SB-0942, As Passed Senate, May 30, 2018

SENATE BILL No. 942

April 12, 2018, Introduced by Senator HANSEN and referred to the Committee on Appropriations.

A bill to amend 1975 PA 222, entitled

"Higher education loan authority act,"

by amending sections 2 and 4 (MCL 390.1152 and 390.1154), section 2

as amended by 1987 PA 206 and section 4 as amended by 2007 PA 34,

and by adding section 8a.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 2. As used in this act:

(a) "Authority" means the Michigan higher education student

loan authority created by section 3.

(b) "Bonds" means the bonds authorized to be issued by the

authority under this act, which may consist of bonds, notes, term

loans, commercial paper, or other debt obligations evidencing an

obligation to repay borrowed money and payable solely from revenues

and other money pledged by the authority.

to the issuance of bonds, means either the resolution or trust

agreement securing the bonds.

(d) "Eligible institution" means : an institution of higher

education; a vocational school; or, with respect to students or

their parents who are citizens or nationals of the United States,

an institution outside the United States comparable to an

institution of higher education or to a vocational school ~~which~~

that is approved by the state board of education and by the United

States secretary of education for purposes of the guaranteed loan

program.

(e) "National of the United States" means a person who, though

not a citizen of the United States, owes permanent allegiance to

the United States, as ~~defined~~ described in section ~~101(a)(22)~~

101(a)(22)(B) of the immigration and nationality act, 8 ~~U.S.C.~~ USC

1101.

(f) "Obligations" or "borrower obligations" means loan notes

and other debt obligations evidencing loans to students or parents

of students ~~which~~ that the authority may take, acquire, buy, sell,

or indorse under this act and may include a direct or indirect

interest in whole or part of the notes or obligations.

(g) "Parent" means a biological or adoptive parent or legal

guardian.

(h) "Standard rating service" means a service recognized in

the investment profession ~~which~~ that evaluates and measures

securities investment and credit risk.

(i) "Student" means a person who is enrolled or accepted for

enrollment at an eligible institution and who is making suitable

progress in his or her education toward obtaining a degree or other

appropriate certification in accordance with standards acceptable

to the authority.

(j) "Talent investment fund" means the talent investment fund

as defined in section 8a.

Sec. 4. The authority ~~shall have~~ has the powers necessary to

carry out and effectuate the purposes of this act, including, but

not limited to, the following powers:

(a) The power to sue and be sued; to have a seal and alter the

seal at pleasure; to have perpetual succession; to make, execute,

and deliver contracts, conveyances, bonds, and other instruments

necessary in the exercise of its powers; and to make and amend

bylaws.

(b) The power to accept gifts, grants, loans, and other aids

or amounts from a person, corporation, or governmental agency.

students for the purpose of assisting students in obtaining an

education beyond or in addition to obtaining a high school

education by attending an eligible institution, including

refinancing or consolidating borrower obligations previously

incurred by a student or parent of a student with other lending

sources for this purpose and participating in loans to students and

parents of students for this purpose with other lending sources.

(d) The power to enforce its rights under a contract or

agreement including the commencement of a court action.

(e) The power to acquire, hold, and dispose of real and

personal property necessary for the accomplishment of the purposes

of this act.

(f) The power to procure insurance against losses that may be

incurred in connection with its property, assets, activities, or

the exercise of the powers granted under this act.

(g) The power to borrow money and to issue its bonds and

provide for the rights of the holders of the bonds and to secure

the bonds by assignment, pledge, or granting a security interest in

its property including all or a part of a borrower obligation. ~~The~~

This state shall not be liable for the repayment of bonds issued by

the authority, the bonds issued by the authority shall not be a

debt of ~~the~~ this state, and each bond shall contain on its face a

statement to this effect. The authority may, at its option,

authorize the issuance of bonds for the purposes described in

section 5 that are subject to federal income taxation,

notwithstanding any intergovernmental immunity from federal

taxation under the constitution of the United States for bonds of

the authority, but any waiver of intergovernmental immunity,

expressed or implied in this act, shall extend only to bonds

specifically authorized by the authority as bonds that are subject

to federal income taxation.

(h) The power to invest funds not required for immediate use

or disbursement in obligations of ~~the~~ this state or the United

States, in obligations the principal and interest of which are

guaranteed by ~~the~~ this state or the United States, in United States

government or federal agency obligation repurchase agreements, in

mutual funds and common trust funds composed of investment vehicles

that are legal for direct investment by the authority, in bankers'

acceptances of United States banks, in certificates of deposit,

savings accounts, deposit accounts, or depository receipts of a

bank that is a member of the federal deposit insurance corporation

or a savings and loan association that is a member of the federal

savings and loan insurance corporation or a credit union that is

insured by the national credit union administration, or up to 50%

of the funds in commercial paper rated at the time of purchase

within the 3 highest rating classifications established by not less

than 2 standard rating services and that matures not more than 270

days after the date of purchase.

