road agencies, the20department of state, and the attorney general shall be phased out21until further funds are no longer appropriated for this purpose.22 All money in the Michigan transportation fund is apportioned and 23 appropriated in the following manner: 24 (a) Not more than $3,000,000.00 as may be annually appropri- 25 ated each fiscal year to the state trunk line fund for subsequent 26 deposit in the rail grade crossing account. 05318'01 * 4 1 (b) Not less than $3,000,000.00 each year to the critical 2 bridge fund established in section 11b for the purpose of payment 3 of the principal, interest, and redemption premium on any notes 4 or bonds issued by the state transportation commission under 5 section 11b. 6 (c) Revenue from 3 cents of the tax levied under section 72(1) of 1950 PA 127, MCL 207.1028 OF THE MOTOR FUEL TAX ACT, 8 2000 PA 403, MCL 207.1008, to the state trunk line fund, county 9 road commissions, and cities and villages in the percentages pro- 10 vided in subdivision (i). 11 (d) Revenue from 1 cent of the tax levied under section 122(1) of 1950 PA 127, MCL 207.1028 OF THE MOTOR FUEL TAX ACT, 13 2000 PA 403, MCL 207.1008, to the state trunk line fund for 14 repair of state bridges under section 11. 15 (e) $43,000,000.00 to the state trunk line fund for debt 16 service costs on state of Michigan projects. 17 (F) 85% OF THE REVENUE FROM 4 CENTS OF THE TAX LEVIED UNDER 18 SECTION 8(1)(B) OF THE MOTOR FUEL TAX ACT, 2000 PA 403, 19 MCL 207.1008, AND 85% OF THE REVENUE FROM 4 CENTS OF THE TAX 20 LEVIED UNDER SECTION 2(1) OF THE MOTOR CARRIER FUEL TAX ACT, 1980 21 PA 119, MCL 207.212, TO THE STATE TRUNK LINE FUND FOR SUBSEQUENT 22 DEPOSIT IN THE COMMERCIAL HIGHWAY FUND DESCRIBED IN SECTION 11F. 23 (G) 15% OF THE REVENUE FROM 4 CENTS OF THE TAX LEVIED UNDER 24 SECTION 8(1)(B) OF THE MOTOR FUEL TAX ACT, 2000 PA 403, 25 MCL 207.1008, AND 15% OF THE REVENUE FROM 4 CENTS OF THE TAX 26 LEVIED UNDER SECTION 2(1) OF THE MOTOR CARRIER FUEL TAX ACT, 1980 27 PA 119, MCL 207.212, TO THE STATE TRUNK LINE FUND FOR SUBSEQUENT 05318'01 * 5 1 DEPOSIT IN THE CRITICAL BRIDGE FUND FOR PURPOSES DESCRIBED IN 2 SECTION 11B(4). 3 (H)(f)10% to the comprehensive transportation fund for 4 the purposes described in section 10e. 5 (I)(g)$36,775,000.00 to the state trunk line fund for 6 subsequent deposit in the transportation economic development 7 fund,and, as of September 30, 1997,with first priority for 8 allocation to debt service on bonds issued to fund transportation 9 economic development fund projects. In addition, beginning 10 October 1, 1997, $3,500,000.00 is appropriated from the Michigan 11 transportation fund to the state trunk line fund for subsequent 12 deposit in the transportation economic development fund to be 13 used for economic development road projects in any of the tar- 14 geted industries described in section 9(1)(a) of 1987 PA 231, 15 MCL 247.909. 16 (J)(h)Not less than $33,000,000.00 as may be annually 17 appropriated each fiscal year to the local program fund created 18 in section 11e. 19 (K)(i)The balance of the Michigan transportation fund as 20 follows, after deduction of the amounts appropriated in subdivi- 21 sions (a) through(h)(J) and section 11b: 22 (i) 39.1% to the state trunk line fund for the purposes 23 described in section 11. 24 (ii) 39.1% to the county road commissions of the state. 25 (iii) 21.8% to the cities and villages of the state. 26 (2) The money appropriated pursuant to this section shall be 27 used for the purposes as provided in this act and any other 05318'01 * 6 1 applicable act. Subject to the requirements of section 9b, the 2 department shall develop programs in conjunction with the 3 Michigan state chamber of commerce and the Michigan minority 4 business development council to assist small businesses, includ- 5 ing those located in enterprise zones and those located in empow- 6 erment zones as determined under federal law, as defined by law 7 in becoming qualified to bid. 8 (3) Thirty-one and one-half percent of the funds appropri- 9 ated to this state from the federal government pursuant to 23 10 U.S.C. 157, commonly known as minimum guarantee funds, shall be 11 allocated to the transportation economic development fund, if 12 such an allocation is consistent with federal law. These funds 13 shall be distributed 16-1/2% for development projects for rural 14 counties as defined by law and 15% for capacity improvement or 15 advanced traffic management systems in urban counties as defined 16 by law. Federal funds allocated for distribution under this sec- 17 tion shall be eligible for obligation and use by all recipients 18 as defined by the transportation equity act for the 21st century, 19 Public Law 105-178, 112 Stat. 107. 