Bill Text: MI HB5603 | 2011-2012 | 96th Legislature | Introduced
Bill Title: Agriculture; agribusiness; agriculture innovation loan guarantee act; create. Creates new act.
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2012-05-10 - Printed Bill Filed 05/10/2012 [HB5603 Detail]
Download: Michigan-2011-HB5603-Introduced.html
HOUSE BILL No. 5603
May 9, 2012, Introduced by Reps. Hovey-Wright, Daley, Glardon, Denby, Outman, Rendon, Santana, Segal, Brunner, Kurtz, Smiley, Ananich, Greimel, Talabi and Oakes and referred to the Committee on Agriculture.
A bill to create an agriculture innovation finance authority
and prescribe its powers and duties; to provide for certain
agriculture loan programs; to authorize the making of certain loan
guarantees; to enhance value-added agricultural processing,
commercialization of agriculture technologies, processes, or
products, and farming operations within this state; to provide for
the issuance and purchase of notes and bonds; to prescribe the
powers and duties of certain state and local agencies and
officials; and to prescribe penalties and provide remedies.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act shall be known and may be cited as the
"agriculture innovation loan guarantee act".
Sec. 3. As used in this act:
(a) "Agricultural processing" means 1 or more operations that
transform, package, sort, or grade livestock or livestock products,
agricultural commodities, or plant or plant products into goods
that are used for intermediate or final consumption, including
goods for nonfood use.
(b) "Authority" means the agriculture innovation finance
authority created under section 5.
(c) "Beginning farmer" means a farmer who has 10 years or less
of farming experience as of the date the loan is originally made.
(d) "Board" means the board of directors of the Michigan
agriculture innovation finance authority.
(e) "Bond" means a bond issued by the authority pursuant to
this act.
(f) "Commercialization" means the transition from research to
the actions necessary to achieve market entry and general market
competitiveness of new innovative technologies, processes, and
products and the services that support, assist, equip, finance, or
promote a person or an entity with that transition.
(g) "Department" means the department of agriculture and rural
development.
(h) "Eligible participants" means a person able to receive
loan guarantee expenditures under this act and includes, but is not
limited to, individuals, farmer-owned cooperatives, partnerships,
limited liability companies, private or public corporations, and
nonprofit organizations in this state. Eligible participants shall
not include any entity located in a renaissance zone established
under the Michigan renaissance zone act, 1996 PA 376, MCL 125.2681
to 125.2696.
(i) "Farming" means the cultivation of land for the production
and harvest of agricultural crops and includes the production of
poultry and poultry products, the production of livestock and
cervidae including breeding and grazing, the production of grains
and feeds, the production of forages and sod, the production of
dairy products, and the production of fruits and vegetables, the
harvest and production of timber and timber products, the
production of seeds and grasses, the harvest and production of
floriculture, the production of aquaculture, and the production of
equines.
(j) "FSA" means the farm service agency in the United States
department of agriculture.
(k) "Loan guarantee" means a commitment by the authority to
pay part or all of a loan's principal and interest to a lender or
the holder of a security in case the borrower defaults.
(l) "Loan guarantee transaction" means the aggregation of the
dollar amount of the existing outstanding principal balance of all
loans to the same borrower guaranteed under this act in addition to
the amounts of any new guarantee loan applications to the same
applicant.
(m) "Loan programs" means 1 or more of the following:
(i) An agriculture innovation loan guarantee program.
(ii) A loan guarantee program for beginning and small farmers.
(iii) An interest rate assistance program.
(n) "Net worth" means total assets minus total liabilities as
determined in accordance with generally accepted accounting
principles with appropriate exceptions and exemptions.
(o) "Note" means a note issued by the authority pursuant to
this act.
(p) "Participating lender" means a lender who has experience
in agricultural lending, who is approved by FSA as a preferred
lender or a certified lender, and who is eligible to participate in
the FSA guaranteed farm loan program.
(q) "Person" means an individual, partnership, corporation,
association, governmental entity, or other legal entity.
(r) "Real or personal property" means all or any specifically
designated real estate, fixtures, or personal property offered as
security for the loan, including all forms of property eligible for
a security interest as defined by the uniform commercial code, 1962
PA 174, MCL 440.1101 to 440.11102.
