HB-5830, As Passed House, December 4, 2012
SUBSTITUTE FOR
HOUSE BILL NO. 5830
A bill to amend 1964 PA 183, entitled
"An act creating the state building authority with power to
acquire, construct, furnish, equip, own, improve, enlarge, operate,
mortgage, and maintain facilities for the use of the state or any
of its agencies; to act as a developer or co-owner of facilities as
a condominium project for the use of the state or any of its
agencies; to authorize the execution of leases pertaining to those
facilities by the building authority with the state or any of its
agencies; to authorize the payment of true rentals by the state; to
provide for the issuance of revenue obligations by the building
authority to be paid from the true rentals to be paid by the state
and other resources and security provided for and pledged by the
building authority; to authorize the creation of funds; to
authorize the conveyance of lands by the state or any of its
agencies for the purposes authorized in this act; to authorize the
appointment of a trustee for bondholders; to permit remedies for
the benefit of parties in interest; to provide for other powers and
duties of the authority; and to provide for other matters in
relation to the authority and its obligations,"
by amending sections 3, 5, 7, and 8 (MCL 830.413, 830.415, 830.417,
and 830.418), sections 3 and 7 as amended by 2005 PA 67, section 5
as amended by 1994 PA 252, and section 8 as amended by 2002 PA 382.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 3. The building authority may do any of the following:
(a) Adopt bylaws for the regulation of its affairs and the
conduct of its business.
(b) Adopt an official seal.
(c) Maintain a principal office at a place within this state.
(d) Sue and be sued in its own name and plead and be
impleaded.
(e) Acquire, construct, furnish, equip, improve, restore,
renovate, enlarge, own, operate, and maintain facilities that are
approved
by concurrent resolution of the legislature in an
appropriations act for the use of this state or an agency of this
state.
(f) Acquire in the name of the building authority, hold, and
dispose of real and personal property, or an interest in real and
personal property, in the exercise of its powers and the
performance of its duties.
(g) Act as a developer or co-owner of a facility that is a
condominium project under the condominium act, 1978 PA 59, MCL
559.101 to 559.276, in the exercise of its powers and the
performance of its duties.
(h) Borrow money for a corporate purpose as prescribed in this
act, issue negotiable revenue bonds payable solely from the true
rental except to the extent paid from the proceeds of sale of
revenue obligations and any additional security provided for and
pledged by the building authority in the resolution authorizing
revenue obligations under section 8, and provide for the payment of
the bonds and the rights of the holders of the bonds and mortgage
facilities in favor of the holders of bonds issued under this act.
(i) Make and enter into contracts, leases, and other
instruments necessary or incident to the performance of its duties
and the execution of its powers. A lease may include provisions for
construction, improvement, restoration, renovation, capital
maintenance improvements, operation, use, and disposition of the
facilities on payment of the bonds. If the cost of a contract for
construction, materials, or services, other than compensation for
personal or professional services, involves an expenditure of more
than $5,000.00, the building authority shall make a written
contract with the lowest qualified bidder, after advertisement for
not less than 2 consecutive weeks in a newspaper of general
circulation in this state, and in other publications as determined
by the building authority.
(j) Employ and fix the compensation of consulting engineers,
architects, superintendents, managers, and other construction,
accounting, appraisal, and financial experts, attorneys, and other
employees and agents as the authority determines are necessary to
perform its duties and functions under this act.
(k) Receive and accept from a federal agency grants for or in
aid of the construction of facilities and receive and accept aid or
contributions from any source of either money, property, labor, or
other things of value, to be held, used, and applied only for the
purposes for which the grants and contributions were made.
(l) Require fidelity bonds from employees handling money of the
building authority. The bonds shall be in sums and subject to the
terms and conditions that the board considers satisfactory.
(m) Do all acts necessary or, in the opinion of the building
authority, convenient to carry out the powers expressly granted.
(n) Require that final actions of the board are entered in the
journal of the board. A writing prepared, owned, used, in the
possession of, or retained by the board in the performance of an
official function shall be made available to the public in
compliance with the freedom of information act, 1976 PA 442, MCL
15.231 to 15.246.
