Bill Text: MI SB0436 | 2015-2016 | 98th Legislature | Introduced

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Bill Title: Transportation; funds; Michigan roads to recovery fund; create, and require the issuance of bonds to fund road repairs. Amends sec. 18b of 1951 PA 51 (MCL 247.668b) & adds sec. 18m.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2015-07-01 - Referred To Committee On Transportation [SB0436 Detail]

Download: Michigan-2015-SB0436-Introduced.html

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SENATE BILL No. 436

 

 

July 1, 2015, Introduced by Senator KNOLLENBERG and referred to the Committee on Transportation.

 

 

 

     A bill to amend 1951 PA 51, entitled

 

"An act to provide for the classification of all public roads,

streets, and highways in this state, and for the revision of that

classification and for additions to and deletions from each

classification; to set up and establish the Michigan transportation

fund; to provide for the deposits in the Michigan transportation

fund of specific taxes on motor vehicles and motor vehicle fuels;

to provide for the allocation of funds from the Michigan

transportation fund and the use and administration of the fund for

transportation purposes; to promote safe and efficient travel for

motor vehicle drivers, bicyclists, pedestrians, and other legal

users of roads, streets, and highways; to set up and establish the

truck safety fund; to provide for the allocation of funds from the

truck safety fund and administration of the fund for truck safety

purposes; to set up and establish the Michigan truck safety

commission; to establish certain standards for road contracts for

certain businesses; to provide for the continuing review of

transportation needs within the state; to authorize the state

transportation commission, counties, cities, and villages to borrow

money, issue bonds, and make pledges of funds for transportation

purposes; to authorize counties to advance funds for the payment of

deficiencies necessary for the payment of bonds issued under this

act; to provide for the limitations, payment, retirement, and

security of the bonds and pledges; to provide for appropriations

and tax levies by counties and townships for county roads; to

authorize contributions by townships for county roads; to provide

for the establishment and administration of the state trunk line

fund, local bridge fund, comprehensive transportation fund, and

certain other funds; to provide for the deposits in the state trunk

line fund, critical bridge fund, comprehensive transportation fund,

and certain other funds of money raised by specific taxes and fees;

to provide for definitions of public transportation functions and

criteria; to define the purposes for which Michigan transportation

funds may be allocated; to provide for Michigan transportation fund

grants; to provide for review and approval of transportation

programs; to provide for submission of annual legislative requests

and reports; to provide for the establishment and functions of

certain advisory entities; to provide for conditions for grants; to

provide for the issuance of bonds and notes for transportation

purposes; to provide for the powers and duties of certain state and

local agencies and officials; to provide for the making of loans

for transportation purposes by the state transportation department

and for the receipt and repayment by local units and agencies of

those loans from certain specified sources; and to repeal acts and

parts of acts,"

 

by amending section 18b (MCL 247.668b), as amended by 2002 PA 498,

 

and by adding section 18m.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 18b. (1) The state transportation commission may borrow

 

money and issue notes or bonds for the following purposes:

 

     (a) To pay all or any portion of or to make loans, grants, or

 

contract payments to pay all or any portion of any capital costs

 

for the purposes described in section 9 of article IX of the state

 

constitution of 1963.

 

     (b) To pay the principal or the principal and interest on

 

notes and, if the state transportation commission considers

 

refunding to be expedient, to refund bonds payable from money in

 

the state trunk line fund or the comprehensive transportation fund

 

or received or to be received from the motor vehicle highway fund

 

or the Michigan transportation fund regardless of when the refunded

 

bonds were issued, by the issuance of new bonds, whether or not the

 

bonds to be refunded have matured or are subject to prior

 

redemption or are to be paid, redeemed, or surrendered at the time

 

of issuance of the refunding bonds; and to issue new bonds partly

 

to refund bonds or pay notes then outstanding and partly for any

 

other transportation purpose authorized by this act.

 

     (c) To pay all costs relating to the issuance of the bonds or

 

notes described in this section, including, but not limited to,

 

legal, engineering, accounting, and consulting services, interest

 

on bonds or notes for such period as determined by the state

 

transportation commission in the resolution authorizing the bonds

 

or notes and a reserve for payment of principal, interest, and

 

redemption premiums on the bonds or notes in an amount determined

 

by the state transportation commission in the resolution

 

authorizing the bonds or notes.

