SENATE BILL No. 278

 

 

April 16, 2015, Introduced by Senator HILDENBRAND and referred to the Committee on Transportation.

 

 

 

     A bill to amend 1945 PA 327, entitled

 

"Aeronautics code of the state of Michigan,"

 

(MCL 259.1 to 259.208) by amending the title, as amended by 2002 PA

 

90, and by adding chapter VIIA.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

TITLE

 

     An act relating to aeronautics in this state; providing for

 

the development and regulation thereof; aeronautics; creating a

 

state aeronautics commission; prescribing powers and duties;

 

providing for the licensing, or registration, or and supervision

 

and control of all aircraft, airports and landing fields, schools

 

of aviation, flying clubs, airmen, aviation instructors, airport

 

managers, manufacturers, dealers, and commercial operation in

 

intrastate commerce; providing for rules pertaining thereto;

 

prescribing a privilege tax for the use of the aeronautical


facilities on the lands and waters of this state; providing for the

 

acquisition, development, and operation of airports, landing

 

fields, and other aeronautical facilities by the this state, by

 

political subdivisions, or by public airport authorities; providing

 

for the incorporation of public airport authorities and providing

 

for the powers, duties, and obligations of public airport

 

authorities; providing for the transfer of airport management to

 

public airport authorities, including the transfer of airport

 

liabilities, employees, and operational jurisdiction; providing

 

jurisdiction of crimes, torts, and contracts; providing police

 

powers for those entrusted to enforce this act; providing for civil

 

liability of owners, operators, and others; making hunting from

 

aircraft unlawful; providing for a repair station operators lien;

 

providing for appeals from rules or orders issued by the

 

commission; providing for the transfer from the Michigan board of

 

aeronautics to the aeronautics commission all properties and funds

 

held by the board of aeronautics; providing for a state aeronautics

 

fund and making an appropriation therefor; prescribing penalties;

 

and making uniform the law with reference to state development and

 

regulation of aeronautics.

 

 

 

CHAPTER VIIA.

 

ACQUISITION AND OPERATION OF AIRPORTS, LANDING FIELDS, AND OTHER

 

AERONAUTICAL FACILITIES BY REGIONAL AIRPORT AUTHORITIES

 

 

 

     Sec. 137. This chapter shall be known and may be cited as the

 

"regional airport authority act".

 


     Sec. 138. (1) Unless specified otherwise in this chapter,

 

definitions in chapter II apply to terms used in this chapter.

 

     (2) As used in this chapter:

 

     (a) "Airport" means a publicly owned airport licensed by the

 

department under section 86 and includes all airport facilities at

 

the airport. An airport is publicly owned if the portion used for

 

the landing and taking off of aircraft is owned, operated,

 

controlled, leased to, or leased by the United States or an agency

 

or department of the United States, this state, a local government,

 

or another public corporation.

 

     (b) "Airport facilities" means any of the following at an

 

airport:

 

     (i) Real or personal property, or an interest in real or

 

personal property, used for the landing, taking off, taxiing,

 

parking, or storing of aircraft, or for receiving or discharging

 

passengers or cargo, an appurtenant area used for an airport

 

building or other facility, and any appurtenant right-of-way.

 

     (ii) Real or personal property, including an easement, used

 

for over-flight, noise abatement, a clear zone, a side transition

 

zone, an environmental mitigation requirement, utilities, a

 

drainage system, a right-of-way, or any other requirement imposed

 

as a condition of approving the acquisition, construction,

 

expansion, or operation of other airport facilities, whether or not

 

located within the boundaries of the local government.

 

     (iii) Structures, buildings, and improvements, including

 

aeronautical and nonaeronautical, commercial or noncommercial

 

structures, concessions, roadways, beacons, markers, communication


systems, and navigational aids.

 

     (iv) Any other improvements or facilities necessary, useful,

 

or intended for use in the operation of an airport.

 

     (c) "Approval date" means, for airports certificated under 14

 

CFR part 139, the date of the issuance by the FAA to the regional

 

authority assuming operational jurisdiction of the airport of a

 

certificate under 14 CFR part 139 with respect to the airport, and

 

the concurrence by the FAA of the designation of the regional

 

authority as a sponsor of the airport, including the FAA's approval

 

of the assignment of existing grant agreements to the regional

 

authority, or, for an uncertificated airport, the date specified in

 

the agreement pursuant to which the airport is to be transferred to

 

the regional authority, as approved by the FAA.

 

     (d) "Board" means the governing body of a regional authority

 

appointed under section 140.

 

     (e) "Chief executive officer" means the chief administrative

 

officer of a regional authority.

 

     (f) "Enplanement" means a domestic, territorial, or

 

international revenue passenger who boards an aircraft that departs

 

from the airport.

 

     (g) "FAA" means the Federal Aviation Administration of the

 

United States Department of Transportation, or any successor

 

agency.

 

     (h) "Fiscal year" means the annual period that is the fiscal

 

year of the local government or another annual period established

 

by the board.

 

     (i) "Legislative body" means the elected body of a local


government that has legislative powers.

 

     (j) "Local government" means a county, city, township, or

 

village that creates the regional authority.

 

     (k) "Regional authority" means a regional airport authority

 

created under section 139 and governed by a board.

 

     (l) "Sponsor" means a public agency authorized by 49 USC 47101

 

to 47134 to submit requests for, accept, and be responsible for

 

performing all of the assurances associated with accepting grant

 

agreements with respect to airports from the FAA or this state, and

 

to perform some duties and responsibilities previously assumed by

 

the local government that owns or operates the airport before the

 

transfer of operational jurisdiction of the airport to an authority

 

created under this chapter by virtue of the local government's

 

acceptance before the approval date of grants for the benefit of

 

the airport from the FAA or another agency of the United States or

 

this state.