(s) "Secured loan" means a financial obligation secured by a
lien on an interest in real or personal property.
(t) "Small farmer" means a farmer who has sustained annual
gross sales from agricultural production of less than $250,000.00
at the date the loan was originally made. If 2 or more borrowers
sign a promissory note, the annual sales of the borrowers shall be
aggregated for the purpose of determining whether the loan
qualifies as a small farmer loan.
(u) "Value-added" means the enhancement or improvement of the
overall value of an agricultural commodity or of an animal or plant
product into a product of higher value. The enhancement or
improvement includes, but is not limited to, marketing,
agricultural processing, transforming, or packaging.
Sec. 5. The agriculture innovation finance authority is
created as a body corporate within the department and shall be
administered under the supervision of the department but shall
exercise its prescribed statutory power, duties, and functions
independently of the department. The budgeting, procurement, and
related functions of the authority shall be performed under the
direction and supervision of the department. Funds of the authority
shall be handled in the same manner and subject to the same
provisions of law applicable to state funds or in a manner
specified in a resolution of the authority authorizing the issuance
of bonds and notes.
Sec. 7. (1) The authority shall be governed by a board of
directors consisting of the director of the department of
agriculture and rural development, the state treasurer, and 7 other
members with knowledge, skill, and experience in production
agriculture, agri-business, agricultural banking, business, or the
financial field who shall be appointed by the governor with the
advice and consent of the senate. None of the 7 members appointed
under this section shall be employees of the state. Of the members
appointed under this section, 2 members shall represent production
agriculture and 2 members shall represent agricultural banking or
the financial field. Of the members initially appointed by the
governor to serve a term of 3 years under subsection (2), 1 shall
be appointed from a list of 2 or more nominees of the speaker of
the house of representatives and 1 shall be appointed from a list
of 2 or more nominees of the senate majority leader.
(2) Members appointed under subsection (1) shall serve terms
of 3 years and until a successor has been appointed and has
qualified. However, of the 7 members initially appointed, the
governor shall designate 2 to serve for 2 years and 2 to serve for
1 year.
(3) Upon appointment to the board under subsection (1), and
upon the taking and filing of the constitutional oath of office, a
member of the board shall enter the office and exercise the duties
of the office.
(4) The governor shall fill a vacancy in the office of a
member of the board by appointment with the advice and consent of
the senate. A vacancy shall be filled for the balance of the
unexpired term of the office.
(5) Members of the board and officers and employees of the
authority are subject to 1968 PA 317, MCL 15.321 to 15.330. A
member of the board or an officer, employee, or agent of the
authority shall discharge the duties of his or her position in a
nonpartisan manner, with good faith, and with that degree of
diligence, care, and skill that an ordinarily prudent person would
exercise under similar circumstances in a like position. In
discharging his or her duties, a member of the board or an officer,
employee, or agent of the authority, when acting in good faith, may
rely upon the opinion of counsel for the authority, upon the report
of an independent appraiser selected with reasonable care by the
board, or upon financial statements of the authority represented to
the member of the board, officer, employee, or agent to be correct
by the officer of the authority having charge of its books or
account, or stated in a written report by the auditor general or a
certified public accountant or a firm of accountants fairly to
reflect the financial condition of the authority.
(6) The board shall organize and make its own policies and
procedures. The board shall conduct all business at public meetings
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
each meeting shall be given in the manner required by the open
meetings act, 1976 PA 267, MCL 15.261 to 15.275. Five members of
the board constitute a quorum for the transaction of business. An
action of the board requires a concurring vote by 5 members of the
board. A state officer who is a member of the board may designate a
representative from his or her department to serve instead of that
state officer as a voting member of the board for 1 or more
meetings.
Sec. 9. (1) The board shall elect a chairperson and a vice-
chairperson from among its members. The authority may employ legal
and technical experts and other officers, agents, or employees,
permanent or temporary, paid from the funds of the authority. The
authority shall determine the qualifications, duties, and
compensation of its employees. The authority may delegate to 1 or
more members, officers, agents, or employees any powers or duties
it considers proper.
