HOUSE BILL No. 5070


     November 2, 1999, Introduced by Reps. Gieleghem, Martinez, Bogardus, Bovin, Rivet,
Prusi, Dennis, Jacobs, Minore, Hale, Schauer, Schermesser, Mans, Cherry, Neumann, Hardman,
Garza, Woodward, Spade, Thomas, Lockwood and Lemmons and referred to the Committee on
Appropriations.


        A bill to amend 1961 PA 108, entitled

   "An act to provide for loans by the state of Michigan to school
   districts for the payment of principal and interest upon school
   bonds; to prescribe the terms and conditions of the loans and the
   conditions upon which levies for bond principal and interest
   shall be included in computing the amount to be so loaned by the
   state; to prescribe the powers and duties of the superintendent
   of public instruction and the state treasurer in relation to such
   loans; to provide for the repayment of such loans; to provide
   incentives for repayment of such loans; to provide for other mat-
   ters in respect to such loans; and to make an appropriation,"

   by amending section 2 (MCL 388.952), as amended by 1992 PA 228.

               THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 1         Sec. 2.  (1) If the minimum amount  which  it
             would other-

 2    wise be necessary for a school district to levy in any year to

 3    pay principal and interest on its qualified bonds, including any

 4    necessary allowances for estimated tax delinquencies, exceeds 13

 5    mills or the computed millage under subsection (2), whichever is

 6    less, on each dollar of its  assessed valuation as last
             equalized



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 1    by the state  TAXABLE VALUE, then the school
             district may elect

 2    to borrow all or any part of the excess from the state.  In that

 3    event the state shall loan the excess amount to the school dis-

 4    trict for the payment of principal and interest.  For bond issues

 5    sold before October 1, 1991 or bond issues sold exclusively to

 6    refund qualified bond issues sold before October 1, 1991, schools

 7    shall be allowed to borrow at least the percentage over  7
              5

 8    mills allowed them in the 1990-91 fiscal year.  The school dis-

 9    trict shall levy not less than 12 mills or its equivalent for

10    operating purposes.

11         (2) The computed millage referred to in subsection (1) is

12    the number of mills as computed by the state treasurer that the

13    school district would have to levy in the year the computation is

14    made and each succeeding year to be able to pay the principal and

15    interest on all of its qualified bonds and loans made to the

16    school district under this act, taking into account loans made to

17    the school district under this act for debt service, by not later

18    than 60 months after the final maturity date of all of its quali-

19    fied bonds outstanding as of the date of the computation, but

20    shall be not less than  7  5 mills.  The state
             treasurer shall

21    make the computation based on the following assumptions:

22         (a) An assumed interest rate on loans made under this act

23    equal to the average interest rate on school bond loan fund notes

24    and bonds over the immediately preceding 5-year period.

25         (b) A projected total  state equalized valuation
              TAXABLE

26    VALUE for the school district that assumes a  state
             equalized

27     valuation  TAXABLE VALUE growth rate or decline
                       rate equal to the



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 1    school district's average yearly  state equalized valuation
             

 2    TAXABLE VALUE growth rate or decline rate over the immediately

 3    preceding 5-year period.

 4         (3) Upon request made by a school district before June 1 of

 5    any year, the superintendent of public instruction and the state

 6    treasurer annually may jointly issue an order waiving all or a

 7    portion of the millage required to be levied by a school district

 8    to pay principal and interest on its qualified bonds pursuant to

 9    subsection (1) if they find all of the following:

10         (a) The school board of the school district has applied to

11    the department of education for permission to levy less than the

12    millage required to be levied to pay the principal and interest

13    on its qualified bonds pursuant to subsection (1).

14         (b) The application specifies the number of mills the school

15    district requests permission to levy.

16         (c) The waiver will be financially beneficial to the state

17    or to the school district, or both.

18         (d) The waiver will not reduce the millage levied by the

19    school district to pay principal and interest on qualified bonds

20    under subsection (1) to less than  7  5 mills.

21         (e) The school board, by resolution, has agreed to comply

22    with all conditions that the superintendent of public instruction

23    and the state treasurer consider are necessary.











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