May 29, 2012, Introduced by Reps. Stapleton, Talabi, Jackson, Cavanagh, Stanley, Bledsoe, Ananich, Townsend, Hobbs, Dillon, Rutledge, Lane, Ouimet, Walsh, Lyons, Price, Pettalia and Greimel and referred to the Committee on Local, Intergovernmental, and Regional Affairs.
A bill to provide for the creation of certain lighting
authorities for the purpose of operating lighting systems; to
provide for the powers and duties of the authorities; to provide
for the conveyance of operational jurisdiction over certain
operations to authorities; to provide for the assumption of certain
contracts, bonds, notes, and other evidences of indebtedness and
liabilities related to the provision of lighting authorities; to
authorize expenditures from certain funds; to finance the
acquisition of property and the development of certain public
improvements or related facilities; to provide for the issuance of
bonds and notes; to authorize certain investments; and to impose
certain powers and duties upon state and local departments,
agencies, and officers.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act shall be known and may be cited as the
"municipal lighting authority act".
Sec. 3. As used in this act:
(a) "Ancillary facility" means any revolving credit agreement,
agreement establishing a line of credit, or a letter of credit;
reimbursement agreement; interest rate exchange or similar
agreement; currency exchange agreement; commodity exchange
agreement; interest rate floor or cap; option, put, call, or
similar agreement to hedge payment, currency, commodity, rate,
spread, or similar exposure; investment agreement; float agreement;
forward agreement or other investment arrangement; insurance
contract; surety bond; commitment to purchase or sell securities;
purchase or sale agreement or commitment; or other contract or
agreement or other security agreement approved by an authority
under this act, including without limitation any arrangement
referred to in this act.
(b) "Authority" means a lighting authority incorporated under
this act.
(c) "Best value" means a contract and procurement process that
rewards the lowest responsible bids from locally headquartered
operations and that includes local workforce employment and
training plans.
(d) "Board" means the board of directors of an authority.
(e) "Chief executive officer" means any of the following:
(i) The city manager of a city or, if the city does not employ
a city manager, the mayor of the city.
(ii) The manager of a village or, if the village does not
employ a manager, the president of the village.
(iii) The manager of a township or the manager or superintendent
of a charter township or, if the township does not employ a manager
or superintendent, the supervisor of the township.
(f) "Constituent local governments" includes each of the local
governments that sign or are signatories of the articles of
incorporation of an authority incorporated under this act.
(g) "Lighting system" or "system" means plants, works,
instrumentalities, and properties used or useful in connection with
providing lighting and necessary resources and appurtenances for
the system.
(h) "Local government" means a city, village, or township.
Sec. 5. (1) It is the intent of this act to provide an
equitable and reasonable method and means of financing, operating,
and maintaining a lighting system to supply lighting in sufficient
quantities to constituent local governments.
(2) The powers of the authority shall be carried out in a
manner authorized by this act.
(3) A city, village, or township, or any combination thereof,
by majority vote of its respective governing body, may incorporate
an authority comprising the territory within its respective limits
for acquiring, constructing, consolidating, purchasing, operating,
or maintaining a municipally owned lighting system. The authority
is a public municipal corporation with the rights, powers, and
duties as provided in this act.
(4) Nothing in this act, nor the creation of an authority,
shall be construed as transferring the ownership of any lighting
system assets to the authority unless the transfer is specified in
the articles of incorporation of the authority as provided in
section 9 and the transfer is ratified in accordance with all
applicable laws.
(5) A transfer of ownership or operational control of a
lighting system to an authority shall not be considered a sale,
lease, or disposal of any kind of an asset by the local government
under any state or local law.
Sec. 7. Nothing in this act shall be considered to alter the
laws and regulations regarding utility franchises unless explicitly
stated. The creation of an authority shall not be considered to
create a new franchise as long as the authority does either of the
following:
(a) The authority only provides service within its own
territory, which shall be composed of the territory within the
constituent local governments and any area that the local
government may be serving or permitted to serve under law on the
effective date of this act.
(b) The authority provides service in accordance with the
territorial limitations as provided in subdivision (a) and
additionally provides service to constituent local governments that
do not serve private customers under a contractual agreement.
Sec. 9. (1) One or more local governments may adopt articles
of incorporation by a majority vote of their governing bodies and
incorporate an authority for the purpose of acquiring, owning,
improving, enlarging, extending, constructing, operating, or
maintaining a lighting system and providing lighting services.
