April 22, 2008, Introduced by Reps. Lindberg, Kathleen Law, Hopgood, McDowell, Sheltrown, Byrnes, Lahti, Robert Jones, Gillard, Valentine, Alma Smith, Brown, Vagnozzi, Cushingberry, Miller, Meisner, Simpson, Spade, Gonzales, Polidori, Leland, Donigan, Condino, Espinoza, Hammon, Bieda, Lemmons, Dean, Meadows, Warren, Hood, Gaffney, Hune, Hammel, Hansen, Nofs and Bauer and referred to the Committee on Tourism, Outdoor Recreation and Natural Resources.
A bill to amend 1994 PA 451, entitled
"Natural resources and environmental protection act,"
by amending sections 1901 and 1903 (MCL 324.1901 and 324.1903),
section 1901 as added by 1995 PA 60 and section 1903 as amended by
2002 PA 52, and by adding sections 1911, 1912, 1913, 1914, 1915,
1916, 1917, 1918, 1919, 1920, 1921, 1922, 1923, 1924, 1925, 1926,
1927, and 1928.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1901. As used in this part:
(a) "Authority", unless the content clearly implies a
different meaning, means the Michigan natural resources trust fund
authority created in section 1911.
(b) (a)
"Board" means the Michigan
natural resources trust
fund board established in section 1905.
(b)
"Economic development revenue bonds (oil and gas
revenues),
series 1982A, dated December 1,
1982" includes bonds
refunding
these bonds, provided that any refunding bonds mature no
later
than September 1, 1994.
(c) "Bonds" means the bonds of the authority issued as
provided in this part.
(d) (c)
"Local unit of
government" means a county, city,
township, village, school district, the Huron-Clinton metropolitan
authority, or any authority composed of counties, cities,
townships, villages, or school districts, or any combination
thereof, which authority is legally constituted to provide public
recreation.
(e) "Notes" means the notes of the authority issued as
provided in this part, including commercial paper.
(f) (d)
"Total expenditures"
means the amounts actually
expended from the trust fund as authorized by section 1903(1) and
(2).
(g) (e)
"Trust fund" means the Michigan
natural resources
trust fund established in section 35 of article IX of the state
constitution of 1963.
Sec. 1903. (1) Subject to the limitations of this part and of
section 35 of article IX of the state constitution of 1963, the
interest and earnings of the trust fund in any 1 state fiscal year
may be expended in subsequent state fiscal years only for the
following purposes:
(a) The acquisition of land or rights in land for recreational
uses or protection of the land because of its environmental
importance or its scenic beauty.
(b) The development of public recreation facilities.
(c) The administration of the fund, including payments in lieu
of taxes on state owned land purchased through the trust fund and
the repayment of bonds and notes issued under this part.
(2)
In addition to the money described in subsection (1), 33-
1/3%
66-2/3% of the money, exclusive of interest and earnings,
received by the trust fund in any state fiscal year may be expended
in subsequent state fiscal years for the purposes described in
subsection (1). However, the authorization for the expenditure of
money provided in this subsection does not apply after the state
fiscal year in which the total amount of money in the trust fund,
exclusive of interest and earnings and amounts authorized for
expenditure under this section, exceeds $500,000,000.00.
(3) An expenditure from the trust fund may be made in the form
of a grant to a local unit of government, subject to the following
conditions:
(a) The grant is used for the purposes described in subsection
(1) and meets the requirements of either subdivision (b) or (c).
(b) A grant for the purposes described in subsection (1)(a) is
matched
by the local unit of government or public authority with at
least 25% of the total cost of the project.
(c) A grant for the purposes described in subsection (1)(b) is
matched by the local unit of government with 25% or more of the
total cost of the project.
(4) Not less than 25% of the total amounts made available for
expenditure from the trust fund from any state fiscal year shall be
expended for acquisition of land and rights in land, and not more
than 25% of the total amounts made available for expenditure from
the trust fund from any state fiscal year shall be expended for
development of public recreation facilities.
(5) If property that was acquired with money from the trust
fund is subsequently sold or transferred by the state to a
nongovernmental entity, the state shall forward to the state
treasurer for deposit into the trust fund an amount of money equal
to the following:
(a) If the property was acquired solely with trust fund money,
the greatest of the following:
(i) The net proceeds of the sale.
(ii) The fair market value of the property at the time of the
sale or transfer.
(iii) The amount of money that was expended from the trust fund
to acquire the property.
