SENATE BILL No. 1164

 

 

March 4, 2008, Introduced by Senators KAHN, BARCIA, KUIPERS, RICHARDVILLE, PAPPAGEORGE, ALLEN, BROWN and HARDIMAN and referred to the Committee on Energy Policy and Public Utilities.

 

 

 

     A bill to create a clean energy authority; to prescribe its

 

powers and duties; to create the clean energy fund; to authorize

 

the issuance of bonds, notes, and other evidences of indebtedness;

 

and to provide an exemption from taxation.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 1. This act shall be known and may be cited as the "clean

 

energy authority act".

 

     Sec. 3. As used in this act:

 

     (a) "Alternative and renewable energy" means any of the

 

following:

 

     (i) Energy produced from an IGCC facility that captures

 

greenhouse gases.

 

     (ii) Biomass.

 


     (iii) Geothermal energy.

 

     (iv) Solar thermal energy.

 

     (v) Wind energy.

 

     (vi) Hydroelectric energy.

 

     (b) "Alternative and renewable energy facility" means a

 

facility or energy system that uses alternative and renewable

 

energy to produce synthetic methane gas and that generates and

 

transmits or distributes electricity from that gas.

 

     (c) "Authority" means the clean energy authority.

 

     (d) "Department" means the department of natural resources.

 

     (e) "Gasifier" means a facility located in this state that

 

produces synthetic gas from carbon-based feedstock such as coal,

 

petroleum coke, wood, biomass, agricultural products, and other

 

products.

 

     (f) "Greenhouse gas" means carbon dioxide, methane,

 

chlorofluorocarbons, and hydrochlorofluorocarbons.

 

     (g) "IGCC facility" means an integrated gasification combined

 

cycle plant located in this state that produces synthetic methane

 

gas from carbon-based feedstock, including, but not limited to,

 

coal, petroleum coke, wood, biomass, agricultural products, and

 

other products, and uses such synthetic gas to generate

 

electricity. IGCC facility includes the transmission lines and

 

facilities, gas transportation lines and facilities, and associated

 

property and equipment employed specifically to serve the IGCC

 

facility.

 

     (h) "Joint venture" means a joint venture, partnership,

 

limited partnership, limited liability partnership, corporation,

 


limited liability company, business trust, unincorporated

 

organization, association, or any other legal or commercial entity

 

formed by the authority and 1 or more qualified persons for the

 

purpose of developing, constructing, owning, operating, and

 

maintaining 1 or more new coal gasification or IGCC facilities.

 

     (i) "Oil and gas property" means all oil, gas, and mineral

 

leasehold interests transferred, or otherwise leased, to the

 

authority by the department of natural resources pursuant to

 

section 502 of the natural resources and environmental protection

 

act, 1994 PA 451, MCL 324.502.

 

     (j) "Oil, gas, and mineral resources" means the physical

 

concentration of naturally occurring oil, gas, petroleum, and

 

associated minerals and substances in and under state-owned lands

 

that can be extracted for commercial profit.

 

     (k) "Working interest" means the operating interest under an

 

oil and gas lease that includes the exclusive right to explore for,

 

develop, produce, and take the oil, gas, and mineral resources in,

 

under, and that may be produced from the lands covered by the

 

lease. The working interest is subject to all costs of exploration,

 

development, and production while the lessor receives its share of

 

production free of such costs. The working interest embodies the

 

right to share in the production, or revenue representing the

 

proceeds of production, attributable to its fractional interest

 

under the lease.

 

     Sec. 5. (1) The clean energy authority is created as a public

 

body corporate and politic and an autonomous entity within the

 

department of treasury. The authority shall be a quasi-corporation

 


and shall exercise its prescribed statutory powers, duties, and

 

function independently of the head of the department of treasury.

 

The property, revenues, receipts borrowings, appropriations,

 

allowances, and other funds of the authority shall belong to the

 

authority.

 

     (2) The authority shall consist of 5 individuals appointed by

 

the governor with the advice and consent of the senate. Not more

 

than 3 of the individuals shall be members of the same political

 

party. An individual shall be appointed for a term of 4 years.

