HB-5839, As Passed House, November 28, 2012
August 15, 2012, Introduced by Rep. Knollenberg and referred to the Committee on Local, Intergovernmental, and Regional Affairs.
A bill to amend 1893 PA 206, entitled
"The general property tax act,"
by amending section 87c (MCL 211.87c), as amended by 2002 PA 165.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 87c. (1) A county that has created a fund pursuant to
section 87b by resolution of its board of commissioners and without
a vote of its electors may borrow money and issue its revolving
fund notes to establish or continue, in whole or in part, the
delinquent tax revolving fund and to pay the expenses of the
borrowing.
(2) If a fund is created and a county determines to borrow
pursuant to this section, the county treasurer shall be the agent
for the county in connection with all transactions relative to the
fund.
(3) If provided by separate resolution of the county board of
commissioners for any year in which a county determines to borrow
for the purposes provided in this section and subject to subsection
(15),
(4), there shall be payable to the county treasurer's office
from
the surplus in the fund an amount equal to 20% of the
following
amount to the county treasurer for services as agent for
the
county and the remainder of the
following amount to the county
treasurer's
office for delinquent tax
administration expenses:
(a) For any delinquent tax on which the interest rate before
sale exceeds 1% per month, 1/27 of the interest collected per
month.
(b) For any delinquent tax on which the interest rate before
sale is 1% per month or less, 3/64 of the interest collected each
month.
(4)
The amount payable under subsection (3) to the county
treasurer
for services as agent for the county shall not exceed 20%
of
the county treasurer's annual salary, and any excess over this
limitation
shall be payable to the county treasurer's office for
delinquent
tax administration expenses. In addition, the total sum
payable under subsection (3) shall not exceed 5% of the total
budget of the treasurer's office for that year.
(5) In the resolution authorizing the borrowing and issuance
of notes, the delinquent taxes from which the borrowing is to be
repaid shall be pledged to the payment of the principal and
interest of the notes, and the proceeds of the collection of the
delinquent taxes pledged and the interest on the proceeds shall be
placed in a segregated fund or account and shall not be used for
any other purpose until the notes are paid in full, including
interest. The segregated fund or account shall be established as a
part of the delinquent tax revolving fund and shall be accounted
for separately on the books of the county treasurer.
(6) The proceeds of the notes shall be placed in and used as
the whole or part of the fund established pursuant to section 87b,
after the expenses of borrowing have been deducted.
(7) The notes issued pursuant to this section shall comply
with all of the following:
(a) Be in an aggregate principal amount not exceeding the
aggregate amount of the delinquent taxes pledged, exclusive of
interest.
(b) Bear interest not exceeding 14.5% per annum.
(c) Be in those denominations, and mature on the date not
exceeding 6 years after their date of issue, as the board of
commissioners by its resolution determines.
(d) May be issued at an original issue discount not to exceed
2% of the face value of the note issued.
(8) The resolution authorizing issuance of the notes may
provide that all or part of the notes shall be subject to
prepayment and, if subject to prepayment, shall provide the amount
of call premium payable, if any, the number of days' notice of
prepayment that shall be given, and whether the notice shall be
written or published, or both. Otherwise, the notes shall not be
subject to prepayment.
(9) The sale and award of notes shall be conducted and made by
the treasurer of the county issuing them at a public or private
sale. If a public sale is held, the notes shall be advertised for
sale once not less than 5 days before sale in a publication printed
in the English language and circulated in this state that carries
as a part of its regular service notices of the sales of municipal
bonds and that has been designated in the resolution as a
publication complying with these qualifications. The notice of sale
shall be in the form designated by the county treasurer. The notes
may be sold subject to the option of the county treasurer and the
county treasurer may withhold a part of the issue from delivery if,
in his or her opinion, sufficient funds are available before
delivery of the notes to make full delivery unnecessary to the
purposes of the borrowing.