20 Sec. 11b. (1) During each April, there is appropriated to a 21 critical bridge fund from the Michigan transportation fund, 22 $5,000,000.00. The money appropriated to a critical bridge fund 23 and the interest accruing to that fund shall be expended for a 24 critical bridge program to be administered by the department to 25 provide financial assistance to highway authorities for the 26 improvement or reconstruction of existing bridges or for the 27 construction of bridges to replace existing bridges in whole or 05318'01 * 7 1 in part. This section is not subject to section 12(15) or 2 section 13(5). 3 (2) The state transportation commission shall borrow money 4 and issue notes or bonds in an amount of not less than 5 $30,000,000.00 to supplement the funding provided for the local 6 bridge program under subsection (1). The bonds or notes issued 7 pursuant to this subsection may be issued by the commission for 8 any purpose for which other critical bridge funds may be used 9 under this section. The bonds or notes authorized by this sub- 10 section shall be issued by resolution of the state transportation 11 commission consistent with the requirements of section 18b. 12 (3) The state transportation department shall promulgate 13 rules pursuant toAct No. 306 of the Public Acts of 1969, as14amended, being sections 24.201 to 24.328 of the Michigan Compiled15LawsTHE ADMINISTRATIVE PROCEDURES ACT OF 1969, 1969 PA 306, 16 MCL 24.201 TO 24.328, governing the administration of the criti- 17 cal bridge program. The rules shall set forth the eligibility 18 criteria for financial assistance under the program and other 19 matters related to the program as the department considers neces- 20 sary and desirable. The department shall take into consideration 21 the availability of federal aid and other financial resources of 22 the highway authority responsible for the bridge, the importance 23 of the bridge to the highway, road, or street network, and the 24 condition of the existing bridge. The department shall not 25 receive more than 38.4% of the critical bridge funds available 26 during a 5-year period for expenditures on the state trunk line 27 system. 05318'01 * 8 1 (4) REVENUES THAT ARE TRANSFERRED TO THE CRITICAL BRIDGE 2 FUND PURSUANT TO SECTION 10(1)(I) SHALL ONLY BE USED ON FEDERAL 3 AID HIGHWAY BRIDGES AS DEFINED UNDER SECTION 101(a)(5) OF TITLE 4 23 OF THE UNITED STATES CODE, 23 U.S.C. 101. 5 (5) ON OR BEFORE JANUARY 1 OF EACH CALENDAR YEAR, THE 6 ADVISORY COMMITTEE CREATED PURSUANT TO R 247.154 OF THE MICHIGAN 7 ADMINISTRATIVE CODE SHALL AFFIRM IN WRITING TO THE DEPARTMENT 8 THAT THE REVENUE TRANSFERRED TO THE CRITICAL BRIDGE FUND UNDER 9 SECTION 10(1)(I) DURING THE PRECEDING FISCAL YEAR WAS SPENT ONLY 10 FOR PURPOSES AUTHORIZED UNDER SUBSECTION (4). 11 SEC. 11F. (1) THERE IS CREATED WITHIN THE STATE TRUNK LINE 12 FUND THE COMMERCIAL HIGHWAY FUND FOR THE PURPOSE OF RECEIVING 13 FUNDS ALLOCATED FROM THE MICHIGAN TRANSPORTATION FUND AND THE 14 STATE TRUNK LINE FUND. FUNDS RECEIVED INTO THE COMMERCIAL HIGH- 15 WAY FUND SHALL BE EXPENDED ONLY FOR THE CONSTRUCTION, RECONSTRUC- 16 TION, REHABILITATION, RESTORATION, OR RESURFACING OF STATE TRUNK 17 LINE HIGHWAYS AND BRIDGES BELONGING TO THE NATIONAL HIGHWAY 18 SYSTEM DESCRIBED IN SECTION 103(b) OF TITLE 23 OF THE UNITED 19 STATES CODE, 23 U.S.C. 103. 20 (2) ON OR BEFORE JANUARY 1 OF EACH CALENDAR YEAR, THE 21 DEPARTMENT SHALL AFFIRM IN WRITING TO THE STATE TRANSPORTATION 22 COMMISSION THAT REVENUE TRANSFERRED TO THE COMMERCIAL HIGHWAY 23 FUND UNDER SECTION 10(1)(H) DURING THE PRECEDING FISCAL YEAR WAS 24 SPENT ONLY ON PURPOSES AUTHORIZED UNDER THIS SECTION. 