SB-0593, As Passed Senate, December 13, 2017
September 27, 2017, Introduced by Senators SHIRKEY, STAMAS and BRANDENBURG and referred to the Committee on Finance.
A bill to amend 1909 PA 279, entitled
"The home rule city act,"
by amending section 4a (MCL 117.4a), as amended by 2002 PA 201.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 4a. (1) Each city in its charter may provide for the
borrowing of money on the credit of the city and issuing bonds for
the borrowing of money, for any purpose within the scope of the
powers of the city.
(2) Notwithstanding a charter provision to the contrary, the
net
indebtedness incurred for all public purposes shall must not
exceed the greater of the following:
(a) Ten percent of the assessed value of all the real and
personal property in the city.
(b) Fifteen percent of the assessed value of all the real and
personal property in the city if that portion of the total amount
of
indebtedness incurred which that
exceeds 10% is or has been used
solely for the construction or renovation of hospital facilities.
(3) In case of fire, flood, or other calamity, the legislative
body may borrow for the relief of the inhabitants of the city and
for the preservation of municipal property, a sum not to exceed 3/8
of 1% of the assessed value of all the real and personal property
in the city, due in not more than 5 years, even if the loan would
cause the indebtedness of the city to exceed the limit established
by this section.
(4) In computing the net indebtedness, all of the following
shall
must be excluded:
(a) Bonds issued in anticipation of the payment of special
assessments, even though they are also a general obligation of the
city.
(b) Mortgage bonds that are secured only by a mortgage on the
property or franchise of a public utility.
(c) Bonds issued to refund money advanced or paid on special
assessments for water main extensions.
(d) Motor vehicle highway fund bonds, even though they are
also a general obligation of the city.
(e) Revenue bonds.
(f) Bonds issued or contract or assessment obligations
incurred to comply with an order of the water resources commission
or a court of competent jurisdiction.
(g) Obligations incurred before January 9, 1973 for water
supply, sewage, drainage, or refuse disposal, or resource recovery
projects, or incurred after January 8, 1973 for projects necessary
to protect the public health by abating pollution. A certification
by
the county, district, or state health department shall be is
sufficient proof that the project is necessary to protect the
public health by abating pollution.
(h) Bonds issued to acquire housing for which rent subsidies
will be received by the city or an agency of the city under a
contract with the United States government and used by the city to
operate and maintain the housing and pay principal and interest on
the bonds.
(i) Obligations entered into under an intergovernmental self-
insurance contract under section 5 of 1951 PA 35, MCL 124.5, or
issued to pay premiums or to establish funds to self-insure for
losses under the revised municipal finance act, 2001 PA 34, MCL
141.2101 to 141.2821.
(j) Bonds issued or assessments or contract obligations
incurred for the construction, improvement, or replacement of a
combined sewer overflow abatement facility. As used in this
subdivision:
(i) "Combined sewer overflow" means a discharge from a
combined sewer system that occurs when the flow capacity of the
combined sewer system is exceeded.
(ii) "Combined sewer overflow abatement facility" means any
works, instrumentalities, or equipment necessary or appropriate to
abate combined sewer overflows.
(iii) "Combined sewer system" means a sewer designed and used
to
convey both storm water runoff and sanitary sewage, and which
that contains lawfully installed regulators and control devices
that allow for delivery of sanitary flow to treatment during dry
weather periods and divert storm water and sanitary sewage to
surface waters during storm flow periods.
(iv) "Construction" means any action taken in the designing or
building of a combined sewer overflow abatement facility. This term
includes, but is not limited to, all of the following:
(A) Engineering services.
(B) Legal services.
(C) Financial services.
(D) Design of plans and specifications.
(E) Acquisition of land or structural components, or both.
(F) Building, erection, alteration, remodeling, or extension
of a combined sewer overflow abatement facility.
(G) City supervision of the project activities described in
sub-subparagraphs (A) to (F).
(v) "Improvement" means any action taken to expand,
rehabilitate, or restore a combined sewer overflow abatement
facility.
(vi) "Replacement" means any action taken to obtain and
install equipment, accessories, or appurtenances during the useful
life of a combined sewer overflow abatement facility necessary to
maintain the capacity and performance for which the equipment,
accessories, or appurtenances are designed and constructed.
(5) The resources of the sinking fund pledged for the
retirement
of any outstanding bonds shall must
also be deducted
from the amount of the indebtedness.
(6) An obligation for the construction, renovation, or
modernization
of a hospital under subsection (2)(b) shall must not
be incurred after July 1, 1978 unless the construction, renovation,
or modernization has been approved in accordance with any
applicable act or unless the obligation is to refinance a previous
obligation.
(7) Each city may provide in its charter for the borrowing of
money and issuing bonds for the borrowing of money in anticipation
of the payment of special assessments, which bonds may be an
obligation of the special assessment district or may be both an
obligation of the special assessment district and a general
obligation of the city.
(8) Bonds issued and obligations incurred before July 31, 1973
are validated.
(9) In computing the net indebtedness for the purposes of
subsection (2), there may be added to the assessed value of real
and personal property in a city for a fiscal year an amount equal
to the assessed value equivalent of certain city revenues as
determined under this subsection. The assessed value equivalent
shall
must be calculated by dividing the sum of the following
amounts by the city's millage rate for the fiscal year:
(a) The amount paid or the estimated amount required to be
paid by the state to the city during the city's fiscal year for the
city's use under the Glenn Steil state revenue sharing act of 1971,
1971 PA 140, MCL 141.901 to 141.921, and the amount of any eligible
reimbursement to the city under the local community stabilization
authority act, 2014 PA 86, MCL 123.1341 to 123.1362, except any
amount distributed under section 17(4)(c) of the local community
stabilization authority act, 2014 PA 86, MCL 123.1357, in excess of
the city's qualified loss. The department of treasury shall certify
the
amount these amounts upon request. As used in this subdivision,
"qualified loss" means that term as defined in section 5 of the
local community stabilization authority act, 2014 PA 86, MCL
123.1345.
(b) The amount levied by the city for its own use during the
city's fiscal year from the specific tax levied under 1974 PA 198,
MCL 207.551 to 207.572.
(c) The amount levied by the city for its own use during the
city's fiscal year from the specific tax levied under the
commercial redevelopment act, 1978 PA 255, MCL 207.651 to 207.668.
Enacting section 1. This amendatory act takes effect 90 days
after the date it is enacted into law.