SB-0979, As Passed Senate, October 20, 2016

 

 

 

 

 

 

 

 

 

 

 

 

SUBSTITUTE FOR

 

SENATE BILL NO. 979

 

 

 

 

 

 

 

 

 

 

 

 

 

     A bill to provide for the establishment of municipal recovery

 

and development authorities in certain local governments; to

 

provide for the powers and duties of a municipal recovery and

 

development authority; to authorize the levy and collection of a

 

property tax by a municipal recovery and development authority; to

 

provide for the issuance of bonds, notes, and other obligations; to

 

authorize certain investments; and to provide for the powers and

 

duties of certain government officials.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 1. This act shall be known and may be cited as the

 

"municipal recovery and development authority act".

 

     Sec. 3. As used in this act:

 

     (a) "Articles" means the articles of incorporation of an


authority.

 

     (b) "Authority" means a municipal recovery and development

 

authority established under this act.

 

     (c) "Board" means the board of directors of an authority.

 

     (d) "Chief executive officer" means the mayor of the local

 

government.

 

     (e) "Governing body" means the council, commission, or other

 

entity vested with legislative power for the local government.

 

     (f) "Local government" means a city in which a drinking water

 

declaration of emergency was issued by the governor.

 

     Sec. 5. (1) A local government may form an authority to

 

promote and assist in the recovery and economic development of that

 

local government regarding a drinking water declaration of

 

emergency issued by the governor.

 

     (2) An authority created under this act is an authority under

 

section 6 of article IX of the state constitution of 1963. An

 

authority is a public corporate body with the power to sue and be

 

sued in any court of this state.

 

     (3) An authority possesses all the powers necessary for

 

carrying out the purposes of its formation. The enumeration of

 

specific powers in this act shall not be construed as a limitation

 

on the general powers of an authority, consistent with its

 

articles.

 

     (4) An authority created under this act shall have a duration

 

of not more than 15 years from the date the authority's articles of

 

incorporation are filed with the secretary of state.

 

     Sec. 7. (1) To initiate the establishment of an authority,


articles of incorporation shall be prepared by a majority of the

 

members of the governing body of the local government establishing

 

the authority. The articles of incorporation shall include all of

 

the following:

 

     (a) The name of the authority.

 

     (b) The size of the board, the qualifications and terms of

 

office of board members, the manner of appointing the members of

 

the board, and the procedure for filling vacancies in the office of

 

board member, consistent with section 9.

 

     (c) The purpose of the authority.

 

     (d) The duration of the authority, consistent with section

 

5(4).

 

     (e) The method of dissolution of the authority.

 

     (f) Any other matters considered advisable.

 

     (2) The articles shall be adopted and may be amended by an

 

affirmative vote of a majority of the members of the governing body

 

of the local government establishing the authority.

 

     (3) Before the proposed articles or proposed amendments to the

 

articles are adopted, the proposed articles or amendments shall be

 

published not less than once in a newspaper generally circulated

 

within the local government and shall be posted on the local

 

government's website. The adoption of proposed articles or

 

amendments by the local government shall be evidenced by an

 

endorsement on the articles or amendments by the clerk of the local

 

government.

 

     (4) Upon adoption of the articles or amendments to the

 

articles by the local government, a printed copy of the articles or


the amended articles shall be filed with the secretary of state by

 

the clerk of the local government.

 

     (5) The authority's articles of incorporation, or amendments

 

to the articles, take effect upon filing with the secretary of

 

state.

 

     Sec. 9. (1) An authority created under this act shall be

 

directed and governed by a board of directors consisting of 11

 

members appointed as provided in this section.

 

     (2) Subject to subsection (3), the board shall be appointed as

 

follows:

 

     (a) Two members appointed by the governor from a list of 3 or

 

more individuals selected by the speaker of the house of

 

representatives.

 

     (b) Two members appointed by the governor from a list of 3 or

 

more individuals selected by the senate majority leader.

 

     (c) One member who is a health professional licensed or

 

registered under article 15 of the public health code, 1978 PA 368,

 

MCL 333.16101 to 333.18838, appointed by the chief executive

 

officer of the local government.