25 Sec. 18b. (1) The state transportation commission may 26 borrow money and issue notes or bonds for the following 27 purposes: 05318'01 * 9 1 (a) To pay all or any portion of or to make loans, grants, 2 or contract payments to pay all or any portion of any capital 3 costs for the purposes described in section 9 of article IX of 4 the state constitution of 1963. 5 (b) To pay the principal or the principal and interest on 6 notes and, if the state transportation commission considers 7 refunding to be expedient, to refund bonds payable from money in 8 the state trunk line fund or the comprehensive transportation 9 fund or received or to be received from the motor vehicle highway 10 fund or the Michigan transportation fund regardless of when the 11 refunded bonds were issued, by the issuance of new bonds, whether 12 or not the bonds to be refunded have matured or are subject to 13 prior redemption or are to be paid, redeemed, or surrendered at 14 the time of issuance of the refunding bonds; and to issue new 15 bonds partly to refund bonds or pay notes then outstanding and 16 partly for any other transportation purpose authorized by this 17 act. 18 (c) To pay all costs relating to the issuance of the bonds 19 or notes described in this section, including, but not limited 20 to, legal, engineering, accounting, and consulting services, 21 interest on bonds or notes forsuchTHE periodasdetermined 22 by the state transportation commission in the resolution autho- 23 rizing the bonds or notes and a reserve for payment of principal, 24 interest, and redemption premiums on the bonds or notes in an 25 amount determined by the state transportation commission in the 26 resolution authorizing the bonds or notes. 05318'01 * 10 1 (2) The refunding bonds described in subsection (1)(b) shall 2 be sold and the proceeds and the earnings or profits from the 3 investment of those proceeds applied in whole or in part to the 4 purchase, redemption, or payment of the principal or the princi- 5 pal and interest of the bonds to be refunded and the refunding 6 bonds issued by the state transportation commission under subsec- 7 tion (1)(b) and the costs described in subsection (1)(c). 8 Refunding notes or bonds shall be considered to be issued for the 9 same purpose or purposes for which the notes or bonds to be 10 refunded were issued. 11 (3) The notes or bonds authorized by this section shall be 12 issued only after authorization by resolution of the state trans- 13 portation commission., whichTHE resolution shall contain ALL 14 OF the following: 15 (a) An irrevocable pledge providing for the payment of the 16 principal and interest on the notes or bonds from moneywhich17 THAT is restricted as to use by section 9 of article IX of the 18 state constitution of 1963 andwhichTHAT is deposited or to be 19 deposited in the comprehensive transportation fund, in the case 20 of bonds or notes issued for comprehensive transportation pur- 21 poses as defined by law, or in the state trunk line fund, in the 22 case of bonds or notes issued for transportation purposes 23 described in the second paragraph of section 9 of article IX of 24 the state constitution of 1963, or in the case of notes or bonds, 25 if the resolution authorizing the notes or bonds provides, from 26 money received or to be received by the state transportation 27 department from the proceeds of bonds or renewal notes to be 05318'01 * 11 1 issued after the date of the resolution or from money received or 2 to be received from the proceeds of the grants described in sub- 3 section (9). If the resolution authorizing the bonds or notes 4soprovides, a portion of the principal or interest on the 5 bonds or notes may be secured by an irrevocable pledge of money 6 deposited in the comprehensive transportation fund or the state 7 trunk line fund, and the balance of the principal and interest 8 secured by an irrevocable pledge of the proceeds of bonds or 9 renewal notes or money received or to be received from the pro- 10 ceeds of the grants described in subsection (9). 