Bill Text: MI SB1100 | 2015-2016 | 98th Legislature | Introduced
Bill Title: State financing and management; authorities; Michigan veterans' facility authority; create. Creates new act.
Spectrum: Partisan Bill (Republican 4-0)
Status: (Enrolled - Dead) 2016-12-30 - Presented To Governor 12/29/2016 @ 4:32 Pm 12/30/16 Addenda [SB1100 Detail]
Download: Michigan-2015-SB1100-Introduced.html
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SENATE BILL No. 1100
September 21, 2016, Introduced by Senators HILDENBRAND, STAMAS, MACGREGOR, KNEZEK and MARLEAU and referred to the Committee on Veterans, Military Affairs and Homeland Security.
A bill to create the Michigan veterans' facility authority; to
develop and operate certain veterans' facilities; to create funds
and accounts; to authorize the issuing of bonds and notes; to
prescribe the powers and duties of the authority and certain state
departments and other state officials and employees; and to make
appropriations and prescribe certain conditions for the
appropriations.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act shall be known and may be cited as the
"Michigan veterans' facility authority act".
Sec. 2. As used in this act:
(a) "Authority" means the Michigan veterans' facility
authority created under section 3.
(b) "Board" means the board of directors of the authority.
(c) "Bond" means a bond, note, or other obligation issued by
the authority under this act.
(d) "Department" means the department of military and veterans
affairs.
(e) "Develop" means to plan, acquire, construct, improve,
enlarge, maintain, renew, renovate, repair, replace, lease, equip,
furnish, market, promote, manage, or operate.
(f) "Veteran" means an individual who meets both of the
following:
(i) Is a veteran as defined in section 1 of 1965 PA 190, MCL
35.61.
(ii) Was honorably discharged.
(g) "Veterans' facility" means a long-term care facility and
ancillary facilities for veterans and their dependents as
determined by the authority.
Sec. 3. (1) The Michigan veterans' facility authority is
created as a public body corporate and politic within the
department. The exercise by the authority of the powers conferred
by this act is an essential governmental function of this state.
(2) Notwithstanding the existence of common management, the
authority shall be treated and accounted for as a separate legal
entity with its separate corporate purposes as set forth in this
act. The assets, liabilities, and funds of the authority shall not
be consolidated or commingled with those of this state.
Sec. 4. The authority shall exercise its duties independently
of the department. The staffing, budgeting, procurement, and
related administrative functions of the authority may be performed
under the direction and supervision of the director of the
department.
Sec. 5. (1) The authority shall exercise its duties through
its board of directors.
(2) The board shall be made up of 9 members as follows:
(a) The director of the department.
(b) Three members with professional knowledge, skill, or
experience in long-term care, health care licensure or finance, or
medicine who represent the interests of 1 or more congressionally
chartered veterans' organizations appointed by the governor with
the advice and consent of the senate.
(c) Three members with professional knowledge, skill, or
experience in long-term care, health care licensure or finance, or
medicine appointed by the governor with the advice and consent of
the senate. One of the members appointed under this subdivision
shall be a resident of the Upper Peninsula of this state.
(d) One member appointed by the governor from a list of 2 or
more individuals selected by the majority leader of the senate,
with professional knowledge, skill, or experience in long-term
care, health care licensure or finance, or medicine.
(e) One member appointed by the governor from a list of 2 or
more individuals selected by the speaker of the house of
representatives, with professional knowledge, skill, or experience
in long-term care, health care licensure or finance, or medicine.
(3) The appointed members shall serve for terms of 4 years. Of
the 5 members first appointed, 1 shall be appointed for an initial
term of 1 year, 2 shall be appointed for an initial term of 2
years, and 2 shall be appointed for an initial term of 3 years. The
appointed members shall serve until a successor is appointed. A
vacancy shall be filled for the balance of the unexpired term in
the same manner as the original appointment.
(4) The director of a state department who is a designated
member of the board may appoint a representative to serve in his or
her absence.
(5) Members of the board shall serve without compensation but
may receive reasonable reimbursement for necessary travel and
expenses incurred in the discharge of their duties.
(6) The director of the department shall serve as chairperson
of the board.
(7) A majority of the appointed and serving members of the
board shall constitute a quorum of the board for the transaction of
business. A member may participate in a meeting by the use of
amplified telephonic or video conferencing equipment. A member
participating by the use of video conferencing equipment shall be
considered to be present for purposes of a quorum and for purposes
of voting. Actions of the board shall be approved by a majority
vote of the members present at a meeting.
(8) The authority may employ or contract for legal, financial,
and technical experts, and other officers, agents, and employees,
permanent and temporary, as the authority requires, and shall
determine their qualifications, duties, and compensation. The board
may delegate to 1 or more agents or employees those powers or
duties with the limitations as the board considers proper.
