SB-0272, As Passed House, December 19, 2014

 

 

 

 

 

 

 

 

 

 

 

HOUSE SUBSTITUTE FOR

 

SENATE BILL NO. 272

 

 

 

 

 

 

 

 

 

 

 

 

     A bill to amend 1984 PA 270, entitled

 

"Michigan strategic fund act,"

 

by amending sections 4, 5, and 23 (MCL 125.2004, 125.2005, and

 

125.2023), section 4 as amended by 2012 PA 145, section 5 as

 

amended by 2011 PA 251, and section 23 as amended by 2009 PA 85,

 

and by adding section 7b.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 4. As used in this act:

 

     (a) "Board" means the board of directors of the Michigan

 

strategic fund, except where the context clearly requires a

 

different definition.

 

     (b) "Economic development project" means an endeavor related

 

to industrial, commercial, or agricultural enterprise. Economic

 

development project includes, but is not limited to, a theme or


 

recreation park; agricultural or forestry production, harvesting,

 

storage, or processing facilities or equipment; port facilities;

 

and the use of equipment or facilities designed to produce energy

 

from renewable resources. Economic development project does not

 

include that portion of an endeavor devoted to the sale of goods at

 

retail, except that, as used in relation to the fund insuring a

 

transaction entered into by a depository institution, and as used

 

in relation to a loan by the fund to a minority owned business, an

 

economic development project may include that portion of an

 

endeavor devoted to the sale of goods at retail. Economic

 

development project does not include that portion of an endeavor

 

devoted to housing or a program or activity authorized under

 

chapter 8A.

 

     (c) "Financial institution" means a state or nationally

 

chartered bank or a state or federally chartered savings and loan

 

association, savings bank, or credit union whose deposits are

 

insured by an agency of the United States government and that

 

maintains a principal office or branch office in this state under

 

the laws of this state or the United States.

 

     (d) "Fund" means the Michigan strategic fund created under

 

section 5, except where the context clearly requires a different

 

definition.

 

     (e) "Green chemistry" means chemistry and chemical engineering

 

to design chemical products or processes that reduce or eliminate

 

the use or generation of hazardous substances, while producing

 

high-quality products through safe and efficient manufacturing

 

processes. Green chemistry is guided by the following 12


 

principles:

 

     (i) Prevent waste: Design chemical syntheses to prevent waste,

 

leaving no waste to treat or clean up.

 

     (ii) Design safer chemicals and products: Design chemical

 

products to be fully effective, yet have little or no toxicity.

 

     (iii) Design less hazardous chemical syntheses: Design syntheses

 

to use and generate substances with little or no toxicity to humans

 

and the environment.

 

     (iv) Use renewable feedstocks: Use raw materials and feedstocks

 

that are renewable rather than depleting. Renewable feedstocks are

 

often made from agricultural products or are the wastes of other

 

processes; depleting feedstocks are made from fossil fuels,

 

including petroleum, natural gas, or coal, or are mined.

 

     (v) Use catalysts, not stoichiometric reagents: Minimize waste

 

by using catalytic reactions. Catalysts are used in small amounts

 

and can carry out a single reaction many times. They are preferable

 

to stoichiometric reagents, which are used in excess and work only

 

once.

 

     (vi) Avoid chemical derivatives: Avoid using blocking or

 

protecting groups or any temporary modifications if possible.

 

Derivatives use additional reagents and generate waste.

 

     (vii) Maximize atom economy: Design syntheses so that the final

 

product contains the maximum proportion of the starting materials.

 

There should be few, if any, wasted atoms.

 

     (viii) Use safer solvents and reaction conditions: Avoid using

 

solvents, separation agents, or other auxiliary chemicals. If these

 

chemicals are necessary, use innocuous chemicals.


 

     (ix) Increase energy efficiency: Run chemical reactions at

 

ambient temperature and pressure whenever possible.

