SENATE BILL No. 855

November 29, 2001, Introduced by Senator NORTH and referred to the Committee on

Finance.

A bill to amend 1895 PA 215, entitled

"The fourth class city act,"

by amending sections 10 and 25 (MCL 107.10 and 110.25), section

10 as amended by 1983 PA 45.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1 Sec. 10. (1) Repairs, alterations, and extensions may

2 also be provided by the city council by contract for the making

3 and installation thereof OF REPAIRS, ALTERATIONS, AND

4 EXTENSIONS, which contract shall not impose a general obligation

5 on the city, but which may provide for payment therefor out of

6 such THE net revenues, after payment of obligations due, provi-

7 sion for payment of obligations to become due, and payment of

8 legitimate and necessary operating and other expenses, thereof,

9 as shall become available from the operation of such THE works

10 after completion of such THE repairs, alterations, or

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1 extensions and for retention of title to materials furnished in

2 the seller until paid for in full. However, a contract made pur-

3 suant to this section shall not be construed to deprive the

4 people of the city of any right vested in them by the constitu-

5 tion or the laws of this state, to constitute the granting of any

6 franchise or its operating equivalent, or to convey title to

7 property to any person not possessed of such THE title prior to

8 the execution of such THE title retaining contract. Unless an

9 exception from prior approval is available pursuant to subsection

10 (2), a title retaining contract shall be approved by the munici-

11 pal finance commission or its successor agency prior to the exe-

12 cution thereof. The municipal finance commission or its succes-

13 sor agency shall determine their approval or disapproval upon all

14 of the following factors:

15 (a) Whether such contract conforms to the provisions of this

16 act.

17 (b) Whether after payment of legitimate and necessary oper-

18 ating and other expenses, and payments due or to become due on

19 any existing obligations, the probable revenues pledged to the

20 payment of such contract will be sufficient to pay the principal

21 and interest on such contract when due.

22 (c) Whether the cost of the repairs, alterations, or exten-

23 sions to be paid by such contract are excessive.

24 (2) The requirement of subsection (1) for obtaining the

25 prior approval of the municipal finance commission or its succes-

26 sor agency before a title retaining contract may be executed

27 shall be subject to sections 10 and 11 of chapter III of the

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1 municipal finance act, Act No. 202 of the Public Acts of 1943,

2 being sections 133.10 and 133.11 of the Michigan Compiled Laws,

3 and the department of treasury shall have the same authority as

4 provided by section 11 of chapter III of Act No. 202 of the

5 Public Acts of 1943 to issue an order providing or denying an

6 exception from the prior approval required by subsection (1) for

7 a title retaining contract authorized by this section.

8 Sec. 25. Loans shall not be made by the council, or by its

9 authority, in any year exceeding the amounts prescribed in this

10 act. For any loans lawfully made, the bonds of the city may be

11 issued, subject to the provisions of Act No. 202 of the Public

12 Acts of 1943, as amended, being sections 131.1 to 138.2 of the

13 Michigan Compiled Laws THE REVISED MUNICIPAL FINANCE ACT, 2001

14 PA 34, MCL 141.2101 TO 141.2821, the bonds shall be executed in a

15 manner as the council directs. Bonds heretofore PREVIOUSLY

16 issued or indebtedness heretofore PREVIOUSLY incurred by any

17 city are hereby validated.

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