(2) The authority shall contract with the department for the
purpose of maintaining and improving the rights and interests of
the authority.
(3) The accounts of the authority shall be subject to annual
audits by the state auditor general or a certified public
accountant appointed by the auditor general. Records shall be
maintained according to generally accepted auditing principles.
Sec. 11. (1) The authority shall establish loan programs that
promote value-added agricultural processing, commercialization of
agriculture technologies, processes, or products, and farming
operations within this state.
(2) The loan guarantee interest rate and payment terms shall
be negotiated between the participating lender and the eligible
participant.
(3) Participating lenders shall not use a loan guarantee for
the sole purpose of refinancing prior debt.
(4) The loan guarantee shall not be more than 90% of the
participating lender's loss after all alternatives to collect have
been exhausted.
(5) All loan guarantee programs established by the authority
shall include a provision that an out-of-state business must have a
significant existing or proposed business presence in this state.
(6) Guaranteed loans are the property and responsibility of
the lender. The lender shall make the loan and service the loan to
conclusion.
Sec. 13. The authority shall establish and administer an
agriculture innovation loan guarantee program that does all of the
following:
(a) Utilizes participating lenders only.
(b) Provides that loan guarantees are approved by the
authority only for projects in this state designed to establish,
retain, expand, attract, or develop new innovation in value-added
agricultural processing and related agricultural production
operations or the commercialization of agriculture technologies,
processes, or products.
(c) Permits the purchase of real estate, real estate
improvements, machinery, equipment, and operating needs not to
exceed a total of $5,000,000.00 for each loan guarantee transaction
for established agricultural processing as well as new ventures.
(d) Requires segregation of security and lien priority issues
to be documented in the agreement between the authority and the
participating lender.
(e) Ensures that the loan guarantees are used to finance
operations that are viable, productive, and sustainable as
determined by the participating lender.
Sec. 15. The authority may establish and administer a loan
guarantee program for beginning farmers and small farmers that does
all of the following:
(a) Utilizes qualified lenders only.
(b) Limits loan guarantees to no more than $1,000,000.00 per
loan guarantee transaction.
(c) Requires the applicant to fund at least 10% of the
purchase price.
(d) Permits the purchase of real estate, real estate
improvements, machinery, equipment, and operating needs not to
exceed a total of $1,000,000.00 per farm unit to be included in any
loan it guarantees.
Sec. 17. (1) The authority may establish and administer an
interest rate assistance program on a farm loan guarantee through a
participating lender to provide interest rate assistance for any of
the following:
(a) Beginning farmers.
(b) Small farmers.
(c) New ventures that will enhance value-added agricultural
processing or the commercialization of agriculture technologies,
processes, or products.
(2) The authority may provide an interest buy-down to the
participating lender in which the participating lender receives its
typical return and the eligible participant benefits from a reduced
interest rate.
Sec. 19. In the performance of its duties, the exercise of its
powers, and the selection of specific programs and projects under
the loan programs, the authority shall comply with all of the
following:
(a) The authority shall not become an owner of agricultural
land, agricultural improvements, or real or personal property,
except on a temporary basis if necessary to implement its programs,
to protect its investments by means of foreclosure or other means,
or to facilitate transfer of agricultural land, agricultural
improvements, or real or personal property.
(b) The authority shall exercise diligence and care in the
selection of projects and shall apply customary and acceptable
business and lending standards in the selection and subsequent
implementation of those projects. The authority may delegate
primary responsibility for determination and implementation of the
projects to an agency of the federal government if that agency
assumes an obligation to repay the loan, either directly or by
insurance or guarantee.
Sec. 21. The authority shall possess all powers necessary or
convenient to carry out this act, including all the following
powers:
(a) To sue and to be sued; to have a seal and to alter the
seal; to have perpetual succession; to make and execute contracts
and other instruments necessary or convenient to the exercise of
the powers of the authority; and to make, amend, and repeal bylaws
and rules.
(b) In cooperation with other state agencies, state
universities, local units of government, and other industry groups,
to conduct studies and analyses of agricultural trends and future
economic estimates within this state, the results of which shall be
made available to the public and the agricultural industry; to
engage in research; and to disseminate information to industry
partners.
