SB-0809, As Passed Senate, November 13, 2003                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                              SUBSTITUTE FOR                                    

                                                                                

                           SENATE BILL NO. 809                                  

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                 A bill to amend 2002 PA 49, entitled                                              

                                                                                

    "Michigan broadband development authority act,"                             

                                                                                

    by amending section 7 (MCL 484.3207).                                       

                                                                                

                THE PEOPLE OF THE STATE OF MICHIGAN ENACT:                      

                                                                                

1       Sec. 7.  (1) The powers of the authority shall include all                  

                                                                                

2   those necessary to carry out and effectuate the purposes of this            

                                                                                

3   act, including, but not limited to, all of the following:                   

                                                                                

4       (a) To borrow money and issue bonds and notes to fund                       

                                                                                

5   operations of the authority, to finance or refinance part or all            

                                                                                

6   of the development costs of the broadband infrastructure, to                

                                                                                

7   refinance existing debt for technology that constitutes a part of           

                                                                                

8   or is related to the broadband infrastructure, and to secure                

                                                                                

9   bonds and notes by mortgage, assignment, or pledge of any of its            

                                                                                

10  revenues and assets.                                                        

                                                                                

11      (b) To invest any money of the authority at the authority's                 

                                                                                


                                                                                

1   discretion, in any obligations determined proper by the                     

                                                                                

2   authority, and name and use depositories for its money.                     

                                                                                

3       (c) To enter into joint venture and partnership arrangements                

                                                                                

4   subject to subsections (2) and (3) with persons that will                   

                                                                                

5   acquire, construct, develop, maintain, and operate all or                   

                                                                                

6   portions of the broadband infrastructure.                                   

                                                                                

7       (d) To be designated the state program manager for federal                  

                                                                                

8   telecommunications assistance, to represent this state in                   

                                                                                

9   negotiations with the federal government regarding                          

                                                                                

10  telecommunications assistance, and to receive and distribute                

                                                                                

11  federal funding, including loans, grants, and other forms of                

                                                                                

12  funding and assistance on this state's behalf.                              

                                                                                

13      (e) To receive and distribute state or local funding                        

                                                                                

14  including grants, loans, general appropriations, or an                      

                                                                                

15  appropriation made for the purposes under subsection (4).                   

                                                                                

16      (f) To make loans and to enter into any joint venture and                   

                                                                                

17  partnership arrangements subject to subsections (2) and (3) with            

                                                                                

18  broadband developers and broadband operators that will acquire,             

                                                                                

19  construct, maintain, and operate all or portions of the broadband           

                                                                                

20  infrastructure.                                                             

                                                                                

21      (g) To provide operating assistance to make broadband                       

                                                                                

22  services more affordable to broadband developers, broadband                 

                                                                                

23  operators, and broadband customers, in conjunction with broadband           

                                                                                

24  infrastructure financed by the authority.                                   

                                                                                

25      (h) To impose and collect charges, fees, or rentals for the                 

                                                                                

26  services furnished by those portions of the broadband                       

                                                                                

27  infrastructure financed by the authority under this act.                    


                                                                                

1       (i) To set construction, operation, and financing standards                 

                                                                                

2   for the broadband infrastructure in connection with authority               

                                                                                

3   financing and to provide for inspections to determine compliance            

                                                                                

4   with those standards.                                                       

                                                                                

5       (j) To acquire from any person interests in real or personal                

                                                                                

6   property necessary for the operation of the authority.                      

                                                                                

7       (k) To procure insurance against any loss in connection with                

                                                                                

8   the broadband infrastructure and any other property, assets, or             

                                                                                

9   activities of the authority.                                                

                                                                                

10                                                                               (l) To sue and be sued, to have a seal, and to make, execute,                       

                                                                                

11  and deliver contracts, conveyances, and other instruments                   

                                                                                

12  necessary to the exercise of the authority's powers.                        

                                                                                

13      (m) To enforce financial, operational, warranty, security,                  

                                                                                

14  lease, and guaranty terms and conditions established under                  

                                                                                

15  financings by the authority.  The authority may under this                  

                                                                                

16  subsection acquire, construct, develop, lease, create, and                  

                                                                                

17  maintain all or portions of the broadband infrastructure and                

                                                                                

18  acquire from any person interests in real and personal property.            

                                                                                

19      (n) To make and amend bylaws.                                               

                                                                                

20      (o) To indemnify and procure insurance indemnifying any                     

                                                                                

21  members of the board of the authority from personal liability by            

                                                                                

22  reason of their service as a board member.                                  