 

     (x) Design chemicals and products to degrade after use: Design

 

chemical products to break down to innocuous substances after use

 

so that they do not accumulate in the environment.

 

     (xi) Analyze in real-time to prevent pollution: Include in-

 

process real-time monitoring and control during syntheses to

 

minimize or eliminate the formation of by-products.

 

     (xii) Minimize the potential for accidents: Design chemicals

 

and their forms, including solid, liquid, or gas, to minimize the

 

potential for chemical accidents, including explosions, fires, and

 

releases to the environment.

 

     (f) "Michigan economic development corporation" or "MEDC"

 

means the Michigan economic development corporation, the public

 

body corporate created under section 28 of article VII of the state

 

constitution of 1963 and the urban cooperation act of 1967, 1967

 

(Ex Sess) PA 7, MCL 124.501 to 124.512, by a contractual interlocal

 

agreement effective April 5, 1999, and subsequently amended,

 

between local participating economic development corporations

 

formed under the economic development corporations act, 1974 PA

 

338, MCL 125.1601 to 125.1636, and the fund.

 

     (g) "Municipality" means a county, city, village, township,

 

port district, development organization, institution of higher

 

education, community or junior college, or subdivision or

 

instrumentality of any of the legal entities listed in this

 

subdivision.

 

     (h) "Person" means an individual, sole proprietorship,


 

partnership, limited partnership, limited liability partnership,

 

limited liability company, joint venture, profit or nonprofit

 

corporation including a public or private college or university,

 

public utility, municipality, local industrial development

 

corporation, economic development corporation, or other association

 

of persons organized for agricultural, commercial, or industrial

 

purposes, a lender, or any other entity approved by the board.

 

     (i) "Port facilities" means seawall jetties; piers; wharves;

 

docks; boat landings; marinas; warehouses; storehouses; elevators;

 

grain bins; cold storage plants; bunkers; oil tanks; ferries;

 

canals; locks; bridges; tunnels; seaways; conveyors; modern

 

appliances for the economical handling, storage, and transportation

 

of freight and handling of passenger traffic; transfer and terminal

 

facilities required for the efficient operation and development of

 

ports and harbors; other harbor improvements; or improvements,

 

enlargements, remodeling, or extensions of any of these buildings

 

or structures. Port facilities do not include an international

 

bridge or international tunnel.

 

     (j) (i) "Project" means an economic development project and,

 

in addition, means the acquisition, construction, reconstruction,

 

conversion, or leasing of an industrial, commercial, retail,

 

agricultural, or forestry enterprise, or any part of these, to

 

carry out the purposes and objectives of this act and of the fund,

 

including, but not limited to, acquisition of land or interest in

 

land, buildings, structures, or other planned or existing planned

 

improvements to land including leasehold improvements, machinery,

 

equipment, or furnishings which include, but are not limited to,


Senate Bill No. 272 (H-1) as amended December 19, 2014

 

the following: research parks; office facilities; engineering

 

facilities; research and development laboratories; warehousing

 

facilities; parts distribution facilities; depots or storage

 

facilities; port facilities; railroad facilities, including

 

trackage, right of way, and appurtenances; airports; [bridges and bridge

facilities;] water and air

 

pollution control equipment or waste disposal facilities; theme or

 

recreational parks; equipment or facilities designed to produce

 

energy from renewable resources; farms, ranches, forests, and other

 

agricultural or forestry commodity producers; agricultural

 

harvesting, storage, transportation, or processing facilities or

 

equipment; grain elevators; shipping heads and livestock pens;

 

livestock; warehouses; wharves and dock facilities; dredging of

 

recreational or commercial harbors; water, electricity, hydro

 

electric, coal, petroleum, or natural gas provision facilities;

 

dams and irrigation facilities; sewage, liquid, and solid waste

 

collection, disposal treatment, and drainage services and

 

facilities. Project does not include a program or activity

 

authorized under chapter 8A.

 

     (k) (j) "Private sector" means other than the fund, a state or

 

federal source, or an agency of a state or the federal government.