(c) To agree and comply with conditions attached to federal
financial assistance.
(d) To establish and collect fees and charges in connection
with the sale of the authority's loan guarantee commitments and
servicing, including the reimbursement of costs of financing by the
authority and service charges; and to use any accumulated fees,
charges, and interest income for achieving any of the corporate
purposes of the authority, to the extent that the fees, charges,
and interest income are not pledged to the repayment of bonds and
notes of the authority or the interest on those bonds and notes.
(e) To make loan guarantees.
(f) To establish standards or inspect records, or both,
relating to guarantees made under the agriculture innovation loan
guarantee programs.
(g) To accept gifts, grants, loans, appropriations, or other
aid from any person.
(h) Subject to section 19(a), to acquire or contract to
acquire from a person, by grant, purchase, or otherwise, leaseholds
or real or personal property, or any interest in a leasehold or
real or personal property; and to own, hold, clear, improve, and
rehabilitate and to sell, assign, exchange, transfer, convey,
lease, mortgage, or otherwise dispose of or encumber any interest
in a leasehold or real or personal property. This act shall not
impede the operation and effect of the Michigan right to farm act,
1981 PA 93, MCL 286.471 to 286.474; local zoning, building, and
housing ordinances; ordinances relating to subdivision control,
land development, or fire prevention; or other ordinances
concerning agricultural land, farming, or the development of
farming.
(i) To procure insurance against any loss in connection with
the property and other assets of the authority.
(j) To invest, at the discretion of the authority, funds held
in reserve or sinking funds, or money not required for immediate
use or disbursement in obligations of this state or of the United
States, in obligations the principal and interest of which are
guaranteed by this state or the United States, or in other
obligations as may be approved by the state treasurer.
(k) To promulgate rules necessary to carry out the purposes of
this act and to exercise the powers expressly granted in this act.
Rules shall be promulgated pursuant to the administrative
procedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328.
(l) To engage the services of private consultants on a contract
basis for rendering professional and technical assistance and
advice.
Sec. 23. (1) The authority shall submit to the governor, the
clerk of the house of representatives, the secretary of the senate,
and the chairpersons of the senate and house standing committees
with jurisdiction over issues pertaining to agriculture not later
than January 15 of each year a complete report on the activities of
the authority under this act. The report shall include all of the
following:
(a) A description of the authority's operations and
accomplishments.
(b) An accounting of the authority's receipts and expenditures
during the fiscal year, in accordance with the classifications it
establishes for its operating and capital accounts.
(c) An accounting of the authority's assets and liabilities at
the end of its fiscal year and the status of reserve, special, and
other funds.
(d) A schedule of the bonds and notes outstanding at the end
of its fiscal year and a statement of the amounts redeemed and
issued during its fiscal year.
(e) A statement of the authority's proposed and projected
activities.
(f) A list of participating lenders.
(g) A list of eligible participants that received a loan
guarantee under this act.
(h) An accounting of administrative expenses.
(i) Recommendations to the legislature.
(2) The annual report shall identify the performance goals of
the authority and clearly indicate the progress made to attain
those goals during the reporting period. If possible, results shall
be expressed in terms of number of loan guarantees, amount of
capital investment, and types of value-added and commercialization
activities assisted.
Sec. 25. A program authorized by this act may be combined with
any other state or federal program in order to promote value-added
agricultural processing; commercialization of agriculture
technologies, processes, or products; and farming operations within
this state.
Sec. 27. (1) The authority may authorize and issue its bonds
or notes payable solely from the revenues or funds available to the
authority. Bonds and notes of the authority are not a debt or
liability of this state and do not create or constitute any
indebtedness, liability, or obligations of this state or constitute
a pledge of the faith and credit of this state. All authority bonds
and notes shall be payable solely from revenues or funds pledged or
available for their payment as authorized in this part. Each bond
and note shall contain on its face a statement to the effect that
the authority is obligated to pay the principal of and the interest
on the bond or note only from revenues or funds of the authority
pledged for the payment of principal and interest and that this
state is not obligated to pay that principal or interest and that
neither the faith and credit nor the taxing power of this state is
pledged to the payment of the principal of or the interest on the
bond or note.