 

     (d) One member who is a civil engineer licensed as a

 

professional engineer under article 20 of the occupational code,

 

1980 PA 299, MCL 339.2001 to 339.2014, appointed by the chief

 

executive officer of the local government.

 

     (e) One member who is a certified public accountant licensed

 

as a certified public accountant under article 7 of the

 

occupational code, 1980 PA 299, MCL 339.720 to 339.736, appointed

 

by the governing body of the local government.


     (f) One member who is an education professional, appointed by

 

the governing body of the local government. As used in this

 

subdivision, "education professional" includes, but is not limited

 

to, a teacher, public school administrator, professor, or college

 

or university administrator.

 

     (g) Two at-large members appointed by the chief executive

 

officer of the local government.

 

     (h) One at-large member appointed by the governing body of the

 

local government.

 

     (3) At least 1 of the members appointed by the governor under

 

subsection (2)(a) and at least 1 of the members appointed by the

 

governor under subsection (2)(b) must be residents of the local

 

government. In addition, at least 2 of the members appointed by the

 

chief executive officer and at least 2 of the members appointed by

 

the governing body must be residents of the local government.

 

     (4) Except as otherwise provided in this subsection, the term

 

of office for members of the board is 4 years. For the first

 

appointments to the board, all of the following apply:

 

     (a) One of the members appointed under subsection (2)(g) by

 

the chief executive officer shall be appointed for 1 year.

 

     (b) One of the members appointed under subsection (2)(g) by

 

the chief executive officer shall be appointed for 2 years.

 

     (c) The member appointed under subsection (2)(h) by the

 

governing body shall be appointed for 3 years.

 

     (5) If a vacancy occurs on the board other than by expiration

 

of a term of office, the vacancy shall be filled in the same manner

 

as the original appointment for the remainder of the term of


office.

 

     Sec. 11. (1) Within 14 days following the appointment of the

 

last board member to the board, the board shall hold its first

 

meeting.

 

     (2) At its first meeting, the board shall select a

 

chairperson, treasurer, and any other officers as the board

 

considers necessary.

 

     (3) The board shall hire an executive director to whom the

 

authority may delegate any of its administrative powers and

 

authorizations. However, an executive director shall not enter into

 

a contract that has a cumulative value of $100,000.00 or more

 

without approval by a majority of the members of the board

 

appointed and serving.

 

     (4) The board shall select, employ, and fix the compensation

 

for employees of the board and contract for those legal and other

 

professional services that the board considers necessary to

 

effectuate the purposes of the authority.

 

     (5) A majority of the members of the board constitute a quorum

 

for the purpose of conducting business and exercising powers of the

 

authority. Official action may be taken by an authority upon the

 

vote of a majority of the board members present, unless the

 

articles of incorporation or authority bylaws require a larger

 

number.

 

     (6) The board shall adopt rules and bylaws governing its

 

procedures and the holding of meetings. The board shall designate

 

an office or location as its principal place of business.

 

     (7) The business of the board shall be conducted at a public


meeting of the board held in compliance with the open meetings act,

 

1976 PA 267, MCL 15.261 to 15.275. Public notice of the time, date,

 

and place of the meeting shall be given in the manner required by

 

the open meetings act, 1976 PA 267, MCL 15.261 to 15.275. After

 

organization, a board shall adopt a schedule of regular meetings

 

and adopt a regular meeting date, place, and time.

 

     (8) A board shall keep a written or printed record of each

 

meeting, which record and any other document or record prepared,

 

owned, used, in the possession of, or retained by the authority in

 

the performance of an official function shall be made available to

 

the public in compliance with the freedom of information act, 1976

 

PA 442, MCL 15.231 to 15.246.

 

     (9) The board shall provide a monthly progress report to the

 

chief executive officer and the governing body of the local

 

government and the local government shall make that monthly

 

progress report available on the local government's Internet

 

website. The monthly progress report shall include, but not be

 

limited to, a list of all expenditures by the authority for the

 

reporting period.

 

     Sec. 13. (1) A board shall obtain an annual audit of the

 

authority, and report on the audit and auditing procedures, in the

 

manner provided by sections 6 to 13 of the uniform budgeting and

 

accounting act, 1968 PA 2, MCL 141.426 to 141.433. The audit shall

 

also be in accordance with generally accepted government auditing

 

standards as promulgated by the United States General Accounting

 

Office and shall satisfy federal regulations relating to federal

 

grant compliance audit requirements.