 

     Sec. 139. (1) An authority created under this section is a

 

public body corporate for purposes of state and federal law and

 

must comply with all of the following:

 

     (a) The open meetings act, 1976 PA 267, MCL 15.261 to 15.275.

 

     (b) The freedom of information act, 1976 PA 442, MCL 15.231 to

 

15.246.

 

     (c) The uniform budget and accounting act, 1968 PA 2, MCL

 

141.421 to 141.440a.

 

     (2) A local government that owns or operates an airport may,

 

by resolution, declare its intention to incorporate a regional

 

authority. In the resolution of intent, the legislative body of the


local government shall set a date for a public hearing on the

 

adoption of a proposed resolution incorporating the regional

 

authority. The public hearing must be held in accordance with the

 

open meetings act, 1976 PA 267, MCL 15.261 to 15.275. After the

 

public hearing, if the legislative body of the local government

 

intends to proceed with the incorporation of the regional

 

authority, it must adopt, by majority vote of its members, a

 

resolution adopting the articles of incorporation of the regional

 

authority. The adoption of the resolution is subject to any

 

applicable statutory or charter provisions with respect to the

 

approval or disapproval by an officer of the local government and

 

the adoption of an ordinance over the officer's veto. The articles

 

of incorporation for the regional authority take effect on being

 

filed with the secretary of state.

 

     (3) The validity of the incorporation of a regional authority

 

is conclusively presumed unless questioned in an original action

 

filed in the court of appeals within 60 days after the creation or

 

incorporation of the regional authority under this chapter. The

 

court of appeals has original jurisdiction to hear an action under

 

this subsection. The court shall hear the action in an expedited

 

manner. The state transportation department is a necessary party in

 

an action under this subsection.

 

     (4) The department shall not promulgate rules under this

 

chapter.

 

     Sec. 140. (1) An authority created under this chapter must be

 

directed and governed by a board consisting of not fewer than 5 and

 

not more than 9 members, who shall serve 3-year terms. The initial


terms of the board members must be staggered so that the terms of

 

not less than 20% of the members expire each year.

 

     (2) The articles of incorporation of an authority created

 

under this chapter must specify the number and qualifications of

 

the members of the board. However, not more than 45% of the members

 

may be elected officials, and at least 1 member must be a resident

 

of a jurisdiction in this state located outside the boundaries of

 

the local government. At a minimum, a board member must have

 

experience in aviation, business, accounting, finance, marketing,

 

engineering, law, real estate, economic development, management, or

 

another field of value to the operation of the airport. A full-time

 

paid employee of the local government is not eligible for

 

appointment to the board.

 

     (3) Within 60 days after incorporation of a regional

 

authority, the members of the legislative body of the local

 

government shall appoint the members of the board. Before assuming

 

the duties of office, a member of the board must qualify by taking

 

and subscribing to the constitutional oath of office.

 

     (4) A member of the board whose term has expired shall hold

 

office until the board member's successor is appointed and

 

qualified, or until resignation or removal. If a member of the

 

board is removed or is unable to complete his or her term of

 

office, the legislative body shall appoint a successor to complete

 

the term. A member of the board may resign by written notice to the

 

regional authority. The resignation is effective on receipt by the

 

secretary or chairperson of the regional authority or at a

 

subsequent time as set forth in the notice of resignation. The


regional authority shall promptly advise the local government in

 

writing of any vacancy. The legislative body shall appoint a new

 

member to fill the vacancy within 60 days after the local

 

government is advised of the notice of resignation by the regional

 

authority.

 

     (5) The local government may only remove a board member for

 

cause. Cause includes failure to attend at least 70% of the

 

meetings of the board each fiscal year, conviction of a felony,

 

breach of fiduciary duty to the regional authority, and other

 

conduct as specified in the articles of incorporation or bylaws of

 

the regional authority.

 

     (6) Within 90 days after a regional authority is incorporated

 

under section 139, the board of the regional authority shall hold

 

its first meeting. At the first meeting, the board shall organize

 

by electing a chairperson, a vice-chairperson, a secretary, and any

 

additional officers that the board considers necessary. With the

 

exception of the treasurer, all officers of the board must be

 

elected annually by, and must be members of, the board.

 

     (7) Except for those powers reserved or delegated to the chief

 

executive officer of the regional authority by this chapter or by

 

the board as provided in section 142(3), the board may withdraw

 

from the chief executive officer any power that the board has

 

delegated to the chief executive officer.

 

     (8) A regional authority shall not compensate a member of the

 

board for service to the authority or attendance at a meeting, but

 

may reimburse a member for an actual and necessary expense incurred

 

in the discharge of the member's official duties.


     (9) A board may act only by resolution or ordinance. Unless

 

the articles of incorporation or bylaws of the regional authority

 

require otherwise, a vote of the majority of the board members

 

present at a meeting of the board or a committee of the board at

 

which a quorum is present constitutes the action of the board or

 

committee.

 

     Sec. 141. (1) After organization, a board shall adopt a

 

schedule of regular meetings and adopt a regular meeting date,

 

place, and time. The board shall meet not less than quarterly. A

 

special meeting of the board may be scheduled as provided in the

 

bylaws of the regional authority, but the board chairperson shall

 

call a special meeting on request of 2 or more board members.