 

Members shall serve without compensation for services, except that

 

a member may receive reasonable reimbursement for necessary travel

 

and expenses incurred in the discharge of the member's duties. Each

 

member shall hold office until a successor has been appointed and

 

qualified.

 

     (3) A majority of the members of the authority appointed and

 

serving constitute a quorum for the transaction of business at a

 

meeting or the exercise of a power or function of the authority,

 

notwithstanding the existence of 1 or more vacancies. The authority

 

may act only by resolution approved by a majority of the members

 

appointed and serving.

 

     Sec. 7. (1) Notwithstanding section 3(1) of 1968 PA 317, MCL

 

15.323, members of the authority and officers and employees of the

 

authority are subject to 1968 PA 317, MCL 15.321 to 15.330, or 1968

 

PA 318, MCL 15.301 to 15.310, as applicable.

 

     (2) A member of the authority or officer, employee, or agent

 

of the authority shall discharge the duties of his or her position

 

in a nonpartisan manner, with good faith, and with that degree of

 


diligence, care, and skill that an ordinarily prudent person would

 

exercise under similar circumstances in a similar position. In

 

discharging the duties, a member of the authority or an officer,

 

employee, or agent, when acting in good faith, may rely upon the

 

opinion of counsel for the authority, upon the report of an

 

independent appraiser selected with reasonable care by the

 

authority, or upon financial statements of the authority

 

represented to the member of the authority or officer, employee, or

 

agent of the authority to be correct by the officer of the

 

authority having charge of its books or account, or stated in a

 

written report by a certified public accountant or firm of

 

certified public accountants fairly to reflect the financial

 

condition of the authority.

 

     (3) A member of the authority shall not make, participate in

 

making, or in any way attempt to use his or her position as a

 

member of the authority to influence a decision regarding a loan,

 

grant, investment, or other expenditure under this act to his or

 

her employer.

 

     (4) A member, employee, or agent of the authority shall not

 

engage in any conduct that constitutes a conflict of interest and

 

shall immediately advise the authority in writing of the details of

 

any incident or circumstances that may present the existence of a

 

conflict of interest with respect to the performance of the

 

authority-related work or duty of the member, employee, or agent of

 

the authority.

 

     (5) A member of the authority who has a conflict of interest

 

related to any matter before the authority shall disclose the

 


conflict of interest before the authority takes any action with

 

respect to the matter. The disclosure shall become a part of the

 

record of the authority's official proceedings. The member with the

 

conflict of interest shall refrain from doing all of the following

 

with respect to the matter that is the basis of the conflict of

 

interest:

 

     (a) Voting in the authority's proceedings related to the

 

matter.

 

     (b) Participating in the authority's discussion of and

 

deliberation on the matter.

 

     (c) Being present at the meeting when the discussion,

 

deliberation, and voting on the matter take place.

 

     (d) Discussing the matter with any other authority member.

 

     (6) Failure of a member to comply with subsection (5)

 

constitutes misconduct in office and subjects the member to removal

 

from office.

 

     (7) When authorizing expenditures and investments under this

 

act, the authority shall not consider whether a recipient has made

 

a contribution or expenditure under the Michigan campaign finance

 

act, 1976 PA 388, MCL 169.201 to 169.282.

 

     (8) Expenditures under this act shall not be used to finance

 

or influence political activities.

 

     Sec. 9. The authority has the powers and duties necessary to

 

carry out the provisions of this act and achieve its purposes,

 

including, but not limited to, powers to do any of the following:

 

     (a) Sue and be sued; have a seal and alter the seal; have

 

perpetual succession; make, execute, and deliver contracts,

 


agreements, leases, conveyances, and other instruments necessary or

 

convenient to the exercise of its powers; and make and amend

 

bylaws.

 

     (b) Solicit and accept gifts, grants, loans, and other aids

 

from any person or the federal, state, or a local government or any

 

agency of the federal, state, or a local government, or participate

 

in any other way in any federal, state, or local government

 

program.

 

     (c) Expend revenues and other funds under its control without

 

legislative appropriation.

 

     (d) Make grants, loans, and investments; guarantee and insure

 

loans, leases, bonds, notes, or other indebtedness, whether public

 

or private; and issue letters of credit.

 

     (e) Enforce its rights under mortgages, leases, contracts, or

 

agreements, including foreclosure and court actions.