 

     (2) The refunding bonds described in subsection (1)(b) shall

 

be sold and the proceeds and the earnings or profits from the

 

investment of those proceeds applied in whole or in part to the

 

purchase, redemption, or payment of the principal or the principal

 

and interest of the bonds to be refunded and the refunding bonds

 

issued by the state transportation commission under subsection

 

(1)(b) and the costs described in subsection (1)(c). Refunding

 

notes or bonds shall be considered to be issued for the same

 

purpose or purposes for which the notes or bonds to be refunded

 

were issued.

 

     (3) The notes or bonds authorized by this section shall be

 

issued only after authorization by resolution of the state

 

transportation commission, which resolution shall contain all of

 

the following:

 

     (a) An irrevocable pledge providing for the payment of the

 

principal and interest on the notes or bonds from money which that

 

is restricted as to use by section 9 of article IX of the state

 

constitution of 1963 and which that is deposited or to be deposited

 

in the comprehensive transportation fund, in the case of bonds or

 

notes issued for comprehensive transportation purposes as defined

 

by law, or in the state trunk line fund, in the case of bonds or

 

notes issued for transportation purposes described in the second

 

paragraph of section 9 of article IX of the state constitution of

 

1963, or in the case of notes or bonds, if the resolution

 

authorizing the notes or bonds provides, from money received or to

 

be received by the state transportation department from the

 

proceeds of bonds or renewal notes to be issued after the date of

 

the resolution or from money received or to be received from the

 

proceeds of the grants described in subsection (9). If provided in

 

the resolution authorizing the bonds or notes, so provides, a

 

portion of the principal or interest on the bonds or notes may be

 

secured by an irrevocable pledge of money deposited in the

 

comprehensive transportation fund or the state trunk line fund, and

 

the balance of the principal and interest secured by an irrevocable

 

pledge of the proceeds of bonds or renewal notes or money received

 

or to be received from the proceeds of the grants described in

 

subsection (9).

 

     (b) A brief statement describing the projects for which the

 

notes or bonds are to be issued and in the case of notes or bonds

 

to pay notes or refund bonds, a description of the notes or bonds

 

to be paid or refunded. For purposes of this section and section

 

18k, in connection with bonds issued to fund the loan program

 

established under section 11(6) to (11), the loan program shall

 

constitute the project, and it shall is not be necessary to specify

 

the particular item or costs of a particular item to be financed

 

from any particular loan made under the loan program.

 

     (c) The estimated cost of the projects or refunding or

 

refinancing.

 

     (d) The detail of the notes or bonds including the date of

 

issue, maturity date or dates of the bonds or notes, the maximum

 

interest rate, the dates of payment of interest, the paying agents,

 

the transfer agent or agents, the provisions for registration, the

 

redemption provisions, and the manner of execution or, as provided

 

in subsection (11)(d), the limitations within which such the detail

 

may be determined by the a person designated by the commission.

 

     (4) If after the issuance of notes or bonds, the state

 

transportation commission determines that a project for which the

 

notes or bonds are to be issued should be changed, the state

 

transportation commission, by resolution , adopted after the 30

 

days' notice of intention to adopt the resolution has been given to

 

the appropriations committees of the senate and the house of

 

representatives, shall amend the resolution authorizing the bonds

 

or notes to change the description of the project or projects or to

 

substitute a different project or projects for the project for

 

which the notes or bonds were issued and shall make other revisions

 

in the resolution authorizing the notes or bonds with respect to

 

cost as may be necessary to permit the change in or substitution of

 

a the project. or projects.

 

     (5) Before October 1, 1979, the total amount of bonds and

 

notes issued pursuant to under this section for comprehensive

 

transportation purposes as defined by law shall not exceed an

 

amount as will be serviced as to maximum principal and interest

 

requirements by a sum equal to the amount deposited to the credit

 

of the general transportation fund for the fiscal year ending

 

September 30, 1977. After September 30, 1979, the total amount of

 

bonds and notes issued pursuant to under this section for

 

comprehensive transportation purposes as defined by law shall not

 

exceed an amount as will be serviced, out of state funds only, as

 

to maximum annual principal and interest requirements by an amount

 

equal to 50% of the total amount of money from taxes, the use of

 

which money is restricted by section 9 of article IX of the state

 

constitution of 1963, and which money is deposited in the state

 

treasury to the credit of the comprehensive transportation fund

 

during the state fiscal year immediately preceding the issuance of

 

the bonds or notes.