 

     (2) A board shall appoint an audit committee consisting of at

 

least 2 members of the board. The audit committee shall meet not

 

less than annually with the chief financial officer, the chief

 

executive officer, and the independent auditors of the regional

 

authority to review reports related to the financial condition,

 

operations, performance, and management of the regional authority

 

and airport.

 

     Sec. 142. (1) A board shall appoint a chief executive officer

 

who must have professional qualifications commensurate with the

 

responsibility of the jobs to be performed by chief executive

 

officers. The chief executive officer is an ex officio member of

 

the board, is not considered in determining the presence of a

 

quorum, and does not have a vote. The chief executive officer

 

serves at the pleasure of the board. The board may contract with

 

the chief executive officer for a commercially reasonable length of


time commensurate with the length of time for contracts of airport

 

chief executive officers, directors, or managers with similar

 

responsibilities at other airports or airport authorities in or

 

outside of this state with a comparable number of annual

 

enplanements. A contract under this subsection is terminable at

 

will by the board.

 

     (2) A chief executive officer shall appoint a chief financial

 

officer who shall serve as the treasurer of the regional authority.

 

The chief financial officer must have professional qualifications

 

commensurate with the responsibility of the jobs to be performed by

 

chief financial officers. Notwithstanding any law to the contrary,

 

the chief financial officer shall receive all money belonging to

 

the regional authority or arising or received in connection with

 

the airport from whatever source derived. The chief financial

 

officer shall deposit, invest, and pay money of the regional

 

authority only in accordance with applicable state law and

 

policies, procedures, ordinances, or resolutions adopted by the

 

board. On and after the approval date, the regional authority is

 

considered to be the owner of all money or other property

 

previously or later received by the treasurer of the local

 

government or deposited in the treasury of the local government to

 

the credit of the airport for which operational jurisdiction has

 

been transferred to the regional authority. The regional authority

 

is entitled to all interest and other earnings on the money on and

 

after the approval date. The treasurer of a local government that

 

receives or has custody of money or other property that belongs to

 

a regional authority shall promptly transfer the money or other


property to the custody of the chief financial officer of the

 

regional authority.

 

     (3) The board shall require the chief financial officer and

 

chief executive officer to post a suitable bond of not less than

 

$100,000.00 by a responsible bonding company. The regional

 

authority shall pay the premium of the bond.

 

     (4) The board shall prescribe the duties and responsibilities

 

of the chief executive officer that are in addition to the duties

 

and responsibilities imposed on the chief executive officer by this

 

chapter. The chief executive officer shall supervise, and is

 

responsible for, all of the following:

 

     (a) The day-to-day operation of the airport, including the

 

control, supervision, management, and oversight of the functions of

 

the airport.

 

     (b) The issuance of bonds and notes as approved by the board.

 

     (c) The negotiation, establishment and approval of

 

compensation and other terms and conditions of employment for

 

employees of the regional authority, within the budget approved by

 

the board. However, any collective bargaining agreements for

 

represented employees are subject to board approval.

 

     (d) The appointment, dismissal, discipline, demotion,

 

promotion, and classification of employees of the regional

 

authority.

 

     (e) The negotiation, supervision, and enforcement of other

 

contracts as approved by the board and entered into by the regional

 

authority and the supervision of contractors and subcontractors of

 

the regional authority in their performance of their duties.


     (5) The chief executive officer may execute and deliver, and

 

delegate signatory power for, contracts, leases, obligations, and

 

other instruments approved by the board or for which power to

 

approve has been delegated to the chief executive officer of the

 

regional authority by this chapter or by action of the board. The

 

chief executive officer has all powers incident to the performance

 

of his or her duties that are prescribed by this chapter or by the

 

board. The board may delegate additional powers to the chief

 

executive officer not enumerated in this chapter. If the chief

 

executive officer is temporarily absent or disabled, he or she may

 

designate a qualified person as acting chief executive officer to

 

perform the duties of the office. If the chief executive officer

 

fails or is unable to designate an acting chief executive officer,

 

the board shall designate an acting chief executive officer for the

 

period of absence or disability of the chief executive officer.

 

     (6) A regional authority shall establish procurement policies

 

and procedures consistent with the procurement policies of the FAA

 

and any applicable state laws or rules, including any competitive

 

bidding requirements.

 

     (7) A regional authority may enter into a lease purchase or

 

installment purchase contract for a period not to exceed the

 

anticipated useful life of the item purchased. The authority may

 

enter into a cooperative purchasing agreement with this state or

 

another public entity for the purchase of goods, including, but not

 

limited to, recycled goods, and services necessary for the

 

authority.

 

     (8) A member of the board or an officer, appointee, or


employee of a regional authority is a public servant under 1968 PA

 

317, MCL 15.321 to 15.330, and is subject to any other applicable

 

law with respect to conflicts of interest. The board shall

 

establish an ethics policy governing the conducting of airport

 

business and the conduct of airport employees. A regional authority

 

shall establish policies that are no less stringent than those

 

provided for public officers and employees by 1973 PA 196, MCL

 

15.341 to 15.348, and coordinate efforts for the regional authority

 

to preclude the opportunity for and the occurrence of transactions

 

by the regional authority that would create a conflict of interest

 

involving members of the board or employees of the authority.

 

     (9) A member of the board or an officer, appointee, or

 

employee of the regional authority is not subject to personal

 

liability when acting in good faith within the scope of his or her

 

authority and is not subject to liability for any liability of the

 

regional authority. The board may defend and indemnify a member of

 

the board or an officer, appointee, or employee of the regional

 

authority against liability arising out of the discharge of his or

 

her official duties. A regional authority may indemnify and procure

 

insurance indemnifying members of the board and officers,

 

appointees, and employees of the regional authority from personal

 

loss or accountability for liability asserted by a person with

 

regard to bonds or other obligations of the regional authority, or

 

from any personal liability or accountability by reason of the

 

issuance of the bonds or other obligations or by reason of any

 

other action taken or the failure to act by the regional authority.