 

     (f) Acquire, hold, convey, lease, assign, transfer, mortgage,

 

or otherwise dispose of or encumber real or personal property,

 

including oil, gas, and mineral resources, and working interests in

 

oil and gas property.

 

     (g) Procure insurance against any loss in connection with the

 

authority's property, assets, or activities.

 

     (h) Invest in or otherwise enter into and perform joint

 

exploration agreements, joint operating agreements, joint

 

development agreements, and any other necessary contracts and

 

agreements with a qualified person or persons to explore for,

 

develop, and produce oil, gas, and mineral resources from oil and

 

gas properties co-owned by the authority and 1 or more qualified

 


persons.

 

     (i) Borrow money and issue its bonds, provide for the rights

 

of the holders of the bonds, and secure the bonds by mortgage,

 

assignment, or pledge of any or all of its property.

 

     (j) Subject to the provisions of any contract with the holders

 

of its bonds, whenever it considers it necessary or desirable,

 

consent to the modification, with respect to security, rate of

 

interest, time of payment of interest or principal, or any other

 

term of a bond, mortgage, or contract of any kind between the

 

authority and any other person.

 

     (k) Invest any funds not required for immediate use or

 

disbursement, at its discretion, in any obligations determined to

 

be proper by the authority, and name and use depositories for its

 

money.

 

     (l) Engage personnel and retain the services of private

 

consultants, managers, attorneys, auditors, engineers, geologists,

 

land experts, and scientists to secure professional management and

 

technical assistance and advice, with the fees and costs payable

 

out of any money of the authority legally available for this

 

purpose.

 

     (m) Charge, impose, and collect fees and charges in connection

 

with any transaction and provide for reasonable penalties for

 

delinquent payment of fees or charges.

 

     (n) Do all other things necessary or convenient to achieve the

 

purposes of the authority, this act, or other laws that relate to

 

the purposes and responsibilities of the authority.

 

     Sec. 11. (1) All money of the authority shall be paid to the

 


state treasurer as agent of the authority, who shall not commingle

 

the money with any other money. Money of the authority shall be

 

deposited in a separate revolving fund under the jurisdiction and

 

control of the authority to be known as the "clean energy fund."

 

The state treasurer shall credit to the fund interest and earnings

 

from fund investments.

 

     (2) All of the following shall be paid into the clean energy

 

fund:

 

     (a) Any money appropriated by this state for the purposes of

 

the fund.

 

     (b) Any money that the authority receives in repayment of

 

advances made from the fund.

 

     (c) Money derived from the authority's working interest in oil

 

and gas property.

 

     (d) Any other money that may be made available to the

 

authority from any other source.

 

     Sec. 13. (1) The authority shall develop and implement a

 

statewide integrated energy resource plan, which shall include all

 

of the following:

 

     (a) The development of facilities to capture, sequester, or

 

both capture and sequester greenhouse gases.

 

     (b) The development of gasifiers.

 

     (c) The promotion of enhanced oil recovery from lands owned by

 

this state using captured greenhouse gases.

 

     (d) The promotion of alternative and renewable energy

 

facilities in this state.

 

     (e) The exploration for and development and production of oil,

 


gas, and mineral resources in this state.

 

     (2) The authority, in conjunction with the department, shall

 

develop a plan and make recommendations to the legislature to

 

promote the leasing of state-owned lands that include depleted oil

 

and gas reservoirs or other geologic features or facilities

 

suitable for the storage of captured greenhouse gases. The plan and

 

recommendation shall be submitted to the legislature within 180

 

days after the effective date of this act.

 

     (3) The authority shall assist in and encourage the

 

development of at least 1 pilot IGCC facility that consists of both

 

of the following:

 

     (a) An electric power plant that is fueled by some or all of

 

the synthetic gas and that is capable of producing not less than

 

250 megawatts of electric power.

 

     (b) A gasifier which is capable of capturing greenhouse gases.