(2) The articles of incorporation adopted under subsection (1)
shall be signed by 1 of the following:
(a) For a city, by the mayor and clerk of that city.
(b) For a village, by the president and clerk of that village.
(c) For a township, by the supervisor and clerk of the
township.
(3) The articles of incorporation adopted by a local
government under subsection (1) shall be in a form substantially as
follows:
"The foregoing articles of incorporation were adopted by the
____________________________ of the _______________ of
________________ County, Michigan, at a meeting held on the ____
day of __________, ______.
____________________
____________________ of the
____________________."
(4) The articles of incorporation shall specify best value
objectives.
(5) One printed copy of the articles of incorporation
certified as a true copy by the person or persons designated by the
certification, with the date and place of the publication, shall be
filed with the secretary of state and the clerk of any county in
which the authority provides services. The authority becomes
effective at the time provided in the articles of incorporation,
but shall not be effective before the filing with the secretary of
state and the clerk of all applicable counties.
(6) The validity of an authority is conclusively presumed
unless questioned in an original action filed in the court of
appeals within 60 days after the creation of the authority. The
court of appeals has original jurisdiction to hear an action under
this subsection. The court of appeals shall hear the action in an
expedited manner.
Sec. 11. (1) An authority is a public municipal corporation.
The authority is a public body corporate with the power to sue and
be sued in any court of this state. The authority possesses all the
powers necessary to carry out the purposes of its incorporation.
The enumeration of any powers in this act shall not be construed as
a limitation on an authority's general powers.
(2) An authority may do any of the following:
(a) Adopt bylaws for the regulation of the authority's affairs
and the conducting of its business.
(b) Adopt an official seal and alter the seal at its pleasure.
(c) Maintain an office at a place or places within this state
as it may designate.
(d) Sue and be sued in its own name, plead, and be impleaded.
(e) Determine the location of any project constructed by it
under this act and determine, in its discretion and without
reference to any other provisions of this act or any other law, the
design, standards, and the materials of construction, and
construct, maintain, repair, and operate the project.
(f) Issue bonds of the authority for any of its corporate
purposes under those means as provided in this act.
(g) Adopt and promulgate rules and regulations for the use of
any project operated or constructed by it under the provisions of
this act.
(h) Acquire, hold, lease, and dispose of real and personal
property in the exercise of its powers and the performance of its
duties under this act.
(i) Engage engineering, legal, and other professional services
as considered necessary to effectuate the purposes of the
authority.
(3) The authority shall maintain its books and records and its
funds on an enterprise fund basis. An authority shall not pay any
net proceeds or profits to its constituent local governments, but
may pay the constituent local governments for services provided.
(4) Following the appointment of the authority board, the
board shall implement a best value supply chain and procurement
system and shall annually report to the governing body of each
constituent local government on the efforts of the authority to
include local businesses.
Sec. 13. (1) An authority created under this act shall be
directed and governed by a board of directors consisting of 5
members appointed as provided in this section.
(2) If an authority has only 1 local government as a member,
the board shall be appointed as follows:
(a) Three members who are residents of the local government
appointed by the chief executive officer of the local government
for a term of service of 3 years, except that for the first
appointments to the board, 1 of the members shall be appointed for
a term of service of 6 years. If the chief executive officer of the
local government fails to make an appointment to the board of
directors within 42 days after the authority is created or fails to
fill a vacancy on the authority within 70 days of the vacancy
occurring, then the governing body of that local government has the
power to make the appointment.
(b) Two members who are residents of the local government
appointed by the governing body of the local government for a term
of service of 3 years, except that for the first appointments to
the board, 1 of the members shall be appointed for a term of
service of 6 years. If the governing body of the local government
fails to make an appointment to the board of directors within 42
days after the authority is created or fails to fill a vacancy on
the authority within 70 days of the vacancy occurring, then the
chief executive officer of that local government has the power to
make the appointment.
(3) If an authority has more than 1 local government as a
member, the board shall be appointed as provided in the articles of
incorporation of the authority.
(4) At least 1 board member appointed to an authority board
shall be a professional engineer licensed under article 20 of the
occupational code, 1980 PA 299, MCL 339.2001 to 339.2014.