11 (b) A brief statement describing the projects for which the 12 notes or bonds are to be issued and in the case of notes or bonds 13 to pay notes or refund bonds, a description of the notes or bonds 14 to be paid or refunded. For purposes of this section and section 15 18k, in connection with bonds issued to fund the loan program 16 established under section 11(7) to (12), the loan program shall 17 constitute the project, and it shall not be necessary to specify 18 the particular item or costs of a particular item to be financed 19 from any particular loan made under the loan program. 20 (c) The estimated cost of the projects,orTHE ESTIMATED 21 COST OF refunding, or THE ESTIMATED COST OF refinancing. 22 (d) The detail of the notes or bonds including the date of 23 issue, maturity date or dates of the bonds or notes, the maximum 24 interest rate, the dates of payment of interest, the paying 25 agents, the transfer agent or agents, the provisions for regis- 26 tration, the redemption provisions, and the manner of execution 27 or, as provided in subsection (11)(d), the limitations within 05318'01 * 12 1 whichsuchTHE REQUIRED detail may be determined by the person 2 designated by the commission. 3 (4) If after the issuance of notes or bonds, the state 4 transportation commission determines that a project for which the 5 notes or bonds are to be issued should be changed, the state 6 transportation commission, by resolution, adopted after the 30 7 days' notice of intention to adopt the resolution has been given 8 to the appropriations committees of the senate and the house of 9 representatives, shall amend the resolution authorizing the bonds 10 or notes to change the description of the project or projects or 11 to substitute a different project or projects for the project for 12 which the notes or bonds were issued and shall make other revi- 13 sions in the resolution authorizing the notes or bonds with 14 respect to cost as may be necessary to permit the change in or 15 substitution of a project or projects. 16 (5) Before October 1, 1979, the total amount of bonds and 17 notes issued pursuant to this section for comprehensive transpor- 18 tation purposes as defined by law shall not exceed an amount as 19 will be serviced as to maximum principal and interest require- 20 ments by a sum equal to the amount deposited to the credit of the 21 general transportation fund for the fiscal year ending 22 September 30, 1977. After September 30, 1979, the total amount 23 of bonds and notes issued pursuant to this section for comprehen- 24 sive transportation purposes as defined by law shall not exceed 25 an amount as will be serviced, out of state funds only, as to 26 maximum annual principal and interest requirements by an amount 27 equal to 50% of the total amount of money from taxes, the use of 05318'01 * 13 1 which money is restricted by section 9 of article IX of the state 2 constitution of 1963, and which money is deposited in the state 3 treasury to the credit of the comprehensive transportation fund 4 during the state fiscal year immediately preceding the issuance 5 of the bonds or notes. 6 (6) The total amount of bonds and notes issued pursuant to 7 this section for transportation purposes described in the second 8 paragraph of section 9 of article IX of the state constitution of 9 1963 shall not exceed an amount as will be serviced as to the 10 maximum principal and interest requirements by a sum equal to 50% 11 of the total of the amount of money received from taxes, the use 12 of which is restricted by section 9 of article IX of the state 13 constitution of 1963 and which is deposited in the state treasury 14 to the credit of the state trunk line fund during the state 15 fiscal year immediately preceding the issuance of the bonds or 16 notes. 