 

     (4) The authority shall submit applications to the department

 

of natural resources identifying state-owned lands the authority

 

wishes to secure and develop, as lessee, under oil and gas leases

 

granted by the department of natural resources, as lessor. Before

 

submitting an application, the authority shall consider whether the

 

land has unusual or sensitive environmental features that should be

 

reserved and maintained in an undeveloped state and shall solicit

 

opinions of interested groups and the public. Upon receipt of such

 

an application submitted by the authority, the department of

 

natural resources shall enter into a direct lease with the

 

authority covering the state-owned lands identified in the

 

application. The department is not required to enter into a direct

 


lease with the authority covering any land that is then in

 

production or is leased or permitted for drilling or production or

 

land the department determines has unusual or sensitive

 

environmental features that should be reserved by the state and

 

maintained in an undeveloped state. However, after the abandonment,

 

release, discharge, cancellation, or termination of any lease

 

covering any such land retained by the department in accordance

 

with this subsection, the department shall enter into a direct

 

lease with the authority covering such land to the extent it was

 

identified by the authority in an application. The authority shall

 

pay to the department the royalty due under each lease with the

 

department, which shall be applied in accordance with sections 35

 

and 35a of article IX of the state constitution of 1963.

 

     (5) The authority may assign up to an aggregate 49% of its

 

working interest in each oil and gas lease entered into pursuant to

 

this section to a qualified person or persons. The authority shall

 

require, as a condition of such an assignment, that the qualified

 

person or persons agree, as co-owners of the leases, to participate

 

with the authority in the joint development of the leases under a

 

joint exploration agreement, joint operating agreement, joint

 

development agreement, or other agreement the authority considers

 

necessary. Each joint exploration agreement, joint operating

 

agreement, joint development agreement, or other agreement shall

 

require that the qualified person or persons, as co-owner or owners

 

of the leases, shall contribute capital and pay all development and

 

operating costs of the joint development in which the qualified

 

person or persons participates in proportion to its share of the

 


working interest in each lease. Decisions as to the time, place,

 

and manner of drilling and extraction of oil, gas, and mineral

 

resources under this act, including the designation and appointment

 

of the operator of each lease, shall be made by the authority. The

 

authority shall be subject to regulation by the department in the

 

same manner and to the same extent as any other lessee.

 

     (6) The authority may enter into a joint venture with 1 or

 

more qualified persons for the purpose of developing, constructing,

 

owning, operating, and maintaining, or participating in the

 

development, construction, ownership, operation, and maintenance

 

of, 1 or more new gasifiers or IGCC facilities located within this

 

state.

 

     (7) For purposes of this section, "qualified person" means a

 

person who meets all of the following criteria:

 

     (a) Has oil and gas industry experience, reputation, and

 

business probity.

 

     (b) Has a commitment and ability to enter into a development

 

agreement with the authority to develop or participate in the

 

development of 1 or more pilot IGCC facilities that will consist of

 

both of the following:

 

     (i) An electric power plant that is fueled by some or all of

 

the synthetic gas and that is capable of producing not less than

 

250 megawatts of electric power.

 

     (ii) A gasifier which is capable of capturing greenhouse gases.

 

     (c) Has a commitment and ability to capture and utilize

 

greenhouse gases by sequestration for storage, enhanced oil

 

recovery, and other technologies.

 


     (d) Has obtained the right to use integrated gasification

 

combined cycle technology to develop an IGCC facility.

 

     (e) Has secured a site for an IGCC facility that has access to

 

existing pipelines, high-voltage electric transmission lines, and

 

available infrastructure, and has the demonstrated support of

 

county and municipal governments in the immediate area.

 

     (f) Has applied for or has received an allocation of tax

 

credits available under 26 USC 48 or other energy-based incentives

 

from the federal government.

 

     (8) The qualified person or persons selected by the authority

 

to receive a working interest shall be the person or persons that

 

the authority determines will provide the best value to the state

 

in achieving the purposes of this act. The authority may consider,

 

in determining the best value to the state, the best interest of

 

this state, including, but not limited to, any positive economic

 

impact to the state likely to be generated by the development of

 

IGCC facilities, the economic and environmental impact resulting

 

from the development and use of alternative and renewable energy,

 

and the skilled jobs and increased capital investment relating to

 

the development of an IGCC facility and the use of alternative and

 

renewable energy.

