SB 996 Summary

• Allows cities and counties with accumulated operating deficits to issue fiscal stabilization bonds after legislative approval and board authorization, with deficits exceeding emergency municipal loan fund limits.

• Requires cities and counties to submit a statement from their chief executive or board chair indicating how they intend to avoid future deficits as a condition of bond issuance approval.

• Caps unlimited or limited tax bonds at 3% of state equalized valuation of real and personal property within the jurisdiction, excluding reserves, issuance costs, discounts, and refunding bonds.

• Exempts bonds issued on or after the effective date from requirements of the Michigan municipal distributable aid bond act, allowing distributable aid to be pledged without triggering those restrictions.

• Creates a statutory lien on pledged revenues and distributable aid that is paramount and superior to all other liens for the sole purpose of paying principal and interest on the bonds.