 

The regional authority may also purchase and maintain insurance on


behalf of any person against any liability asserted against the

 

person and incurred by the person in any capacity or arising out of

 

the status of the person as a member of the board or an officer or

 

employee of the regional authority, whether or not the regional

 

authority would have the power to indemnify the person against that

 

liability under this subsection. A regional authority, pursuant to

 

bylaw, contract, agreement, or resolution of its board, may

 

obligate itself in advance to defend and indemnify persons.

 

     (10) A regional authority shall indemnify and hold harmless

 

the local government for any civil claim existing or any civil

 

action or proceeding pending by or against the local government

 

involving or relating to the airport, airport facilities, or any

 

civil liability related to the obligations of the local government

 

issued or incurred with respect to the airport that was pending at

 

the time of, or that was incurred before, the transfer of

 

operational jurisdiction of the airport to the regional authority.

 

     Sec. 143. (1) A regional authority may do any of the

 

following:

 

     (a) Adopt a corporate seal.

 

     (b) Sue or be sued in any court of this state or file suit in

 

any federal court.

 

     (c) Plan, promote, extend, maintain, acquire, purchase,

 

construct, install, improve, repair, enlarge, and operate all

 

airports and airport facilities under the operational jurisdiction

 

of or owned by the regional authority.

 

     (d) Assume and perform the obligations and the covenants

 

related to the airport that are contained in an agreement or other


document by the local government or between the local government

 

and the state or the FAA relative to grants for the airport or

 

airport facilities.

 

     (e) Acquire, by grant, purchase, devise, lease, the exercise

 

of the right of eminent domain, or otherwise, and hold real and

 

personal property, in fee simple or any lesser interest or by

 

easement, as the regional authority considers necessary either for

 

the construction of airport facilities or for the efficient

 

operation or extension of any airport facilities acquired or

 

constructed or to be constructed under this chapter, and, except as

 

otherwise provided by this act, hold in its name, lease, and

 

dispose of all real and personal property owned by or under the

 

operational jurisdiction of the regional authority. The acquisition

 

of land by a regional authority for an airport or airport

 

facilities in furtherance of the purposes of the regional

 

authority, and the exercise of any other powers of the regional

 

authority, are public, governmental, and municipal functions,

 

purposes and uses exercised for a public purpose, and matters of

 

public necessity.

 

     (f) Enter into all contracts and agreements necessary or

 

incidental to the performance of its duties and execution of its

 

powers under this chapter with a department or agency of the United

 

States, with a state or local governmental agency, or with another

 

person, public or private, on terms and conditions acceptable to

 

the regional authority consistent with section 142(6).

 

     (g) Have and exercise exclusive responsibility to study and

 

plan any improvements, expansion, or enhancements that affect the


airport, and commission planning, engineering, economic, and other

 

studies to provide information for making decisions about the

 

location, design, management, and other features of the airport or

 

airport facilities.

 

     (h) Exercise responsibility for developing all aspects of the

 

airport and airport facilities, including, but not limited to, all

 

of the following:

 

     (i) The location of terminals, hangars, aids to air

 

navigation, parking lots and structures, cargo facilities, and all

 

other facilities and services necessary to serve passengers and

 

other customers of the airport.

 

     (ii) Street and highway access and egress with the objective

 

of minimizing, to the extent practicable, traffic congestion on

 

access routes in the vicinity of the airport.

 

     (iii) Participation in demonstration programs and economic

 

development.

 

     (i) Act as a sponsor and submit requests for, accept, and be

 

responsible to perform all of the assurances associated with

 

accepting grants from the FAA or another agency of the United

 

States or of this state with respect to the airport under the

 

operational jurisdiction of the regional authority, and perform the

 

duties and responsibilities previously assumed by the local

 

government by virtue of its acceptance of grants from the FAA or

 

another agency of the United States or this state.

 

     (j) Enter into agreements to use the facilities or services of

 

this state, a subdivision or department of this state, a county or

 

municipality, or the federal government or an agency of the federal


government as necessary or desirable to accomplish the purposes of

 

this chapter for consideration or pursuant to a cost-allocation

 

formula in compliance with its obligations under applicable federal

 

law, regulations, and assurances associated with accepting grants

 

from the FAA or another agency of the United States or this state,

 

including, but not limited to, policies of the FAA prohibiting

 

revenue diversion or the payment of fees exceeding the value of

 

services provided by a governmental agency.

 

     (k) Allow this state, a subdivision or department of this

 

state, a county or municipality, or the federal government or an

 

agency of the federal government to use airport facilities or the

 

services of the regional authority as necessary or desirable to

 

accomplish the purposes of this chapter, for consideration

 

acceptable to the regional authority in compliance with its

 

obligations under applicable federal law, regulations, and

 

assurances associated with accepting grants from the FAA or another

 

agency of the United States or this state.

 

     (l) Adopt and enforce in a court of competent jurisdiction of

 

this state reasonable rules, regulations, and ordinances for the

 

orderly, safe, efficient, and sanitary operation and use of airport

 

facilities, and establish civil and criminal penalties for the

 

violation of rules, regulations, and ordinances authorized under

 

this chapter to the same extent as the local government.

