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.