(o) Require that the books and records of account of the
building authority are audited annually by the auditor general, or
if the auditor general is unable to act, by an independent
certified public accountant appointed by the auditor general.
(p) Make and enter into contracts for insurance, letters of
credit, and commitments to purchase its revenue obligations, or
enter into other transactions to provide separate security to
assure the timely payment of any revenue obligations of the
building authority. A contract of the building authority permitted
by this section shall not be a general obligation of the state or
building authority.
Sec. 5. (1) Property owned by the state may be conveyed to the
building authority for any purpose expressed in this act, subject,
however, to prior approval by the state administrative board, by
the
attorney general, and by concurrent resolution of the
legislature
concurred in by a majority of the members elected to
and
serving in each house. The votes and names of the members
voting
on the resolution shall be entered in the journal. as
provided in an appropriations act. After approval as provided in
this subsection, a conveyance shall be executed for and on behalf
of the state by the governor and secretary of state, or in the
event of the absence or disability of either of them, by the
lieutenant governor or deputy secretary of state.
(2) In addition to other authority granted by law, property
owned by an institution of higher education may be conveyed to the
building authority for any purpose expressed in this act, subject,
however, to approval by the governing body of the institution of
higher
education, by the state administrative board, and by
concurrent
resolution of the legislature concurred in by a majority
of
the members elected to and serving in each house. The votes and
names
of the members voting on the resolution shall be entered in
the
journal. as provided in an
appropriations act. After approval
as provided in this subsection, a conveyance shall be executed for
and on behalf of the institution of higher education by authorized
officers of the institution of higher education. In addition to
other authority granted by law, an institution of higher education
may enter into a lease with the building authority under section 6
for the period provided in that section.
Sec. 7. (1) The state may lease facilities from the building
authority for public purposes within the concepts provided in this
act, upon terms and conditions agreed upon and subject to the
limitations and provisions provided in section 6. Before execution,
a lease shall be approved by the state administrative board and,
except
as provided in subsections (3) and (4), by concurrent
resolution
of the legislature concurred in by a majority of the
members
elected to and serving in each house. The votes and names
of
the members voting shall be entered in the journal. as provided
in an appropriations act. The lease as approved by the building
authority and the administrative board, and if required, the
legislature or an institution of higher education, may provide for
a determinable true rental as a range as permitted under section
1(e).
(2) If a lease is approved containing a true rental stated as
a range, then actual rental to be paid under the lease shall be
fixed at an amount certified by the appraiser and, after the
certification, shall be approved by the state administrative board
and the building authority. The appraiser shall not certify, and
the board and authority shall not approve, a true rental amount
unless the amount is fixed within or below the stated range. A
lease
shall not be executed more than 3 5 years after its approval
by the legislature. The state shall pay to the building authority
or its assignee the true rental at the times, in the manner, and at
the place specified in the lease. The governor and the budget
director shall include in the annual budget of the state for each
year an amount fully sufficient to pay the true rental required to
be paid by the state to the building authority or its assignee
required by any lease under this act. If the lease is for an
institution of higher education, then in addition, the lease shall
be authorized by the institution of higher education and signed by
its authorized officers.
(3) The state, except institutions of higher education, may
lease from the building authority property that is comprised only
of furnishings or equipment if all of the following requirements
are met:
(a) Before a lease that is only for furnishings or equipment
is
executed, the general form of the lease shall be approved by
concurrent
resolution of the legislature concurred in by a majority
of
the members elected to and serving in each house. as provided in
an appropriations act. The form of the lease approved by the
legislature need not contain a description of the property to be
leased or the rental or a rental range. However, before the state
executes the lease, the description of the property to be leased
and the rental shall be approved by the state administrative board
as
provided in subsection (2). The concurrent resolution of the
legislature
appropriations act approving the form of lease shall
also approve a maximum amount of furnishings and equipment that may
be
leased. during the 2 years following the approval of the
lease
pursuant
to the form of lease approved.A
lease that is only for
furnishings or equipment shall not be executed more than 4 years
after its approval by the legislature.