(2) All expenses incurred in carrying out the loan program
shall be payable solely from revenues or funds provided or to be
provided under this part. This section does not authorize the
authority to incur any indebtedness or liability on behalf of or
payable by this state. Any money derived from the proceeds of bonds
or notes shall be expended by the authority in the manner
prescribed in this act and the resolution authorizing such
indebtedness.
Sec. 29. (1) The authority may issue from time to time bonds
or notes in principal amounts the authority considers necessary to
provide funds for any purpose, including, but not limited to, all
of the following:
(a) The payment, funding, or refunding of the principal of,
interest on, or redemption premiums on bonds or notes issued by the
authority whether the bonds or notes or interest to be funded or
refunded have or have not become due.
(b) The establishment or increase of reserves to secure or to
pay authority bonds or notes or interest on those bonds or notes.
(c) The payment of interest on the bonds or notes for a period
as the authority determines.
(d) The payment of all other costs or expenses of the
authority incidental to and necessary or convenient to carry out
its corporate purposes and powers.
(2) The bonds or notes of the authority shall not be a general
obligation of the authority but shall be payable solely from the
revenues or funds, or both, pledged to the payment of the principal
of and interest on the bonds or notes as provided in the resolution
authorizing the bond or note.
(3) The following apply to the bonds or notes of the
authority:
(a) Shall be authorized by resolution of the authority.
(b) Shall bear the date or dates of issuance.
(c) May be issued as either tax-exempt bonds or notes or
taxable bonds or notes for federal income tax purposes.
(d) Shall be serial bonds, term bonds, or term and serial
bonds.
(e) Shall mature at such time or times not exceeding 30 years
from the date of issuance.
(f) May provide for sinking fund payments.
(g) May provide for redemption at the option of the authority
for any reason or reasons.
(h) May provide for redemption at the option of the bondholder
for any reason or reasons.
(i) Shall bear interest at a fixed or variable rate or rates
of interest per annum or no interest.
(j) Shall be registered bonds, coupon bonds, or both.
(k) May contain a conversion feature.
(l) May be transferable.
(m) Shall be in the form, denomination or denominations, and
with the other provisions and terms as is determined necessary or
beneficial by the authority.
(4) If a member of the board or any officer of the authority
whose signature or facsimile of his or her signature appears on the
note, bond, or coupon ceases to be a member or officer before the
delivery of that note or bond, the signature shall continue to be
valid and sufficient for all purposes, as if the member or officer
had remained in office until the delivery.
(5) Bonds or notes of the authority may be sold at a public or
private sale at the time or times, at the price or prices, and at a
discount as the authority determines. Bonds and notes of the
authority are not subject to the revised municipal finance act,
2001 PA 34, MCL 141.2101 to 141.2821. The bonds or notes of the
authority are not required to be registered under the uniform
securities act (2002), 2008 PA 551, MCL 451.2101 to 451.2703.
(6) The issuance of bonds and notes under this section is
subject to the agency financing reporting act, 2002 PA 470, MCL
129.171 to 129.177.
(7) For the purpose of more effectively managing its debt
service, the authority may enter into an interest rate exchange or
swap, hedge, or similar agreement with respect to its bonds or
notes on the terms and payable from the sources and with the
security, if any, as determined by a resolution of the authority.
Sec. 31. (1) The authority may provide for the issuance of
bonds or notes in the amounts the authority considers necessary for
the purpose of refunding bonds or notes of the authority then
outstanding, including the payment of any redemption premium and
interest accrued or to accrue to the earliest or subsequent date of
redemption, purchase, or maturity of these bonds or notes. The
proceeds of bonds or notes issued for the purpose of refunding
outstanding bonds or notes may be applied by the authority to the
purchase or retirement at maturity or redemption of outstanding
bonds or notes either on the earliest or subsequent redemption
date, and pending such applications, may be placed in escrow to be
applied to the purchase or retirement at maturity or redemption on
the date or dates determined by the authority. Pending such
application and subject to agreements with noteholders or
bondholders, the escrowed proceeds may be invested and reinvested
in the manner the authority determines, maturing at the date or
times as appropriate to assure the prompt payment of the principal,
interest, and redemption premium, if any, on the outstanding bonds
or notes to be refunded. After the terms of the escrow have been
fully satisfied and carried out, the balance of the proceeds and
interest, income, and profits, if any, earned or realized on the
investment of the proceeds shall be returned to the authority for
use by the authority in any lawful manner.
