Bill Text: MI HB6036 | 2015-2016 | 98th Legislature | Engrossed
Bill Title: State financing and management; other; certain forms of energy improvement financing for certain local units of government; provide for. Amends 1968 PA 2 (MCL 141.421 - 141.440a) by adding sec. 13a.
Spectrum: Partisan Bill (Republican 2-0)
Status: (Passed) 2016-12-31 - Assigned Pa 529'16 [HB6036 Detail]
Download: Michigan-2015-HB6036-Engrossed.html
HB-6036, As Passed Senate, December 14, 2016
HOUSE BILL No. 6036
November 9, 2016, Introduced by Reps. Pscholka and Iden and referred to the Committee on Local Government.
A bill to amend 1968 PA 2, entitled
"Uniform budgeting and accounting act,"
(MCL 141.421 to 141.440a) by adding section 13a.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 13a. (1) Except as otherwise provided by law, the
legislative body of a local unit may provide by resolution for the
acquisition or financing of energy conservation improvements to be
made to facilities or infrastructure owned or operated by the local
unit and may pay for the improvements or the financing or refunding
of the improvements from the general fund of the local unit or from
the savings that result from the energy conservation improvements.
Energy conservation improvements may include, but are not limited
to, heating, ventilating, or air-conditioning system improvements,
fenestration improvements, roof improvements, the installation of
any insulation, the installation or repair of heating, ventilating,
or air-conditioning controls, entrance or exit way closures,
information technology improvements associated with an energy
conservation improvement, and municipal utility improvements
associated with an energy conservation improvement.
(2) The legislative body of a local unit may acquire, finance,
or refund 1 or more of the energy conservation improvements
described in subsection (1) by installment contract, which may
include a lease-purchase agreement described in subsection (5), or
may borrow money and issue notes for the purpose of securing funds
for the improvements or may enter into contracts in which the cost
of the energy conservation improvements is paid from a portion of
the savings that result from the energy conservation improvements.
These contractual agreements may provide that the cost of the
energy conservation improvements are paid only if the energy
savings are sufficient to cover their cost. An installment
contract, a lease-purchase agreement described in subsection (5),
or notes issued pursuant to this subsection shall extend for a
period of time not to exceed 20 years from the date of the final
completion of the energy conservation improvements or the useful
life of the aggregate energy conservation improvements, whichever
is less. Notes issued pursuant to this subsection shall be limited
full faith and credit, tax limited obligations of the local unit,
payable from tax levies and the general fund as pledged by the
legislative body of the local unit. The notes shall be subject to
the revised municipal finance act, 2001 PA 34, MCL 141.2101 to
141.2821. A lease-purchase agreement issued pursuant to this
subsection shall not be subject to the revised municipal finance
act, 2001 PA 34, MCL 141.2101 to 141.2821, and shall not be a
municipal security or a debt as those terms are defined in that
act. This subsection does not limit in any manner the borrowing or
bonding authority of a local unit as provided by law.
(3) Prior to entering into a contract for energy conservation
improvements under this section, the legislative body of a local
unit shall determine the following information and, within 60 days
of the completion of the improvements, shall report the following
information to the Michigan public service commission:
(a) Name of each facility to which an improvement is made and
a description of the energy conservation improvement.
(b) Actual energy consumption during the 12-month period
before commencement of the improvement.
(c) Project costs and expenditures, including the total of all
lease payments over the duration of the lease-purchase agreement.
(d) Estimated annual energy savings, including projected
savings over the duration of the installment contract.
(4) If energy conservation improvements are made as provided
in this section, the legislative body of a local unit shall report
to the Michigan public service commission, by July 1 of each of the
5 years after the improvements are completed, only the actual
annual energy consumption of each facility to which improvements
are made. The forms for the reports required by this section shall
be furnished by the Michigan public service commission.
(5) An installment contract described in this section may
include a lease-purchase agreement, which may be a multiyear
contractual obligation that provides for automatic renewal unless
positive action is taken by the legislative body to terminate that
contract. Payments under a lease-purchase agreement shall be a
current operating expense subject to annual appropriations of funds
by the legislative body and shall obligate the legislative body
only for those sums payable during the fiscal year of contract
execution or any renewal year thereafter. The legislative body may
make payments under a lease-purchase agreement from any legally
available funds or from a combination of energy or operational
savings, capital contributions, future replacement costs avoided,
or billable revenue enhancements that result from energy
conservation improvements, provided that the legislative body has
determined that those funds are sufficient to cover, in aggregate
over the full term of the contractual agreement, the cost of the
energy conservation improvements. The lease-purchase agreement will
terminate immediately and absolutely and without further obligation
on the part of the legislative body at the close of the fiscal year
in which it was executed or renewed or at such time as appropriated
and otherwise unobligated funds are no longer available to satisfy
the obligations of the legislative body under the lease-purchase
agreement. During the term of the lease-purchase agreement, the
legislative body shall be the vested owner of the energy
conservation improvements and may grant a security interest in the
energy conservation improvements to the provider of the lease-
purchase agreement. Upon the termination of the lease-purchase
agreement and the satisfaction of the obligations of the
legislative body, the provider of the lease-purchase agreement
shall release its security interest in the energy conservation
improvements.
Enacting section 1. This amendatory act takes effect 90 days
after the date it is enacted into law.