(b) A lease that is only for furnishings or equipment shall be
executed only if the furnishings or equipment are for use by a
state agency as determined under the management and budget act,
1984 PA 431, MCL 18.1101 to 18.1594.
(4) Through September 30, 2007, an institution of higher
education, this state, and the building authority may enter into a
lease for capital maintenance improvements if, before a lease that
is only for capital maintenance improvements is executed, the
general form of the lease is approved by concurrent resolution of
the legislature concurred in by a majority of the members elected
to and serving in each house. The form of the lease approved by the
legislature need not contain a description of the capital
maintenance improvements to be leased or the rental or a rental
range. However, before this state executes the lease, the
description of the capital maintenance improvements to be leased
and the rental shall be approved by the state administrative board.
(5) The building authority shall retain title to capital
maintenance improvements during the term of a lease approved under
subsection (4). The building authority shall not be required to
have any ownership interest in the structure to which a capital
maintenance improvement is made. Title to the capital maintenance
improvement shall be evidenced by a bill of sale.
(6) The actual rental to be paid under a lease approved under
subsection (4) for a capital maintenance improvement shall be
determined by an appraiser or by an alternate method and, after the
determination, shall be approved by the state administrative board
and the building authority. The state administrative board shall
approve any alternate method for determining actual rental, and an
alternate method may include a determination by a person or
business that is in the business of providing capital maintenance
improvements to institutions of higher education.
(7) The state shall pay to the building authority or its
assignee the true rental at the times, in the manner, and at the
place specified in the lease approved under subsection (4). The
governor and the budget director shall include in the annual budget
of the state for each year an amount fully sufficient to pay the
true rental required to be paid by this state to the building
authority or its assignee required by any lease under this act.
Sec. 8. (1) By resolution or resolutions of its board, the
building authority may provide for the issuance of revenue
obligations, which may include revenue bonds, revenue notes, or
other evidences of revenue indebtedness, and refunding revenue
bonds or notes, or other refunding evidences of indebtedness, the
obligations for which shall not become a general obligation of this
state or a charge against this state, but all revenue obligations
and the interest on the revenue obligations and the call premiums
for the revenue obligations shall be payable solely from true
rental, except to the extent paid from the proceeds of sale of
revenue obligations and any additional security provided for and
pledged, or from other funds as provided in this act, and each
revenue obligation shall have such a statement printed on the face
of the revenue obligation. If the resolution of the building
authority provides for interest coupons to be attached to a revenue
obligation, each interest coupon shall have a statement printed on
the coupon that the coupon is not a general obligation of this
state or the building authority but is payable solely from certain
revenues as specified in the revenue obligation. Revenue
obligations may be issued for the purpose of paying part or all of
the costs of the facilities or for the purpose of refunding or
advance refunding, in whole or in part, outstanding revenue
obligations issued pursuant to this act whether the obligations to
be refunded or advance refunded have matured or are redeemable or
shall mature or become redeemable after being refunded. The cost of
the facilities may include an allowance for legal, engineering,
architectural, and consulting services; interest on revenue
obligations becoming due before the collection of the first true
rental available for the payment of those revenue obligations; a
reserve for the payment of principal, interest, and redemption
premiums on the revenue obligations of the authority; and other
necessary incidental expenses including, but not limited to,
placement fees; fees or charges for insurance, letters of credit,
lines of credit, remarketing agreements, or commitments to purchase
obligations
issued pursuant to under this act; fees or charges
associated with an agreement to manage payment, revenue, or
interest rate exposure; or any other fees or charges for any other
security provided to assure timely payment of the obligations.
(2) The proceeds of a revenue obligation issue may be used to
pay the cost of facilities that are subject to more than 1 lease if
either subdivision (a) or (b) is true:
(a) Both of the following are true:
(i) The resolution authorizing the revenue obligations provides
for the use of a specific allocable portion of the revenue
obligation proceeds to pay the estimated cost of each of the
facilities, together with the allocable portion of the reserves,
discount, interest on the obligations becoming due before the first
true rental available for payment of the obligations, and
obligation issuance expense with respect to each facility.
(ii) The true rental and other funds of the building authority
and other security as provided in this act available for the
revenue obligations including other funds as provided in this act
are sufficient to pay the allocable portion of the revenue
obligation issue for which the true rental and other funds and
security are pledged.