 

     Sec. 5. (1) There is created by this act a public body

 

corporate and politic to be known as the Michigan strategic fund.

 

The fund shall be within the department of treasury and shall

 

exercise its prescribed statutory powers, duties, and functions

 

independently of the state treasurer. The statutory authority,

 

powers, duties, functions, records, personnel, property, unexpended

 

balances of appropriations, allocations, and other funds of the


 

fund, including the functions of budgeting, procurement, personnel,

 

and management-related functions, shall be retained by the fund,

 

and the fund shall be an autonomous entity within the department of

 

treasury in the same manner as the Michigan employment security

 

commission was designated an autonomous entity within the Michigan

 

department of labor under section 379 of the executive organization

 

act of 1965, 1965 PA 380, MCL 16.479.

 

     (2) Except as otherwise provided in this act, the purposes,

 

powers, and duties of the Michigan strategic fund are vested in and

 

shall be exercised by a board of directors.

 

     (3) Except as provided in subsection (4), the board shall

 

consist of the director of the department of licensing and

 

regulatory affairs or his or her designee from within the

 

department of licensing and regulatory affairs, the state treasurer

 

or his or her designee from within the department of treasury, the

 

chief executive officer of the MEDC or his or her designee, and 6

 

other members with knowledge, skill, and experience in the

 

academic, business, or financial field, who shall be appointed by

 

the governor with the advice and consent of the senate. None of the

 

6 members appointed under this section shall be employees of this

 

state. Not less than 5 members of the board appointed under this

 

subsection shall be members of the private sector. Five of the 6

 

members appointed under this subsection shall serve for fixed

 

terms. Upon completion of each fixed term expiring after December

 

30, 2005, a member shall be appointed for a term of 4 years. Of the

 

private sector members appointed by the governor for a fixed term,

 

1 shall be appointed from a list of 3 or more nominees of the


 

speaker of the house of representatives representing persons within

 

the private sector with experience in private equity or venture

 

capital investments, commercial lending, or commercialization of

 

technology and 1 shall be appointed from a list of 3 or more

 

nominees of the senate majority leader representing persons within

 

the private sector with experience in private equity or venture

 

capital investments, commercial lending, or commercialization of

 

technology. A member appointed under this subsection or subsection

 

(4) shall serve until a successor is appointed, and a vacancy shall

 

be filled for the balance of the unexpired term in the same manner

 

as the original appointment. The member appointed under this

 

subsection and serving without a fixed term shall serve at the

 

pleasure of the governor. Of the members appointed under this

 

subsection and subsection (4), there shall be minority, female, and

 

small business representation. After December 31, 2005, at least 2

 

of the members of the board shall have experience in private equity

 

or venture capital investments, at least 1 of the members shall

 

have experience in commercial lending, and at least 1 of the

 

members of the board shall have experience in commercialization of

 

technology.

 

     (4) In addition to the 9 members of the board under subsection

 

(3), not later than December 15, 2005, the governor shall appoint,

 

with the advice and consent of the senate, 2 additional members to

 

the board for terms expiring December 31, 2007. After the initial

 

appointments under this subsection, members appointed under this

 

subsection shall be appointed for a term of 4 years. The members

 

appointed under this subsection shall be from the private sector


 

and shall have experience in private equity or venture capital

 

investments, commercial lending, or commercialization of

 

technology. From the date of the appointment of the members under

 

this subsection until December 31, 2015, the board shall have 11

 

members. After December 31, 2015, the board shall have 9 members

 

and no members shall be appointed under this subsection.

 

     (5) The governor shall designate 1 member of the board to

 

serve as its chairperson. The governor shall designate 1 member of

 

the board to serve as president of the fund and may designate 1

 

member to serve as vice-president of the fund. The chairperson,

 

president, and vice-president, if a vice-president is designated,

 

shall serve as those officers at the pleasure of the governor.