(b) If the property was acquired with a combination of trust
fund money and other restricted funding sources governed by federal
or state law, an amount equal to the percentage of the funds
contributed by the trust fund for the acquisition of the property
multiplied by the greatest of subdivision (a)(i), (ii), or (iii).
Sec. 1911. The Michigan natural resources trust fund authority
is created as a body corporate within the department and shall be
administered under the supervision of the department but shall
exercise its prescribed statutory power, duties, and functions
independently of the department. The budgeting, procurement, and
related functions of the authority shall be performed under the
direction and supervision of the department. Funds of the authority
shall be handled in the same manner and subject to the same
provisions of law applicable to state funds or in a manner
specified in a resolution of the authority authorizing the issuance
of bonds and notes.
Sec. 1912. (1) The authority shall be governed by the board.
(2) Members of the board and officers and employees of the
authority are subject to 1968 PA 317, MCL 15.321 to 15.330. A
member of the board or an officer, employee, or agent of the
authority shall discharge the duties of his or her position in a
nonpartisan manner, with good faith, and with that degree of
diligence, care, and skill that an ordinarily prudent person would
exercise under similar circumstances in a like position. In
discharging his or her duties, a member of the board or an officer,
employee, or agent of the authority, when acting in good faith, may
rely upon the opinion of counsel for the authority, upon the report
of an independent appraiser selected with reasonable care by the
board, or upon financial statements of the authority represented to
the member of the board, officer, employee, or agent to be correct
by the officer of the authority having charge of its books or
account, or stated in a written report by the auditor general or a
certified public accountant or the firm of the accountants fairly
to reflect the financial condition of the authority.
Sec. 1913. (1) The authority may employ legal and technical
experts and other officers, agents, or employees, permanent or
temporary, paid from the funds of the authority. The authority
shall determine the qualifications, duties, and compensation of
those it employs, but an employee shall not be paid a higher salary
than the director. The authority may delegate to 1 or more members,
officers, agents, or employees any powers or duties it considers
proper.
(2) The authority shall contract with the department for the
purpose of maintaining and improving the rights and interests of
the authority.
(3) The authority shall annually file a written report on its
activities of the last year with the legislature. This report shall
be submitted not later than 270 days following the end of the
fiscal year. This report shall specify the amount and source of
revenues received, the status of investments made, and a
description of the projects funded with proceeds of bonds sold
under this part.
(4) The accounts of the authority shall be subject to annual
audits by the state auditor general or a certified public
accountant appointed by the auditor general. Records of the
authority shall be maintained according to generally accepted
auditing principles.
Sec. 1914. Except as otherwise provided in this part, the
board may do all things necessary or convenient to implement the
purposes, objectives, and provisions of this part, and the
purposes, objectives, and powers delegated to the board by other
laws or executive orders, including, but not limited to, all of the
following:
(a) Adopt an official seal and bylaws for the regulation of
its affairs and alter the seal or bylaws at its pleasure.
(b) Sue and be sued in its own name and plead and be
impleaded.
(c) Borrow money and issue negotiable revenue bonds and notes
pursuant to this part.
(d) Enter into contracts and other instruments necessary,
incidental, or convenient to the performance of its duties and the
exercise of its powers.
(e) With the prior consent of the department, solicit and
accept gifts, grants, loans, and other aid from any person, or the
federal, state, or local government or any agency of the federal,
state, or local government, or participate in any other way in a
federal, state, or local government program.
(f) Procure insurance against loss in connection with the
property, assets, or activities of the authority.
(g) Invest money of the 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.
(h) Contract for goods and services and engage personnel as
necessary and engage the services of private consultants, managers,
legal counsel, and auditors for rendering professional financial
assistance and advice payable out of any money of the authority,
subject to the restrictions provided in this part.
(i) Indemnify and procure insurance indemnifying members of
the board from personal loss or accountability from liability
asserted by a person on bonds or notes of the authority, or from
any personal liability or accountability by reason of the issuance
of the bonds or notes, or by reason of any other action taken or
the failure to act by the authority.
(j) Do all other things necessary or convenient to achieve the
objectives and purposes of the authority, this part, rules
promulgated under this part, or other laws that relate to the
purposes and responsibilities of the authority.