(b) The obligation is part of an interim financing pool
described in subsection (20).
(3) Revenue obligations that refund outstanding obligations
may include the payment of interest accrued, or to accrue, to the
earliest or any subsequent date of redemption, purchase, or
maturity of the revenue obligations to be refunded, redemption
premium, if any, and any commission, service fee, and other expense
necessary to be paid in connection with revenue obligations that
refund outstanding obligations. Proceeds of refunding revenue
obligations may also be used to pay part of the cost of issuance of
the refunding revenue obligations, interest on the refunding
revenue obligations, a reserve for the payment of principal,
interest, and redemption premiums on the refunding revenue
obligations, and other necessary incidental expenses including, but
not limited to, placement fees; fees or charges for insurance,
letters of credit, lines of credit, remarketing agreements, or
commitments to purchase obligations issued pursuant to this act;
fees or charges associated with an agreement to manage payment,
revenue, or interest rate exposure; or any other fees or charges
for any other security provided to assure timely payment of the
obligations. The building authority may also provide for the
withdrawal of any funds from a reserve created for the payment of
principal, interest, and redemption premiums on the refunded
obligations and for the deposit of those funds in the reserve for
the payment of principal, interest, and redemption premiums on the
refunding obligations or may provide for use of that reserve money
to pay principal, interest, and redemption premiums on the
obligations to be refunded. Obligations issued to refund
outstanding obligations may be issued in a principal amount greater
than, the same as, or less than the principal amount of the
obligations to be refunded, and subject to the maximum rate of
interest provided in subsection (8), may bear interest rates that
are higher than, the same as, or lower than the interest rates of
the obligations to be refunded. If obligations are issued to refund
outstanding obligations of the authority, a lease whose rental has
been pledged for repayment of the obligations to be refunded shall
not be terminated solely by reason of the payment or provision for
payment of the obligations to be refunded, and the lease and all of
the rights and obligations under the lease remain in full force and
effect in accordance with its terms.
(4) Except as otherwise provided in this section, the building
authority shall use income or profit derived from the investment of
money in a fund or account of the building authority, including the
proceeds of sale of the revenue obligations, only for the purpose
of paying principal, interest, and redemption premiums on the
revenue obligations of the building authority, or for any purpose
for which the proceeds of the revenue obligations may be used under
this act, as determined by the resolution of the board authorizing
the issuance of revenue obligations.
(5) Within limits considered appropriate and established by
the board, the board may authorize by resolution a member of the
board or the person appointed by the building authority as its
chief operating officer or chief staff person, if the authorization
limits or prescribes the maximum interest rates, minimum price,
maximum principal amount, and the latest maturity date of the
obligations, to do any of the following:
(a) Determine interest rates or methods for determining
interest rates for, maturities of, principal amounts of,
denominations of, dates of issuance of, interest payment dates for,
redemption rights and the terms under which redemption rights may
be waived, transferred, or sold, prepayment rights with respect to,
the purchase price of, and the type of funds for settlement of
obligations.
(b) Determine which, if any, letter of credit, line of credit,
standby note or bond purchase agreement, bond insurance, or other
agreement providing security or liquidity for obligations of the
building authority, approved by the board, provides a cost savings
and should be entered into in connection with the issuance of the
obligations of the building authority.
(c) Take any other action on behalf of the board within
limitations established by the board as the board considers
necessary in connection with the issuance of obligations of the
building authority.
(6) To the extent provided by resolution of the board,
principal of, and interest and redemption premiums on, revenue
obligations issued for the purpose of paying all or part of the
cost of the facilities shall be secured by and payable only from
any or all of the following sources:
(a) The true rental derived from the facilities constructed or
acquired with the proceeds of the revenue obligations.
(b) The proceeds of revenue obligations.
(c) The reserve, if any, established for the payment of
principal of, or interest or redemption premiums on, the
obligations.
(d) The proceeds of insurance, a letter of credit, or a line
of credit acquired as security for the revenue obligations.
(e) The proceeds of obligations issued to refund the revenue
obligations.
