Bill Text: MI HB4216 | 2011-2012 | 96th Legislature | Introduced
Bill Title: Local government; financing; reference to local government and school district fiscal accountability act; provide for in the revised municipal finance act. Amends sec. 303 of 2001 PA 34 (MCL 141.2303). TIE BAR WITH: HB 4214'11
Spectrum: Partisan Bill (Republican 2-0)
Status: (Passed) 2011-03-17 - Assigned Pa 5'11 With Immediate Effect [HB4216 Detail]
Download: Michigan-2011-HB4216-Introduced.html
HOUSE BILL No. 4216
February 9, 2011, Introduced by Reps. Pscholka and McMillin and referred to the Committee on Local, Intergovernmental, and Regional Affairs.
A bill to amend 2001 PA 34, entitled
"Revised municipal finance act,"
by amending section 303 (MCL 141.2303), as amended by 2002 PA 541.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 303. (1) Each municipality shall file an audit report
annually with the department within 6 months from the end of its
fiscal year or as otherwise provided in the uniform budgeting and
accounting act, 1968 PA 2, MCL 141.421 to 141.440a.
(2) Accompanying the audit report described in subsection (1),
a municipality shall file a qualifying statement, on a form and in
the manner provided by the department, which shall be certified by
the chief administrative officer. Within 30 business days of the
receipt of the qualifying statement, the department shall determine
if the municipality complies with the requirements of subsection
(3). If the department determines that the municipality complies
with the provisions of subsection (3) or if the department fails to
notify the municipality of its determination under this subsection
within 30 business days of receipt of the qualifying statement, the
municipality may proceed to issue municipal securities under this
act without further approval from the department until 30 business
days after the next qualifying statement is due or a new
determination is made by the department, whichever occurs first.
(3) To qualify to issue municipal securities without further
approval from the department, the municipality shall be in material
compliance with all of the following requirements, as determined by
the department:
(a) The municipality is not operating under the provisions of
the
local government fiscal responsibility act, 1990 PA 72, MCL
141.1201
to 141.1291.local government
and school district fiscal
accountability act.
(b) The municipality did not issue securities in the
immediately preceding 5 fiscal years or current fiscal year that
were authorized by either the emergency municipal loan act, 1980 PA
243, MCL 141.931 to 141.942, other than a security issued for a
loan authorized under section 3(2)(a) of the emergency municipal
loan act, 1980 PA 243, MCL 141.933, or the fiscal stabilization
act, 1981 PA 80, MCL 141.1001 to 141.1011.
(c) The municipality was not required by the terms of a court
order or judgment to levy a tax in the preceding fiscal year. For
purposes of this subdivision, the department may determine that a
court order or judgment to levy a tax is not material if it did not
have an adverse financial impact on the municipality.
(d) The most recent audit report, as required by the uniform
budgeting and accounting act, 1968 PA 2, MCL 141.421 to 141.440a,
was filed with the department within 6 months from the end of the
fiscal year of the municipality.
(e) The debt retirement fund balance for any municipal
security that is funded from an unlimited tax levy does not exceed
150% of the amount required for principal and interest payments due
for that municipal security in the next fiscal year.
(f) The municipality is not currently exceeding its statutory
or constitutional debt limits.
(g) The municipality has no outstanding securities that were
not authorized by statute.
(h) The municipality is not currently and during the preceding
fiscal year was not in violation of any provisions in the covenants
for an outstanding security.
(i) The municipality was not delinquent more than 1 time in
the preceding fiscal year in transferring employee taxes withheld
to the appropriate agency, transferring taxes collected as agent
for another taxing entity to that taxing unit, or making all
required pension, retirement, or benefit plan contributions.
(j) The most recent delinquent property taxes of the
municipality, without regard to payments received from the county
under the general property tax act, 1893 PA 206, MCL 211.1 to
211.157,
211.155, did not exceed 18% of the amount levied.
(k) The municipality did not submit a qualifying statement or
an application for any other municipal security in the preceding 12
months that was materially false or incorrect.
