HOUSE BILL No. 5823


     April 9, 2002, Introduced by Rep. Bisbee and referred to the Committee on Tax Policy.


        A bill to amend 1994 PA 451, entitled

   "Natural resources and environmental protection act,"

   by amending section 4302 (MCL 324.4302).

               THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

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             Sec. 4302.  The waterworks system, intercepting sewers,

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        pumping stations, sewage disposal plant and system, transfer sta-

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        tion, and garbage and refuse processing or disposal plant and

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        system, are public utilities within the meaning of any constitu-

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        tional or statutory provisions for the purpose of acquiring, pur-

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        chasing, owning, operating, constructing, equipping, and main-

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        taining the waterworks system, intercepting sewers, pumping sta-

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        tions, sewage disposal plant and system, transfer station, and

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        garbage and refuse processing or disposal plant and system.  A

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        local unit of government may issue FULL faith and credit bonds or

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        mortgage bonds for the purposes described in this part beyond the


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        general limits of the bonded indebtedness prescribed by law

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        except as provided in this section.  The mortgage bonds as pro-

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        vided in this section shall not impose any general liability upon

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        the local unit of government but shall be secured only on the

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        property and revenues of the utility as provided in this section,

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        including a franchise, stating the terms upon which the purchaser

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        may operate the utility in case of foreclosure.  The franchise

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        shall not extend for a longer period than 20 years from the date

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        of the sale on foreclosure.  The  mortgage bonds shall be sold

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        for not less than par, bear interest at a rate not to exceed the

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        maximum rate permitted by the municipal finance act, Act No. 202

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        of the Public Acts of 1943, being sections 131.1 to 139.3 of the

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        Michigan Compiled Laws, and the  total amount OF MORTGAGE BONDS

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        shall not exceed 60% of the original cost of the utility except

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        as provided in this section.  Bonds shall not be issued as gen-

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        eral obligations of the local unit of government except upon a

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        3/5 affirmative vote of the qualified electors of the local unit

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        of government and except as provided in this section, not in

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        excess of 3% of the assessed valuation of the real and personal

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        property of the local unit of government as shown by the last

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        preceding tax roll.  Bonds shall not be issued as FULL faith and

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        credit bonds or mortgage bonds of the utility except upon a 3/5

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        affirmative vote of the legislative body of the local unit of

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        government.  BONDS ISSUED UNDER THIS SECTION ARE SUBJECT TO THE

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        REVENUE BOND ACT OF 1933, 1933 PA 94, MCL 141.101 TO 141.140.







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