(2) In the resolution authorizing bonds or notes to refund
bonds or notes, the authority may provide that the bonds or notes
to be refunded shall be considered paid when there has been
deposited in escrow, money or investment obligations that would
provide payments of principal and interest adequate to pay the
principal and interest on the bonds to be refunded, as that
principal and interest becomes due whether by maturity or prior
redemption and that, upon the deposit of the money or investment
obligations, the obligations of the authority to the holders of the
bonds or notes to be refunded shall be terminated except as to the
rights to the money or investment obligations deposited in trust.
(3) The authority shall not have outstanding at any time bonds
or notes in an aggregate principal amount exceeding $40,000,000.00
excluding bonds or notes issued to refund outstanding bonds or
notes. Administrative costs shall not exceed 5% over the life of
the program.
(4) The authority may hire a person to administer the bonding
provisions of this act.
Sec. 33. (1) The authority may authorize and approve an
insurance contract, an agreement for a line of credit, a letter of
credit, a commitment to purchase notes or bonds, an agreement to
remarket bonds or notes, and any other transaction to provide
security to assure timely payment of a bond or note.
(2) The authority may authorize payment from the proceeds of
the notes or bonds, or other funds available, of the cost of
issuance including, but not limited to, fees for placement, charges
for insurance, letters of credit, lines of credit, remarketing
agreements, reimbursement agreements, or purchase or sales
agreements or commitments, or agreements to provide security to
assure timely payment of notes or bonds.
Sec. 35. Within limitations that shall be contained in the
issuance or authorization resolution of the authority, the
authority may authorize a member of the board or other officer of
the authority to do 1 or more of the following:
(a) Sell and deliver, and receive payment for notes or bonds.
(b) Refund notes or bonds by the delivery of new notes or
bonds whether or not the notes or bonds to be refunded have matured
or are subject to redemption.
(c) Deliver notes or bonds, partly to refund notes or bonds
and partly for any other authorized purpose.
(d) Buy notes or bonds so issued and resell those notes or
bonds.
(e) Approve interest rates or methods for fixing interest
rates, prices, discounts, maturities, principal amounts,
denominations, dates of issuance, interest payment dates,
redemption rights at the option of the authority or the holder, the
place of delivery and payment, and other matters and procedures
necessary to complete the transactions authorized.
(f) Direct the investment of any and all funds of the
authority.
(g) Approve the terms of a contract, including, but not
limited to, a contract for the sale or cutting of timber, and
execute and deliver the contract subject to the restrictions of
this part.
(h) Approve terms of any insurance contract, agreement for a
line of credit, a letter of credit, a commitment to purchase notes
or bonds, an agreement to remarket bonds or notes, an agreement to
manage payment, revenue, or interest rate exposure, or any other
transaction to provide security to assure timely payment of a bond
or note.
(i) Perform any power, duty, function, or responsibility of
the authority.
Sec. 37. A resolution authorizing bonds or notes may provide
for all of the following that shall be part of the contract with
the holders of the bonds or notes:
(a) A pledge to any payment or purpose all or any part of
authority revenues or assets to which its right then exists or may
later come to exist, and of money derived from the revenues or
assets, and of the proceeds of bonds or notes or of an issue of
bonds or notes, subject to any existing agreements with bondholders
or noteholders.
(b) A pledge of a loan, grant, or contribution from the
federal or state government.
(c) The establishment and setting aside of reserves or sinking
funds and the regulation and disposition of reserves or sinking
funds subject to this part.
(d) Authority for and limitations on the issuance of
additional bonds or notes for the purposes provided for in the
resolution and the terms upon which additional notes or bonds may
be issued and secured.
(e) The procedure, if any, by which the terms of a contract
with noteholders or bondholders may be amended or abrogated, the
number of noteholders or bondholders who are required to consent to
the amendment or abrogation, and the manner in which the consent
may be given.
