SB 729 — State finance: authorities; outstanding obligations of the state building authority; provide exception to the limit of. Amends sec. 8 of 1964 PA 183 (MCL 830.418).

SB-729, As Passed House,Senate, MayDecember 14,9, 20262025 SUBSTITUTE FOR SENATE BILL NO.

and to provide for other matters in relation to the authority and its obligations," BJH S04980'25 (S-1)_SB729_APH_1(S-1)_SB729_APS_1 dm4jcop0wo6y by amending section 8 (MCL 830.418), as amended by 2024 PA 228.

(ii) Interest on revenue obligations becoming due before the BJH S04980'25 (S-1)_SB729_APH_1(S-1)_SB729_APS_1 dm4jcop0wo6y 1 collection of the first true rental available for the payment of those revenue obligations.

(i) The resolution or resolutions authorizing the revenue obligations provide for the use of a specific allocable portion of the revenue obligation proceeds to pay the estimated cost of each of the facilities, together with the allocable portion of the reserves, discount, interest on the obligations becoming due before the first true rental available for payment of the obligations, and BJH S04980'25 (S-1)_SB729_APH_1(S-1)_SB729_APS_1 dm4jcop0wo6y 1 obligation issuance expense with respect to each facility.

(iii) Fees or charges associated with an agreement to manage BJH S04980'25 (S-1)_SB729_APH_1(S-1)_SB729_APS_1 dm4jcop0wo6y 1 payment, revenue, or interest rate exposure.

(9) Except as otherwise provided in this section, the building authority shall use income or profit derived from the investment of money in a fund or account of the building authority, including the proceeds of sale of the revenue obligations, only for the purpose of paying principal, interest, and redemption premiums on the BJH S04980'25 (S-1)_SB729_APH_1(S-1)_SB729_APS_1 dm4jcop0wo6y 1 revenue obligations of the building authority, or for any purpose for which the proceeds of the revenue obligations may be used under this act, as determined by the resolution or resolutions of the board authorizing the issuance of revenue obligations.

(11) To the extent provided by resolution of the board, BJH S04980'25 (S-1)_SB729_APH_1(S-1)_SB729_APS_1 dm4jcop0wo6y 1 principal of, and interest and redemption premiums on, revenue obligations issued for the purpose of paying all or part of the cost of the facilities must be secured by and payable only from 1 or more of the following sources:

(12) To the extent provided by resolution of the board, principal of, and interest and redemption premiums on, refunding BJH S04980'25 (S-1)_SB729_APH_1(S-1)_SB729_APS_1 dm4jcop0wo6y 1 revenue obligations must be secured by and payable only from 1 or more of the following sources:

The obligations must mature not more than 40 years from their date, and in any event not more than 1 year from BJH S04980'25 (S-1)_SB729_APH_1(S-1)_SB729_APS_1 dm4jcop0wo6y 1 the due date of the last true rental pledged for the payment of the obligations.

(m) The method of execution of the obligations, and other provisions respecting the obligations, the rights of the holders of the obligations, the security for the obligations, and the BJH S04980'25 (S-1)_SB729_APH_1(S-1)_SB729_APS_1 dm4jcop0wo6y 1 procedures for disbursement of the obligation proceeds and for the investment of the proceeds of obligations and money for the payment of obligations.

BJH S04980'25 (S-1)_SB729_APH_1(S-1)_SB729_APS_1 dm4jcop0wo6y 1 (b) The appointment of a trustee for the holders of the obligations.

(20) The building authority may issue additional obligations of equal standing with respect to the pledge of the true rentals and additional security provided pursuant to this act with previously issued obligations of the building authority issued to acquire or construct a facility or facilities, or to refund the obligations, for the purpose of completing, or making additions, BJH S04980'25 (S-1)_SB729_APH_1(S-1)_SB729_APS_1 dm4jcop0wo6y 1 improvements, or replacements to, the facility or facilities for which the previous obligations of the authority were issued or to refund all or part of obligations previously issued for the facility or facilities, under the terms and conditions provided in the resolution or resolutions authorizing the previous issue of obligations.

If Except as otherwise provided under subdivisionssubdivision (e)(e), and (f), if an obligation is issued to retire a prior obligation within 90 BJH S04980'25 (S-1)_SB729_APH_1(S-1)_SB729_APS_1 dm4jcop0wo6y 1 within 90 days after the date of issuance of the refunding obligation, the obligation is counted against the limitation when the refunded obligation is retired.

(f) $63,800,000.00 of advance refunding that was part of the 2026 revenue and refunding bonds, series I, issued by the state building authority in July 2026.

The authority shall not acquire a facility unless BJH S04980'25 (S-1)_SB729_APH_1 dm4jco 1 the acquisition is approved by the state administrative board and in an appropriations act.

The authority may pledge any or all of the true rental and other revenues, investment income or profit, or BJH S04980'25 (S-1)_SB729_APS_1 p0wo6y 1 money in funds or accounts to the payment of revenue obligations of the authority other than those to which they pertain.

The agreement may include, but is not limited to, an interest rate exchange agreement, an agreement providing for payment or receipt of money based on levels of or BJH S04980'25 (S-1)_SB729_APH_1 dm4jco 1 changes in interest rates, an agreement to exchange cash flows or series of payments, or an agreement providing for or incorporating interest rate caps, collars, floors, or locks.

Subject to a prior BJH S04980'25 (S-1)_SB729_APS_1 p0wo6y 1 pledge or lien created under this act, a payment to be made by the building authority under an agreement described in this subsection is payable, together with other obligations of the building authority, from those sources described in subsections (11) and (12), all with the parity or priority and on the conditions set forth in the board's resolution.

The resolution may state the maximum par amount of obligations that may BJH S04980'25 (S-1)_SB729_APH_1 dm4jco 1 be issued pursuant to the pool.

(iv) Other terms of the obligations as provided in subsection (13) or the limits within which the chief operating officer, chief BJH S04980'25 (S-1)_SB729_APS_1 p0wo6y 1 staff person, or member of the board shall determine those terms as provided in subsection (10).

(iv) The aggregate amounts of obligations issued and outstanding with respect to a facility under a pool, together with other obligations that may have been issued and are outstanding BJH S04980'25 (S-1)_SB729_APH_1 dm4jco 1 with respect to the facility under this act do not exceed the cost of the facility, including allowable interest costs, as approved by the state administrative board, an institution of higher education, BJH S04980'25 (S-1)_SB729_APS_1 p0wo6y 1 if applicable, and the legislature.

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