 

     (6) Members of the board shall serve without compensation for

 

their membership on the board, except that members of the board may

 

receive reasonable reimbursement for necessary travel and expenses.

 

     (7) The board may delegate to its president, vice-president,

 

staff, or others, including the MEDC, those functions and authority

 

that the board deems necessary or appropriate, which may include

 

the oversight and supervision of employees of the fund. However,

 

responsibilities specifically vested in the board under chapter 8A

 

shall be performed by the board and shall not be transferred to the

 

MEDC, except that Michigan business development program incentives

 

under section 88r, and community revitalization incentives under

 

chapter 8C, of $1,000,000.00 or less can be authorized by the

 

president of the fund.

 

     (8) A majority of the members of the board appointed and

 

serving constitutes a quorum for the transaction of business at a


 

meeting, or the exercise of a power or function of the fund,

 

notwithstanding the existence of 1 or more vacancies. The board may

 

act only by resolution approved by a majority of board members

 

appointed and serving. Voting upon action taken by the board shall

 

be conducted by majority vote of the members appointed and serving.

 

Members of the board may be present in person at a meeting of the

 

board or, if authorized by the bylaws of the board, by use of

 

telecommunications or other electronic equipment. The fund shall

 

meet at the call of the chair and as may be provided in the bylaws

 

of the fund. Meetings of the fund may be held anywhere within the

 

state of Michigan.

 

     (9) 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, and shall

 

also be provided on an internet website operated by the fund. A

 

record or portion of a record, material, or other data received,

 

prepared, used, or retained by the fund or any of its centers in

 

connection with an application to or with a project or product

 

assisted by the fund or any of its centers or with an award, grant,

 

loan, or investment that relates to financial or proprietary

 

information submitted by the applicant that is considered by the

 

applicant and acknowledged by the board or a designee of the board

 

as confidential shall not be subject to the disclosure requirements

 

of the freedom of information act, 1976 PA 442, MCL 15.231 to

 

15.246. The disclosure of a record concerning investment


 

information described in section 88c under the freedom of

 

information act, 1976 PA 442, MCL 15.231 to 15.246, is subject to

 

the limitations provided in section 88c. The board may also meet in

 

closed session pursuant to the open meetings act, 1976 PA 267, MCL

 

15.261 to 15.275, to make a determination of whether it

 

acknowledges as confidential any financial or proprietary

 

information submitted by the applicant and considered by the

 

applicant as confidential. Unless considered proprietary

 

information, the board shall not acknowledge routine financial

 

information as confidential. If the board determines that

 

information submitted to the fund is financial or proprietary

 

information and is confidential, the board shall release a written

 

statement, subject to disclosure under the freedom of information

 

act, 1976 PA 442, MCL 15.231 to 15.246, that states all of the

 

following:

 

     (a) The name and business location of the person requesting

 

that the information submitted be confidential as financial or

 

proprietary information.

 

     (b) That the information submitted was determined by the board

 

to be confidential as financial or proprietary information.

 

     (c) A broad nonspecific overview of the financial or

 

proprietary information determined to be confidential.

 

     (10) The fund shall not disclose financial or proprietary

 

information not subject to disclosure pursuant to subsection (9)

 

without consent of the applicant submitting the information.

 

     (11) Any document to which the fund is a party evidencing a

 

loan, insurance, mortgage, lease, venture, or other type of


 

agreement the fund is authorized to enter into shall not be

 

considered financial or proprietary information that may be exempt

 

from disclosure under subsection (9).

 

     (12) For purposes of subsections (9), (10), and (11),

 

"financial or proprietary information" means information that has

 

not been publicly disseminated or which is unavailable from other

 

sources, the release of which might cause the applicant significant

 

competitive harm.

 

     Sec. 7b. (1) The governor shall establish and appoint an

 

advisory committee to make recommendations to the board regarding

 

projects relating to port facilities.