(5) At least 1 board member appointed to an authority board
shall be a certified public accountant who is licensed as a
certified public accountant under article 7 of the occupational
code, 1980 PA 299, MCL 339.720 to 339.736, or shall qualify as a
financial expert as that term is defined by rule by the United
States securities and exchange commission pursuant to section 407
of the Sarbanes-Oxley act of 2002, Public Law 107-204.
(6) At least 1 board member appointed to an authority board
shall be an attorney licensed to practice in this state.
(7) At the time of his or her appointment to a board of
directors, and no later than January 31 of each year, a board
member of an authority board shall make a certification, signed
under penalty of perjury, to the attorney general that states all
of the following:
(a) Except as otherwise provided in this subdivision, he or
she is not currently employed by or receiving a pension or any
other form of income from any entity that has sought or received a
contract with the authority. For purposes of this subdivision,
income does not include stock dividends from or the sale of stock
of publicly traded shares constituting less than 0.1% ownership in
the entity.
(b) Except as otherwise provided in this subdivision, he or
she does not own an interest in any entity that has sought or
received a contract with the authority. For purposes of this
subdivision, own does not include the ownership in the form of
publicly traded shares constituting less than 0.1% ownership in the
entity.
(c) He or she does not serve as an officer, director, or in a
similar decision-making role in any entity that has sought or
received a contract with the authority or that has a financial
interest contrary to the authority in connection with any financing
of the authority.
(8) A person shall not begin service as a board member until
he or she completes and files the certification with the attorney
general as required under this section.
(9) The attorney general shall publish a report no later than
the last day of February of each year stating whether each member
of an authority's board has filed the required certification and
whether the certification was complete. The report shall be made
available to the public on the office of attorney general's website
as soon as practicable. If a report indicates that a board member
has failed to make the required certification, a copy of the report
shall be sent to the chief executive officer of each local
government that authorized the incorporation of the authority and
to the board member who failed to make the required certification.
The local government shall provide the last known address for that
board member to the attorney general upon request.
(10) If the required certification is not filed by a board
member by the third day of March following the publication of the
report by the attorney general, the term of office for that board
member who fails to make the required certification under this
section shall automatically terminate on the fifth day of March
following the publication of the report by the attorney general.
Sec. 15. (1) Within 30 days following the appointment of the
fifth board member to the board, the board shall hold its first
meeting.
(2) At its first meeting, the board shall select a
chairperson, treasurer, and any other officers as the board
considers necessary. The board shall require the treasurer to post
a suitable bond of not less than $100,000.00 issued by a
responsible bonding entity, with the cost of the premium of the
bond paid for by the authority.
(3) The board shall select, employ, and fix the compensation
for employees of the board and contract for those engineering,
legal, and other professional services that the board considers
necessary to effectuate the purposes of the authority.
(4) A majority of the members of the board constitute a quorum
for the purpose of conducting business and exercising powers of the
authority. Official action may be taken by an authority upon the
vote of a majority of the board members present, unless the
articles of incorporation or authority bylaws require a larger
number.
(5) The board shall adopt rules and bylaws governing its
procedures and the holding of meetings. The board shall designate
an office or location as its principal place of business.
(6) The business of the board shall be conducted at a public
meeting of the board held in compliance with the open meetings act,
1976 PA 267, MCL 15.261 to 15.275. Public notice of the time, date,
and place of the meeting shall be given in the manner required by
the open meetings act, 1976 PA 267, MCL 15.261 to 15.275. After
organization, a board shall adopt a schedule of regular meetings
and adopt a regular meeting date, place, and time.
(7) A board shall keep a written or printed record of each
meeting, which record and any other document or record prepared,
owned, used, in the possession of, or retained by the authority in
the performance of an official function shall be made available to
the public in compliance with the freedom of information act, 1976
PA 442, MCL 15.231 to 15.246.
(8) A board shall provide for a system of accounts for the
authority to conform to a uniform system required by law and for
the auditing of the accounts of the authority. The board shall
obtain an annual audit of the authority by an independent certified
public accountant and report on the audit and auditing procedures
in the manner provided by sections 6 to 13 of the uniform budgeting
and accounting act, 1968 PA 2, MCL 141.426 to 141.433. The audit
also shall be in accordance with generally accepted government
auditing standards and shall satisfy federal regulations relating
to federal grant compliance audit requirements.