(9) The members of the board and officers and employees of the
authority are subject to 1968 PA 317, MCL 15.321 to 15.330, or 1968
PA 318, MCL 15.301 to 15.310.
(10) A member of the board or 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 the duties, a member of the board or an officer,
employee, or agent, 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 or officer, employee, or agent of the authority
to be correct by the president or the officer of the authority
having charge of its books or account, or stated in a written
report by a certified public accountant or firm of certified public
accountants fairly to reflect the financial condition of the
authority.
(11) 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.
(12) Upon request by a member of the legislature, the board
shall make nonprivileged information regarding the operations and
accounts of the authority and nonprivileged information regarding
the care provided to veterans at a veterans' facility available to
members of the legislature.
Sec. 6. The authority shall have all of the following powers:
(a) To solicit and accept gifts, grants, and loans from any
person.
(b) To invest any money of the authority at the authority's
discretion, in any obligations determined proper by the authority,
and name and use depositories for its money.
(c) To procure insurance against any loss in connection with
the property, assets, or activities of the authority.
(d) To sue and be sued, to have a seal, and to make, execute,
and deliver contracts, conveyances, and other instruments necessary
to the exercise of the authority's powers.
(e) To make and amend bylaws.
(f) To employ and contract with individuals necessary for the
operation of the authority and 1 or more veterans' facilities.
(g) To make and execute contracts including without limitation
sale agreements, trust agreements, trust indentures, bond purchase
agreements, tax regulatory agreements, continuing disclosure
agreements, ancillary facilities, and all other instruments
necessary or convenient for the exercise of its powers and
functions, and commence any action to protect or enforce any right
conferred upon it by any law, contract or other agreement.
(h) To engage the services of financial advisors and experts,
legal counsel, placement agents, underwriters, appraisers and other
advisors, consultants and fiduciaries as may be necessary to
effectuate the purposes of this act.
(i) To pay its operating expenses and financing costs.
(j) To pledge revenues or other assets as security for the
payment of the principal of and interest on any bonds.
(k) To procure insurance, letters of credit, or other credit
enhancement with respect to any bonds for the payment of tenders of
bonds, or for the payment upon maturity of short-term bonds.
(l) To develop or operate 1 or more veterans' facilities.
(m) To solicit federal funds and other funding sources to
develop veterans' facilities.
(n) To do any and all things necessary or convenient to carry
out its purposes and exercise the powers expressly given and
granted in this act.
Sec. 7. (1) It is determined that the creation of the
authority and the carrying out of its authorized duties is in all
respects a public and governmental purpose for the benefit of the
people of this state and for the improvement of their health,
safety, welfare, comfort, and security, and that these purposes are
public purposes and that the authority will be performing an
essential governmental function in the exercise of the powers
conferred upon it by this act.
(2) The property of the authority and its income and
operations shall be exempt from taxation by this state and any
political subdivision of this state.
(3) In the case of any bonds, the interest on which is
intended to be exempt from federal income tax, the authority shall
prescribe restrictions on the use of the proceeds of those bonds
and related matters as are necessary to assure the exemption, and
the recipients of proceeds of those bonds shall be bound thereby to
the extent the restrictions shall be made applicable to them. Any
recipient of the proceeds of bonds bearing interest that is
intended to be exempt from federal income tax, including without
limitation this state or any political subdivision of this state,
is authorized to execute a tax regulatory agreement with the
authority and, as to any political subdivision that is a recipient
of the proceeds of bonds bearing interest that is intended to be
exempt from federal income, this state. The execution of a tax
regulatory agreement may be treated as a condition to receiving any
proceeds of a bond issued under this act.
Sec. 8. (1) The authority shall have power and is hereby
authorized from time to time to issue bonds in the principal amount
or amounts and with the maturities as the authority shall determine
to be necessary to provide sufficient funds for achieving its
authorized purposes. The department of treasury shall provide
technical expertise as necessary for the authority to issue bonds
under this act.
(2) The board of the authority shall authorize the issuance of
bonds by resolution. The authority may issue bonds, including
refunding bonds, without obtaining the consent of any department,
division, commission, board, bureau, or agency of this state and
without any other proceedings or the occurrence of any other
conditions other than those proceedings, conditions, or things that
are specifically required by this act. Every issue of bonds shall
be special revenue obligations payable from and secured by a pledge
of revenues and other assets, including without limitation the
proceeds of the bonds deposited in a reserve fund for the benefit
of the owners of the bonds, earnings on funds of the authority and
other funds as may become available, upon the terms and conditions
as specified by the authority in the authority resolution under
which the bonds are issued or in a related trust agreement or trust
indenture.