(f) The proceeds of the foreclosure or enforcement of a
mortgage, security interest, or deed of trust on the facilities
financed by the revenue obligations granted by the authority as
security for the revenue obligations.
(g) Other funds of the authority not previously pledged for
other obligations of the authority, including funds of the
authority derived from rentals and other revenues, investment
income or profit, or funds or accounts relating to other
facilities, and payments received pursuant to an agreement to
manage payment, revenue, or interest rate exposure as provided in
subsection (19).
(h) Investment earnings and profits on any or all of the
sources described in subdivisions (a) to (g).
(7) To the extent provided by resolution of the board,
principal of, and interest and redemption premiums on, refunding
revenue obligations shall be secured by and payable only from any
or all of the following sources:
(a) The true rental derived from the facilities constructed or
acquired with the proceeds of the obligations being refunded.
(b) The proceeds of the refunding obligations.
(c) The reserve, if any, established for the payment of the
principal of, or interest and redemption premiums on, the refunding
obligations or the obligations to be refunded.
(d) The proceeds of insurance, a letter of credit, or a line
of credit acquired as security for the revenue obligations.
(e) The proceeds of obligations issued to refund the refunding
obligations.
(f) The proceeds of the foreclosure or enforcement of any
mortgage, security interest, or deed of trust on the facilities
financed from the proceeds of the obligations being refunded,
granted by the authority as security for the refunding obligations.
(g) Other funds of the authority not previously pledged for
other obligations of the authority, including other funds of the
authority derived from rentals and other revenues, investment
income or profit, or funds or accounts relating to other
facilities, and payments received pursuant to an agreement to
manage payment, revenue, or interest rate exposure as provided in
subsection (19).
(h) Investment earnings or profits on any of the sources
described in subdivisions (a) to (g).
(8) Obligations issued under this act may be either serial
obligations or term obligations, or any combination of serial or
term obligations. The obligations shall mature not more than 40
years from their date, and in any event not more than 1 year from
the due date of the last true rental pledged for the payment of the
obligations, and may bear interest at fixed or variable interest
rates, or may be without stated interest, but the net interest rate
or rates of interest, taking into account any discount on the sale
of the obligations, shall not exceed a rate permitted by the
revised municipal finance act, 2001 PA 34, MCL 141.2101 to
141.2821. The obligations may be sold at a discount.
(9) Except as otherwise provided in this subsection, in the
resolution or resolutions authorizing the issuance of the
obligations, the board shall determine the principal amount of the
obligations to be issued, the registration provisions, the date of
issuance, the obligation numbers, the obligation denominations, the
obligation designations, the obligation maturities, the interest
payment dates, the paying agent or paying agents or the method of
selection of the agent or agents, the rights of prior redemption of
the obligations, and the terms under which redemption rights may be
waived, transferred, or sold, the rights of the holders to require
prepayment of the principal of or interest on the obligations, the
maximum rate of interest, the method of execution of the
obligations, and such other provisions respecting the obligations,
the rights of the holders of the obligations, the security for the
obligations, and the procedures for disbursement of the obligation
proceeds and for the investment of the proceeds of obligations and
money for the payment of obligations. Rather than making the
determinations required by this subsection, the board may authorize
a person identified in subsection (5) to make the determinations
and take the actions authorized under subsection (5).
(10) The board in the resolution or resolutions authorizing
the issuance of obligations may provide for the assignment of the
true rental to be paid by the state under the lease or leases to 1
of the paying agents for the obligations or to a trustee, as
provided in this act, in which case the state shall pay the rental
to the paying agent or trustee. For the purposes and within the
limitations set forth in this act, the board may by resolution
covenant to issue or cause to be issued, or use its best efforts to
issue or cause to be issued, refunding revenue obligations to
refund obligations issued under this act.
