House Introduced Bill 5832

HOUSE BILL No. 5832


     May 23, 2000, Introduced by Rep. Jelinek and referred to the Committee on Education.


        A bill to amend 1961 PA 112, entitled

   "An act to authorize and provide for the issuance and sale of
   bonds and notes of the state; to provide funds for making loans
   to school districts for payment of principal and interest on cer-
   tain school bonds; to provide for use of moneys repaid to the
   state by school districts; and to make an appropriation,"

   by amending the title and sections 1 and 2 (MCL 388.981 and

   388.982), the title and section 2 as amended by 1991 PA 64, and

   by adding sections 1a and 1b.

               THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 1
                                    TITLE

 2
           An act to authorize and provide for the issuance,  and 

 3
      sale, AND REFUNDING of bonds,  and  notes, OR COMMERCIAL PAPER of

 4
      the state; to provide funds for making loans to school districts

 5
      for payment of principal and interest on certain school bonds; to

 6
      provide for use of moneys repaid to the state by school

 7
      districts; and to make an appropriation.


   04904'99                                                 TAV
                                              2

 1
           Sec. 1.  (1) The people of  the  THIS state by virtue of the

 2
      provisions of section 16 of article  9  IX of the state constitu-

 3
      tion OF 1963 having authorized the state to borrow from time to

 4
      time such amounts as shall be required, pledge its faith and

 5
      credit, and issue its notes or bonds  therefor  for the purpose

 6
      of making loans to school districts as provided in  the  THAT

 7
      constitutional provision and legislation enacted to implement

 8
       the  THAT constitutional provision, the state administrative

 9
      board is authorized and directed to borrow on the full faith and

10
      credit of the state from time to time such sums of money as may

11
      be necessary  therefor  FOR THESE PURPOSES, including such sums

12
      as may be necessary to REIMBURSE FUNDS ADVANCED OR LOANED BY THIS

13
      STATE TO THE SCHOOL BOND LOAN FUND TO MAKE LOANS TO SCHOOL DIS-

14
      TRICTS OR TO REFUND BONDS, NOTES, OR COMMERCIAL PAPER ISSUED

15
      UNDER THIS ACT OR TO pay the principal of AND INTEREST ON any

16
      notes or renewals  thereof heretofore or hereafter  OF NOTES

17
      issued pursuant to the provisions of section 5 to provide tempo-

18
      rary financing of sums used for the purpose of making loans to

19
      school districts.  The amount to be borrowed from time to time

20
      shall be not less than  such  AN amount  as shall be 
   certified

21
      in writing by the  superintendent of public instruction  STATE

22
      TREASURER as being in his OR HER opinion necessary to provide

23
      funds for  such loans to school districts over the next ensuing 2

24
      calendar years  THE PURPOSES OF THIS ACT.

25
           (2) The bonds, NOTES, OR COMMERCIAL PAPER ISSUED UNDER THIS

26
      ACT shall be designated school loan bonds, NOTES, OR COMMERCIAL

27
      PAPER, RESPECTIVELY, and may be issued in series from time to



   04904'99
                                   3

 1
      time as  moneys are  MONEY IS needed for  such school loan 

 2
      purposes OF THIS ACT, with different dates of issuance for each

 3
       such  series.  The state administrative board may from time to

 4
      time determine, and by resolution prescribe, the date of issue of

 5
      each  such  series, the amount of bonds, NOTES, OR COMMERCIAL

 6
      PAPER to be included in  such  EACH series, the maturities of the

 7
      bonds, NOTES, OR COMMERCIAL PAPER so included, the maximum rate

 8
      or rates of interest on the bonds, NOTES, OR COMMERCIAL PAPER,

 9
      the dates of payment of interest, the place or places of payment

10
      of principal and interest, and provisions relative to registra-

11
      tion of bonds, NOTES, OR COMMERCIAL PAPER, if any.  The bonds,

12
      NOTES, OR COMMERCIAL PAPER, or any portion thereof, may be made

13
      subject to redemption  prior to  BEFORE maturity upon such terms

14
      as may be prescribed  prior to  BEFORE the issuance of the bonds,

15
      NOTES, OR COMMERCIAL PAPER by resolution of the state administra-

16
      tive board.

17
           (3) The bonds, NOTES, OR COMMERCIAL PAPER ISSUED UNDER THIS

18
      ACT shall be executed for and on behalf of  the state of

19
      Michigan  THIS STATE by the state treasurer  and the secretary of

20
      state, or their deputies  OR A DEPUTY STATE TREASURER, and a fac-

21
      simile of the seal of the state  , as approved by the state

22
      administrative board,  TREASURER shall be PRINTED OR IMPRESSED ON

23
      OR affixed  thereto by the secretary of state  TO THE BONDS,

24
      NOTES, OR COMMERCIAL PAPER.  Interest coupons, IF ANY, evidencing

25
      accrued interest to the respective dates of maturity of the

26
      bonds, NOTES, OR COMMERCIAL PAPER shall bear the facsimile

27
      signature of the state treasurer.