Sec. 1915. (1) The authority may authorize and issue its bonds
or notes payable solely from the revenues or funds available to the
authority. Bonds and notes of the authority are not a debt or
liability of the state and do not create or constitute any
indebtedness, liability, or obligations of the state or constitute
a pledge of the faith and credit of the state. All authority bonds
and notes shall be payable solely from revenues or funds pledged or
available for their payment as authorized in this part. Each bond
and note shall contain on its face a statement to the effect that
the authority is obligated to pay the principal of and the interest
on the bond or note only from revenues or funds of the authority
pledged for the payment of principal and interest and that the
state is not obligated to pay that principal or interest and that
neither the faith and credit nor the taxing power of the state is
pledged to the payment of the principal of or the interest on the
bond or note.
(2) All expenses incurred in carrying out this part shall be
payable solely from revenues or funds provided or to be provided
under this part. This part does not authorize the authority to
incur any indebtedness or liability on behalf of or payable by the
state.
(3) Any revenues or funds available to the authority that are
not necessary to pay principal of or interest on any outstanding
bonds or notes of the authority or which are not required to be
deposited in a fund created to secure the bonds or notes of the
authority or required to provide for the funding of any other
matters required by a resolution authorizing the issuance of bonds
or notes of the authority shall be expended for the purposes of the
trust fund. Any money derived from the proceeds of bonds or notes
shall be expended by the authority in the manner prescribed in the
part and the resolution authorizing such indebtedness.
Sec. 1916. (1) The authority may issue from time to time bonds
or notes in principal amounts the authority considers necessary to
provide funds for any purpose, including, but not limited to, all
of the following:
(a) The payment, funding, or refunding of the principal of,
interest on, or redemption premiums on bonds or notes issued by the
authority whether the bonds or notes or interest to be funded or
refunded have or have not become due.
(b) The establishment or increase of reserves to secure or to
pay authority bonds or notes or interest on those bonds or notes.
(c) The payment of interest on the bonds or notes for a period
as the authority determines.
(d) The payment of all other costs or expenses of the
authority incident to and necessary or convenient to carry out its
corporate purposes and powers.
(2) The bonds or notes of the authority shall not be a general
obligation of the authority but shall be payable solely from the
revenues or funds, or both, pledged to the payment of the principal
of and interest on the bonds or notes as provided in the resolution
authorizing the bonds or notes.
(3) The bonds or notes of the authority:
(a) Shall be authorized by resolution of the authority.
(b) Shall bear the date or dates of issuance.
(c) May be issued as either tax-exempt bonds or notes or
taxable bonds or notes for federal income tax purposes.
(d) Shall be serial bonds, term bonds, or term and serial
bonds.
(e) Shall mature at such time or times not exceeding 30 years
from the date of issuance.
(f) May provide for sinking fund payments.
(g) May provide for redemption at the option of the authority
for any reason or reasons.
(h) May provide for redemption at the option of the bondholder
for any reason or reasons.
(i) Shall bear interest at a fixed or variable rate or rates
of interest per annum or at no interest.
(j) Shall be registered bonds, coupon bonds, or both.
(k) May contain a conversion feature.
(l) May be transferable.
(m) Shall be in the form, denomination or denominations, and
with the other provisions and terms as is determined necessary or
beneficial by the authority.
(4) If a member of the board or any officer of the authority
whose signature or facsimile of his or her signature appears on a
note, bond, or coupon ceases to be a member or officer before the
delivery of that note or bond, the signature shall continue to be
valid and sufficient for all purposes, as if the member or officer
had remained in office until the delivery.
(5) Bonds or notes of the authority may be sold at a public or
private sale at the time or times, at the price or prices, and at a
discount as the authority determines. Bonds and notes of the
authority are not subject to the revised municipal finance act,
2001 PA 34, MCL 141.2101 to 141.2821. A bond or note of the
authority is not required to be filed under the uniform securities
act, 1964 PA 265, MCL 451.501 to 451.818.
(6) The issuance of bonds and notes under this section is
subject to the agency financing reporting act.
(7) For the purpose of more effectively managing its debt
service, the authority may enter into an interest rate exchange or
swap, hedge, or similar agreement with respect to its bonds or
notes on the terms and payable from the sources and with the
security, if any, as determined by a resolution of the authority.