(11) The board in the resolution, or resolutions, authorizing
the obligations may provide for the terms and conditions upon which
the holders of the obligations, or a portion of the obligations or
a trustee for the obligations, is entitled to the appointment of a
receiver. The receiver may enter and take possession of the
facility, may lease and maintain the facility, may prescribe
rentals and collect, receive, and apply income and revenues
thereafter arising from the facility in the same manner and to the
same extent that the authority is so authorized. The resolution or
resolutions may provide for the appointment of a trustee for the
holders of the obligations, may give to the trustee the appropriate
rights, duties, remedies, and powers, with or without the execution
of a deed of trust or mortgage, necessary and appropriate to secure
the obligations, and may provide that the principal of and interest
on any obligations issued under this act shall be secured by a
mortgage, security interest, or deed of trust covering the
facility, which mortgage, security interest, or deed of trust may
contain the covenants, agreements, and remedies as will properly
safeguard the obligations as may be provided for in the resolution
or resolutions authorizing the obligations, including the right to
sell the facility upon foreclosure sale, not inconsistent with this
act.
(12) All obligations and the interest coupons, if any,
attached to the obligations are declared to be fully negotiable and
to have all of the qualities incident to negotiable instruments
under the uniform commercial code, 1962 PA 174, MCL 440.1101 to
440.11102, subject only to the provisions for registration of the
obligations that may appear on the obligations. The obligations and
interest on the obligations are exempt from all taxation by this
state or any of its political subdivisions.
(13) The obligations may be sold at private or at public sale
under the procedures and subject to the conditions prescribed by
resolution of the board.
(14) The building authority may issue additional obligations
of equal standing with respect to the pledge of the true rentals
and additional security provided pursuant to this act with
previously issued obligations of the building authority issued to
acquire or construct a facility or facilities, or to refund the
obligations, for the purpose of completing, or making additions,
improvements, or replacements to, the facility or facilities for
which the previous obligations of the authority were issued or to
refund all or part of obligations previously issued for such a
facility, under the terms and conditions provided in the resolution
authorizing the previous issue of obligations.
(15) The authority shall not have obligations outstanding at
any 1 time for any of its corporate purposes in a principal amount
totaling more than $2,700,000,000.00, which limitations shall not
include principal appreciation as provided in subsection (17) or
obligations or portions of obligations used to pay for any of the
following:
(a) Amounts set aside for payment of interest becoming due
before the collection of the first true rental available.
(b) Amounts set aside for a reserve for payment of principal,
interest, and redemption premiums.
(c) Costs of issuance of the obligations and the discount, if
any, on sale.
(d) The sums expected to be set aside for the purposes
provided in this subsection for any obligations authorized by the
authority but not sold. The amount set aside or expected to be set
aside for the purposes provided in this subsection shall be
conclusively determined by a certificate setting forth the amounts
executed by the executive director of the building authority. In
addition, there shall be excluded from the limitation obligations
issued to refund prior obligations if those prior obligations will
not be retired within 90 days after the date of issuance of the
refunding obligations. If an obligation is issued to retire a prior
obligation within 90 days after the date of issuance of the
refunding obligation, the obligation is counted against the
limitation when the refunded obligation is retired.
(16) The authority may apply and pledge, if not already
pledged, all or any unpledged part of the true rental and other
revenues of a facility; income and profit from the investment of
money pertaining to a facility; and money in a fund or account of
the authority pertaining to a facility to pay the principal,
interest, and redemption premiums on revenue obligations of the
authority other than those to which the true rental and other
revenues, investment income, or profit or funds or accounts
pertain; to pay amounts due under an agreement to manage payment,
revenue, or interest rate exposure regardless of the obligations or
investments to which the agreement relates; or to pay part or all
of the cost of additional facilities to be acquired by the
authority for the use of the state. The authority may establish a
separate fund into which the rental and other revenues, investment
income or profit, or money of such a fund or account shall be
deposited to be used to pay principal, interest, and redemption
premiums on outstanding obligations of the authority or to acquire
facilities for the use of this state. The authority shall not
acquire a facility unless the acquisition is approved by the state
administrative
board and by a concurrent resolution of the
legislature
approved by a majority of the members elected to and
serving
in each house. in an
appropriations act. The authority may
pledge any or all of the foregoing to the payment of revenue
obligations of the authority other than those to which they
pertain. If the true rental and other revenues, investment income
or profit, or the money in funds or accounts to be applied as
specified in this subsection pertain to a facility leased to the
state and an institution of higher education pursuant to a lease
executed and delivered before January 1, 1983, no application or
pledge thereof may be made unless approved by the institution of
higher education.
