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