Sec. 1917. (1) The authority may provide for the issuance of
bonds or notes in the amounts the authority considers necessary for
the purpose of refunding bonds or notes of the authority then
outstanding, including the payment of any redemption premium and
interest accrued or to accrue to the earliest or subsequent date of
redemption, purchase, or maturity of these bonds or notes. The
proceeds of bonds or notes issued for the purpose of refunding
outstanding bonds or notes may be applied by the authority to the
purchase or retirement at maturity or redemption of outstanding
bonds or notes either on the earliest or subsequent redemption
date, and pending such applications, may be placed in escrow to be
applied to the purchase or retirement at maturity or redemption on
the date or dates determined by the authority. Pending such
application and subject to agreements with noteholders or
bondholders, the escrowed proceeds may be invested and reinvested
in the manner the authority determines, maturing at the date or
times as appropriate to assure the prompt payment of the principal,
interest, and redemption premium, if any, on the outstanding bonds
or notes to be refunded. After the terms of the escrow have been
fully satisfied and carried out, the balance of the proceeds and
interest, income, and profits, if any, earned or realized on the
investment of the proceeds shall be returned to the authority for
use by the authority in any lawful manner.
(2) In the resolution authorizing bonds or notes to refund
bonds or notes, the authority may provide that the bonds or notes
to be refunded shall be considered paid when there has been
deposited in escrow money or investment obligations that would
provide payments of principal and interest adequate to pay the
principal and interest on the bonds to be refunded, as that
principal and interest becomes due whether by maturity or prior
redemption and that, upon the deposit of the money or investment
obligations, the obligations of the authority to the holders of the
bonds or notes to be refunded shall be terminated except as to the
rights to the money or investment obligations deposited in trust.
Sec. 1918. (1) The authority may authorize and approve an
insurance contract, an agreement for a line of credit, a letter of
credit, a commitment to purchase notes or bonds, an agreement to
remarket bonds or notes, and any other transaction to provide
security to assure timely payment of a bond or note.
(2) The authority may authorize payment from the proceeds of
the notes or bonds, or other funds available, of the cost of
issuance including, but not limited to, fees for placement, charges
for insurance, letters of credit, lines of credit, remarketing
agreements, reimbursement agreements, or purchase or sales
agreements or commitments, or agreements to provide security to
assure timely payment of notes or bonds.
Sec. 1919. Within limitations that shall be contained in the
issuance or authorization resolution of the authority, the
authority may authorize a member of the board, the executive
director, or other officer of the authority to do 1 or more of the
following:
(a) Sell and deliver, and receive payment for notes or bonds.
(b) Refund notes or bonds by the delivery of new notes or
bonds whether or not the notes or bonds to be refunded have matured
or are subject to redemption.
(c) Deliver notes or bonds, partly to refund notes or bonds
and partly for any other authorized purpose.
(d) Buy notes or bonds so issued and resell those notes or
bonds.
(e) Approve interest rates or methods for fixing interest
rates, prices, discounts, maturities, principal amounts,
denominations, dates of issuance, interest payment dates,
redemption rights at the option of the authority or the holder, the
place of delivery and payment, and other matters and procedures
necessary to complete the transactions authorized.
(f) Direct the investment of any and all funds of the
authority.
(g) Approve the terms of a contract, including, but not
limited to, a contract for the sale or cutting of timber, and
execute and deliver the contract subject to the restrictions of
this part.
(h) Approve terms of any insurance contract, agreement for a
line of credit, a letter of credit, a commitment to purchase notes
or bonds, an agreement to remarket bonds or notes, an agreement to
manage payment, revenue, or interest rate exposure, or any other
transaction to provide security to assure timely payment of a bond
or note.
(i) Perform any power, duty, function, or responsibility of
the authority.
Sec. 1920. A resolution authorizing bonds or notes may provide
for all of the following, which shall be part of the contract with
the holders of the bonds or notes:
(a) A pledge to any payment or purpose of all or any part of
authority revenues or assets to which its right then exists or may
later come to exist, and of money derived from the revenues or
assets, and of the proceeds of bonds or notes or of an issue of
bonds or notes, subject to any existing agreements with bondholders
or noteholders.
(b) A pledge of a loan, grant, or contribution from the
federal or state government.
(c) The establishment and setting aside of reserves or sinking
funds and the regulation and disposition of reserves or sinking
funds subject to this part.
(d) Authority for and limitations on the issuance of
additional bonds or notes for the purposes provided for in the
resolution and the terms upon which additional notes or bonds may
be issued and secured.
(e) The procedure, if any, by which the terms of a contract
with noteholders or bondholders may be amended or abrogated, the
number of noteholders or bondholders who are required to consent to
the amendment or abrogation, and the manner in which the consent
may be given.
(f) A contract with the bondholders as to the custody,
collection, securing, investment, and payment of any money of the
authority. Money of the authority and deposits of money may be
secured in the manner determined by the authority. Banks and trust
companies may give security for such deposits.
