Bill Text: MI SB1125 | 2011-2012 | 96th Legislature | Engrossed
Bill Title: Housing; housing development authority; limit on principal amount of bonds and notes; increase. Amends sec. 32 of 1966 PA 346 (MCL 125.1432).
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2012-10-17 - Assigned Pa 0328'12 With Immediate Effect [SB1125 Detail]
Download: Michigan-2011-SB1125-Engrossed.html
SB-1125, As Passed Senate, June 6, 2012
SENATE BILL No. 1125
May 15, 2012, Introduced by Senator KOWALL and referred to the Committee on Economic Development.
A bill to amend 1966 PA 346, entitled
"State housing development authority act of 1966,"
by amending section 32 (MCL 125.1432), as amended by 2008 PA 56.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 32. (1) The authority may create and establish 1 or more
special funds called capital reserve funds to secure notes and
bonds of the authority. The authority shall pay into a capital
reserve fund money appropriated and made available by this state
for the purposes of the fund, the proceeds of the sale of notes or
bonds to the extent provided in the resolution of the authority
authorizing the issuance of the notes or bonds, and other money
that is made available to the authority for the purpose of a fund
from any other source. In addition to, or in lieu of, depositing
money in a capital reserve fund, the authority may obtain and
pledge letters of credit and, effective retroactively as of June 1,
1993, insurance policies, surety bonds, guarantees, or other
security arrangements if those other security arrangements are
approved by the state treasurer, for the purposes of the capital
reserve fund. The amount available under letters of credit,
insurance policies, surety bonds, guarantees, or other security
arrangements pledged to a capital reserve fund shall be credited
toward the satisfaction of a capital reserve fund requirement. All
money and proceeds under letters of credit, insurance policies,
surety bonds, guarantees, or other security arrangements held in a
capital reserve fund, except as specifically provided, shall be
used as required solely for the payment of the principal of notes
or bonds of the authority secured in whole or in part by the
capital reserve fund, for the purchase or redemption of notes or
bonds, for the payment of interest on the notes or bonds, or for
the payment of a redemption premium required to be paid when the
notes or bonds are redeemed prior to maturity. However, the
authority shall not use the capital reserve fund for an optional
purchase or optional redemption of notes or bonds if the use would
reduce the total of the money on deposit in the capital reserve
fund and amounts available under a letter of credit, insurance
policy, surety bond, guarantee, or other security arrangement
pledged to a capital reserve fund to less than the capital reserve
fund requirement established for the fund. Income or interest
earned
by, or increment to, a capital reserve fund due to from the
investment of the money in the capital reserve fund may be
transferred by the authority to other funds or accounts of the
authority to the extent that the transfer does not reduce the total
of the amount of money in a capital reserve fund and amounts
available under a letter of credit, insurance policy, surety bond,
guarantee, or other security arrangement pledged to the capital
reserve
fund below the capital reserve fund requirement for a the
fund.
(2)
The authority shall not at any time issue notes or bonds
secured in whole or in part by a capital reserve fund if, upon the
issuance of the notes or bonds, the amount in the capital reserve
fund, including the amounts available under a letter of credit,
insurance policy, surety bond, guarantee, or other security
arrangement pledged to the capital reserve fund, would be less than
the capital reserve fund requirement for the fund, unless the
authority, at the time of issuance of the notes or bonds, deposits
in the fund from the proceeds of the notes or bonds to be issued,
or from other sources, an amount that, together with the amount
then in the fund, is not less than the capital reserve fund
requirement for the fund, or obtains a letter of credit, insurance
policy, surety bond, guarantee, or other security arrangement in an
amount that, together with the amount then in the fund, is not less
than the capital reserve fund requirement for the fund. For the
purposes of this section, "capital reserve fund requirement" means
the
requirement provided amount
required in the resolution of the
authority authorizing the notes or bonds with respect to which the
fund is established, which amount shall not exceed the maximum
amount of principal and interest maturing and becoming due in a
succeeding calendar year on the notes or bonds of the authority
secured in whole or part by the fund.
(3) The authority has, before January 9, 1977, in connection
with its housing development bonds issued pursuant to a bond
resolution dated June 10, 1971, established within the capital
reserve fund relating to housing development bonds, a capital
reserve account and a capital reserve capital account. This capital
reserve account constitutes a capital reserve fund under this act.
Money in this capital reserve account shall secure only housing
development bonds issued pursuant to the June 10, 1971 bond
resolution. Unless otherwise provided by the authority, money in
the capital reserve capital account shall secure all bonds and
notes of the authority. In determining whether the capital reserve
fund requirement established for a capital reserve fund has been
met, the authority shall not include or take into account money in
the capital reserve capital account.
(4) The authority has, before January 9, 1977, in connection
with its insured mortgage revenue bonds issued pursuant to a bond
resolution dated May 11, 1976, established a bond reserve fund.