(3) The authority may issue bonds to refund any bonds by the
issuance of new bonds, whenever it considers the refunding
expedient, whether the bonds to be refunded have or have not
matured, and to issue bonds partly to refund bonds then outstanding
and partly for restructuring or any of its other authorized
purposes.
(4) For each issue of bonds, the authority shall determine all
of the following:
(a) The date of issuance.
(b) Whether the bonds shall bear no interest, appreciate as to
principal amount, bear interest at fixed or variable rates, or any
combination of these.
(c) Whether the bonds shall be payable at or prior to
maturity.
(d) When the bonds shall mature.
(e) Whether the authority may redeem the bonds prior to
maturity, at what price, and under what conditions.
(f) The method of payment of principal of and interest on the
bonds.
(g) The form, denominations, and places of payment of
principal of and interest on the bonds.
(h) If any officer whose signature or the facsimile of whose
signature appears on any bond shall cease to be that officer before
the delivery of the bond, that signature or facsimile shall
nevertheless be valid and sufficient for all purposes as if he or
she had remained in office until delivery of the bond.
(i) Any other terms and conditions necessary to issue the
bonds in fully marketable form.
(5) The authority may sell the bonds in the manner determined
by the authority board, at public or private sale, and on either a
competitive or negotiated basis.
(6) This act shall govern the creation, perfection, priority,
and enforcement of any pledge of revenues or other security made by
the authority. Each pledge made by the authority shall be valid and
binding at the time the pledge is made. The encumbered revenues,
reserves, or earnings pledged or earnings on the investment of the
encumbered revenues, reserves, or earnings pledged shall
immediately be subject to the lien of the pledge without any
physical delivery or further act and the lien on that pledge shall
be valid and binding as against all parties having claims of any
kind in tort, contract or otherwise against the authority,
irrespective of whether the parties have notice of the lien or
pledge, and without filing or recording the pledge. The resolution
or other instrument by which a pledge is created does not have to
be recorded.
(7) This act shall also govern the negotiability of bonds
issued under this act. Any bonds issued under this act shall be
fully negotiable within the meaning and for all purposes of the
uniform commercial code. By accepting the bond or obligation, each
owner of a bond or other obligation of the authority shall be
conclusively considered to have agreed that the bond is and shall
be fully negotiable within the meaning and for all purposes of the
uniform commercial code.
(8) In the discretion of the authority, any bonds may be
secured by a trust agreement or trust indenture by and between the
authority and a trustee, which may be any trust company or bank
having the powers of a trust company, whether located within or
without this state. A trust agreement or trust indenture authorized
under this subsection, or an authority resolution providing for the
issuance of bonds may provide for the creation and maintenance of
reserves as the authority shall determine to be proper and may
include covenants setting forth the duties of the authority in
relation to the bonds, the income to the authority, and the sale
agreement. A trust agreement or trust indenture authorized under
this subsection or an authority resolution may contain provisions
respecting the custody, safeguarding, and application of all money
and bonds and may contain provisions for protecting and enforcing
the rights and remedies under the sale agreement of the owners of
the bonds and benefited parties as may be reasonable and proper and
not in violation of law. It shall be lawful for any bank or trust
company incorporated under the laws of this state that may act as
depository of the proceeds of bonds or of any other funds or
obligations received on behalf of the authority to furnish
indemnifying bonds or to pledge obligations as may be required by
the authority. Any trust agreement or trust indenture authorized
under this subsection or an authority resolution may contain other
provisions as the authority may consider reasonable and proper for
priorities and subordination among the owners of bonds and
benefited parties.
(9) A member of the board or an officer, appointee, or
employee of the authority shall not be subject to personal
liability when acting in good faith within the scope of his or her
authority or on account of liability of the authority. The board
may defend and indemnify a member of the board or an officer,
appointee, or employee of the authority against liability arising
out of the discharge of his or her official duties. The authority
may indemnify and procure insurance indemnifying members of the
board and other officers and employees of the authority from
personal loss or accountability for liability asserted by a person
with regard to bonds or other obligations of the authority, or from
any personal liability or accountability by reason of the issuance
of the bonds or other obligations or by reason of any other action
taken or the failure to act by the authority. The authority may
also purchase and maintain insurance on behalf of any person
against the liability asserted against the person and incurred by
the person in any capacity or arising out of the status of the
person as a member of the board or an officer or employee of the
authority, whether or not the authority would have the power to
indemnify the person against that liability under this subsection.
(10) A member, officer, employee or agent of the authority
shall not have an interest, either directly or indirectly, in any
business organization engaged in any business, contract or
transaction with the authority or in any contract of any other
person engaged in any business with the authority, or in the
purchase, sale, lease or transfer of any property to or from the
authority.
(11) Bonds issued under this act are not subject to the
revised municipal finance act, 2001 PA 34, MCL 141.2101 to
141.2821.