 

     (9) Revenues of the authority may be used by it to further the

 

purposes of this act, including to repay bonded indebtedness, to

 

provide working capital, to develop and assist in or encourage

 

development of alternative energy projects, to assist in and

 

encourage the development of alternative and renewable energy

 

facilities to capture and sequester greenhouse gases, and to assist

 


in and encourage the development of enhanced oil recovery projects.

 

     Sec. 15. (1) The authority shall submit to the legislature an

 

annual status report on its activities. The report shall include,

 

but not be limited to, specific information concerning the

 

achievement of the purposes of this act. The report shall also

 

recommend additional legislation considered necessary or desirable

 

by the authority to achieve the purposes of this act.

 

     (2) The auditor general or a certified public accountant

 

appointed by the auditor general annually shall conduct and submit

 

to the legislature an audit of the authority. In conducting the

 

audit, the auditor general or certified public accountant shall

 

have access to all records of the authority at any time, whether or

 

not those records are confidential.

 

     Sec. 17. (1) The authority may borrow money and issue bonds or

 

notes for the following purposes:

 

     (a) To provide sufficient funds for achieving the authority's

 

purposes and objectives, including, but not limited to, amounts

 

necessary to pay the costs of acquiring, maintaining, exploring,

 

developing, and operating oil and gas property and alternative and

 

renewable energy facilities; to make loans for the costs of

 

acquiring, maintaining, exploring, developing, and operating oil

 

and gas property and alternative and renewable energy facilities;

 

for making grants; for providing money to guarantee or insure

 

loans, leases, bonds, notes, or other indebtedness; for making

 

working capital loans; for all other expenditures of the authority

 

incident to and necessary or convenient to carry out the

 

authority's purposes and powers; and for any combination of these.

 


The cost of acquiring, maintaining, exploring, developing, and

 

operating oil and gas property and alternative and renewable energy

 

facilities may include administrative costs, including, but not

 

limited to, engineering, architectural, legal, geologic, land

 

acquisition and maintenance, and accounting fees that are necessary

 

for the acquisition, maintenance, exploration, development, and

 

operation of the oil and gas property and alternative and renewable

 

energy facilities.

 

     (b) To refund bonds or notes of the authority issued under

 

this act by the issuance of new bonds, whether or not the bonds or

 

notes to be refunded have matured or are subject to prior

 

redemption or are to be paid, redeemed, or surrendered at the time

 

of the issuance of the refunding bonds or notes; and to issue bonds

 

or notes partly to refund the bonds or notes and partly for any

 

other purpose provided for by this section.

 

     (c) To pay the costs of issuance of bonds or notes under this

 

act; to pay interest on bonds or notes becoming payable prior to

 

the receipt of the first revenues available for payment of that

 

interest as determined by the authority; and to establish, in full

 

or in part, a reserve for the payment of the principal and interest

 

on the bonds or notes in the amount determined by the authority.

 

     (2) The bonds and notes, including, but not limited to,

 

commercial paper, shall be authorized by resolution adopted by the

 

authority and shall bear the date or dates, and shall mature at the

 

time or times not exceeding 50 years from the date of issuance, as

 

the resolution may provide. The bonds and notes shall bear interest

 

at the rate or rates as may be set, reset, or calculated from time

 


to time, or may bear no interest, as provided in the resolution.

 

The bonds and notes shall be in the denominations, be in the form,

 

either coupon or registered, carry the registration privileges, be

 

transferable, be executed in the manner, be payable in the medium

 

of payment and at the place or places, and be subject to the terms

 

of prior redemption at the option of the authority or the holders

 

of the bonds and notes as the resolution or resolutions may

 

provide. The bonds and notes of the authority may be sold at public

 

or private sale at the price or prices determined by the authority.

 

For purposes of 1966 PA 326, MCL 438.31 to 438.33, this act and

 

other acts applicable to the authority shall regulate the rate of

 

interest payable or charged by the authority, and 1966 PA 326, MCL

 

438.31 to 438.33, does not apply. Bonds and notes may be sold at a

 

discount.

 

     (3) Bonds or notes may be 1 or more of the following:

 

     (a) Made the subject of a put or agreement to repurchase by

 

the authority or others.

 

     (b) Secured by a letter of credit or by any other collateral

 

that the resolution may authorize.