(9) The board shall provide a quarterly progress report to the
chief executive officer and the governing body of each constituent
local government and shall make that quarterly progress report
available on the authority's internet website.
Sec. 17. (1) On or before March 15 after the creation of the
authority, and on or before March 15 of every second year after the
creation of the authority, the board shall prepare and submit to
the governing bodies of the constituent local governments a plan
for the next 3 succeeding fiscal years. The plan shall contain all
of the following:
(a) The number and placement of street lights in the
constituent local governments composing the authority.
(b) A budget that includes, but is not limited to, the
following:
(i) Anticipated expenses of administration, operation, and
maintenance of the authority and the lighting system.
(ii) Any reserve to be established for the administration,
operation, and maintenance of the authority and the lighting
system.
(iii) A statement showing the amounts necessary to retire all
principal and interest on any bonds of the authority maturing
during the applicable fiscal years.
(iv) A plan to implement best value practices in subsequent
fiscal years.
(v) Any other item specified in the articles of incorporation
of the authority.
(c) The budget prepared by the authority shall provide that
any money derived from the collection of rates and charges shall be
applied and used by the authority in the following manner and in
the following priority:
(i) To provide for the payment during each fiscal year of all
current expenses of administration, operation, and maintenance as
may be necessary to preserve the lighting system in good repair and
working order, including payments required under bonded
indebtedness incurred in accordance with the authorization
contained in this act.
(ii) In the discretion of the board, there may be set aside
during each fiscal year money to provide a reserve fund for
replacements or major repairs and improvements not anticipated or
considered to be a part of current expenses of administration,
operation, or maintenance of the lighting system.
(2) The governing body of the constituent local governments
composing the authority may vote to accept or reject the plan. The
governing body of a local government does not have the power to
amend the plan in any respect. Unless 1 or more of the governing
bodies of the the constituent local governments vote to reject the
plan within 45 days of its submittal, the plan is considered
approved.
(3) If the governing body of a local government rejects the
plan as provided in subsection (2), the authority shall revise the
plan and shall submit the revised plan to the governing body of the
constituent local governments within 30 days of the vote that
rejected the plan.
(4) The governing body of each local government may vote to
accept or reject the revised plan within 30 days of its submittal.
Unless 1 or more of the governing bodies of the the constituent
local governments vote to reject the revised plan, the revised plan
is considered approved.
(5) If the governing body of a local government votes to
reject the revised plan, the governing body of that local
government must contemporaneously adopt, by a vote of at least 2/3
of the members of the governing body of that local government
elected and serving, a resolution that includes a list of items
that, if altered, would result in a vote to adopt the plan. Failure
to adopt a resolution in compliance with this subsection is
considered acceptance of the revised plan by the governing body of
that local government.
(6) If the governing body of a local government votes to
reject the revised plan and submits the required resolution as
provided in subsection (5), the authority shall prepare a final
proposed plan not more than 20 days following the vote to reject
the revised plan. The final proposed plan shall be sent to each
chief executive officer of the constituent local governments, and
each chief executive officer shall make the final proposed plan
available on that local government's internet website as soon as is
practicable. The final proposed plan shall also be made available
at a public hearing to be held not more than 10 days after the
final proposed plan is complete. Public comment shall be taken at
the public hearing concerning the final proposed plan. On or after
the tenth day after the public hearing, the authority shall vote on
the final proposed plan.
(7) Except as otherwise provided in this subsection, if 2/3 of
the board members of the authority vote to adopt the final proposed
plan, it is adopted. If the final proposed plan incorporates a
majority of the items identified in the appropriate resolution or
resolutions adopted by the governing bodies of the local
governments, then the final proposed plan is adopted if approved by
a majority vote of the board of directors of the authority.
(8) If a plan is not adopted on or before July 1 of the year
in which a plan is required to be prepared under subsection (1),
then the adopted plan shall be the final proposed plan, except that
all changes identified in the resolution of the rejecting governing
body submitted under this act are considered amendments to the
final proposed plan so that the plan as adopted contains all
changes listed in the resolution from the rejecting governing body.
(9) A plan adopted by the board may be amended by a vote of 4
of the 5 members on the board
Sec. 19. Unless the board, by resolution, establishes a
different fiscal year, the fiscal year of the authority shall
commence on July 1 of each year and end on the following June 30.