     (2) An authority shall prepare budgets and appropriations acts

 

in the manner provided by sections 14 to 19 of the uniform

 

budgeting and accounting act, 1968 PA 2, MCL 141.434 to 141.439.

 

     (3) The state treasurer, the attorney general, a prosecuting

 

attorney, bank, certified public accountant, certified public

 

accounting firm, or other person shall have the same powers,

 

duties, and immunities with respect to the authority as provided

 

for local units in sections 6 to 20 of the uniform budgeting and

 

accounting act, 1968 PA 2, MCL 141.426 to 141.440.

 

     (4) If an authority ends a fiscal year in a deficit condition,

 

the authority shall file a financial plan to correct the deficit

 

condition in the same manner as provided in section 21(2) of the

 

Glenn Steil state revenue sharing act of 1971, 1971 PA 140, MCL

 

141.921.

 

     (5) The board may authorize funds of the authority to be

 

invested or deposited in any investment or depository authorized

 

under section 1 of 1943 PA 20, MCL 129.91.

 

     Sec. 15. An authority may do any of the following:

 

     (a) Provide funding to the local government to promote and

 

assist in the recovery and economic development of that local

 

government regarding a drinking water declaration of emergency

 

issued by the governor.

 

     (b) Levy a tax as provided in section 17.

 

     (c) Make and enter into contracts, agreements, or instruments

 

necessary or incidental to the performance of its powers, duties,

 

functions, and responsibilities under this act. An authority shall

 

not enter into any contract, agreement, or instrument for a period


longer than the existence of the authority.

 

     (d) Solicit, receive, and accept gifts, grants, loans,

 

contributions of money, property, or other things of value, or

 

other aid or payment from any federal, state, local, or

 

intergovernmental agency or from any other person or entity, public

 

or private, upon terms and conditions acceptable to the authority,

 

or participate in any other way in a federal, state, local, or

 

intergovernmental program.

 

     (e) Apply for and receive loans, grants, guarantees, or other

 

financial assistance from any federal, state, local, or

 

intergovernmental agency or from any other person or entity, public

 

or private.

 

     (f) Convey, sell, transfer, exchange, lease, or otherwise

 

dispose of property or rights or interests in property to any

 

person for consideration on terms and conditions and in a manner

 

the authority considers proper, fair, and valuable.

 

     (g) Issue bonds or notes of the authority for any of its

 

purposes under this act. An authority shall not issue any bonds or

 

notes for a period longer than the existence of the authority.

 

     (h) Acquire, hold, lease, and dispose of real and personal

 

property in the exercise of its powers and the performance of its

 

duties under this act.

 

     (i) Engage or contract for legal and other professional

 

services as considered necessary to effectuate the purposes of the

 

authority.

 

     (j) Any other things necessary or convenient to exercise the

 

powers, duties, functions, and responsibilities of the authority


under this act.

 

     Sec. 17. (1) An authority may levy a tax of not more than 0.5

 

mills for a period of time, as determined by the board, that does

 

not go beyond the existence of the authority on all of the taxable

 

property within the local government for the purpose of promoting

 

and assisting in the recovery and economic development of the local

 

government regarding a drinking water declaration of emergency

 

issued by the governor. The authority may levy the tax only if a

 

majority of the electors in the local government voting on the tax

 

at a statewide general or primary election approve the tax. The

 

proposal for a tax shall be submitted to a vote of the electors of

 

the authority by resolution of the board.

 

     (2) A ballot proposal for a tax shall comply with the

 

requirements of section 24f of the general property tax act, 1893

 

PA 206, MCL 211.24f. A proposal for a tax shall not be placed on

 

the ballot unless the proposal is adopted by a resolution of the

 

board and certified by the board not later than the twelfth Tuesday

 

before the election to the clerk of the local government for

 

inclusion on the ballot. The proposal shall be certified for

 

inclusion on the ballot at the next eligible election, as specified

 

by the board's resolution.

 

     (3) If a majority of the electors in the local government

 

voting on the question of a tax approve the proposal as provided

 

under subsection (1), the tax levy is authorized. Not more than 2

 

elections may be held in a calendar year on a proposal for a tax

 

authorized under this act.

