HOUSE BILL No. 5697

 

 

March 7, 2018, Introduced by Reps. Afendoulis, VerHeulen, Brinks, LaGrand and Brann and referred to the Committee on Appropriations.

 

     A bill to amend 1966 PA 331, entitled

 

"Community college act of 1966,"

 

by amending section 164 (MCL 389.164), as added by 2008 PA 359.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 164. (1) Subject to subsection (16), by resolution of its

 

board of trustees, a community college district may authorize,

 

issue, and sell its new jobs training revenue bonds in anticipation

 

of payments to be received pursuant to an agreement, subject to the

 

requirements of this chapter, to finance costs of new jobs training

 

programs and to pay costs of issuing those bonds. The bonds shall

 

be payable in the manner and on the terms and conditions

 

determined, or within the parameters specified, by the board in the

 

resolution authorizing issuance of the bonds. The resolution

 

authorizing the bonds shall create a lien on the receipts from new

 

jobs credit from withholding to be received by the community

 

college district pursuant to an agreement or agreements that shall

 

be a statutory lien and shall be a first lien subject only to liens

 

previously created. As additional security, in the resolution

 

authorizing the bonds, the board of trustees may also pledge the

 

limited tax full faith and credit of the district and may authorize

 

and enter into an insurance contract, agreement for lines of

 

credit, letter of credit, commitment to purchase obligations,

 

remarketing agreement, reimbursement agreement, tender agreement,

 

or any other transaction necessary to provide security to assure

 

timely payment of any bonds.

 

     (2) Bonds described in subsection (1) shall be authorized by

 

resolution of the board of trustees, and shall bear the date or

 

dates, and shall mature at the time or times, not exceeding 20

 

years from the date of issue, provided in the resolution. The bonds

 

shall bear interest at the rate or rates, fixed or variable or a

 

combination of fixed and variable, be in the denominations, be in

 

the form, either coupon or registered, carry the registration

 

privileges, be executed in the manner, be payable in the medium of

 

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

 

redemption provided in the resolution or resolutions. The bonds of

 

the community college district may be sold at a competitive or

 

negotiated sale at par, premium, or discount as determined in the

 

authorizing resolution.

 

     (3) A community college district may issue bonds described in

 

subsection (1) with respect to a single project or multiple

 

projects as determined by the board of trustees in the resolution

authorizing the issuance of the bonds. The board of trustees may

 

determine to sell the bonds in conjunction with the sale of bonds

 

by another community college district.

 

     (4) Any resolution authorizing any bonds under this section,

 

or any issue of bonds of those bonds, may contain provisions

 

concerning any of the following, and those provisions are part of

 

the contract with the holders of the bonds:

 

     (a) Pledging all or any part of any fees or available funds of

 

the community college district, or other money received or to be

 

received, to secure the payment of the bonds or of any issue of

 

bonds, and subject to any agreements with bondholders as may then

 

exist.

 

     (b) Pledging all or any part of the assets of the community

 

college district, including mortgages and obligations securing the

 

assets, to secure the payment of the bonds or of any issue of

 

bonds, subject to any agreements with bondholders as may then

 

exist.

 

     (c) The setting aside of reserves or sinking funds and the

 

regulation and disposition of reserves or sinking funds.

 

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

 

of bonds may be applied and pledging the proceeds to secure the

 

payment of the bonds or of any issue of bonds.

 

     (e) Limitations on the issuance of additional bonds; the terms

 

on which additional bonds may be issued and secured; and the

 

refunding of outstanding or other bonds.

 

     (f) The procedure, if any, by which the terms of any contract

 

with bondholders may be amended or abrogated, the amount of bonds

the holders of which must consent to the amendment or abrogation,

 

and the manner in which bondholders may give that consent.

 

     (g) Vesting in a trustee or trustees the property, rights,

 

powers, and duties in trust determined by the board of trustees of

 

the community college district.

 

     (h) Any other matters that in any way affect the security or

 

protection of the bonds.

 

     (i) Delegating to an officer or other employee of the

 

community college district, or an agent designated by the community

 

college district, the power to cause the issue, sale, and delivery

 

of the bonds within limits on those bonds established by the

 

community college district concerning any of the following:

 

     (i) The form of the bonds.

 

     (ii) The maximum interest rate or rates of the bonds.

 

     (iii) The maturity date or dates of the bonds.

 

     (iv) The purchase price of the bonds.

 

     (v) The denominations of the bonds.

 

     (vi) The redemption premiums of the bonds.

 

     (vii) The nature of the security for the bonds.

 

     (viii) Any other terms and conditions concerning issuance of

 

the bonds prescribed by the board of trustees of the community

 

college district.

 

     (5) All of the following apply to any pledge of money or other

 

assets made by a community college district to secure any bonds or

 

issue of bonds under this section:

 

     (a) The pledge is valid and binding from the time when the

 

pledge is made.