Sec. 21. (1) For the purpose of constructing, acquiring,
improving, enlarging, or extending a lighting system, including the
payment of engineering, legal, and financing expenses, and after
the establishment of the initial service rates and the execution of
contracts for the provision of construction services, purchase of
power, and other related activities within the corporate limits of
the authority, the authority may borrow money and issue revenue
bonds and notes for the purposes provided in this section. The
aggregate principal amount of the bonds and notes at no time shall
exceed 5% of the total state equalized valuation of the property
assessed in the local governments comprising the authority.
(2) Revenue bonds are payable upon the terms and conditions
specified by the authority in the resolution under which the
authority issues the bonds or in a related trust agreement or trust
indenture. The board of directors in the resolution authorizing the
bonds, a trust indenture, ancillary facility, or other agreement
entered into with respect to bonds of the authority may pledge any
funds received or to be received by the authority for the payment
of the bonds or other obligations of the authority under the
agreement and create a first lien in favor of the holders of the
bonds or a party subject to the agreement, including, but not
limited to, funds received pursuant to a contract entered into
under section 25. The principal of and interest on the bonds shall
be payable, except as provided in this act, solely from the
proceeds described in the resolution authorizing the bonds or trust
indenture, and the proceeds may include revenues pledged directly
to authority bonds pursuant to a contract entered into under
section 25 by a local government.
(3) The resolution authorizing the issuance of bonds under
this section shall include all of the following:
(a) A statement that the bonds are revenue bonds.
(b) A statement briefly describing the lighting system to be
constructed, acquired, improved, or extended and the estimated cost
of the lighting system.
(c) A statement that the contracts for services of the
authority have been entered into with all the local governments
comprising the authority.
(d) In the case of refunding bonds, identification of the
parameters under which the bonds can be issued.
(e) Delegation for a time period at the board of directors'
discretion to an officer, employee, or designated agent of the
authority the power to issue, sell, and deliver bonds within the
limits on those bonds established by the authority as to any of the
following:
(i) Form.
(ii) Maximum interest rates.
(iii) Maturity dates.
(iv) Purchase price.
(v) Denominations.
(vi) Redemption dates and premiums, if any.
(vii) Nature of the security.
(viii) Selection of an applicable interest rate index.
(ix) The terms of ancillary facilities entered into in
connection with the issuance of bonds.
(x) Other terms and conditions with respect to the bond issue
that the authority prescribes.
(f) Specification of other details and matters that are
considered necessary or advisable to provide for the prompt and
orderly retirement of the bonds and the interest on the bonds at
maturity.
(g) Provision for the deposit of revenues pledged for the
payment of bonds issued under this section into a separate account
for the purpose of paying principal and interest on those bonds,
the administrative costs associated with those bonds, and any other
bonds issued by the authority that are secured by those revenues.
For purposes of this subdivision, principal and interest may
include any fees related to an ancillary facility, if any.
(4) An authority may issue bonds under this section to refund
any bonds by issuing new bonds if it considers the refunding
expedient, whether or not the bonds to be refunded have matured,
and may issue bonds partly to refund bonds that are outstanding and
partly for restructuring or any of the authority's other authorized
purposes.
(5) Bonds issued under this act shall not mature more than 30
years from the date of the original issuance.
(6) An authority may issue bond anticipation notes secured by
the issuance of revenue bonds issued under this section in addition
to the revenues that the authority is permitted to pledge as
provided in this section.
(7) Any bonds issued under this act shall be sold to the
Michigan finance authority created by Executive Reorganization
Order No. 2010-2, MCL 12.194.
(8) Bonds issued by an authority under this act are not
subject to the revised municipal finance act, 2001 PA 34, MCL
141.2101 to 141.2821. Bonds issued by an authority under this act
are not subject to the revenue bond act of 1933, 1933 PA 94, MCL
141.101 to 141.140.
Sec. 23. (1) An authority may enter into, amend, or terminate,
as it determines necessary or appropriate, any ancillary facility
for any of the following purposes:
(a) To facilitate the issue, sale, resale, purchase,
repurchase, or payment of bonds, or the making or performance of
swap contracts, including without limitation bond insurance,
letters of credit, and liquidity facilities.
(b) To attempt to hedge risk or achieve a desirable effective
interest rate or cash flow.