This bond reserve fund constitutes a capital reserve fund under
this act.
(5)
The authority may issue notes and bonds subject to the
following
limitations:
(a)
The authority but shall not have outstanding at any time
bonds and notes for any of its corporate purposes in an aggregate
principal amount exceeding $4,200,000,000.00, excluding all of the
following:
(a) (i) The
principal amount of bonds and notes issued to
refund outstanding bonds and notes.
(b) (ii) The
principal amount of bonds and notes that
appreciate in principal amount, except to the extent of the
principal amount of these bonds and notes payable at such time.
(c) (iii) The
principal amount of notes and bonds representing
original issue discount, if any.
(b)
After November 1, 2011, the limitation on the aggregate
principal
amount of notes and bonds provided in subdivision (a) is
$3,000,000,000.00,
excluding all of the following:
(i) The exclusions provided in subparagraphs (i), (ii), and
(iii)
of
subdivision (a).
(ii) The aggregate principal amount of bonds and notes
issued
on
or before November 1, 2011, that is outstanding on November 1,
2011,
and that exceeds $3,000,000,000.00.
(6) Subject to the limitation in subsection (5), that portion
of the state ceiling to be used for qualified mortgage bonds,
mortgage credit certificates, or bonds to finance qualified
residential rental projects shall be allocated to the authority
unless the authority elects by resolution to allow another issuer
to issue qualified mortgage bonds, mortgage credit certificates, or
bonds to finance qualified residential rental projects. As used in
this subsection:
(a) "Mortgage credit certificate" means that term as defined
in section 25 of the internal revenue code, 26 USC 25.
(b) "Qualified mortgage bond" means that term as defined in
section 143 of the internal revenue code, 26 USC 143.
(c) "Qualified residential rental project" means that term as
defined in section 142 of the internal revenue code, 26 USC 142.
(d) (a)
"State ceiling" means the
aggregate amount of certain
private activity bonds, including qualified mortgage bonds, that
may be issued in any calendar year in this state pursuant to
section 146 of the internal revenue code, 26 USC 146.
(b)
"Qualified mortgage bond", "mortgage credit certificate",
and
"qualified residential rental project" mean those terms as
defined
in section 146 of the internal revenue code, 26 USC 146.
(7)
To assure ensure the continued operation and solvency of
the authority for the carrying out of the public purposes of this
act, the authority shall accumulate in each capital reserve fund an
amount equal to the capital reserve fund requirement for that fund.
If at any time the capital reserve fund requirement for a capital
reserve fund exceeds the amount of the capital reserve fund, the
authority shall transfer to this fund from the capital reserve
capital account established by the authority's June 10, 1971 bond
resolution the amount necessary to restore the capital reserve fund
to an amount equal to the capital reserve fund requirement. If a
deficiency exists in more than 1 capital reserve fund and the
amount in the capital reserve capital account is not sufficient to
fully restore the capital reserve funds, the money in the capital
reserve capital account shall be allocated between the deficient
capital reserve funds pro rata according to the amounts of the
deficiencies. If at any time the capital reserve capital account
has been exhausted and the capital reserve fund requirement for a
capital reserve fund exceeds the amount of the capital reserve
fund, the chairperson of the authority on or before September 1
shall certify to the governor and budget director the amount, if
any, necessary to restore a capital reserve fund to an amount equal
to the capital reserve fund requirement. The governor and the
budget director shall include in the annual budget the amount
certified by the chairperson of the authority.
(8) In computing the amount of a capital reserve fund for the
purposes of this section, securities in which all or a portion of
the fund is invested shall be valued at par. If the securities are
purchased at other than par, the securities may be valued at their
cost to the authority, as adjusted by amortization of the discount
or premium paid upon purchase of the securities on a pro rata basis
to the maturity date of the securities.
(9) To the extent possible and consistent with sound fiscal
management and good housing development planning, the authority
shall make full use of available federal housing subsidy programs.
The authority shall recommend programs and legislation to better
maintain and improve existing housing stock.
(10) The authority shall require that not less than 15% of the
multifamily dwelling units financed by mortgage loans from the
authority in a calendar year under federal government subsidy
programs, subject to applicable federal regulations, be offered on
a priority basis to low income families and persons receiving their
primary incomes from social security programs or state and federal
public assistance programs.
(11) The authority shall implement a program of loans for
mobile homes as soon as is reasonably feasible. The authority shall
develop a program for financing the construction or rehabilitation
of mobile home parks and mobile home condominium projects within 24
months after December 31, 1982, subject to a determination of
feasibility by the authority and the authority's ability to sell
bonds.
(12) The authority shall implement a program of loans for
consumer housing cooperatives as soon as is reasonably feasible.
The authority shall develop a program for financing the
construction or rehabilitation of consumer housing cooperative
projects within 12 months after July 10, 1984, subject to a
determination of feasibility by the authority and the authority's
ability to sell bonds.