 

     (6) The total amount of bonds and notes issued pursuant to

 

under this section for transportation purposes described in the

 

second paragraph of section 9 of article IX of the state

 

constitution of 1963 shall not exceed an amount as will be serviced

 

as to the maximum principal and interest requirements by a sum

 

equal to 50% of the total of the amount of money received from

 

taxes, the use of which is restricted by section 9 of article IX of

 

the state constitution of 1963 and which is deposited in the state

 

treasury to the credit of the state trunk line fund during the

 

state fiscal year immediately preceding the issuance of the bonds

 

or notes.

 

     (7) The principal or principal and interest or the portion of

 

principal or interest of bonds or notes which that are issued in

 

anticipation of the issuance of bonds or renewal notes or of

 

federal grants as provided in subsection (9) and which that do not

 

pledge for their payment money in the state trunk line fund or the

 

comprehensive transportation fund or money received or to be

 

received by the state transportation department from the Michigan

 

transportation fund or the motor vehicle highway fund shall not be

 

considered to be principal and interest requirements subject to the

 

limitation set forth in limitations under subsections (5) and (6).

 

The principal of and interest on notes or bonds refunded or for the

 

refunding of which refunding bonds have been sold, whether the

 

bonds to be refunded are to be retired at the time of delivery of

 

the refunding bonds or not, shall not be considered to be principal

 

and interest requirements subject to the limitation set forth in

 

limitations under subsections (5) and (6).

 

     (8) In computing the maximum annual principal and interest

 

requirements under subsection (6), the total outstanding maximum

 

annual contributions required to be made by the state highway

 

commission and the state transportation commission pursuant to

 

under contracts entered into under the authorization of section

 

18d, which contributions are pledged to the payment of bonds issued

 

under section 18d, shall be included in the amount.

 

     (9) The state transportation commission may borrow money and

 

issue notes or bonds in anticipation of the receipt of grants from

 

the United States of America or any agency or instrumentality

 

thereof of the United States of America and may pledge for the

 

payment of the principal, interest, and redemption premiums on such

 

notes or bonds 1 or more of the following:

 

     (a) The proceeds of any grant and any investment earnings or

 

gain on the grant.

 

     (b) If deemed advisable by the state transportation

 

commission, money which that is restricted as to use by section 9

 

of article IX of the state constitution of 1963, and which that is

 

deposited or to be deposited in the comprehensive transportation

 

fund, in the case of bonds or notes issued for comprehensive

 

transportation purposes as defined by law, or in the state trunk

 

line fund, in the case of bonds or notes issued for transportation

 

purposes described in the second paragraph of section 9 of article

 

IX of the state constitution of 1963.

 

     (c) If deemed advisable by the state transportation

 

commission, money received or to be received by the state from the

 

sale of the bonds or notes described in this section to be issued

 

after the issuance of the notes or bonds described in this

 

subsection and any investment earnings or gain thereon.on those

 

notes or bonds.

 

     (10) Bonds or notes may be issued under this section as

 

separate issues or series with different dates of issuance, but the

 

aggregate of the bonds or notes shall be are subject to the

 

limitations set forth in this section.

 

     (11) The state transportation commission in determining to

 

issue bonds or notes may do 1 or more of the following:

 

     (a) Authorize and enter into insurance contracts, agreements

 

for lines of credit, letters of credit, commitments to purchase

 

obligations, remarketing agreements, reimbursement agreements, and

 

any other transactions to provide security to assure timely payment

 

of any bonds or notes.

 

     (b) Authorize payment from the proceeds of the bonds or notes

 

or other funds available, of the cost of issuance, including, but

 

not limited to, fees for placement, fees or charges for insurance,

 

letters of credit, lines of credit, remarketing agreements,

 

reimbursement agreements, or purchase or sales agreements or

 

commitments, or other agreements to provide security to assure

 

timely payment of bonds or notes.

 

     (c) Authorize principal and interest to be payable from 1 or

 

more of the following:

 

     (i) Money described in subsection (3)(a).

 

     (ii) Proceeds of bonds or notes.

 

     (iii) Earning on proceeds of bonds or notes or other funds

 

held for payment of bonds or notes.

 

     (iv) Proceeds of any other security provided to assure timely

 

payment of the bonds or notes.

 

     (v) Proceeds of federal grants and other money described in

 

subsection (9).

 

     (vi) Any combination of the sources described in subparagraphs

 

(i) to (v).