   04904'99
                                   4

 1
           (4) The bonds, NOTES, OR COMMERCIAL PAPER ISSUED UNDER THIS

 2
      ACT shall be sold by the state administrative board  , at not

 3
      less than par and accrued interest  AT A PRICE DETERMINED BY OR

 4
      PURSUANT TO A RESOLUTION OF THE STATE ADMINISTRATIVE BOARD.

 5
       Such sale or  THE sales shall be public OR PRIVATE sales,  held

 6
      from time to time at the discretion of  AS DETERMINED BY the

 7
      state administrative board.  , after notice by publication at

 8
      least 5 days before each such sale, in a publication printed in

 9
      the English language and circulated in the state of Michigan

10
      which carries as part of its regular service, notices of sale of

11
      municipal bonds.  The bonds so sold at each such sale shall be

12
      awarded to the bidder whose bid in the opinion of the state

13
      administrative board would result in the lowest interest cost to

14
      the state.  The state administrative board shall have the right

15
      to reject any or all bids. 

16
           (5) THE STATE ADMINISTRATIVE BOARD MAY AUTHORIZE PAYMENT OF

17
      THE COSTS OF ISSUANCE FROM THE PROCEEDS OF THE BONDS, NOTES, OR

18
      COMMERCIAL PAPER ISSUED UNDER THIS ACT, INCLUDING, BUT NOT

19
      LIMITED TO, FEES FOR PLACEMENT AND FEES AND CHARGES FOR INSUR-

20
      ANCE, LETTERS OF CREDIT, PURCHASE OF SALE AGREEMENTS OR COMMIT-

21
      MENTS, OR AGREEMENTS TO PROVIDE SECURITY TO ASSURE TIMELY PAYMENT

22
      OF THE BONDS, NOTES, OR COMMERCIAL PAPER.

23
           (6) AS USED IN THIS ACT, EXCEPT FOR THIS SUBSECTION, "STATE

24
      TREASURER" MEANS THE STATE TREASURER OR HIS OR HER DESIGNEE.

25
      THIS DESIGNATION SHALL BE IN A WRITTEN INSTRUMENT SIGNED BY THE

26
      STATE TREASURER AND MAINTAINED IN A PERMANENT FILE.  THE

27
      SIGNATURE OF ANY DESIGNEE SHALL HAVE THE SAME FORCE AND EFFECT AS



   04904'99
                                   5

 1
      THE SIGNATURE OF THE STATE TREASURER FOR ALL PURPOSES OF ALL

 2
      OTHER PROVISIONS OF THIS ACT.

 3
           SEC. 1A.  THE STATE ADMINISTRATIVE BOARD MAY ISSUE BONDS,

 4
      NOTES, OR COMMERCIAL PAPER TO REFUND BONDS, NOTES, OR COMMERCIAL

 5
      PAPER ISSUED UNDER THIS ACT BY THE ISSUANCE OF NEW BONDS, NOTES,

 6
      OR COMMERCIAL PAPER, WHETHER OR NOT THE BONDS, NOTES, OR COMMER-

 7
      CIAL PAPER TO BE REFUNDED HAVE MATURED OR ARE SUBJECT TO PRIOR

 8
      REDEMPTION.  THE STATE ADMINISTRATIVE BOARD MAY ISSUE BONDS,

 9
      NOTES, OR COMMERCIAL PAPER PARTLY TO REFUND BONDS, NOTES, OR COM-

10
      MERCIAL PAPER ISSUED UNDER THIS ACT AND PARTLY FOR ANY OTHER PUR-

11
      POSE PROVIDED BY THIS ACT.

12
           SEC. 1B.  (1) THE STATE ADMINISTRATIVE BOARD MAY AUTHORIZE

13
      AND APPROVE INSURANCE CONTRACTS; AGREEMENTS FOR LINES OF CREDIT;

14
      LETTERS OF CREDIT; COMMITMENTS TO PURCHASE BONDS, NOTES, OR COM-

15
      MERCIAL PAPER; AND ANY OTHER TRANSACTION TO PROVIDE SECURITY TO

16
      ASSURE TIMELY PAYMENT OR PURCHASE OF ANY BONDS, NOTES, OR COMMER-

17
      CIAL PAPER ISSUED UNDER THIS ACT.  THE STATE ADMINISTRATIVE BOARD

18