 

     (m) Enter into exclusive or nonexclusive contracts, leases,

 

franchises, or other arrangements with any person or persons for

 

granting the privilege of using, improving, or having access to the

 

airport, the airport facilities, or a portion of the airport or the


airport facilities, for commercial airline-related purposes

 

consistent with its obligations under applicable federal law,

 

regulations, and assurances associated with accepting grants from

 

the FAA or another agency of the United States or this state.

 

     (n) Enter into exclusive or nonexclusive contracts, leases, or

 

other arrangements not described in subdivision (m) for

 

commercially reasonable terms consistent with its obligations under

 

applicable federal law, regulations, and assurances associated with

 

accepting grants from the FAA or another agency of the United

 

States or this state.

 

     (o) Apply for and receive loans, grants, guarantees, or other

 

financial assistance in aid of airport facilities and the operation

 

of the airport from a state, federal, county, or municipal

 

government or agency or from another source, public or private,

 

including financial assistance for planning, constructing,

 

improving, or operating the airport, for providing security at the

 

airport, or for providing ground access to the airport.

 

     (p) Appoint and vest with police powers airport law

 

enforcement officers, guards, or police officers under this

 

chapter. The law enforcement officers, guards, or police officers

 

of the regional authority have the full police powers and authority

 

of peace officers in the areas over which the regional authority

 

has operational jurisdiction, including, but not limited to, the

 

prevention and detection of crime, the power to investigate and

 

enforce the laws of this state, rules, regulations, and ordinances

 

issued by the regional authority, and, to the extent permitted or

 

required by federal law and regulations, requirements of federal


law and regulations governing airport security. The officers may

 

issue summonses, make arrests, and initiate criminal proceedings. A

 

regional authority is responsible for all actions of its officers

 

committed under color of their official position and authority.

 

     (q) Procure insurance or become a self-funded insurer against

 

loss in connection with the property, assets, or activities of the

 

regional authority.

 

     (r) Invest money of the regional authority, consistent with

 

applicable state law and the contractual obligations of the

 

regional authority, at the board's discretion, in instruments,

 

obligations, securities, or property determined proper by the

 

board, and name and use depositories for its money.

 

     (s) Fix, charge, and collect rates, fees, rentals, and charges

 

in and for the use and operation of the airport or airports under

 

the operational jurisdiction of the regional authority.

 

     (2) Except as otherwise prohibited by this chapter, a regional

 

authority has all the powers of a political subdivision under this

 

act. The powers granted to a regional authority are public and

 

governmental functions.

 

     (3) Except for the regional authority's exclusive jurisdiction

 

over landing fields and other aeronautical facilities, this chapter

 

does not limit the power of a local government in which an airport

 

is located to zone property under the Michigan zoning enabling act,

 

2006 PA 110, MCL 125.3101 to 125.3702, or to engage in land

 

planning under the Michigan planning enabling act, 2008 PA 33, MCL

 

125.3801 to 125.3885, with respect to property that is not part of

 

the airport.


     (4) Notwithstanding any other provision of law to the

 

contrary, a regional authority shall not impose or levy taxes,

 

except the regional authority may impose fees or charges permitted

 

by federal law.

 

     (5) Unless a regional authority obtains the approval of the

 

legislative body, the regional authority shall not incur any

 

indebtedness pledging, on a superior basis, any revenues from

 

airport facilities that are otherwise pledged to secure any

 

obligation, note, bond, or other instrument of indebtedness for

 

which the full faith and credit of the local government has been

 

pledged. The local government may establish conditions under which

 

the regional authority may incur indebtedness pledging, on a parity

 

basis, any revenues from airport facilities that are otherwise

 

pledged to secure any obligation, note, bond, or other instrument

 

of indebtedness for which the full faith and credit of the local

 

government has been pledged.

 

     (6) On the creation or incorporation of an authority under

 

this chapter, the local government shall not pledge airport

 

facilities or assets to secure any instrument of indebtedness

 

except to secure bonds issued for airport capital improvement

 

projects after the creation or incorporation of the regional

 

authority and before the approval date.

 

     (7) A regional authority shall not take any action contrary to

 

obligations assumed or entered into under state law or federal

 

rules or regulations or any agreement entered into or assumed with

 

respect to state or federal grants.

 

     (8) A local government shall not take any action contrary to


obligations or covenants under applicable state or federal law,

 

regulations, and assurances associated with the state or federal

 

government.

 

     (9) If a local government previously acted as a sponsor and

 

action by, or concurrence of, the local government is required to

 

complete a project related to the airport or airport facilities,

 

the local government shall not withhold, condition, or delay

 

concurrence with any regional authority action necessary to

 

complete the project in accordance with obligations under

 

applicable federal law, regulations, and assurances associated with

 

accepting grants from the FAA or another agency of the United

 

States or this state.

 

     (10) A regional authority shall serve as the agent of the

 

local government for the preparation, submission, execution, and

 

administration of any state or federal grants pending on the

 

approval date. The regional authority shall also act as the

 

custodian of all money received or to be received by the local

 

government or the regional authority for the projects for which the

 

grants were awarded.

 

     Sec. 144. (1) All of the following occur on the approval date:

 

     (a) The regional authority may acquire, and shall assume the

 

exclusive right, responsibility, and authority to occupy, operate,

 

control, and use, the airport and the airport facilities owned by

 

the local government on that date, subject only to any restrictions

 

imposed by this act.

 

     (b) The local government shall convey title to or enter into a

 

lease of the real property comprising the airport with the regional


authority, which shall otherwise acquire and succeed to all rights,

 

title, and interests in and to the fixtures, equipment, materials,

 

furnishings, and other personal property owned and used for

 

purposes of the airport on that date by the local government. The

 

officers of the local government shall execute the instruments of

 

conveyance, assignment, and transfer that are necessary and

 

appropriate to comply with this subdivision.