 

     Sec. 19. (1) The notices of close of registration and election


shall be published as provided for by the state election laws. The

 

notice of close of registration shall include the ballot language

 

of the proposal.

 

     (2) The results of an election for a tax shall be canvassed by

 

the board of county canvassers of the county. The board of county

 

canvassers of the county shall make the final canvass of an

 

election for a tax based on the returns of the election inspectors

 

in that local government. The board of county canvassers of the

 

county shall certify the results of the election to the board of

 

the authority.

 

     Sec. 21. A tax authorized to be levied by an authority under

 

this act shall be levied and collected at the same time and in the

 

same manner as provided by the general property tax act, 1893 PA

 

206, MCL 211.1 to 211.155.

 

     Sec. 23. (1) For the purpose of promoting and addressing the

 

recovery and economic development of a local government regarding a

 

drinking water declaration of emergency issued by the governor, the

 

authority may borrow money and issue revenue bonds and notes for

 

the purposes provided in this section.

 

     (2) Revenue bonds are payable upon the terms and conditions

 

specified by the authority in the resolution under which the

 

authority issues the bonds or in a related trust agreement or trust

 

indenture. The board in the resolution authorizing the bonds, a

 

trust indenture, or other agreement entered into with respect to

 

bonds of the authority may pledge any funds received or to be

 

received by the authority for the payment of the bonds or other

 

obligations of the authority under the agreement and create a first


lien in favor of the holders of the bonds or a party subject to the

 

agreement. The principal of and interest on the bonds shall be

 

payable, except as provided in this act, solely from the proceeds

 

described in the resolution authorizing the bonds or trust

 

indenture.

 

     (3) The resolution authorizing the issuance of bonds under

 

this section shall include all of the following:

 

     (a) A statement that the bonds are revenue bonds.

 

     (b) A statement briefly describing the recovery and economic

 

development of that local government regarding a drinking water

 

declaration of emergency issued by the governor.

 

     (c) In the case of refunding bonds, identification of the

 

parameters under which the bonds can be issued.

 

     (d) Delegation for a time period at the board's discretion to

 

an officer, employee, or designated agent of the authority the

 

power to issue, sell, and deliver bonds within the limits on those

 

bonds established by the authority as to any of the following:

 

     (i) Form.

 

     (ii) Maximum interest rates.

 

     (iii) Maturity dates.

 

     (iv) Purchase price.

 

     (v) Denominations.

 

     (vi) Redemption dates and premiums, if any.

 

     (vii) Nature of the security.

 

     (viii) Selection of an applicable interest rate index.

 

     (ix) Other terms and conditions with respect to the bond issue

 

that the authority prescribes.


     (e) Specification of other details and matters that are

 

considered necessary or advisable to provide for the prompt and

 

orderly retirement of the bonds and the interest on the bonds at

 

maturity.

 

     (f) Provision for the deposit of revenues pledged for the

 

payment of bonds issued under this section into a separate account

 

for the purpose of paying principal and interest on those bonds,

 

the administrative costs associated with those bonds, and any other

 

bonds issued by the authority that are secured by those revenues.

 

     (4) An authority may issue bonds under this section to refund

 

any bonds by issuing new bonds if it considers the refunding

 

expedient, whether or not the bonds to be refunded have matured,

 

and may issue bonds partly to refund bonds that are outstanding and

 

partly for restructuring or any of the authority's other authorized

 

purposes.

 

     (5) Bonds issued under this act shall not mature beyond the

 

existence of the authority.

 

     (6) An authority may issue bond anticipation notes secured by

 

the issuance of revenue bonds issued under this section in addition

 

to the revenues that the authority is permitted to pledge as

 

provided in this section.

 

     (7) Any bonds issued under this act shall be sold to the

 

Michigan finance authority created by Executive Reorganization

 

Order No. 2010-2, MCL 12.194.

 

     (8) Bonds issued by an authority under this act are not

 

subject to the revised municipal finance act, 2001 PA 34, MCL

 

141.2101 to 141.2821. Bonds issued by an authority under this act


are not subject to the revenue bond act of 1933, 1933 PA 94, MCL

 

141.101 to 141.140.