      MAY AUTHORIZE AND APPROVE AN INTEREST RATE EXCHANGE OR SWAP,

19
      HEDGE, OR SIMILAR AGREEMENT OR AGREEMENTS IN CONNECTION WITH THE

20
      ISSUANCE OF BONDS, NOTES, OR COMMERCIAL PAPER ISSUED UNDER THIS

21
      ACT OR IN CONNECTION WITH OUTSTANDING BONDS, NOTES, OR COMMERCIAL

22
      PAPER, OR OTHER OBLIGATIONS OR EVIDENCE OF INDEBTEDNESS OF THIS

23
      STATE UNDER THIS ACT.

24
           (2) THE STATE ADMINISTRATIVE BOARD MAY AUTHORIZE THE STATE

25
      TREASURER OR A DEPUTY TREASURER, BUT ONLY WITHIN LIMITATIONS THAT

26
      ARE CONTAINED IN THE AUTHORIZING RESOLUTION OF THE STATE

27
      ADMINISTRATIVE BOARD, TO DO 1 OR MORE OF THE FOLLOWING:



   04904'99
                                   6

 1
           (A) SELL AND DELIVER AND RECEIVE PAYMENT FOR BONDS, NOTES,

 2
      OR COMMERCIAL PAPER ISSUED UNDER THIS ACT.

 3
           (B) DELIVER BONDS, NOTES, OR COMMERCIAL PAPER PARTLY TO

 4
      REFUND BONDS, NOTES, OR COMMERCIAL PAPER AND PARTLY FOR OTHER

 5
      AUTHORIZED PURPOSES.

 6
           (C) SELECT WHICH OUTSTANDING BONDS, NOTES, OR COMMERCIAL

 7
      PAPER WILL BE REFUNDED, IF ANY, BY THE NEW ISSUE OF BONDS, NOTES,

 8
      OR COMMERCIAL PAPER.

 9
           (D) BUY BONDS, NOTES, OR COMMERCIAL PAPER ISSUED UNDER THIS

10
      ACT.

11
           (E) APPROVE INTEREST RATES, IF ANY, OR METHODS FOR DETERMIN-

12
      ING INTEREST RATES, INCLUDING FIXED OR VARIABLE RATES; PRICES;

13
      DISCOUNTS; MATURITIES; PRINCIPAL AMOUNTS; PURCHASE PRICES; PUR-

14
      CHASE DATES; REMARKETING DATES; DENOMINATIONS; DATES OF ISSUANCE;

15
      INTEREST PAYMENT DATES; REDEMPTION RIGHTS AT THE OPTION OF THE

16
      STATE OR THE OWNER; THE PLACE AND TIME OF DELIVERY AND PAYMENT;

17
      AND OTHER MATTERS AND PROCEDURES NECESSARY TO COMPLETE THE AUTHO-

18
      RIZED TRANSACTIONS.

19
           (F) EXECUTE, DELIVER, AND PAY THE COST OF REMARKETING AGREE-

20
      MENTS; INSURANCE CONTRACTS; AGREEMENTS FOR LINES OF CREDIT; LET-

21
      TERS OF CREDIT; COMMITMENTS TO PURCHASE BONDS, NOTES, OR COMMER-

22
      CIAL PAPER; AND ANY OTHER TRANSACTION TO PROVIDE SECURITY TO

23
      ASSURE TIMELY PAYMENTS OR PURCHASE OF ANY BONDS, NOTES, OR COM-

24
      MERCIAL PAPER ISSUED UNDER THIS ACT.

25
           (G) DETERMINE THE DETAILS OF, EXECUTE, DELIVER, AND PAY THE

26
      COST OF ANY INTEREST RATE EXCHANGE OR SWAP, HEDGE, OR SIMILAR

27
      AGREEMENT OR AGREEMENTS.



   04904'99
                                   7

 1
           Sec. 2.  THE PROCEEDS OF SALE OF REFUNDING BONDS, NOTES, OR

 2
      COMMERCIAL PAPER ISSUED UNDER THIS ACT SHALL BE APPLIED AS DETER-

 3
      MINED BY THE STATE ADMINISTRATIVE BOARD. The proceeds of sale of

 4
       the  OTHER bonds,  or  notes, OR COMMERCIAL PAPER ISSUED
   UNDER

 5
      THIS ACT shall be deposited in a separate fund in the state trea-

 6
      sury to be known as "the school bond loan fund", and shall be

 7
      paid out in no other manner or for any other purpose than pro-

 8
      vided in section 16 of article  9  IX of the state constitution

 9
      of 1963 and laws enacted pursuant to that section.






































   04904'99          Final page.                            TAV