 

     (c) The regional authority shall assume, accept, and become

 

solely liable for all of the lawful obligations, promises,

 

covenants, commitments, and other requirements in respect of the

 

airport of the local government, whether known or unknown,

 

contingent or matured, except for any full faith and credit pledge

 

of the local government in respect of bonds issued by the local

 

government for airport purposes, and shall perform all of the

 

duties and obligations and is entitled to all of the rights of the

 

local government in respect of the airport under any ordinances,

 

agreements, or other instruments and under law. Consistent with

 

this chapter, this assumption includes, and any person shall

 

transfer to the regional authority, all licenses, permits,

 

approvals, or awards related to the airport; all grant agreements,

 

grant preapplications, and the right to receive the balance of any

 

money payable under the agreements; the right to receive any money,

 

including any passenger facility charges, payable to the local

 

government on the approval date and money paid to the local

 

government after the approval date; the benefit of contracts and

 

agreements; and all of the local government's duties, liabilities,

 

responsibilities, and obligations as sponsor of the airport, except


for any obligation or liabilities contested in good faith by the

 

regional authority.

 

     (2) All lawful actions, commitments, and proceedings,

 

including, but not limited to, revenue bond financings for which a

 

notice of intent resolution has been adopted, of the local

 

government made, given, or undertaken before the date of assumption

 

by the regional authority under this section are ratified,

 

confirmed, and validated on assumption by the regional authority.

 

All actions, commitments, or proceedings undertaken shall, and all

 

actions, commitments, or proceedings of the local government in

 

respect of the airport in the process of being undertaken by, but

 

not yet a commitment or obligation of, the local government in

 

respect of the airport may, from and after the date of assumption

 

by the regional authority under this section, be undertaken and

 

completed by the regional authority in the manner and at the times

 

provided in this chapter or other applicable law and in any lawful

 

agreements made by the local government before the date of

 

assumption by the regional authority under this section.

 

     (3) The exclusive right and authority to occupy, operate,

 

control, and use the airport facilities includes, but is not

 

limited to, all of the following:

 

     (a) Operational jurisdiction over all real property of the

 

airport, including, but not limited to, terminals, runways,

 

taxiways, aprons, hangars, aids to air navigation, vehicles or

 

facilities, parking facilities for passengers and employees, and

 

buildings and facilities used to operate, maintain, and manage the

 

airport, subject to any liens on the real property and restrictions


and limitations on the use of the real property.

 

     (b) The local government's right, title, and interest in, and

 

all of the local government's responsibilities arising under,

 

leases, concessions, and other contracts for airport facilities.

 

     (4) The acquisitions, assumptions, successions, or transfers

 

described under this section include, but are not limited to, all

 

of the following:

 

     (a) All contracts and other obligations with airlines,

 

tenants, concessionaires, leaseholders, and others at the airport.

 

     (b) All financial obligations secured by revenues and fees

 

generated from the operations of the airport, including, but not

 

limited to, airport revenue bonds, special facilities revenue

 

bonds, and all bonded indebtedness associated with the airport.

 

     (c) All cash balances and investments relating to or resulting

 

from operations of the airport for which operational jurisdiction

 

has been transferred to a regional authority, all money held under

 

an ordinance, resolution, or indenture related to or securing

 

obligations of the local government that have been assumed by the

 

regional authority, all of the accounts receivable or choses in

 

action arising from operations of the airport, and all benefits of

 

contracts and agreements.

 

     (d) All office equipment, including, but not limited to,

 

computers, records and files, software, and software licenses

 

required for financial management, personnel management, accounting

 

and inventory systems, and general administration.

 

     Sec. 145. (1) The transfer of the operational jurisdiction

 

over an airport to a regional authority may not in any way impair


any contract with an airline, vendor, tenant, bondholder, or other

 

party in privity with the local government.

 

     (2) On the transfer of operational jurisdiction over an

 

airport under section 144, the local government is relieved from

 

all further costs and responsibility arising from or associated

 

with control, operation, development, and maintenance of the

 

airport, except as otherwise required under obligations retained by

 

the local government under this chapter or as otherwise agreed by

 

the local government.

 

     (3) The local government shall comply with all of the

 

following:

 

     (a) Refrain from any action that would impair the regional

 

authority's exercise of the powers granted to the regional

 

authority under this chapter or that could cause the regional

 

authority to violate its rate or bond covenants.

 

     (b) Refrain from any action to sell, transfer, or otherwise

 

encumber or dispose of airport facilities owned by the local

 

government without the consent of the regional authority and, if

 

necessary, the FAA and the department.

 

     (c) Take all action reasonably necessary to cure any defects

 

in title to airport facilities transferred to the regional

 

authority.

 

     (d) On incorporation of a regional authority and before the

 

approval date, conduct operations of the airport in the ordinary

 

and usual course of business.

 

     (e) Maintain and repair, including provide snow removal for,

 

any road that provides ingress and egress to the airport over which


responsibility for maintenance and repair is retained by the local

 

government pursuant to agreement or law.

 

     (4) At the request of a regional authority, the local

 

government may provide the regional authority with transitional

 

services previously performed by the local government and related

 

to the operation of the airport until the date the regional

 

authority elects to assume the services. The regional authority

 

shall pay the cost of the services in compliance with its

 

obligations under applicable federal law, regulations, and

 

assurances associated with accepting grants from the FAA or another

 

agency of the United States or this state, including, but not

 

limited to, policies of the FAA that prohibit revenue diversion or

 

the payment of fees that exceed the value of services provided by a

 

governmental agency.