 

     (c) Reissued by the authority once reacquired by the authority

 

pursuant to any put or repurchase agreement.

 

     (4) The authority may authorize any member of the authority to

 

do 1 or more of the following:

 

     (a) Sell and deliver and receive payment for bonds or notes.

 

     (b) Refund bonds or notes by the delivery of new bonds or

 

notes whether or not the bonds or notes to be refunded have

 

matured, are subject to prior redemption, or are to be paid,

 


redeemed, or surrendered at the time of the issuance of refunding

 

bonds or notes.

 

     (c) Deliver bonds or notes, partly to refund bonds or notes

 

and partly for any other authorized purposes.

 

     (d) Buy bonds or notes so issued at not more than the face

 

value of the bonds or notes.

 

     (e) Approve interest rates or methods for fixing interest

 

rates, prices, discounts, maturities, principal amounts,

 

denominations, dates of issuance, interest payment dates,

 

redemption rights at the option of the authority or the holder, the

 

place of delivery and payment, and other matters and procedures

 

necessary to complete the transactions authorized.

 

     (5) Except as may otherwise be expressly provided by the

 

authority, every issue of its bonds or notes shall be general

 

obligations of the authority payable out of revenues, properties,

 

or money of the authority, subject only to agreements with the

 

holders of particular bonds or notes pledging particular receipts,

 

revenues, properties, or money as security for the bonds or notes.

 

     (6) The bonds or notes of the authority are negotiable

 

instruments within the meaning of and for all the purposes of the

 

uniform commercial code, 1962 PA 174, MCL 440.1101 to 440.11102,

 

subject only to the provisions of the bonds or notes for

 

registration.

 

     (7) Bonds or notes issued by the authority are not subject to

 

the terms of the revised municipal finance act, 2001 PA 34, MCL

 

141.2101 to 141.2821. The bonds or notes issued by the authority

 

are not required to be registered. A filing of a bond or note of

 


the authority is not required under the uniform securities act,

 

1964 PA 265, MCL 451.501 to 451.818.

 

     (8) A resolution authorizing bonds or notes may contain 1 or

 

more of the following, which shall be a part of the contract with

 

the holders of the bonds or notes:

 

     (a) A pledge of all or a part of the fees, charges, and

 

revenues made or received by the authority, or all or a part of the

 

money received in payment of lease rentals, working interests, or

 

loans and interest on the loans, and other money received or to be

 

received by the authority to secure the payment of the bonds or

 

notes or of an issue of the bonds or notes, subject to agreements

 

with bondholders or noteholders as may then exist.

 

     (b) A pledge of all or a part of the assets of the authority,

 

including leases, working interests, or notes or mortgages and

 

obligations securing the same to secure the payment of the bonds or

 

notes or of an issue of bonds or notes, subject to agreements with

 

bondholders or noteholders as may then exist.

 

     (c) A pledge of a loan, grant, or contribution from the

 

federal government, this state, a local unit of government, or

 

other source in aid of the activities or purposes of the authority

 

as provided for in this act.

 

     (d) The use and disposition of the revenues and income from

 

leases, from working interests, or from loans, notes, and mortgages

 

owned by the authority.

 

     (e) The establishment and setting aside of reserves or sinking

 

funds and the regulation and disposition of reserves or sinking

 

funds subject to this act.

 


     (f) Limitations on the purpose to which the proceeds of sale

 

of the bonds or notes may be applied and limitations on pledging

 

those proceeds to secure the payment of other bonds or notes.

 

     (g) Authority for and limitations on the issuance of

 

additional bonds or notes for the purposes provided for in the

 

resolution and the terms upon which additional bonds or notes may

 

be issued and secured.

 

     (h) The procedure, if any, by which the terms of a contract

 

with bondholders or noteholders may be amended or abrogated, the

 

number of bondholders or noteholders who are required to consent to

 

an amendment or abrogation, and the manner in which the consent may

 

be given.

 

     (i) Provisions vesting in a trustee or a secured party the

 

property, income, revenues, receipts, rights, remedies, powers, and

 

duties in trust or otherwise as the authority may determine

 

necessary or appropriate to adequately secure and protect

 

bondholders and noteholders or to limit or abrogate the rights of

 

the bondholders and noteholders. A trust agreement may be executed

 

by the authority with any trustee who may be located inside or

 

outside this state to accomplish any of the foregoing.

