Bill Text: MI HB6577 | 2009-2010 | 95th Legislature | Introduced
Bill Title: School aid; other; state school aid payments; make subject to certain statutory lien and trust, and exempt certain districts from certain withholding of school bond qualification, approval, and loan act. Amends sec. 17a of 1979 PA 94 (MCL 388.1617a). TIE BAR WITH: HB 6576'10, HB 6578'10, HB 6579'10
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2010-11-30 - Printed Bill Filed 11/18/2010 [HB6577 Detail]
Download: Michigan-2009-HB6577-Introduced.html
HOUSE BILL No. 6577
November 17, 2010, Introduced by Rep. Durhal and referred to the Committee on Education.
A bill to amend 1979 PA 94, entitled
"The state school aid act of 1979,"
by amending section 17a (MCL 388.1617a), as amended by 2006 PA 342.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 17a. (1) The department may withhold all or part of any
payment that a district or intermediate district is entitled to
receive under this act to the extent the withholdings are a
component part of a plan, developed and implemented pursuant to the
revised municipal finance act, 2001 PA 34, MCL 141.2101 to
141.2821, or other statutory authority, for financing an
outstanding obligation upon which the district or intermediate
district defaulted. Amounts withheld shall be used to pay, on
behalf of the district or intermediate district, unpaid amounts or
subsequently due amounts, or both, of principal and interest on the
outstanding obligation upon which the district or intermediate
district defaulted.
(2) The state treasurer may withhold all or part of any
payment that a district or intermediate district is entitled to
receive under this act to the extent authorized or required under
section 15 of the school bond qualification, approval, and loan
act, 2005 PA 92, MCL 388.1935. However, this subsection does not
apply to a district that is levying the maximum number of mills
authorized under section 16 of article IX of the state constitution
of 1963 to pay debt service or loans with respect to bonds
qualified pursuant to the school bond qualification, approval, and
loan act, 2005 PA 92, 388.1921 to 388.1939.
(3) Under an agreement entered into by a district or
intermediate district assigning all or a portion of the payment
that it is eligible to receive under this act to the Michigan
municipal
bond finance authority or to the trustee of a pooled
arrangement or other trustee, or pledging the amount for payment of
an
obligation it incurred with the Michigan municipal bond finance
authority or with the trustee of a pooled arrangement, the state
treasurer
shall transmit to the Michigan municipal bond finance
authority or a trustee designated by the authority or to the
trustee of a pooled arrangement or other trustee the amount of the
payment that is assigned or pledged under the agreement. If a
district or intermediate district enters into or has entered into
an agreement described in this subsection pursuant to section 1225
of the revised school code, MCL 380.1225, whether the obligation
was issued before or after the effective date of the 2010
amendatory act that amended this section, the portion of state
school aid paid or to be paid directly to the Michigan finance
authority, trustee of a pooled arrangement, or other trustee for
the sole purpose of paying the principal of and interest on the
obligation is subject to a lien and trust that is a statutory lien
and trust paramount and superior to all other liens and interests
of any kind, for the sole purpose of paying the principal of and
interest on the obligation. The statutory lien and trust is created
applicable to the state school aid received or to be received by
the Michigan finance authority, trustee of a pooled arrangement, or
other trustee immediately upon the later of the effective date of
the 2010 amendatory act that amended this section or the time when
the state school aid is allocated to the district or intermediate
district, but is subject to any subsequent reduction of that
allocation by operation of law or executive order. The lien and
trust imposed by this section with respect to state school aid has
a priority as established in the agreement, except that the
agreement shall not impair any existing lien and trust previously
created pursuant to this section, including any lien and trust
applicable to a multi-year repayment agreement under section 1225
of the revised school code, 1976 PA 451, MCL 380.1225. Except as
otherwise provided in this subsection, the lien and trust created
under this subsection for the benefit of holders of the obligation
issued pursuant to this section is valid and binding against a
party having a claim of any kind in tort, contract, or otherwise
against the district or intermediate district that has issued the
obligation secured by a pledge of state school aid pursuant to this
section, regardless of whether that party has notice of the pledge.
A pledge made pursuant to this section for the benefit of the
holders of obligations or others is perfected without delivery,
recording, or notice. The state school aid paid or to be paid to
the Michigan finance authority, trustee of a pooled arrangement, or
other trustee shall be held in trust for the sole benefit of the
holders of the obligation issued pursuant to this section and shall
be exempt from being levied upon, taken, sequestered, or applied
toward paying the debts or liabilities of the district or
intermediate district other than for payment of the obligation to
which the lien applies. However, nothing in this subsection alters
the ability of the state treasurer to withhold state school aid
from a district or intermediate district as provided by this act.
(4) Notwithstanding the payment dates prescribed by this act
for distributions under this act, the state treasurer may advance
all or part of a payment that is dedicated for distribution or for
which the appropriation authorizing the payment has been made if
and to the extent, under the terms of an agreement entered into by
a
district or intermediate district and the Michigan municipal bond
finance authority, the payment that the district or intermediate
district is eligible to receive has been assigned to or pledged for
payment
of an obligation it incurred with the Michigan municipal
bond
finance authority.
(5)
This subsection section does
not require the state to make
an appropriation to any school district or intermediate school
district and shall not be construed as creating an indebtedness of
the
state, and any agreement made pursuant to this subsection
section shall contain a statement to that effect. As used in this
subsection,
"trustee section:
(a) "Trustee of a pooled arrangement" means the trustee of a
trust approved by the state treasurer and, subject to the
conditions and requirements of that approval, established for the
purpose of offering for sale, as part of a pooled arrangement,
certificates representing undivided interests in notes issued by
districts or intermediate districts under section 1225 of the
revised school code, 1976 PA 451, MCL 380.1225.
(b) "Other trustee" means the trustee approved by the state
treasurer and, subject to the conditions and requirements of that
approval, with whom a district or intermediate district enters into
an agreement pursuant to section 1225 of the revised school code,
1976 PA 451, MCL 380.1225.
(6) If a trustee applies to the state treasurer for approval
of
a trust for the purposes of this subsection, section, the
state
treasurer shall approve or disapprove the trust within 10 days
after receipt of the application.
Enacting section 1. This amendatory act does not take effect
unless all of the following bills of the 95th Legislature are
enacted into law:
(a) Senate Bill No.____ or House Bill No. 6578(request no.
07747'10).
(b) Senate Bill No.____ or House Bill No. 6579(request no.
07749'10).
(c) Senate Bill No.____ or House Bill No. 6576(request no.
07750'10).
