This afternoon the Senate passed House Bills 5566-5570, a package that amends the Emergency Municipal Loan Act to include school districts and amend the criteria for qualifying.

The current statute does not allow school districts to qualify for emergency loans. The legislation allows school districts to qualify.

In addition it requires that a municipality have levied the maximum number of mills it is authorized to levy as approved by the voters and also one of the following new criteria: 1) have one or more delinquent special assessments; 2) outstanding bonds, etc issued in anticipation of a contract with another local unit that has one or more delinquent special assessments; 3) be in receivorship subject to PA 4of 2011; or 4) a financial review by the Department of Treasury has indicated a financial emergency exists.

The Senate substitute allows a total of $85 million to be allocated over six years (the provision sunsets on September 30, 2018). A maximum of $20 million may be given to any one municipality or school district. The $85 million allows $50 million for school districts and $35 million to other municipalities. The Department of Treasury must wait 30 days after this legislation is signed to authorize a new loan.

One amendment added on the House floor would prohibit a community from opting out under PA 152 if they want to be considered for a municipal loan. The Senate committee removed this language at urging from the League and Michigan Association of Counties. We’d like to thank Senator Anderson for offering the amendment as well as those Senators who supported it.

Samantha Harkins works for the Michigan Municipal League handling municipal services and energy and technology issues.  She can be reached at 517-908-0306 or email at [email protected]