HB-5697, As Passed House, November 8, 2018
March 7, 2018, Introduced by Reps. Afendoulis, VerHeulen, Brinks, LaGrand and Brann and referred to the Committee on Appropriations.
A bill to amend 1966 PA 331, entitled
"Community college act of 1966,"
by amending section 164 (MCL 389.164), as added by 2008 PA 359.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 164. (1) Subject to subsection (16), by resolution of its
board of trustees, a community college district may authorize,
issue, and sell its new jobs training revenue bonds in anticipation
of payments to be received pursuant to an agreement, subject to the
requirements of this chapter, to finance costs of new jobs training
programs and to pay costs of issuing those bonds. The bonds shall
be payable in the manner and on the terms and conditions
determined, or within the parameters specified, by the board in the
resolution authorizing issuance of the bonds. The resolution
authorizing the bonds shall create a lien on the receipts from new
jobs credit from withholding to be received by the community
college district pursuant to an agreement or agreements that shall
be a statutory lien and shall be a first lien subject only to liens
previously created. As additional security, in the resolution
authorizing the bonds, the board of trustees may also pledge the
limited tax full faith and credit of the district and may authorize
and enter into an insurance contract, agreement for lines of
credit, letter of credit, commitment to purchase obligations,
remarketing agreement, reimbursement agreement, tender agreement,
or any other transaction necessary to provide security to assure
timely payment of any bonds.
(2) Bonds described in subsection (1) shall be authorized by
resolution of the board of trustees, and shall bear the date or
dates, and shall mature at the time or times, not exceeding 20
years from the date of issue, provided in the resolution. The bonds
shall bear interest at the rate or rates, fixed or variable or a
combination of fixed and variable, be in the denominations, be in
the form, either coupon or registered, carry the registration
privileges, be executed in the manner, be payable in the medium of
payment and at the place or places, and be subject to the terms of
redemption provided in the resolution or resolutions. The bonds of
the community college district may be sold at a competitive or
negotiated sale at par, premium, or discount as determined in the
authorizing resolution.
(3) A community college district may issue bonds described in
subsection (1) with respect to a single project or multiple
projects as determined by the board of trustees in the resolution
authorizing the issuance of the bonds. The board of trustees may
determine to sell the bonds in conjunction with the sale of bonds
by another community college district.
(4) Any resolution authorizing any bonds under this section,
or any issue of bonds of those bonds, may contain provisions
concerning any of the following, and those provisions are part of
the contract with the holders of the bonds:
(a) Pledging all or any part of any fees or available funds of
the community college district, or other money received or to be
received, to secure the payment of the bonds or of any issue of
bonds, and subject to any agreements with bondholders as may then
exist.
(b) Pledging all or any part of the assets of the community
college district, including mortgages and obligations securing the
assets, to secure the payment of the bonds or of any issue of
bonds, subject to any agreements with bondholders as may then
exist.
(c) The setting aside of reserves or sinking funds and the
regulation and disposition of reserves or sinking funds.
(d) Limitations on the purpose to which the proceeds of sale
of bonds may be applied and pledging the proceeds to secure the
payment of the bonds or of any issue of bonds.
(e) Limitations on the issuance of additional bonds; the terms
on which additional bonds may be issued and secured; and the
refunding of outstanding or other bonds.
(f) The procedure, if any, by which the terms of any contract
with bondholders may be amended or abrogated, the amount of bonds
the holders of which must consent to the amendment or abrogation,
and the manner in which bondholders may give that consent.
(g) Vesting in a trustee or trustees the property, rights,
powers, and duties in trust determined by the board of trustees of
the community college district.
(h) Any other matters that in any way affect the security or
protection of the bonds.
(i) Delegating to an officer or other employee of the
community college district, or an agent designated by the community
college district, the power to cause the issue, sale, and delivery
of the bonds within limits on those bonds established by the
community college district concerning any of the following:
(i) The form of the bonds.
(ii) The maximum interest rate or rates of the bonds.
(iii) The maturity date or dates of the bonds.
(iv) The purchase price of the bonds.
(v) The denominations of the bonds.
(vi) The redemption premiums of the bonds.
(vii) The nature of the security for the bonds.
(viii) Any other terms and conditions concerning issuance of
the bonds prescribed by the board of trustees of the community
college district.
(5) All of the following apply to any pledge of money or other
assets made by a community college district to secure any bonds or
issue of bonds under this section:
(a) The pledge is valid and binding from the time when the
pledge is made.