(l) The municipality is not in default on the payment of any
debt, excluding industrial development revenue bonds issued under
the industrial development revenue bond act of 1963, 1963 PA 62,
MCL 125.1251 to 125.1267, economic development corporation bonds
issued under the economic development corporations act, 1974 PA
338, MCL 125.1601 to 125.1636, bonds issued by a local hospital
finance authority for a private hospital under the hospital finance
authority act, 1969 PA 38, MCL 331.31 to 331.84, or any other debt
for which the municipality is not financially liable.
(m) The municipality did not end the immediately preceding
fiscal year with a deficit in any fund, unless the municipality has
filed a financial plan to correct that deficit condition that is
acceptable to the department.
(n) The municipality has not been found by a court of
competent jurisdiction to be in violation of any finance or tax-
related state or federal statutes during the preceding fiscal year.
(o) The municipality has not been determined by the department
to be in violation of this act during the preceding fiscal year.
(p) The municipality did not issue a refunding security in the
preceding fiscal year to avoid a potential default on an
outstanding security.
(4) If a municipality is notified within 30 business days of
the filing of the qualifying statement that it does not comply with
1 or more of the requirements of subsection (3), the municipality
may correct the noncompliant requirements and request a
reconsideration of the determination from the department as
provided in subsection (5).
(5) A municipality may request a reconsideration of the
determination from the department. That request shall indicate the
requirements that the department determined the municipality to be
not in compliance with and the action taken by the municipality to
correct the noncompliance. Within 30 business days of the receipt
of the request for reconsideration, the department shall determine
if the municipality complies with the requirements of subsection
(3) or, if the department fails to notify the municipality of its
determination under this subsection within 30 business days of
receipt of the request for reconsideration, the municipality will
be granted qualified status.
(6) If a municipality is notified within 30 business days
after filing a request for reconsideration that it does not comply
with the requirements of subsection (3), the municipality shall not
issue municipal securities under this act without the prior written
approval of the department to issue a municipal security as
provided in subsections (7) and (8).
(7) If a municipality has not been granted qualified status,
the municipality must obtain, for each municipal security, the
prior written approval of the department to issue a municipal
security. To request prior written approval to issue a municipal
security, the municipality shall submit an application and
supporting documentation to the department on a form and in a
manner prescribed by the department, which shall be certified by
the chief administrative officer. A filing fee equal to 0.03% of
the principal amount of the municipal security to be issued, but
not less than $800.00 and not greater than $2,000.00 as determined
by the department, shall accompany each application. If the
qualifying statement required by subsection (2) was received by the
department more than 6 months after the end of the municipality's
fiscal year, a late fee of $100.00 shall accompany the first
application filed after that date. Within 30 business days of
receiving an application, the fee, and supporting documentation
from a municipality, the department shall make a determination
whether the municipality has met all of the following requirements:
(a) Has indicated the authority to issue the municipal
security requested.
(b) Is projected to be able to repay the municipal security
when due.
(c) Has filed information with the department indicating
compliance with the requirements of subsection (3) or adequately
addressed any noncompliance with subsection (3) as determined by
the department.
(d) If required by the department, has obtained an investment
grade rating for the municipal security or has purchased insurance
for payment of the principal and interest on the municipal security
to the holders of the municipal security, or has otherwise enhanced
the creditworthiness of the municipal security.
(8) If the department determines that the requirements in
subsection (7) have been met, the department shall approve the
issuance of the proposed municipal security. If the department
determines that the requirements in subsection (7) have not been
met, the department shall issue a notice of deficiency to the
municipality that prevents the issuance of the proposed municipal
security. The notice of deficiency shall state the specific
deficiencies and problems with the proposed issuance. After the
deficiencies and problems have been addressed as determined by the
department, the department shall approve the issuance of the
proposed municipal security.
(9) A determination by the department that a municipality has
been granted qualified status constitutes an order granting
exception from prior approval under former 1943 PA 202, of that
municipality's securities.
Enacting section 1. This amendatory act does not take effect
unless Senate Bill No.____ or House Bill No. 4214(request no.
00011'11) of the 96th Legislature is enacted into law.