 

     (d) Authorize or provide for a person designated by the state

 

transportation commission, but only within limitations which shall

 

be that are contained in the authorization resolution of the state

 

transportation commission, to do 1 or more of the following:

 

     (i) Sell, and deliver, and receive payment for bonds or notes.

 

     (ii) Refund bonds or notes by the delivery of new bonds or

 

notes, whether or not the bonds or notes to be refunded have

 

matured or are subject to redemption prior to maturity on the date

 

of delivery of the refunding bonds or notes.

 

     (iii) Deliver bonds or notes partly to refund bonds or notes

 

and partly for any other authorized purposes.

 

     (iv) Buy, hold without cancellation, or sell bonds or notes so

 

issued.

 

     (v) Approve interest rates or methods for fixing interest

 

rates, prices, discounts, maturities, principal amounts,

 

denominations, dates of issuance, interest payment dates, optional

 

or mandatory redemption or tender rights and obligations to be

 

exercised by the state transportation commission or the holder, the

 

place of delivery and payment, and other matters and procedures

 

necessary to complete the transactions authorized.

 

     (e) In connection with outstanding bonds, notes, or other

 

obligations issued under this act, or in connection with the

 

issuance or proposed issuance of bonds, notes, or other

 

indebtedness, the state transportation commission may authorize by

 

resolution the execution and delivery of agreements providing for

 

interest rate exchanges or swaps, hedges, or similar agreements.

 

The obligations of this state under the agreements, including

 

termination payments, may be made payable from and secured by a

 

pledge of the same sources of funds as the bonds, notes, or other

 

obligations in connection with which the agreements are entered

 

into, or from any other sources of funds available as a payment

 

source of bonds, notes, or other obligations issued under this act.

 

In calculating debt service on bonds, notes, and other obligations,

 

the payments and receipts under the agreements authorized by this

 

subsection, without regard to termination payments, and the payment

 

obligations under the bonds, notes, or other obligations in

 

connection with which the agreements are entered into, shall be

 

aggregated and treated as a single obligation.

 

     (f) Bonds and notes issued under this act are not subject to

 

the revised municipal finance act, 2001 PA 34, MCL 141.2101 to

 

141.2821.

 

     (g) 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.

 

     (h) If additionally secured as provided in this subsection,

 

the bonds or notes, notwithstanding other provisions of this act,

 

may be made payable or subject to purchase on demand or prior to

 

maturity at the option of the holder at the time and in the manner

 

as determined by the state transportation commission or the

 

designated person as provided in the resolution authorizing the

 

bonds or notes. Any bonds or notes authorized by this section may

 

bear no interest or interest at a rate or rates which that may be

 

variable but which shall be is not subject to the limitations

 

provided in under section 18e as provided in the resolution

 

authorizing the obligations. If bonds or notes are subject to

 

payment or purchase on demand or prior to maturity at the option of

 

the holder, and the obligation of the this state to make payment or

 

effect purchases on demand or prior to maturity, at the option of

 

the holder is limited to the proceeds of 1 or more of the

 

additional security devices described in this subsection and is not

 

payable from constitutionally restricted funds deposited in the

 

comprehensive transportation fund or the state trunk line fund, for

 

purposes of computing maximum annual principal and interest

 

requirements under subsections (5) and (6), the principal and

 

interest on the bonds or notes subject to payment or purchase on

 

demand or prior redemption at the option of the holder shall be

 

disregarded and the maximum annual principal and interest

 

requirements which that would arise with respect to the repayment

 

of the proceeds of the additional security device shall be

 

substituted therefor.for the principal and interest.

 

     (12) The state transportation commission shall issue and offer

 

for sale revenue bonds. The proceeds from the sale of the revenue

 

bonds required by this subsection shall be deposited in the

 

Michigan roads to recovery fund created in section 18m.

 

     Sec. 18m. (1) The Michigan roads to recovery fund is created

 

within the state treasury.

 

     (2) The state treasurer may receive money or other assets from

 

any source for deposit into the fund. The state treasurer shall

 

direct the investment of the fund. The state treasurer shall credit

 

to the fund interest and earnings from fund investments.

 

     (3) Money in the fund at the close of the fiscal year shall

 

remain in the fund and shall not lapse to the general fund.

 

     (4) The department shall be the administrator of the fund for

 

auditing purposes.

 

     (5) The department shall expend money from the fund, upon

 

appropriation, only for the purpose of funding new road

 

construction projects selected by the department.

 

     Enacting section 1. This amendatory act takes effect 90 days

 

after the date it is enacted into law.