(b) The money or other assets pledged are immediately subject
to the lien of the pledge when received, without any physical
delivery of the money or assets or any further act.
(c) The lien of the pledge is valid and binding as against all
parties having claims of any kind, in tort, contract, or otherwise,
against the community college district, whether or not those
parties have notice of the lien.
(d) The community college district is not required to record
the resolution or any other instrument creating the pledge.
(6) The board of trustees of a community college district and
any person executing bonds subject to this section are not
personally liable on the bonds or subject to any personal liability
or accountability by reason of the issuance of the bonds.
(7) A community college district issuing bonds under this
section may purchase bonds of the community college district out of
any funds available for that purpose, subject to any agreements
with bondholders in effect at that time. Unless the board of the
community college district determines by resolution that the
payment of a higher price is in the best interests of the community
college district, the community college shall not purchase those
bonds at a price that exceeds 1 of the following, as applicable:
(a) If the bonds are redeemable at the time of purchase, the
redemption price applicable at that time plus accrued interest to
the next interest payment date on the bonds.
(b) If the bonds are not redeemable at the time of purchase,
the redemption price applicable on the first date after the
purchase on which the bonds are redeemable, plus accrued interest
to that date.
(8) Bonds issued under this section are not subject to the
revised municipal finance act, 2001 PA 34, MCL 141.2101 to
141.2821, except that bonds issued under this section are subject
to the maximum rate permitted under section 305 of the revised
municipal finance act, 2001 PA 34, MCL 141.2305.
(9) The issuance of bonds under this section is subject to the
agency financing reporting act, 2002 PA 470, MCL 129.171 to
129.177.
(10) Bonds issued under this section shall not be considered
to be within any limitation of outstanding debt limit applicable to
the community college district, including any limitation contained
in section 122, but shall be considered as authorized in addition
to any limitation of outstanding debt limit applicable to the
community college district.
(11) By resolution of its board of trustees, a community
college district may refund all or any part of its outstanding
bonds issued under this section by issuing refunding bonds. A
community college district may issue refunding bonds whether the
outstanding bonds to be refunded have or have not matured, are or
are not redeemable on the date of issuance of the refunding bonds,
or are or are not subject to redemption before maturity.
(12) A community college district may issue refunding bonds
under subsection (11) in a principal amount greater than the
principal amount of the outstanding bonds to be refunded if
necessary to effect the refunding under the refunding plan.
(13) A community college district may use the proceeds of
refunding bonds issued under subsection (11) to pay interest
accrued, or to accrue, to the earliest or any subsequent date of
redemption, purchase, or maturity of the outstanding bonds to be
refunded, redemption premium, if any, and any commission, service
fee, and other expense necessary to be paid in connection with the
outstanding bonds to be refunded. A community college district may
also use the proceeds of refunding bonds to pay part of the cost of
issuance of the refunding bonds, interest on the refunding bonds, a
reserve for the payment of principal, interest, and redemption
premiums on the refunding bonds, and other necessary incidental
expenses, including, but not limited to, placement fees and fees or
charges for insurance, letters of credit, lines of credit, or
commitments to purchase the outstanding bonds to be refunded.
(14) A community college district may apply the proceeds of
refunding bonds issued under subsection (11) and other available
money to payment of the principal, interest, or redemption
premiums, if any, on the refunded outstanding bonds at maturity or
on any prior redemption date or may deposit the proceeds or other
money in trust to use to purchase and deposit in trust direct
obligations of the United States, direct noncallable and
nonprepayable obligations that are unconditionally guaranteed by
the United States government as to full and timely payment of
principal and interest, noncallable and nonprepayable coupons from
those obligations that are stripped pursuant to United States
treasury
Treasury programs, and resolution funding corporation
bonds and strips, the principal and interest on which when due,
together with other available money, will provide funds sufficient
to pay principal, interest, and redemption premiums, if any, on the
refunded outstanding bonds as the refunded outstanding bonds become
due, whether by maturity or on a prior redemption date, as provided
in the authorizing resolution.
(15) A community college district is authorized to pay all or
part of the costs of new jobs training programs out of funds of the
community college district, including self-funding methods. The use
of funds of the community college district and self-funding methods
to pay the costs of new jobs training programs shall be considered
an authorized expenditure of public funds and shall not be
construed as an investment.
(16) A community college district shall not authorize, issue,
or
sell any new jobs training revenue bonds after December 31,
2018.2023.