     (b) The money or other assets pledged are immediately subject

 

to the lien of the pledge when received, without any physical

 

delivery of the money or assets or any further act.

 

     (c) The lien of the pledge is valid and binding as against all

 

parties having claims of any kind, in tort, contract, or otherwise,

 

against the community college district, whether or not those

 

parties have notice of the lien.

 

     (d) The community college district is not required to record

 

the resolution or any other instrument creating the pledge.

 

     (6) The board of trustees of a community college district and

 

any person executing bonds subject to this section are not

 

personally liable on the bonds or subject to any personal liability

 

or accountability by reason of the issuance of the bonds.

 

     (7) A community college district issuing bonds under this

 

section may purchase bonds of the community college district out of

 

any funds available for that purpose, subject to any agreements

 

with bondholders in effect at that time. Unless the board of the

 

community college district determines by resolution that the

 

payment of a higher price is in the best interests of the community

 

college district, the community college shall not purchase those

 

bonds at a price that exceeds 1 of the following, as applicable:

 

     (a) If the bonds are redeemable at the time of purchase, the

 

redemption price applicable at that time plus accrued interest to

 

the next interest payment date on the bonds.

 

     (b) If the bonds are not redeemable at the time of purchase,

 

the redemption price applicable on the first date after the

 

purchase on which the bonds are redeemable, plus accrued interest

to that date.

 

     (8) Bonds issued under this section are not subject to the

 

revised municipal finance act, 2001 PA 34, MCL 141.2101 to

 

141.2821, except that bonds issued under this section are subject

 

to the maximum rate permitted under section 305 of the revised

 

municipal finance act, 2001 PA 34, MCL 141.2305.

 

     (9) The issuance of bonds under this section is subject to the

 

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

 

129.177.

 

     (10) Bonds issued under this section shall not be considered

 

to be within any limitation of outstanding debt limit applicable to

 

the community college district, including any limitation contained

 

in section 122, but shall be considered as authorized in addition

 

to any limitation of outstanding debt limit applicable to the

 

community college district.

 

     (11) By resolution of its board of trustees, a community

 

college district may refund all or any part of its outstanding

 

bonds issued under this section by issuing refunding bonds. A

 

community college district may issue refunding bonds whether the

 

outstanding bonds to be refunded have or have not matured, are or

 

are not redeemable on the date of issuance of the refunding bonds,

 

or are or are not subject to redemption before maturity.

 

     (12) A community college district may issue refunding bonds

 

under subsection (11) in a principal amount greater than the

 

principal amount of the outstanding bonds to be refunded if

 

necessary to effect the refunding under the refunding plan.

 

     (13) A community college district may use the proceeds of

refunding bonds issued under subsection (11) to pay interest

 

accrued, or to accrue, to the earliest or any subsequent date of

 

redemption, purchase, or maturity of the outstanding bonds to be

 

refunded, redemption premium, if any, and any commission, service

 

fee, and other expense necessary to be paid in connection with the

 

outstanding bonds to be refunded. A community college district may

 

also use the proceeds of refunding bonds to pay part of the cost of

 

issuance of the refunding bonds, interest on the refunding bonds, a

 

reserve for the payment of principal, interest, and redemption

 

premiums on the refunding bonds, and other necessary incidental

 

expenses, including, but not limited to, placement fees and fees or

 

charges for insurance, letters of credit, lines of credit, or

 

commitments to purchase the outstanding bonds to be refunded.

 

     (14) A community college district may apply the proceeds of

 

refunding bonds issued under subsection (11) and other available

 

money to payment of the principal, interest, or redemption

 

premiums, if any, on the refunded outstanding bonds at maturity or

 

on any prior redemption date or may deposit the proceeds or other

 

money in trust to use to purchase and deposit in trust direct

 

obligations of the United States, direct noncallable and

 

nonprepayable obligations that are unconditionally guaranteed by

 

the United States government as to full and timely payment of

 

principal and interest, noncallable and nonprepayable coupons from

 

those obligations that are stripped pursuant to United States

 

treasury Treasury programs, and resolution funding corporation

 

bonds and strips, the principal and interest on which when due,

 

together with other available money, will provide funds sufficient

to pay principal, interest, and redemption premiums, if any, on the

 

refunded outstanding bonds as the refunded outstanding bonds become

 

due, whether by maturity or on a prior redemption date, as provided

 

in the authorizing resolution.

 

     (15) A community college district is authorized to pay all or

 

part of the costs of new jobs training programs out of funds of the

 

community college district, including self-funding methods. The use

 

of funds of the community college district and self-funding methods

 

to pay the costs of new jobs training programs shall be considered

 

an authorized expenditure of public funds and shall not be

 

construed as an investment.

 

     (16) A community college district shall not authorize, issue,

 

or sell any new jobs training revenue bonds after December 31,

 

2018.2023.