                                                                                

23      (p) To investigate, evaluate, and assess the current                        

                                                                                

24  broadband infrastructure and the future broadband infrastructure            

                                                                                

25  needs of this state and to encourage and participate in                     

                                                                                

26  aggregation strategies for the broadband services of all public             

                                                                                

27  entities and nonprofit corporations in this state to maximize the           


                                                                                

1   interconnectivity and efficiencies of the broadband                         

                                                                                

2   infrastructure.                                                             

                                                                                

3       (2) Notwithstanding any other provision of this act, the                    

                                                                                

4   authority shall not make loans to, or enter into any joint                  

                                                                                

5   venture and partnership arrangements or participation with, any             

                                                                                

6   governmental entity or nonprofit organization except in                     

                                                                                

7   connection with the financing or refinancing of development costs           

                                                                                

8   for that allocable portion of the broadband infrastructure used             

                                                                                

9   or to be used exclusively by governmental entities or nonprofit             

                                                                                

10  organizations, including, but not limited to, universities,                 

                                                                                

11  colleges, hospitals, school districts, public safety agencies,              

                                                                                

12  judicial organizations, libraries, cities, townships, and                   

                                                                                

13  counties.  No allocable portion of the broadband infrastructure             

                                                                                

14  financed by a loan to a governmental entity or a nonprofit                  

                                                                                

15  organization shall be used to serve residential, business, or               

                                                                                

16  other commercial customers.                                                 

                                                                                

17      (3) Notwithstanding any other provision of this act, except                 

                                                                                

18  in connection with financing or refinancing under subsection (2)            

                                                                                

19  or enforcement procedures authorized under subsection (1)(m), the           

                                                                                

20  authority shall acquire real or personal property constituting              

                                                                                

21  portions of the broadband infrastructure only in connection with            

                                                                                

22  the participation of persons other than governmental entities or            

                                                                                

23  nonprofit organizations through joint ventures and partnership              

                                                                                

24  arrangements, or other co-ownership arrangements and only if the            

                                                                                

25  participation is necessary to assure availability of financing or           

                                                                                

26  refinancing derived from the issuance by the authority of bonds             

                                                                                

27  or notes, the interest on which is exempt from taxation under the           


                                                                                

1   United States internal revenue code, and the financing derived              

                                                                                

2   from the tax-exempt bonds or notes is allocated only to those               

                                                                                

3   development costs relating to that portion of the broadband                 

                                                                                

4   infrastructure that is to be used by governmental bodies or                 

                                                                                

5   nonprofit organizations.                                                    

                                                                                

6       (4) The authority shall establish a seed capital loan program               

                                                                                

7   to make capital loans to persons planning to apply to the                   

                                                                                

8   authority for financing of broadband infrastructure.  Priority              

                                                                                

9   for the seed capital loan program shall be given for developments           

                                                                                

10  targeted to underserved areas and to qualified tool and die                 

                                                                                

11  businesses described in subsection (6).  During the initial 2               

                                                                                

12  years of operations, the authority shall designate a minimum of             

                                                                                

13  $500,000.00 to be targeted to rural underserved areas and a                 

                                                                                

14  minimum of $500,000.00 targeted to urban underserved areas.                 

                                                                                

15  Community economic development programs and small providers shall           

                                                                                

16  be given a preference to receive loans under this subsection.               

                                                                                

17  The terms and conditions for the seed capital loans shall be                

                                                                                

18  established by the authority.  As used in this act, "underserved            

                                                                                

19  areas" means geographical areas of this state identified by the             

                                                                                

20  authority as having the greatest need for broadband development.            

                                                                                

21  In identifying underserved areas, the authority shall consider              

                                                                                

22  the area's economic conditions, including, but not limited to,              

                                                                                

23  family income, affordability of access, lack of options                     

                                                                                

24  available, low percentage of residents subscribing, and any other           

                                                                                

25  criteria considered important by the authority in determining               

                                                                                

26  whether an area is underserved.                                             

                                                                                

27      (5) As part of an application for financing under this act,                 


                                                                                

1   the broadband developer and broadband operator shall file with              

                                                                                

2   the authority a participation plan for small and minority owned             

                                                                                

3   businesses and a communitywide outreach plan to educate the                 

                                                                                

4   public of the availability of broadband services.  The authority            

                                                                                

5   shall not approve an application unless a plan is submitted under           

                                                                                

6   this subsection.                                                            

                                                                                

7       (6) The authority may make loans to a qualified tool and die                

                                                                                

8   business if the qualified tool and die business is located in a             

                                                                                

9   recovery zone if approved by the department of treasury and the             

                                                                                

10  Michigan economic development corporation.  As used in this                 

                                                                                

11  section, "qualified tool and die business" and "recovery zone"              

                                                                                

12  mean those terms as defined in section 8d of the Michigan                   

                                                                                

13  renaissance zone act, 1996 PA 376, MCL 125.2688d.