(10) The notes are full faith and credit obligations of the
county issuing them and, subject to section 87d, if the proceeds of
the taxes pledged are not sufficient to pay the principal and
interest of the notes when due, the county shall impose a general
ad valorem tax without limitation as to rate or amount on all
taxable property in the county to pay the principal and interest
and may reimburse itself from delinquent taxes collected.
(11) If the resolution provides and subject to section 87d,
the notes may be designated general obligation tax notes.
(12) Notwithstanding any other provisions of this section and
section 87d, all the following apply:
(a) Interest on the notes may be payable at any time provided
in the resolution, and may be set, reset, or calculated as provided
in the resolution.
(b) Notes issued under this section may have 1 or more of the
following attributes:
(i) Made the subject of a put or agreement to repurchase by the
county treasurer.
(ii) Secured by a letter of credit issued by a bank under an
agreement entered into by the county treasurer or by any other
collateral that the resolution may authorize.
(iii) Callable as set forth in the resolution.
(iv) Reissued by the county treasurer once reacquired by the
county treasurer under any put or repurchase agreement.
(c) The county treasurer may by order do 1 or more of the
following:
(i) Authorize the issuance of renewal notes.
(ii) Refund or refund in advance notes by the issuance of new
notes, whether the notes to be refunded have or have not matured.
(iii) Issue notes partly to refund notes and partly for any
other purposes authorized by this act.
(iv) Buy and sell any notes issued under this section.
(d) Renewal, refunding, or advance refunding notes shall
comply with all of the following:
(i) Shall be sold and the proceeds applied to the purchase
redemption or payment of the notes to be renewed or refunded.
(ii) Shall not be subject to the revised municipal finance act,
2001 PA 34, MCL 141.2101 to 141.2821.
(iii) May be sold or resold at a public or private sale.
(iv) May pledge the delinquent taxes pledged in the issue to be
refunded in advance after the original issue is defeased by the
advance refunding issue.
(e) Notes may be issued secured by a second lien on delinquent
taxes, interest, and county property tax administration fees
already the subject of a first lien because of the issuance of a
prior note issue.
(f) Any notes issued may be secured in whole or in part under
a trust or escrow agreement, which agreement may also govern the
issuance of renewal notes, refunding notes, and advance refunding
notes. The agreement may authorize the trustee or escrow agent to
make investments of any type authorized in the agreement.
(13) The notes issued under this section and interest on the
notes shall be payable in lawful money of the United States of
America and shall be exempt from all taxation by this state or a
taxing authority in this state.
(14) The notes issued under this section may be made payable
at a bank or trust company, or may be made registrable as to
principal or as to principal and interest under the terms and
conditions specified in the authorizing resolution or by the county
treasurer when awarding the notes.
(15)
A county treasurer elected or appointed to office after
October
1, 1999 is not eligible for the payment under subsection
(3)
for services as agent for the county unless that county
treasurer
held office on October 1, 1999 and has not vacated that
office
after October 1, 1999.
(15) (16)
Notwithstanding 1966 PA 293, MCL
45.501 to 45.521, a
county operating under a home rule charter shall not be restricted
by the provisions of the home rule charter in connection with the
powers granted to the county to issue notes by sections 87b and 87d
and this section. The treasurer of a county described in this
subsection, notwithstanding any charter provisions to the contrary,
shall have all of the powers granted to county treasurers by
sections 87b and 87d and this section.
(17)
Notwithstanding the provisions of 1947 PA 261, MCL 45.451
to
45.457, the provisions of this section shall control the
entitlement
of the county treasurer to the fee provided for in this
section.
(16) (18)
If the treasurer authorizes on the
order authorizing
the notes, any notes issued may be secured in whole or in part
under a trust or escrow agreement. That agreement may authorize the
trustee or escrow agent to make investments of any type authorized
in the agreement.
(17) (19)
Notes issued under this act are
exempt from the
revised municipal finance act, 2001 PA 34, MCL 141.2101 to
141.2821.