 

     Sec. 146. (1) Employees at an airport may transfer to the

 

regional authority to which operational jurisdiction of the airport

 

will be transferred as provided in this section on 1 or more dates

 

agreed to by the regional authority and the local government. The

 

date or dates must be as soon as administratively feasible, but not

 

later than 180 days after the approval date. The initial terms of

 

employment, including for purposes of pension and other benefits,

 

for transferring employees must be substantially similar to the

 

terms of employment for the employees immediately before the

 

transfer. The regional authority shall offer to enter into a

 

collective bargaining agreement covering transferring employees who

 

on their transfer date were covered by a collective bargaining

 

agreement with the local government. The agreement offered by the


regional authority must have substantially similar terms of

 

employment as the local government collective bargaining agreement

 

and remain in effect for the same period. The regional authority

 

shall become the employer of transferring employees on the date of

 

transfer without a break in employment and shall recognize the

 

length of service of the transferring employees with the local

 

government for purposes of the regional authority's benefit plans

 

and programs. The local government is not an employer of any

 

employee at the airport after the transfer date. The accrued local

 

government pension benefits or credits of a transferring employee

 

must not be diminished because of the transfer. Instead, the

 

pension benefits and credits must be transferred to the retirement

 

system or pension plan established by the regional authority as

 

provided in subsections (2) and (3).

 

     (2) By the approval date, the regional authority shall

 

establish a retirement system or pension plan that initially

 

provides benefits to each transferring employee that are

 

substantially similar to the benefits provided by the local

 

government's retirement system or pension plan before the approval

 

date. The regional authority's retirement system or pension plan

 

shall credit a transferring employee for his or her prior

 

employment with the local government, including for purposes of

 

eligibility, vesting, and accruals, and the employee shall make any

 

mandatory employee contribution to the regional authority's

 

retirement system or pension plan.

 

     (3) The local government shall, as soon as administratively

 

feasible, but not later than 180 days after all employee transfers


under subsection (1), transfer to the trustees of the regional

 

authority retirement system or pension plan both of the following:

 

     (i) For defined benefit plans, all accrued benefits, all

 

accrued liabilities, and a share of the assets of the local

 

government's plan sufficient to fund the transferring employees'

 

accrued benefits to the extent that the benefits have been funded

 

by the local government on or before the transfer date.

 

     (ii) For defined contribution plans, the amount credited to

 

each transferring employee's account in the local government's

 

retirement system or pension plan on or before the transfer date.

 

For purposes of this subparagraph, the local government shall fully

 

vest the account of the transferring employee on the day

 

immediately preceding the transfer date and shall make

 

contributions on behalf of the transferring employee for the

 

portion of the transfer year in which the employee was employed by

 

the local government and eligible to participate in the plans

 

regardless of any allocation requirements that otherwise might

 

prevent the transferring employee from receiving a contribution for

 

the year of the transfer.

 

     (4) The local government shall transfer the amounts to be

 

transferred under subsection (3) in cash or in some other form

 

acceptable to the trustees. The transfer of money to the trustees

 

under this subsection terminates the local government's obligation

 

to the transferring employees and the transferring employees'

 

rights under the local government's retirement system and pension

 

plans.

 

     (5) If the local government has an obligation to provide


retiree health benefits or payments to transferring employees, the

 

regional authority shall assume the obligations. The regional

 

authority shall not assume obligations in excess of the amount

 

properly allocable to the transferring employees. The local

 

government shall, as soon as administratively feasible but not

 

later than 180 days after all employee transfers under subsection

 

(1), transfer to the regional authority an amount sufficient to

 

fund the transferring employees' accrued benefits to the extent

 

that the benefits have been funded by the local government on or

 

before the transfer date. The regional authority shall transfer the

 

amounts required to be transferred under this subsection to a

 

qualifying entity established by the regional authority in cash, or

 

in some other form acceptable to the qualifying entity. The

 

transfer of money to a qualifying entity established by the

 

regional authority under this subsection terminates the local

 

government's obligations to the transferring employees and the

 

transferring employees' rights to receive the benefits from the

 

local government.

 

     (6) This section only applies to local government employees

 

who transfer their employment to the regional authority in

 

accordance with this section.

 

     (7) An employee hired by the regional authority, other than a

 

transferring employee, is eligible to participate in the benefit

 

plans established by the regional authority, in accordance with and

 

subject to the terms of the plans as established by the regional

 

authority, in its sole discretion.

 

     (8) As used in this section:


     (a) "Transfer date" means the earlier of the date of transfer

 

or the deadline for transfer of employment to the regional

 

authority.

 

     (b) "Transferring employee" means an employee at the airport

 

who timely transfers to the regional authority by the transfer

 

date.

 

     Sec. 147. A regional authority may accept the transfer of

 

operational jurisdiction of other publicly owned airports, in and

 

outside of the local government. In accepting a transfer, the

 

regional authority shall not assume financial obligations other

 

than those associated with the operation of the airport being

 

transferred and with debt issued to finance improvements at the

 

airport being transferred.

 

     Sec. 148. (1) For the purpose of acquiring, purchasing,

 

constructing, improving, installing, enlarging, furnishing,

 

equipping, reequipping, or repairing airports and airport

 

facilities for which operational jurisdiction is transferred under

 

this chapter or is acquired by the regional authority, a regional

 

authority may issue self-liquidating bonds of the authority in

 

accordance with and exercise all of the powers conferred on public

 

corporations by the revenue bond act of 1933, 1933 PA 94, MCL

 

141.101 to 141.140.