17 (7) The principal or principal and interest or the portion 18 of principal or interest of bonds or noteswhichTHAT are 19 issued in anticipation of the issuance of bonds or renewal notes 20 or of federal grants as provided in subsection (9) andwhich21 THAT do not pledge for their payment money in the state trunk 22 line fund or the comprehensive transportation fund or money 23 received or to be received by the state transportation department 24 from the Michigan transportation fund or the motor vehicle high- 25 way fund shall not be considered to be principal and interest 26 requirements subject to the limitation set forth in subsections 27 (5) and (6). The principal of and interest on notes or bonds 05318'01 * 14 1 refunded or for the refunding of which refunding bonds have been 2 sold, whether the bonds to be refunded are to be retired at the 3 time of delivery of the refunding bonds or not, shall not be con- 4 sidered to be principal and interest requirements subject to the 5 limitation set forth in subsections (5) and (6). 6 (8) In computing the maximum annual principal and interest 7 requirements under subsection (6), the total outstanding maximum 8 annual contributions required to be made by the state highway 9 commission and the state transportation commission pursuant to 10 contracts entered into under the authorization of section 18d, 11 which contributions are pledged to the payment of bonds issued 12 under section 18d, shall be included in the amount. 13 (9) The state transportation commission may borrow money and 14 issue notes or bonds in anticipation of the receipt of grants 15 from the United States of America or any agency or instrumental- 16 itythereofOF THE UNITED STATES OF AMERICA and may pledge for 17 the payment of the principal, interest, and redemption premiums 18 onsuchTHE notes or bonds 1 or more of the following: 19 (a) The proceeds of anysuchgrant,andany investment 20 earnings, or ANY gainthereonON THE NOTES OR BONDS. 21 (b) If deemed advisable by the state transportation commis- 22 sion, moneywhichTHAT is restricted as to use by section 9 of 23 article IX of the state constitution of 1963, andwhichTHAT is 24 deposited or to be deposited in the comprehensive transportation 25 fund, in the case of bonds or notes issued for comprehensive 26 transportation purposes as defined by law, or in the state trunk 27 line fund, in the case of bonds or notes issued for 05318'01 * 15 1 transportation purposes described in the second paragraph of 2 section 9 of article IX of the state constitution of 1963. 3 (c) IfdeemedCONSIDERED advisable by the state transpor- 4 tation commission, money received or to be received by the state 5 from the sale of the bonds or notes described in this section to 6 be issued after the issuance of the notes or bonds described in 7 this subsection and any investment earnings or gain thereon. 8 (10) Bonds or notes may be issued under this section as sep- 9 arate issues or series with different dates of issuance, but the 10 aggregate of the bonds or notes shall be subject to the limita- 11 tions set forth in this section. 12 (11) The state transportation commission in determining to 13 issue bonds or notes may do 1 or more of the following: 14 (a) Authorize and enter into insurance contracts, agreements 15 for lines of credit, letters of credit, commitments to purchase 16 obligations, remarketing agreements, reimbursement agreements, 17 and any other transactions to provide security to assure timely 18 payment of any bonds or notes. 19 (b) Authorize payment from the proceeds of the bonds or 20 notes or other funds available, of the cost of issuance, includ- 21 ing, but not limited to, fees for placement, fees or charges for 22 insurance, letters of credit, lines of credit, remarketing agree- 23 ments, reimbursement agreements, or purchase or sales agreements 24 or commitments, or other agreements to provide security to assure 25 timely payment of bonds or notes. 26 (c) Authorize principal and interest to be payable from 1 or 27 more of the following: 05318'01 * 16 1 (i) Money described in subsection (3)(a). 2 (ii) Proceeds of bonds or notes. 3 (iii) Earning on proceeds of bonds or notes or other funds 4 held for payment of bonds or notes. 5 (iv) Proceeds of any other security provided to assure 6 timely payment of the bonds or notes. 