(12) The issuance of bonds under this act is subject to the
agency financing reporting act, 2002 PA 470, MCL 129.171 to
129.177.
(13) A resolution of the authority authorizing bonds, or the
provisions of a trust agreement or trust indenture authorized by
resolution of the authority, may delegate to an officer or other
employee of the authority, or an agent designated by the authority,
for the period of time as the authority determines, the power to
cause the issue, sale, and delivery of the bonds within limits on
those bonds established by the authority as to any of the
following:
(a) The form.
(b) The maximum interest rate or rates.
(c) The maturity date or dates.
(d) The purchase price.
(e) The denominations.
(f) The redemption premiums.
(g) The nature of the security.
(h) The selection of an applicable interest rate index.
(i) Other terms and conditions with respect to the issuance of
the bonds as the authority shall prescribe.
Sec. 9. Notwithstanding any restriction contained in any other
law, rule, regulation, or order to the contrary, this state and all
political subdivisions of this state, their officers, boards,
commissioners, departments or other agencies, governmental pension
funds, all banks, trust companies, savings banks and institutions,
building and loan associations, savings and loan associations,
investment companies and other persons carrying on a banking or
investment business, and all executors, administrators, guardians,
trustees and other fiduciaries, and all other persons whatsoever
who now are or may hereafter be authorized to invest in bonds or
other obligations of the state, may properly and legally invest any
sinking funds, money or other funds, including capital, belonging
to them or within their control, in any bond. Bonds issued by the
authority under this act are hereby made bonds that may properly
and legally be deposited with, and received by, any state municipal
officers or agency of this state, for any purpose for which the
deposit of bonds or other obligations of this state is now, or may
be, authorized by law.
Sec. 10. The authority may be dissolved by act of the
legislature on condition that the authority has no debts or
obligations outstanding or that provision has been made for the
payment or retirement of all debts or obligations. Upon any such
dissolution of the authority, all property, funds, and assets of
the authority shall be vested in this state.
Sec. 11. This act and all powers granted hereby shall be
liberally construed to effectuate its intent and their purposes,
without implied limitations on the powers of the authority, the
state budget director, and the state treasurer. This act shall
constitute full, complete, and additional authority for all things
that are contemplated in this act to be done. All rights and powers
granted in this act shall be cumulative with those derived from
other sources and shall not, except as expressly stated in this
act, be construed in limitation of those rights and powers. Insofar
as the provisions of this act are inconsistent with the provisions
of any other act, general or special, the provisions of this act
shall be controlling. If any clause, paragraph, section, or part of
this act is adjudged by any court of competent jurisdiction to be
invalid, that judgment shall not affect, impair, or invalidate the
remainder of the clause, paragraph, section, or part but shall be
applied in its operation to the clause, sentence, paragraph,
section, or part directly involved in the controversy in which the
judgment shall have been rendered.
Sec. 12. (1) The authority shall annually file a written
report on its activities of the immediately preceding year with the
governor, each house of the legislature, and the chairperson of the
appropriations subcommittee of each house of the legislature that
has jurisdiction over military and veterans' affairs. This report
shall be submitted not later than 90 days following the end of the
fiscal year. This report shall specify all of the following:
(a) The status of development of each veterans' facility.
(b) A statement whether a veterans' facility will likely be
opening in the next fiscal year.
(c) The census of each veterans' facility.
(d) Accounting of all revenues received and expended.
(e) Statistics on veterans who resided in each veterans'
facility.
(f) Recommendations for improvements at each veterans'
facility.
(g) Salaries and benefits costs of all staff positions within
the authority and at all veterans' facilities.
(h) Any other matters the board considers pertinent.
(2) If the authority indicates that a veterans' facility will
likely be opening in the next fiscal year under subsection (1)(a),
then the authority shall file a supplemental report on its
activities every 90 days until the veterans' facility is open and
operational. The supplemental report shall be filed with the
governor, each house of the legislature, and the chairperson of the
appropriations subcommittee of each house of the legislature that
has jurisdiction over military and veterans' affairs not later than
60 days following the 90-day period covered in the supplemental
report. The supplemental report shall specify all the items
described in subsection (1)(a) to (g).
(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. However, for the first
4 years of the authority's existence, the auditor general shall
conduct a financial audit for the first year and biennially
thereafter and shall conduct a performance audit for the second
year and biennially thereafter. After the initial 4-year period of
the authority's existence, the auditor general shall perform a
performance audit if a veterans' facility receives a Centers for
Medicare and Medicaid Services survey finding that indicates a
substandard quality of care as defined in 42 CFR 488.301, upon
request by either house of the legislature, or as otherwise
determined by the auditor general. Records shall be maintained
according to generally accepted auditing principles.