 

     (2) The advisory board described in subsection (1) shall

 

contain 9 members appointed by the governor as follows:

 

     (a) Five members representing the interests of the following

 

geographical areas of this state as determined by the governor:

 

     (i) The Upper Peninsula of this state.

 

     (ii) The southwest area of this state.

 

     (iii) The northern Lower Peninsula of this state.

 

     (iv) The southeast area of this state.

 

     (v) The thumb area or midstate area of this state.

 

     (b) One member representing the interests of the agricultural

 

business supply and handling industry.

 

     (c) One member representing the interests of the aggregate

 

supply community.

 

     (d) One member appointed from 2 or more nominees of the

 

majority leader of the senate.

 

     (e) One member appointed from 2 or more nominees of the


 

speaker of the house of representatives.

 

     (3) All of the individuals appointed to the advisory board

 

described under subsection (2) shall be knowledgable about port

 

facilities or economic development as determined by the governor

 

and shall serve at the pleasure of the governor.

 

     Sec. 23. (1) The fund may borrow money and issue bonds or

 

notes for the following purposes:

 

     (a) To provide sufficient funds for achieving the fund's

 

purposes and objectives including, but not limited to, amounts

 

necessary to pay the costs of acquiring a project or part of a

 

project; to make loans for the costs of a project or part of a

 

project; to make loans pursuant to section 7(r) for an export

 

related transaction; for making grants; for providing money to

 

guarantee or insure loans, leases, bonds, notes, or other

 

indebtedness; for making working capital loans; for all other

 

expenditures of the fund incident to and necessary or convenient to

 

carry out the fund's purposes, objectives, and powers; and for any

 

combination of the foregoing. The cost of a project may include

 

administrative costs including, but not limited to, engineering,

 

architectural, legal, and accounting fees that are necessary for

 

the project.

 

     (b) To refund bonds or notes of the fund issued under this

 

act, of the job development authority issued under former 1975 PA

 

301, of the Michigan economic development authority issued under

 

former 1982 PA 70, of an economic development corporation issued

 

under the economic development corporations act, 1974 PA 338, MCL

 

125.1601 to 125.1636, or of a municipality issued under the


 

industrial development revenue bond act of 1963, 1963 PA 62, MCL

 

125.1251 to 125.1267, by the issuance of new bonds, whether or not

 

the bonds or notes to be refunded have matured or are subject to

 

prior redemption or are to be paid, redeemed, or surrendered at the

 

time of the issuance of the refunding bonds or notes; and to issue

 

bonds or notes partly to refund the bonds or notes and partly for

 

any other purpose provided for by this section.

 

     (c) To pay the costs of issuance of bonds or notes under this

 

act; to pay interest on bonds or notes becoming payable prior to

 

the receipt of the first revenues available for payment of that

 

interest as determined by the board; and to establish, in full or

 

in part, a reserve for the payment of the principal and interest on

 

the bonds or notes in the amount determined by the board.

 

     (2) The bonds and notes, including, but not limited to,

 

commercial paper, shall be authorized by resolution adopted by the

 

board, shall bear the date or dates, and shall mature at the time

 

or times not exceeding 50 years from the date of issuance, as the

 

resolution may provide. The bonds and notes shall bear interest at

 

the rate or rates as may be set, reset, or calculated from time to

 

time, or may bear no interest, as provided in the resolution. The

 

bonds and notes shall be in the denominations, be in the form,

 

either coupon or registered, carry the registration privileges, be

 

transferable, be executed in the manner, be payable in the medium

 

of payment, at the place or places, and be subject to the terms of

 

prior redemption at the option of the fund or the holders of the

 

bonds and notes as the resolution or resolutions may provide. The

 

bonds and notes of the fund may be sold at public or private sale


 

at the price or prices determined by the fund. For purposes of 1966

 

PA 326, MCL 438.31 to 438.33, this act and other acts applicable to

 

the fund shall regulate the rate of interest payable or charged by

 

the fund, and 1966 PA 326, MCL 438.31 to 438.33, does not apply.