7 (v) Proceeds of federal grants and other money described in 8 subsection (9). 9 (vi) Any combination of the sources described in subpara- 10 graphs (i) to (v). 11 (d) Authorize or provide for a person designated by the 12 state transportation commission, but only within limitations 13whichTHAT shall be contained in the authorization resolution 14 of the state transportation commission, to do 1 or more of the 15 following: 16 (i) Sell and deliver and receive payment for bonds or 17 notes. 18 (ii) Refund bonds or notes by the delivery of new bonds or 19 notes, whether or not the bonds or notes to be refunded have 20 matured or are subject to redemption prior to maturity on the 21 date of delivery of the refunding bonds or notes. 22 (iii) Deliver bonds or notes partly to refund bonds or notes 23 and partly for any other authorized purposes. 24 (iv) Buy, hold without cancellation, or sell bonds or notes 25 so issued. 26 (v) Approve interest rates or methods for fixing interest 27 rates, prices, discounts, maturities, principal amounts, 05318'01 * 17 1 denominations, dates of issuance, interest payment dates, 2 optional or mandatory redemption or tender rights and obligations 3 to be exercised by the state transportation commission or the 4 holder, the place of delivery and payment, and other matters and 5 procedures necessary to complete the transactions authorized. 6 (E) ENTER INTO INTEREST RATE EXCHANGES OR SWAPS, HEDGES, OR 7 SIMILAR AGREEMENTS WITH RESPECT TO ITS BONDS OR NOTES IN THE SAME 8 MANNER AND SUBJECT TO THE SAME LIMITATIONS AND CONDITIONS PRO- 9 VIDED FOR A MUNICIPALITY IN SECTION 317 OF THE REVISED MUNICIPAL 10 FINANCE ACT, 2001 PA 34, MCL 141.2317. 11 (12) If additionally secured as provided inthissubsec- 12 tion (11), the bonds or notes, notwithstanding other provisions 13 of this act, may be made payable or subject to purchase on demand 14 orprior toBEFORE maturity at the option of the holder at the 15 time and in the mannerasTHAT IS determined by the state 16 transportation commission or the designated personasprovided 17 in the resolution authorizing the bonds or notes. Any bonds or 18 notes authorized by this section may bear no interest or interest 19 at a rateor rates whichTHAT may be variable butwhich shall20beTHAT IS subject to the limitations provided in section 18e as 21 provided in the resolution authorizing the obligations. If bonds 22 or notes are subject to payment or purchase on demand orprior23toBEFORE maturity at the option of the holder, and the obliga- 24 tion of the state to make payment or effect purchases on demand 25 orprior toBEFORE maturity, at the option of the holder is 26 limited to the proceeds of 1 or more of the additional security 27 devices described inthissubsection (11) and is not payable 05318'01 * 18 1 from constitutionally restricted funds deposited in the 2 comprehensive transportation fund or the state trunk line fund, 3 for purposes of computing maximum annual principal and interest 4 requirements under subsections (5) and (6), the principal and 5 interest on the bonds or notes subject to payment or purchase on 6 demand or prior redemption at the option of the holder shall be 7 disregarded and the maximum annual principal and interest 8 requirementswhichTHAT would arise with respect to the repay- 9 ment of the proceeds of the additional security device shall be 10 substitutedthereforFOR THE PRINCIPAL AND INTEREST ON THE 11 BONDS OR NOTES. 12 Sec. 18e. Bonds issued by a governmental unit under this 13 act shall be serial bonds with periodic maturities, or term 14 bonds, with mandatory redemption requirements, or both serial and 15 term bonds, the aggregate of which shall not exceed 30 years, the 16 first of which shall fall due not more than 5 years from the date 17 of issuance. Maturities shall be as established by the resolu- 18 tion or ordinance authorizing the bonds or notes, without regard 19 to the useful lives of the projects financed from the proceeds of 20 the bonds or notes. The bonds shall bear interest, taking into 21 account any discount or premium on the sale of the bonds, at a 22 rate not exceeding the maximum rate permitted by themunicipal23finance act, Act No. 202 of the Public Acts of 1943, as amended,24being sections 131.1 to 139.3 of the Michigan Compiled Laws25 REVISED MUNICIPAL FINANCE ACT, 2001 PA 34, MCL 141.2101 TO 26 141.2821, may be made redeemable before maturity on those terms 27 and conditions, and with the premiumas shall beTHAT IS 05318'01 * 19 1 provided by the proceedings authorizing their issuance. 