 

     (2) A regional authority may borrow money and issue municipal

 

securities in accordance with and exercise all of the powers

 

conferred on municipalities by the revised municipal finance act,

 

2001 PA 34, MCL 141.2101 to 141.2821.

 

     (3) All bonds or other evidences of indebtedness issued by a


regional authority under this chapter, and the interest on them,

 

are free and exempt from all taxation in this state, except

 

inheritance and estate taxes and taxes on gains realized from the

 

sale, payment, or other disposition of them.

 

     (4) On request of the board of a regional authority, the

 

legislative body may take 1 or more of the following actions:

 

     (a) Pledge the full faith and credit of the local government

 

behind any obligation or evidence of indebtedness of the regional

 

authority.

 

     (b) Advance money to the regional authority for working

 

capital and other purposes of the regional authority on terms and

 

conditions agreed to by the regional authority and the local

 

government consistent with obligations under applicable federal

 

law, regulations, and assurances associated with accepting grants

 

from the FAA or another agency of the United States or this state.

 

     (c) Appropriate and grant money to the regional authority in

 

furtherance of its purposes.

 

     (d) Grant and convey to the regional authority real or

 

personal property of any kind or nature, or any interest in real or

 

personal property, for carrying out the authorized purposes of the

 

regional authority.

 

     (5) A pledge made under subsection (4) must be at the

 

discretion of the legislative body and may be subject to an

 

agreement providing for terms and conditions of the pledge and for

 

repayment of any amount paid under the pledge as the regional

 

authority and the local government determine to be necessary and

 

advisable consistent with obligations under applicable federal law,


regulations, and assurances associated with accepting grants from

 

the FAA or another agency of the United States or this state.

 

     (6) An agreement by an authority to repay an advance made

 

under this section and any obligation incurred by the regional

 

authority under the agreement is not subject to the revised

 

municipal finance act, 2001 PA 34, MCL 141.2101 to 141.2821.

 

     (7) For the purpose of more effectively managing its debt

 

service, a regional authority may enter into an interest rate

 

exchange or swap, hedge, or similar agreement or agreements in

 

connection with the issuance or proposed issuance of obligations or

 

other evidences of indebtedness or in connection with its then

 

outstanding obligations or other evidences of indebtedness. The

 

authority may create a reserve fund for the payment of the interest

 

rate exchange or swap, hedge, or similar agreement.

 

     (8) An agreement entered into under this section must comply

 

with all of the following requirements:

 

     (a) The agreement is not a debt of the regional authority

 

entering into the agreement for any statutory debt limitation

 

purpose.

 

     (b) The agreement is payable from general funds of the

 

regional authority or, subject to any existing contracts, from any

 

available money or revenue sources, including revenues that are

 

specified by the agreement, securing the obligation or evidence of

 

indebtedness in connection with the agreement.

 

     (9) Notwithstanding anything in this chapter or any other law

 

to the contrary, all ordinances, resolutions, and other proceedings

 

of the local government with respect to any outstanding bonds,


notes, or evidences of indebtedness or liability assumed by a

 

regional authority under this chapter constitute a contract between

 

the regional authority and the holders of the bonds, notes, or

 

evidences of indebtedness or liability and must have their

 

provisions enforceable against the regional authority or any or all

 

of its successors or assigns, by mandamus or any other appropriate

 

action or proceeding in law or in equity in any court of competent

 

jurisdiction in accordance with law.

 

     (10) Bonds, notes, or evidences of indebtedness or liability

 

that are assumed by a regional authority under this chapter are

 

payable solely from and secured solely by the sources of revenue

 

that were pledged to those bonds, notes, or evidences of

 

indebtedness or liability under the ordinance, resolution, or other

 

proceedings of the local government.

 

     (11) This chapter and any other law do not relieve a regional

 

authority from any bonded or other debt or liability lawfully

 

contracted by the local government with respect to the airport and

 

outstanding on the effective date of the transfer of the

 

operational jurisdiction over the airport to the regional

 

authority.

 

     (12) A regional authority shall not take any action to impair

 

the rights or remedies of the holders of the bonds or other

 

obligations of the local government that owns the airport that were

 

lawfully issued before the transfer of operational jurisdiction of

 

the airport to the regional authority.

 

     (13) Beginning on the approval date, trustees, paying agents,

 

and registrars for any obligation of the local government that has


been assumed by the regional authority under section 144 shall

 

perform all of their duties and obligations and provide all notices

 

related to the obligations as if the regional authority were the

 

issuer of the obligations. The trustees, paying agents, and

 

registrars shall care for and consider all revenues and money

 

pledged to secure obligations of the local government that have

 

been assumed by the regional authority under section 144 as

 

revenues and money of the regional authority. The regional

 

authority shall indemnify and hold harmless the trustees, paying

 

agents, and registrars from liability incurred in compliance with

 

this subsection.

 

     Sec. 149. The effectuation of the authorized purposes of a

 

regional authority must be in all respects for the benefit of the

 

people of the region the airport serves and in order to meet

 

present and future state and regional needs with respect to the

 

provision of adequate, safe, and efficient airport facilities and

 

services to the public and to promote the economic development and

 

well-being of this state. By performing an essential governmental

 

function, the regional authority is not required to pay taxes or

 

assessments of any kind or nature whatsoever on any property

 

required or used for airport or airport facility purposes or on any

 

rates, fees, rentals, receipts, or income at any time received by

 

it.