 

Bonds and notes may be sold at a discount.

 

     (3) Bonds or notes may be 1 or more of the following:

 

     (a) Made the subject of a put or agreement to repurchase by

 

the fund or others.

 

     (b) Secured by a letter of credit or by any other collateral

 

that the resolution may authorize.

 

     (c) Reissued by the fund once reacquired by the fund pursuant

 

to any put or repurchase agreement.

 

     (4) The fund may authorize by resolution any member of the

 

board 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, are subject to prior redemption, or are to be paid,

 

redeemed, or surrendered at the time of the issuance of refunding

 

bonds or notes.

 

     (c) Deliver notes or bonds, partly to refund notes or bonds

 

and partly for any other authorized purposes.

 

     (d) Buy notes or bonds so issued at not more than the face

 

value of the 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 fund or the holder, the

 

place of delivery and payment, and other matters and procedures

 

necessary to complete the transactions authorized.

 

     (5) Except as may otherwise be expressly provided by the fund,

 

every issue of its notes or bonds shall be general obligations of

 

the fund payable out of revenues, properties, or money of the fund,

 

subject only to agreements with the holders of particular notes or

 

bonds pledging particular receipts, revenues, properties, or money

 

as security for the notes or bonds.

 

     (6) The notes or bonds of the fund are negotiable instruments

 

within the meaning of and for all the purposes of the uniform

 

commercial code, 1962 PA 174, MCL 440.1101 to 440.11102, 440.9994,

 

subject only to the provisions of the notes or bonds for

 

registration.

 

     (7) Bonds or notes issued by the fund are not subject to the

 

terms of the revised municipal finance act, 2001 PA 34, MCL

 

141.2101 to 141.2821. The bonds or notes issued by the fund are not

 

required to be registered. A filing of a bond or note of the fund

 

is not required under the uniform securities act, 1964 PA 265, MCL

 

451.501 to 451.818, or the uniform securities act (2002), 2008 PA

 

551, MCL 451.2101 to 451.2703.

 

     (8) A resolution authorizing notes or bonds may contain any or

 

all of the following covenants, which shall be a part of the

 

contract with the holders of the notes or bonds:

 

     (a) A pledge of all or a part of the fees, charges, and

 

revenues made or received by the fund, or all or a part of the

 

money received in payment of lease rentals, or loans and interest


 

on the loans, and other money received or to be received to secure

 

the payment of the notes or bonds or of an issue of the notes or

 

bonds, subject to agreements with bondholders or noteholders as may

 

then exist.

 

     (b) A pledge of all or a part of the assets of the fund,

 

including leases, or notes or mortgages and obligations securing

 

the same to secure the payment of the notes or bonds or of an issue

 

of notes or bonds, subject to agreements with noteholders or

 

bondholders as may then exist.

 

     (c) A pledge of a loan, grant, or contribution from the

 

federal, state, or local government, or source in aid of a project

 

as provided for in this act.

 

     (d) A pledge of money directly derived from payments from the

 

heritage trust fund created by the heritage trust fund act of 1982,

 

former 1982 PA 327.

 

     (e) The use and disposition of the revenues and income from

 

leases, or from loans, notes, and mortgages owned by the fund.

 

     (f) The establishment and setting aside of reserves or sinking

 

funds and the regulation and disposition of reserves or sinking

 

funds subject to this act.

 

     (g) Limitations on the purpose to which the proceeds of sale

 

of the notes or bonds may be applied and limitations on pledging

 

those proceeds to secure the payment of other bonds or notes.

 

     (h) Authority for and limitations on the issuance of

 

additional notes or bonds for the purposes provided for in the

 

resolution and the terms upon which additional notes or bonds may

 

be issued and secured. Additional bonds pledging money derived from


 

the heritage trust fund as provided in subdivision (d) may only be

 

issued if the issuance meets the requirements of section 204 of the

 

resolution adopted by the Michigan economic development authority

 

authorizing issuance of its bonds dated December 1, 1982, and any

 

requirement of former 1982 PA 70, provided that these requirements

 

do not apply if those bonds have been defeased.

