HOUSE BILL No. 5835 May 7, 1998, Introduced by Reps. Richner, Birkholz, Horton, Kaza, Voorhees, Jellema, Brewer, Thomas, Baade, Scranton and Raczkowski and referred to the Committee on Commerce. A bill to address currency changes in Europe; and to provide for acceptance of euro currency as a substitute or replacement for original currency referenced in a contract. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 1. This act shall be known and may be cited as the 2 "euro conversion act". 3 Sec. 2. As used in this act: 4 (a) "ECU" or "European currency unit" means the currency 5 basket that is from time to time used as the unit of account of 6 the European union as defined in European council regulation no. 7 3320/94. 8 (b) "Euro" or "euros" means the currency of participating 9 member states of the European union that adopt a single currency 10 in accordance with the treaty on European union signed February 11 7, 1992. 05398'98 LTB 2 1 (c) "Introduction of the euro" means, but is not limited to, 2 the implementation from time to time of an economic and monetary 3 union in member states of the European union pursuant to the 4 treaty on European union of February 7, 1992. 5 Sec. 3. (1) If a subject or medium of payment of a con- 6 tract, security, or instrument is a currency that has been sub- 7 stituted or replaced by the euro, the euro shall be a commer- 8 cially reasonable substitute and substantial equivalent that may 9 be either of the following: 10 (a) Used in determining the value of that currency. 11 (b) Tendered at the conversion rate specified in and calcu- 12 lated according to the regulations adopted by the council of the 13 European union. 14 (2) If a subject or medium of payment of a contract, securi- 15 ty, or instrument is the ECU, the euro shall be a commercially 16 reasonable substitute and substantial equivalent that may be 17 either of the following: 18 (a) Used in determining the value of that currency. 19 (b) Tendered at the conversion rate specified in and calcu- 20 lated according to the regulations adopted by the council of the 21 European union. 22 (3) Unless the parties to a contract, security, or instru- 23 ment described in subsection (1) or (2) agree otherwise, the 24 tendering of money under that contract, security, or instrument 25 may be made in either of the following: 26 (a) Euros. 05398'98 3 1 (b) The currency originally designated by the contract, 2 security, or instrument, if that originally designated currency 3 remains legal tender at the time of performance. 4 (4) The right to tender payment in a currency described in 5 subsection (3)(b) is not affected by either of the following: 6 (a) The currency has been substituted or replaced by the 7 euro. 8 (b) The currency is considered a denomination of the euro 9 and has a fixed conversion rate with respect to the euro. 10 Sec. 4. None of the following discharge or excuse per- 11 formance under a contract, security, or instrument or give a 12 party the right unilaterally to alter or terminate a contract, 13 security, or instrument: 14 (a) The introduction of the euro. 15 (b) Tendering euros under section 3 in connection with any 16 obligation. 17 (c) Determining the value of an obligation in compliance 18 with section 3. 19 (d) Calculating or determining the subject or medium of pay- 20 ment of a contract, security, or instrument under section 3 with 21 reference to an interest rate or other calculation rate that has 22 been substituted or replaced due to the introduction of the euro 23 and that is a commercially reasonable substitute for and substan- 24 tial equivalent to an original interest rate. 25 Sec. 5. A reference to ECU in a contract, security, or 26 instrument without defining ECU is presumed to be a reference to 27 the currency basket that is from time to time used as the unit of 05398'98 4 1 account of the European community. The presumption is rebuttable 2 by showing that the presumption is contrary to intention of the 3 parties. 4 Sec. 6. When an agreement between parties to a contract 5 specifically relates to the introduction of the euro and is in 6 conflict with this act, the agreement between the parties to the 7 contract controls. 8 Sec. 7. This act applies to all contracts, securities, and 9 instruments, including contracts with respect to commercial 10 transactions, and is not displaced by any other law of this 11 state. 12 Sec. 8. In a circumstance of currency alteration other than 13 the introduction of the euro, this act does not create a negative 14 inference or negative presumption regarding the validity or 15 enforceability of a contract, security, or instrument denominated 16 in whole or part in a currency affected by that alteration. 17 Sec. 9. This act applies to a contract, security, and 18 instrument entered into or issued before, on, or after the effec- 19 tive date of this act. 05398'98 Final page. LTB