(g) Vesting in a trustee, or a secured party, such property,
income, revenues, receipts, rights, remedies, powers, and duties in
trust or otherwise as the authority determines necessary or
appropriate to adequately secure and protect noteholders and
bondholders or to limit or abrogate the right of the holders of
bonds or notes of the authority to appoint a trustee under this
part or to limit the rights, powers, and duties of the trustee.
(h) Providing to a trustee or the noteholders or bondholders
remedies that may be exercised if the authority fails or refuses to
comply with this part or defaults in an agreement made with the
holders of an issue of bonds or notes, which may include any of the
following:
(i) By mandamus or other suit, action, or proceeding at law or
in equity, enforcing the rights of the bondholders or noteholders,
and requiring the authority to carry out any other agreements with
the holders of those notes or bonds and to perform the authority's
duties under this part.
(ii) Bringing suit upon the notes or bonds.
(iii) By action or suit, requiring the authority to account as
if it were the trustee of an express trust for the holders of the
notes or bonds.
(iv) By action or suit in equity, enjoining any acts or things
that may be unlawful or in violation of the rights of the holders
of the notes or bonds.
(v) Declaring the notes or bonds due and payable and, if all
defaults shall be made good, then, as permitted by such resolution,
annul that declaration and its consequences.
(i) Any other matters of like or different character that in
any way affect the security of protection of the bonds or notes.
Sec. 1921. A pledge made by the authority is valid and binding
from the time the pledge is made. The money or property pledged and
then received by the authority immediately is subject to the lien
of the pledge without a physical delivery or further act. The lien
of a pledge is valid and binding as against parties having claims
of any kind in tort, contract, or otherwise against the authority,
and is valid and binding as against the transfers of the money or
property pledged, irrespective of whether parties have notice.
Neither the resolution, the trust agreement, nor any other
instrument by which a pledge is created need be recorded in order
to establish and perfect a lien or security interest in the
property so pledged.
Sec. 1922. Neither the members of the board nor any person
executing bonds or notes issued under this part or any person
executing any agreement on behalf of the authority is liable
personally on the bonds or notes by reason of their issuance.
Sec. 1923. The authority may purchase bonds or notes of the
authority out of funds or money of the authority available for that
purpose. The authority may hold, cancel, or resell authority bonds
or notes subject to or in accordance with an agreement with holders
of authority bonds or notes.
Sec. 1924. The state pledges to and agrees with the holders of
bonds or notes issued under this part that the state shall not
limit or restrict the rights vested in the authority by this part
to fulfill the terms of an agreement made with the holders of
authority bonds or notes, or in any way impair the rights or
remedies of the holders of the bonds or notes of the authority
until the bonds and notes, together with interest on the bonds or
notes and interest on any unpaid installments of interest, and all
costs and expenses in connection with an action or proceedings by
or on behalf of those holders are fully met, paid, and discharged.
Sec. 1925. Notwithstanding any restriction contained in any
other law, the state and a public officer, local unit of
government, or agency of the state or a local unit of government; a
bank, trust company, savings bank and institution, savings and loan
association, investment company, or other person carrying on a
banking business; an insurance company, insurance association, or
other person carrying on an insurance business; or an executor,
administrator, guardian, trustee, or other fiduciary may legally
invest funds belonging to them or within their control in bonds or
notes issued under this part, and authority bonds or notes shall be
authorized security for public deposits.
Sec. 1926. Property of the authority is public property
devoted to an essential public and governmental function and
purpose. Income of the authority is considered to be for a public
purpose. The property of the authority and its income and operation
are exempt from all taxes and special assessments of the state or a
political subdivision of the state. Bonds or notes issued by the
authority, and the interest on and income from those bonds and
notes, are exempt from all taxation of the state or a political
subdivision of the state.
Sec. 1927. This part shall be construed liberally to
effectuate the legislative intent and the purposes as complete and
independent authority for the performance of each and every act and
thing authorized by this part, and all powers granted shall be
broadly interpreted to effectuate the intent and purposes and not
as a limitation of powers.
Sec. 1928. The authority may promulgate rules as necessary to
implement this part.
Enacting section 1. This amendatory act does not take effect
unless Senate Joint Resolution ____ or House Joint Resolution ____
(request no. 06687'08) of the 94th Legislature becomes a part of
the state constitution of 1963 as provided in section 1 of article
XII of the state constitution of 1963.