 

     (i) 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

 

an amendment or abrogation, and the manner in which the consent may

 

be given.

 

     (j) Vest in a trustee or a secured party the property, income,

 

revenues, receipts, rights, remedies, powers, and duties in trust

 

or otherwise as the fund may determine necessary or appropriate to

 

adequately secure and protect noteholders and bondholders or to

 

limit or abrogate the rights of the noteholders and bondholders. A

 

trust agreement may be executed by the fund with any trustee who

 

may be located inside or outside this state to accomplish any of

 

the foregoing.

 

     (k) Pay maintenance and repair costs of a project.

 

     (l) The insurance to be carried on a project and the use and

 

disposition of insurance money and condemnation awards.

 

     (m) The terms, conditions, and agreements upon which the

 

holder of the bonds, or a portion of the bonds, is entitled to the

 

appointment of a receiver by the circuit court. A receiver who is

 

appointed may enter and take possession of the project and maintain

 

it or lease or sell the project for cash or on an installment sales


 

contract and prescribe rentals and payments therefor and collect,

 

receive, and apply all income and revenues thereafter arising in

 

the same manner and to the same extent as the fund.

 

     (n) Any other matters, of like or different character, which

 

in any way affect the security or protection of the notes or bonds.

 

     (9) A pledge made by the fund is valid and binding from the

 

time the pledge is made. The money or property so pledged and

 

thereafter received by the fund is immediately 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 fund and is

 

valid and binding as against the transfer of the money or property

 

pledged, irrespective of whether the parties have notice. Neither

 

the resolution, the trust agreement, nor any other instrument by

 

which a pledge is created need be recorded.

 

     (10) A member of the board or a person executing the notes or

 

bonds is not liable personally on the notes or bonds and is not

 

subject to personal liability of accountability by reason of the

 

issuance of the notes or bonds.

 

     (11) This state is not liable on notes or bonds of the fund,

 

and the notes or bonds shall not be considered a debt of this

 

state. The notes and bonds shall contain on their face a statement

 

indicating this fact.

 

     (12) The notes and bonds of the fund are securities in which

 

the public officers and bodies of this state; municipalities and

 

municipal subdivisions; insurance companies, associations, and

 

other persons carrying on an insurance business; banks, trust


 

companies, savings banks, savings associations, and savings and

 

loan associations; investment companies; administrators, guardians,

 

executors, trustees, and other fiduciaries; and all other persons

 

who are authorized to invest in bonds or other obligations of this

 

state may properly and legally invest funds.

 

     (13) The property of the fund and its income and operation is

 

exempt from all taxation by this state or any of its political

 

subdivisions, and all bonds and notes of the fund, the interest on

 

the bonds and notes, and their transfer are exempt from all

 

taxation by this state or any of its political subdivisions, except

 

for estate, gift, and inheritance taxes. The state covenants with

 

the purchasers and all subsequent holders and transferees of notes

 

and bonds issued by the fund under this act, in consideration of

 

the acceptance of and payment for the notes and bonds, that the

 

notes and bonds of the fund, issued pursuant to this act, the

 

interest on the notes and bonds, the transfer of the notes and

 

bonds, and all its fees, charges, gifts, grants, revenues,

 

receipts, and other money received or to be received and pledged to

 

pay or secure the payment of the notes or bonds shall at all times

 

be free and exempt from all state or local taxation provided by the

 

laws of this state, except for estate, gift, and inheritance taxes.

 

     (14) The issuance of bonds and notes under this act is subject

 

to the agency financing reporting act, 2002 PA 470, MCL 129.171 to

 

129.177.

 

     (15) For the purpose of more effectively managing its debt

 

service, the fund 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 the board by resolution. of the board.