2 Outstanding and authorized bonds issued pursuant to this act may 3 be treated as a single issue for the purpose of fixing 4 maturities. If pursuant toAct No. 175 of the Public Acts of51952, as amended, being sections 247.701 to 247.707 of the6Michigan Compiled Laws, or in Act No. 143 of the Public Acts of71943, as amended, being sections 141.251 to 141.254 of the8Michigan Compiled Laws1952 PA 175, MCL 247.201 TO 247.707, OR 9 1943 PA 143, MCL 141.251 TO 141.254, the maximum annual principal 10 and interest requirements on bonds issued by governmental units 11 are required to be measured by reference to amounts received from 12 the motor vehicle highway fund, the requirements shall be mea- 13 sured by the receipts from the motor vehicle highway fund, the 14 Michigan transportation fund, or both funds., and ifIF pursu- 15 ant to this act the maximum annual principal and interest 16 requirements on bonds or notes issued by governmental units are 17 required to be measured by reference to amounts received from the 18 Michigan transportation fund, the requirements shall be measured 19 by the receipts from the motor vehicle highway fund, the Michigan 20 transportation fund, or both funds. The state transportation 21 commission shall certify, which certification shall, for pur-22poses of the validity of bonds, notes, and other obligations, be23conclusive as to the matters stated therein,to the state trea- 24 sury on or before the issuance of any bonds, notes, or other 25 obligations issued after July 1, 1983, pursuant to section 18b or 26 18d for purposes other than the maintenance of highways, roads, 27 streets, and bridges and for purposes other than the purposes 05318'01 * 20 1 specified in section 11(2)(b), (c), and (d) that its average 2 annual debt service requirements for all bonds, notes, and other 3 obligations, or portions of bonds, notes, and other obligations 4 issued after July 1, 1983, for purposes other than the mainte- 5 nance of highways, roads, streets, and bridges and other than for 6 the purposes specified in section 11(2)(b), (c), and (d), includ- 7 ing the bonds, notes, or other obligations to be issued does not 8 exceed 10% of the state revenue appropriated to the state trunk 9 line fund, less the amounts described in section 11(2)(a) to 10(g)(H) during the last completed state fiscal year. THE CER- 11 TIFICATION OF THE STATE TRANSPORTATION COMMISSION REQUIRED UNDER 12 THIS SECTION SHALL BE CONCLUSIVE FOR THE PURPOSES OF DETERMINING 13 THE VALIDITY OF BONDS, NOTES, AND OTHER OBLIGATIONS. If the pur- 14 pose for which the bonds, notes, or other obligations is issued 15 is changed after the issuance of the bonds, notes, or other obli- 16 gations, the change shall be made in such a manner to maintain 17 compliance with the certification required by the preceding sen- 18 tence, as of the date the certificate was originally issued, but 19 nosuchchange shall invalidate or otherwise affect the bonds, 20 notes, or other obligations with respect to which the certificate 21 was issued, or the obligation to pay debt service on the bonds, 22 notes, or other obligations. As used in this section, 23 "maintenance" means maintenance as defined in section 11(6). 24 Enacting section 1. Section 9a of 1951 PA 51, MCL 247.659a, 25 is repealed. 05318'01 * 21 1 Enacting section 2. This amendatory act does not take 2 effect unless all of the following bills of the 91st Legislature 3 are enacted into law: 4 (a) Senate Bill No. _____ or House Bill No. 5734 (request 5 no. 02672'01 *). 6 (b) Senate Bill No. _____ or House Bill No. 5735 (request 7 no. 02672'01 a *). 8 (c) Senate Bill No. _____ or House Bill No. 5736 (request 9 no. 04929'01). 05318'01 * Final page. MRM