(f) A contract with the bondholders as to the custody,
collection, securing, investment, and payment of any money of the
authority. Money of the authority and deposits of money may be
secured in the manner determined by the authority. Banks and trust
companies may give security for such deposits.
(g) Vest in a trustee, or a secured party, such property,
income, revenues, receipts, rights, remedies, powers, and duties in
trust or otherwise as the authority determines necessary or
appropriate to adequately secure and protect noteholders and
bondholders or to limit or abrogate the right of the holders of
bonds or notes of the authority to appoint a trustee under this
part or to limit the rights, powers, and duties of the trustee.
(h) Provide to a trustee or the noteholders or bondholders
remedies that may be exercised if the authority fails or refuses to
comply with this part or defaults in an agreement made with the
holders of an issue of bonds or notes, which may include any of the
following:
(i) By mandamus or other suit, action, or proceeding at law or
in equity, to enforce the rights of the bondholders or noteholders,
and require the authority to carry out any other agreements with
the holders of those notes or bonds and to perform the authority's
duties under this part.
(ii) Bring suit upon the notes or bonds.
(iii) By action or suit, require the authority to account as if
it were the trustee of an express trust for the holders of the
notes or bonds.
(iv) By action or suit in equity, enjoin any acts or things
that may be unlawful or in violation of the rights of the holders
of the notes or bonds.
(v) Declare the notes or bonds due and payable and, if all
defaults shall be made good, then, as permitted by such resolution,
annul that declaration and its consequences.
(i) Any other matters of like or different character that in
any way affect the security of protection of the bonds or notes.
Sec. 39. A pledge made by the authority shall be valid and
binding from the time the pledge is made. The money or property
pledged and then received by the authority immediately is subject
to the lien of the pledge without a physical delivery or further
act. The lien of a pledge is valid and binding as against parties
having claims of any kind in tort, contract, or otherwise against
the authority, and is valid and binding as against the transfers of
the money or property pledged, irrespective of whether parties have
notice. Neither the resolution, the trust agreement, nor any other
instrument by which a pledge is created need be recorded in order
to establish and perfect a lien or security interest in the
property so pledged.
Sec. 41. Neither the members of the authority nor any person
executing bonds or notes issued under this act or any person
executing any agreement on behalf of the authority is liable
personally on the bonds or notes by reason of their issuance.
Sec. 43. The authority may purchase bonds or notes of the
authority out of funds or money of the authority available for that
purpose. The authority may hold, cancel, or resell authority bonds
or notes subject to or in accordance with an agreement with holders
of authority bonds or notes.
Sec. 45. This state pledges to and agrees with the holders of
bonds or notes issued under this act that this state shall not
limit or restrict the rights vested in the authority by this act to
fulfill the terms of an agreement made with the holders of
authority bonds or notes, or in any way impair the rights or
remedies of the holders of the bonds or notes of the authority
until the bonds and notes, together with interest on the bonds or
notes and interest on any unpaid installments of interest, and all
costs and expenses in connection with an action or proceedings by
or on behalf of those holders are fully met, paid, and discharged.
Sec. 47. Notwithstanding any restriction contained in any
other law, this state and a public officer, local unit of
government, or agency of this state or a local unit of government;
a bank, trust company, savings bank and institution, savings and
loan association, investment company, or other person carrying on a
banking business; an insurance company, insurance association, or
other person carrying on an insurance business; or an executor,
administrator, guardian, trustee, or other fiduciary may legally
invest funds belonging to them or within their control in bonds or
notes issued under this act, and authority bonds or notes shall be
authorized security for public deposits.
Sec. 49. Property of the authority is public property devoted
to an essential public and governmental function and purpose.
Income of the authority is considered to be for a public purpose.
The property of the authority and its income and operation are
exempt from all taxes and special assessments of this state or a
political subdivision of this state. Bonds or notes issued by the
authority, and the interest on and income from those bonds and
notes, are exempt from all taxation of this state or a political
subdivision of the state.
Sec. 51. This act shall be construed liberally to effectuate
the legislative intent and the purposes as complete and independent
authority for the performance of each and every act and thing
authorized by this act, and all powers granted shall be broadly
interpreted to effectuate the intent and purposes and not as a
limitation of powers.
