SB-0416, As Passed House, June 4, 2009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SENATE BILL No. 416

 

 

March 31, 2009, Introduced by Senator SWITALSKI and referred to the Committee on Appropriations.

 

 

 

     A bill to amend 2005 PA 92, entitled

 

"School bond qualification, approval, and loan act,"

 

by amending section 9 (MCL 388.1929), as amended by 2006 PA 71.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 9. (1) Except as otherwise provided in this act, a school

 

district may borrow from the state an amount not greater than the

 

difference between the proceeds of the school district’s computed

 

millage and the amount necessary to pay principal and interest on

 

its qualified bonds, including any necessary allowances for

 

estimated tax delinquencies.

 

     (2) For school districts having qualified loans outstanding as

 

of July 20, 2005, the state treasurer shall review information

 

relating to each school district regarding the taxable value of the

 

school district and the actual debt service of outstanding

 


qualified bonds as of July 20, 2005 and shall issue an order

 

establishing the payment date for all those outstanding qualified

 

loans and any additional qualified loans expected to be incurred by

 

those school districts related to qualified bonds issued before

 

July 20, 2005. The payment date shall be not later than 72 months

 

after the date on which the qualified bonds most recently issued by

 

the school district are due and payable.

 

     (3) For qualified loans related to qualified bonds issued

 

after July 20, 2005, the qualified loans shall be due not later

 

than 72 months after the date on which the qualified bonds for

 

which the school borrowed from this state are due and payable. This

 

section does not preclude early repayment of qualified bonds or

 

qualified loans.

 

     (4) Except with regard to qualified loans described in

 

subsection (2), each loan made or considered made to a school

 

district under this act shall be for debt service on only a

 

specific qualified bond issue. The state treasurer shall maintain

 

separate accounts for each school district on the books and

 

accounts of this state noting the qualified bond, the related

 

qualified loans, the final payment date of the bonds, the final

 

payment date of the qualified loans, and the interest rate accrued

 

on the loans.

 

     (5) For qualified loans relating to qualified bonds issued

 

after July 20, 2005, a school district shall continue to levy the

 

computed mills until it has completely repaid all principal and

 

interest on its qualified loans.

 

     (6) For qualified loans relating to qualified bonds issued

 


before July 20, 2005, a school district shall continue to comply

 

with the levy and repayment requirements imposed before July 20,

 

2005. Not less than 90 days after July 20, 2005, the state

 

treasurer and the school district shall enter into amended and

 

restated repayment agreements to incorporate the levy and repayment

 

requirements applicable to qualified loans issued before July 20,

 

2005.

 

     (7) Upon the request of a school district made before June 1

 

of any year, the state treasurer annually may waive all or a

 

portion of the millage required to be levied by a school district

 

to pay principal and interest on its qualified bonds or qualified

 

loans under this section if the state treasurer finds all of the

 

following:

 

     (a) The school board of the school district has applied to the

 

state treasurer for permission to levy less than the millage

 

required to be levied to pay the principal and interest on its

 

qualified bonds or qualified loans under subsection (1).

 

     (b) The application specifies the number of mills the school

 

district requests permission to levy.

 

     (c) The waiver will be financially beneficial to this state,

 

the school district, or both.

 

     (d) The waiver will not reduce the millage levied by the

 

school district to pay principal and interest on qualified bonds or

 

qualified loans under this act to less than 7 mills.

 

     (e) The board of the school district, by resolution, has

 

agreed to comply with all conditions that the state treasurer

 

considers necessary.

 


     (8) Except as otherwise provided in this act, qualified loans

 

shall bear interest at the 1 of the following rates:

 

     (a) The greater of 3% or the average annual cost of funds

 

computed by the state treasurer not less often than annually on the

 

basis of 1 of the following:

 

     (i) All notes or bonds issued by the Michigan municipal bond

 

authority to fund qualified loans or refinance those notes or bonds

 

plus 0.125%.

 

     (ii) If no bonds or notes issued by the Michigan municipal bond

 

authority are outstanding, all state general obligations issued

 

under section bonds or notes issued by this state under sections 15

 

and 16 of article IX of the state constitution of 1963 plus 0.125%.

 

In the event this state has no outstanding general obligations

 

under section 16 of article IX of the state constitution of 1963,

 

the average annual cost of funds shall be computed on the basis of

 

all state general obligations issued under section 15 of article IX

 

of the state constitution of 1963 plus 0.125%.

 

     (b) A lesser rate determined by the state treasurer to be

 

necessary to maintain the exemption from federal income tax of

 

interest on any qualified loans.