(13)
In addition to the powers granted the authority in this
act
to promulgate rules in accordance with When processing rules
under the administrative procedures act of 1969, 1969 PA 306, MCL
24.201 to 24.328, the authority shall furnish to each member of the
legislature a copy of a notice of a public hearing or proposed rule
change at least 10 days before the public hearing and at least 20
days before the adoption of the rule.
(14) Before October 1 of each year, the authority shall
identify housing production goals for housing projects financed
with bonds and notes issued under the limitations provided in
section 32a. The authority shall identify a goal for the authority
as a whole and a specific goal for each program. The authority
shall submit those goals in an annual report to the governor and to
the house committee on urban affairs and the senate committee on
finance, or their successor committees.
(15) Within 6 months after the legislature enacts or the
authority adopts a new program, the authority shall submit an
interim report to the same persons to whom an annual report is
submitted. If both the legislature and the authority establish a
program, the authority shall submit the interim report within 6
months after the effective date of the act establishing the
program. The authority shall include in an interim report all of
the information required in an annual report that is specific to
that program.
(16) After the initial or an interim report, the authority
shall include in an annual report all of the following for each
program:
(a) Whether the production goals for the previous 12-month
period have been met. If those production goals have not been met,
the authority shall explain in the report the reasons why those
production goals have not been met.
(b) Any significant obstacles to the development of housing
for low and moderate income persons that have been encountered by
the authority.
(c) The estimated economic and social benefits of these
housing projects to the immediate neighborhoods in which the
housing projects have been constructed.
(d) The estimated economic and social benefits of these
housing projects to the municipalities in which the housing
projects have been constructed.
(e) The extent of displacement, direct and indirect, of lower
income persons caused by these housing projects, and steps taken by
the authority and other governmental and private parties to
ameliorate the displacement, and the results of those efforts.
(f) The estimated extent of additional reinvestment activities
by private lenders attributable to the authority's financing of
these housing projects.
(g) The age, race, family size, median income, and average
income of the tenants of these housing projects.
(h) The estimated economic impact of these housing projects,
including the number of construction jobs created, wages paid, and
taxes and payments in lieu of taxes paid.
(i) The progress in developing mobile home parks and mobile
home condominium projects, in financing the construction or
rehabilitation of consumer housing cooperative projects, and in
financing the construction or rehabilitation of nonprofit housing
corporation projects.
(j) A report on the neighborhood preservation program under
section 44f. The report shall include information about the
progress in developing the program, the neighborhoods identified as
being
eligible for the program, the neighborhoods
or municipalities
that have applied for the program, the neighborhoods that have
received funds from the program, and the reasons that neighborhoods
or municipalities have been denied funds from the program.
(k) A report on the status of federal programs that provide
assistance to low income tenants displaced as the result of
prepayments
of federally and authority assisted loans. If the
authority
determines that federal programs are inadequate for
tenants
of authority-financed housing projects, the authority will
provide
recommendations to the legislature as to how to address
this
problem on or before May 1, 1989.
(l) A report on the low income housing tax credit program under
section
22b. , that The
report shall include information
regarding
the amount of tax credits allocated to the state under each of the
subdivisions of section 22b(2); the projects that have received tax
credits; and the reasons why projects have been denied tax credits
under the program; a geographical description of the distribution
of those tax credits; and a description of amendments to the
allocation plan made during that year.
(m) A report on education and training opportunities provided
by
the authority under section 17. that will The report shall
indicate the types of education and training opportunities made
available and the amount of funding committed to these activities.
(n) For any programs or projects involving refinancings, the
number of refinancings undertaken by the authority and the total
dollar amount of all refinancings undertaken by the authority.
(17) The authority shall conduct an annual review of all
loans, financial instruments that require repayment, or lines of
credit with the Michigan broadband development authority created in
section 4 of the Michigan broadband development authority act, 2002
PA 49, MCL 484.3204. The review shall contain an analysis of the
Michigan broadband development authority's ability to repay all
loans, financial instruments that require repayment, and lines of
credit with the authority and the amount and payment schedule of
all current loans, financial instruments that require payment, and
lines of credit with the authority. The review shall also contain
an analysis of the number of authority-assisted or -financed
developments and homes purchasing high-speed internet connections
at substantially reduced rates as a direct result of loans from the
Michigan broadband development authority, as specified in the
memorandum of understanding between the authority and the Michigan
broadband development authority.
(18)
The authority shall insure ensure
that the income
characteristics of individuals served by an authority program are
provided
in a manner that insures ensures
each individual's
confidentiality.
The authority shall also insure ensure
that
proprietary information in its reports under this section
concerning an individual, corporation, cooperative, or association
is not released without the permission of that individual,
corporation, cooperative, or association.