(2) An authority may enter into, amend, or terminate any
ancillary facility as it determines necessary or appropriate or to
place the obligations or investments of the authority, as
represented by the bonds or the investment of bond proceeds, in
whole or in part, on the interest rate, cash flow, or other basis
desired by the authority. The ancillary facility may include
without limitation contracts commonly known as interest swap
agreements and futures or contracts providing for payments based on
levels of, or changes in, interest rates. The authority may enter
into these contracts or arrangements in connection with, or
incidental to, entering into, or maintaining any agreement that
secures bonds of the authority or any investment of reserves, or
contract providing for investment of reserves, or similar ancillary
facility guaranteeing an investment rate for a period of years.
(3) An authority's determination that an ancillary facility,
or the amendment or termination of an ancillary facility, is
necessary or appropriate is conclusive. The authority may determine
the terms and conditions of an ancillary facility, including
without limitation provisions as to security, default, termination,
payments, remedy, and consent to service of process.
(4) Before an authority enters into any ancillary facility,
the authority must have the consent of the Michigan finance
authority.
Sec. 25. (1) An authority and any local government may enter
into a contract providing for the construction, acquisition,
improvement, enlargement, or extension of a lighting system,
including the payment of engineering, legal, and financing expenses
in connection with the lighting system, and after the establishment
of the initial service rates and the execution of contracts for the
provision of construction services, purchase of power, and other
related activities within the corporate limits of the authority.
Contracts shall provide for the rates and charges for each local
government. Each local government may pledge its full faith and
credit for the payment of the obligation in the manner and times
specified in the contract. If a local government makes this pledge,
it may include in its annual tax levy an amount sufficient so the
estimated collections from the tax levy will be sufficient to
promptly pay when due the portion of the obligation falling due
before the time of the following year's tax collection, subject to
constitutional, statutory, and charter limitations. If the contract
or an unlimited tax pledge in support of the contract has been
approved by the electors of a local government, the tax may be in
addition to any tax that the local government may otherwise be
authorized to levy and may be imposed without limitation as to rate
or amount, but shall not be in excess of the rate or amount
necessary to pay the contractual obligation. If, at the time of
making the annual tax levy, there are other funds on hand earmarked
for the payment of the contractual obligation, credit for those
funds may be taken upon the annual levy for the payment of the
obligation. The contract is not subject to the revised municipal
finance act, 2001 PA 34, MCL 141.2101 to 141.2821.
(2) The contact may provide for other funds to be raised and
pledged by each contracting local government by the use of 1 or
more of the following additional methods:
(a) The levy of special assessments to the extent legally
permitted by the local government. The procedures relative to the
levying and collection of the special assessments shall conform as
nearly as is applicable to charter or statutory provisions for the
levying and collection, except that a petition is not required from
property owners.
(b) The levy and collection of charges to users and
beneficiaries of the service or services furnished by the lighting
system.
(c) A pledge of revenue that would otherwise be received by
the local government under the city utility users tax act, 1990 PA
100, MCL 141.1151 to 141.1177, as provided in subsection (3).
(d) The receipt of money derived from the imposition of taxes
by this state, except to the extent that the use of the money for
this purpose is expressly prohibited by the state constitution of
1963.
(e) The receipt of other funds that may be validly used for
this purpose.
(3) If an authority issues bonds pursuant to this section to
be paid from revenues from a contract entered into pursuant to this
section, a local government, in furtherance of its obligations
under the contract, may by resolution or order pledge revenues to
be received by the local government pursuant to the city utility
users tax act, 1990 PA 100, MCL 141.1151 to 141.1177, to bonds of
the authority issued pursuant to the contract. If the local
government pledges these revenues, all of the following apply:
(a) Before the pledge and the contract become effective, the
local government shall do all of the following:
(i) Enter into a trust agreement with the authority, the
Michigan finance authority, and a trustee to provide for both of
the following:
(A) Collection of pledged revenues by public utilities and
resale customers.
(B) Direct payment of those pledged revenues to the trustee
for the purposes provided in this act.
(ii) Levy the tax.
(iii) Send a notice to each public utility and resale customer
collecting the tax to remit those collections to the trustee
designated in the trust agreement, pursuant to the city utility
users tax act, 1990 PA 100, MCL 141.1151 to 141.1177.
(iv) Take all other steps necessary and convenient to arrange
for and ensure the orderly collection of the taxes.
(b) After the pledge and contract become effective, the local
government shall continue to do all of the following:
(i) Levy the tax at not lower than the rate at which the tax is
levied when the contract becomes effective.
