HB-4300, As Passed Senate, July 3, 2003                                     

SUBSTITUTE FOR

HOUSE BILL NO. 4300

                                                                             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), the title as             

amended and section 2 as added by 1985 PA 9.                                

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1                                 TITLE                                         

2                                                                                An act to regulate gifts of real and personal property to                          

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

4   those gifts and other funds; and to validate all  such  gifts               

5   made before the enactment of this act.                                      

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

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

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

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

House Bill No. 4300 as amended May 1, 2003

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

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

3   to a corporation or other business association, to a city,                  

4   village, township, or county, or to an instrumentality of a city,           

5   village, township, or county.  A county may grant or loan funds             

6   to a township, village, or city located within that county for              

7   the purpose of encouraging and assisting businesses to locate and           

8   expand within the county.  A grant or loan under this subsection            

9   shall not be derived from ad valorem taxes except for ad valorem            

10  taxes approved [by a vote of the people] for economic development.  The county shall                                                                           

11  establish an application process for proposals to receive a grant           

12  or loan under this subsection.  The awarding of a grant or loan             

13  under this subsection shall be made at a public hearing of the              

14  county board of commissioners.  The grant or loan contract shall            

15  require a report to the county board of commissioners regarding             

16  the activities of the recipient and the degree to which the                 

17  recipient has met the stated public purpose of the funding.

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

19  may be used for local public improvements or to encourage and               

20  assist businesses in locating or expanding in this state, to                

21  preserve jobs in this state, to encourage investment in the                 

22  communities in this state, or for other public purposes.                    

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

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

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

26  private corporation or association created to make and administer           

27  loans made under subsection (1).                                            

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

2   pursuant to under subsection (1) and issue loan revenue bonds             

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

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

5   to this section shall be approved by the department of treasury             

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

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

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

9   Michigan Compiled Laws 2001 PA 34, MCL 141.2101 to 141.2821.  In           

10  determining whether the issuance of the bonds shall be approved,            

11  the department of treasury shall take into consideration the                

12  following:                                                                  

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

14      (b) Whether the probable revenue and properties pledged for                 

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

16  and interest on the bonds when due.                                         

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

18  excessive for the purpose for which the bonds are to be issued.             

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

20  of the city, village, township, or county issuing the loan                  

21  revenue bonds.  The loan revenue bonds are declared to be issued            

22  for an essential public and governmental purpose, and, together             

23  with interest on those bonds and income from those bonds, shall             

24  be exempted from all taxes.