(17) If the authority issues an obligation that appreciates in
principal amount, the amount of principal appreciation each year on
that obligation, after the date of original issuance, shall not be
considered to be principal indebtedness for the purposes of the
limitation in subsection (15) or any other limitation. The
appreciation of principal after the date of original issue shall be
considered interest and shall be within the interest rate
limitations set forth in this act.
(18) Of the $2,700,000,000.00 authorized under subsection
(15), priority shall be determined by the joint capital outlay
committee.
(19) In connection with an obligation issued previously or to
be issued under this act or an investment made previously or to be
made, the board may by resolution authorize and approve the
execution and delivery of an agreement to manage payment, revenue,
or interest rate exposure. The agreement may include, but is not
limited to, an interest rate exchange agreement, an agreement
providing for payment or receipt of money based on levels of or
changes in interest rates, an agreement to exchange cash flows or
series of payments, or an agreement providing for or incorporating
interest rate caps, collars, floors, or locks. Subject to a prior
pledge or lien created under this act, a payment to be made by the
building authority under an agreement described in this subsection
is payable, together with other obligations of the building
authority, from those sources described in subsections (6) and (7),
all with the parity or priority and upon the conditions set forth
in the board's resolution. An agreement entered into under this
subsection is not a general obligation of this state or the
building authority, and the agreement does not count against the
limitation on outstanding obligations contained in subsection (15).
(20) The building authority may authorize by resolution a pool
of obligations to meet interim financing needs. A pool may be
issued in 1 or more series, may relate to 1 or more projects, and
is subject to all of the following:
(a) The board's resolution approving the pool shall state at
least all of the following:
(i) The name or designation of the pool to distinguish it from
any other pool issued under this subsection.
(ii) The latest date by which an obligation issued under the
pool must mature, which shall not be later than 5 years after the
date on which the pool is established. The duration of the pool
shall be the time from the date on which the pool is established to
the latest possible maturity date of obligations issued pursuant to
the pool, or sooner as provided by resolution.
(iii) The maximum par amount of obligations that may be
outstanding at any time during the duration of the pool. The
resolution may state the maximum par amount of obligations that may
be issued pursuant to the pool.
(iv) Other terms of the obligations as provided in subsection
(8) or the limits within which the chief operating officer, chief
staff person, or member of the board shall determine those terms as
provided in subsection (5).
(v) The security for obligations issued pursuant to the pool.
(vi) Other provisions, not inconsistent with the terms of this
act, that the board determines to be necessary or appropriate to
the pool.
(b) Proceeds of obligations issued as part of a pool
established under this subsection may be used for any of the
purposes for which revenue obligations of the building authority
may be used as described in subsection (1). However, an obligation
shall not be issued with respect to a facility unless all of the
following are true:
(i) The board approves the financing of the facility pursuant
to the pool, which approval may be made at the same time as or
after the establishment of the pool.
(ii) The board approves the proposed form of lease for the
facility, which approval may be made prior to, at the same time as,
or after the establishment of the pool.
(iii) The state administrative board, an institution of higher
education, if applicable, and the legislature have approved the
form of the lease as required by section 7, which approval may be
made prior to, at the same time as, or after the establishment of
the pool.
(iv) The aggregate amounts of obligations issued and
outstanding with respect to a facility under a pool, together with
other obligations that may have been issued and are outstanding
with respect to the facility under this act do not exceed the cost
of the facility, including allowable interest costs, as approved by
the state administrative board, an institution of higher education,
if applicable, and the legislature.
(v) On or before the issuance of obligations the proceeds of
which are to finance the acquisition, construction, renovation, or
rehabilitation of the facility, the building authority and the
state, and, if applicable, an institution of higher education,
enter into the lease or an agreement to construct or acquire the
facility, which lease or agreement sets forth the terms and
conditions under which the building authority will finance the
construction or acquisition of the facility for lease to the state
or to the state and any applicable institution of higher education.
(21) 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.
(22) The issuance of bonds and notes under this act is subject
to the agency financing reporting act, 2002 PA 470, MCL 129.171 to
129.177.