(ii) Take all other steps necessary and convenient to ensure
orderly collection of the taxes.
(iii) Perform all of its other lawful obligations under the
contract.
(c) The pledged revenues collected or to be collected by
public utilities and resale customers shall be held in trust to be
applied for the sole and exclusive benefit of authority bondholders
to the extent and in the manner provided for by this act, the
contract, and the trust agreement, and may not be commingled with
any other funds.
(d) The pledged revenues are exempt from being levied upon,
taken, sequestered, or applied toward paying the debts or
liabilities of the local government other than for payment of debt
service on the authority bonds and related administrative costs to
which the contract and trust agreement apply. The pledged revenues
shall be exempt from any further taxes or special assessments of
this state or a political subdivision of this state.
(e) Although the pledged revenues are held in trust, to the
extent that the local government or authority retains any interest
in the pledged revenues, and solely to that extent, the pledged
revenues shall be subject to a lien in favor of the authority
bondholders. This lien is paramount and superior to all other liens
and interests of any kind, including any interest of the local
government or the authority, and shall be for the sole purpose of
ensuring payment of the principal, interest, and related
administrative costs of authority bonds secured by the contract and
the trust agreement. The lien created is effected and perfected
without delivery, recording, or notice.
(4) A trust agreement may provide that, should the trustee
determine that it holds funds in excess of those it reasonably
considers necessary to make bond payments obligated under the
contract and trust agreement, the trustee may release some or all
of the excess funds from the trust and distribute them to the local
government.
(5) A local government may not enter into a contract pledging
revenues pursuant to subsection (3) that would result in
outstanding bonds secured by those pledged revenues having an
aggregate annual debt service that exceeds $12,500,000.00 in any 1
year taking into account any anticipated federal credits as
determined by the authority.
(6) As used in this section:
(a) "Bonds" includes any ancillary facility or other financing
instruments entered into by the authority if the facilities are
permitted by the contract entered into between the local government
and the authority.
(b) "Pledged revenues" means all money to be received by the
local government pursuant to the city utility users tax act, 1990
PA 100, MCL 141.1151 to 141.1177, to the extent pledged for
repayment of authority bonds under the contract.
(c) "Public utilities" and "resale customers" mean those terms
as defined in the city utility users tax act, 1990 PA 100, MCL
141.1151 to 141.1177.
Sec. 27. (1) The property of an authority created under this
act is public property devoted to an essential public and
governmental purpose. Income of an authority is for a public and
governmental purpose.
(2) Except as otherwise provided in this subsection, the
property of an authority created under this act and its income,
activities, and operations are exempt from all taxes and special
assessments of this state or a political subdivision of this state.
Property of an authority and its income, activities, and operations
that are leased to private persons are not exempt from any tax or
special assessment of this state or a political subdivision of this
state. Property of an authority is exempt from any ad valorem
property taxes levied under the general property tax act, 1893 PA
206, MCL 211.1 to 211.155, or other law of this state authorizing
the taxation of real or personal property. An authority is an
entity of government for purposes of section 4a(1)(a) of the
general sales tax act, 1933 PA 167, MCL 205.54a, and section
4(1)(h) of the use tax act, 1937 PA 94, MCL 205.94.
Sec. 29. An authority may acquire property for a lighting
system by purchase, construction, lease, gift, or devise, either
within or outside its corporate limits. The authority may hold,
manage, control, sell, exchange, or lease the property, except that
if the property at issue was purchased, devised, leased, or
otherwise came into the authority's ownership or control from a
constituent local government, the authority may not sell, exchange,
or otherwise dispose of the property unless the other party to the
transaction is the local government that previously owned the
property so that the property will return to the ownership of the
constituent local government that owned the property before the
transfer to the authority.
Sec. 31. The governing body of each local government composing
the authority may advance or loan to the authority any money
required for administrative expenses or for the purpose of
obtaining maps, plans, designs, specifications, and cost estimates
of a proposed lighting system. An advance or loan may be included
as a part of any bond issue by the authority under this act and
repaid to the local government upon the sale of the bonds.
Sec. 33. The powers granted under this act are in addition to
those granted by any charter or statute.
Sec. 35. This act shall be liberally construed in the interest
of the public health, safety, and welfare of the persons and
property within an authority created under this act.