 

     (j) The terms, conditions, and agreements upon which the

 

holder of the bonds, or a portion of the bonds, is entitled to the

 

appointment of a receiver by the circuit court.

 

     (k) Any other matters that in any way affect the security or

 

protection of the bonds or notes.

 

     (9) A pledge made by the authority is valid and binding from

 

the time the pledge is made. The money or property pledged and

 


later received by the authority is immediately subject to the lien

 

of the pledge without a physical delivery or further act. The lien

 

of a pledge is valid and binding as against parties having claims

 

of any kind in tort, contract, or otherwise against the authority

 

and is valid and binding as against the transfer of the money or

 

property pledged, whether or not the parties have notice. The

 

resolution, the trust agreement, or any other instrument by which a

 

pledge is created need not be recorded.

 

     (10) A member of the authority or a person executing the bonds

 

or notes is not liable personally on the bonds or notes and is not

 

subject to personal liability or accountability because of the

 

issuance of the bonds or notes.

 

     (11) This state is not liable on bonds or notes of the

 

authority, and the bonds or notes shall not be considered a debt of

 

this state. The bonds and notes shall contain on their face a

 

statement indicating this fact.

 

     (12) The bonds and notes of the authority are securities in

 

which the public officers and bodies of this state; municipalities

 

and municipal subdivisions; insurance companies, associations, and

 

other persons carrying on an insurance business; banks, trust

 

companies, savings banks, savings associations, and savings and

 

loan associations; investment companies; administrators, guardians,

 

executors, trustees, and other fiduciaries; and all other persons

 

who are authorized to invest in bonds or other obligations of this

 

state may properly and legally invest funds.

 

     (13) The property of the authority, including its share of

 

interest in any joint venture in which the authority participates,

 


and its income and operation are exempt from all taxation,

 

including the severance tax of 1929 PA 48, MCL 205.301 to 205.317,

 

by this state or any of its political subdivisions. All bonds and

 

notes of the authority, the interest on the bonds and notes, and

 

their transfer are exempt from all taxation, including the

 

severance tax of 1929 PA 48, MCL 205.301 to 205.317, by this state

 

or any of its political subdivisions, except for estate, gift, and

 

inheritance taxes. The state covenants with the purchasers and all

 

subsequent holders and transferees of bonds and notes issued by the

 

authority under this act, in consideration of the acceptance of and

 

payment for the bonds and notes, that the bonds and notes of the

 

authority, issued pursuant to this act, the interest on the bonds

 

and notes, the transfer of the bonds and notes, and all of the

 

authority's fees, charges, gifts, grants, revenues, receipts, and

 

other money received or to be received and pledged to pay or secure

 

the payment of the bonds or notes shall at all times be free and

 

exempt from all state or local taxation provided by the laws of

 

this state, except for estate, gift, and inheritance taxes.

 

     (14) The issuance of bonds and notes under this act is subject

 

to the agency financing reporting act, 2002 PA 470, MCL 129.171 to

 

129.177.

 

     (15) For the purpose of more effectively managing its debt

 

service, the authority may enter into an interest rate exchange or

 

swap, hedge, or similar agreement with respect to its bonds or

 

notes on the terms and payable from the sources and with the

 

security, if any, as determined by a resolution of the authority.

 

     Sec. 19. The authority, in its discretion, may contract with

 


others, public or private, for the provision of all or a portion of

 

the services necessary for the management and operation of the

 

authority.

 

     Sec. 21. (1) If requested by the authority, the department

 

shall provide staff and other support to the authority sufficient

 

to carry out its duties, powers, and responsibilities.

 

     (2) All departments and agencies of state government shall

 

provide full cooperation to the authority in the performance of its

 

duties, powers, and responsibilities.

 

     Sec. 23. This act shall be construed liberally to effectuate

 

the legislative intent and the purpose of this act as complete and

 

independent authority for the performance of each act and thing

 

authorized in this act. Powers granted in this act shall be broadly

 

interpreted to effectuate such intent and purposes and not as a

 

limitation of powers.