(i) Subject to a contract with the holders of its bonds, an

applicable bond resolution, or a contract with the recipient of a

loan, when the authority considers it necessary or desirable, the

power to consent to the modification, with respect to security,

rate of interest, time of payment of interest or principal, or

other term of a bond contract or agreement between the authority

and a recipient of a loan, bondholder, or agency or institution

guaranteeing the repayment of a borrower obligation.

(j) The power to engage the services of private consultants to

render professional and technical assistance and advice in carrying

out the purposes of this act.

(k) The power to appoint officers, agents, and employees,

describe their duties, and fix their compensation subject to rules

promulgated by the ~~department of~~ civil service commission.

(l) The power to solicit grants and contributions from a

government, or an agency of government, or from the public, and, at

its discretion, to arrange for the guaranteeing of the repayment of

borrower obligations by other agencies of ~~the~~ this state or

agencies of the United States.

(m) The power to promulgate rules consistent with this act and

necessary to carry out the purpose of this act pursuant to the

administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to

24.328.

(n) The power to collect fees and charges in connection with

its loans, commitments, and servicing, including reimbursement of

the costs of financing by the authority, service charges, and

insurance premiums the authority determines are reasonable and as

approved by the authority.

(o) The power to sell borrower obligations held by the

authority for a price and at a time and pursuant to other terms,

including undertakings or options to repurchase borrower

obligations, as the authority may determine, if the sale will not

impair the rights or interests of holders of bonds issued by the

authority.

(p) The power to participate in federal programs supporting

loans to eligible students and parents of students, and to agree to

and comply with the conditions of those programs.

(q) The power to purchase or otherwise acquire notes or debt

obligations evidencing loans to students or parents of students.

(r) The power to purchase, sell, or exchange borrower

obligations securing a series of bonds of the authority with, or

for the proceeds of, or the borrower obligations securing a

separate series of bonds of the authority, but only to the extent

permitted by the respective bond resolutions for the affected

series of bonds.

(s) The power to grant and pay money to the Michigan higher

education assistance authority established by 1960 PA 77, MCL

390.951 to 390.961, for its loan guaranty fund whenever the

authority determines the grant and payment is necessary or

beneficial in order to effectuate and carry out the powers, duties,

and functions of the authority under this act.

(t) The power to enter into contracts with other authorities,

governmental agencies, private persons, firms, or corporations in

connection with any transaction relating to any indebtedness

incurred by the authority in the providing of funds for the

achievement of its purposes under this act.

(u) The power to competitively contract for services including

consulting services as needed to carry out the purposes of this

act.

(v) In the state fiscal year ending September 30, 2007, the

power to grant and pay money to the Michigan merit award trust fund

established by section 9 of the Michigan trust fund act, 2000 PA

489, MCL 12.259, to provide funding only for 1 or more of the

following:

(i) State competitive scholarships under 1964 PA 208, MCL

390.971 to 390.981.

(ii) Tuition grants under 1966 PA 313, MCL 390.991 to

390.997a.

(iii) The Michigan work-study program established in 1986 PA

288, MCL 390.1371 to 390.1382.

(iv) The Michigan work-study program established in 1986 PA

303, MCL 390.1321 to 390.1332.

(v~~) The tuition incentive program described in section 310 of~~

~~2006 PA 340.~~

(vi~~) Michigan merit award scholarships under the Michigan~~

~~merit award scholarship act, 1999 PA 94, MCL 390.1451 to 390.1459.~~

(v) (~~vii~~) The Michigan nursing scholarship program established

in the Michigan nursing scholarship act, 2002 PA 591, MCL 390.1181

to 390.1189.

(w) In the state fiscal year ending September 30, 2019, the

power to grant and pay money to the talent investment fund

established under section 8a, to provide $100,000,000.00 to the

talent investment fund.

Sec. 8a. (1) The talent investment fund is created within the

state treasury.

(2) The state treasurer may receive money or other assets from

any source for deposit into the talent investment fund. The state

treasurer shall direct the investment of the talent investment

fund. The state treasurer shall credit to the talent investment

fund interest and earnings from talent investment fund investments.

(3) Money in the talent investment fund at the close of the

fiscal year shall remain in the talent investment fund and shall

not lapse to the general fund.

(4) The department of treasury may be the administrator of the

talent investment fund for auditing purposes.

(5) The department of treasury shall expend money from the

fund, upon appropriation, only for the purpose of enhancing the

economic talent of Michigan residents, increasing access to