MI HB4495

Municipalities with outstanding municipal securities must include specified amounts in annual tax levies to cover interest payments, principal due, and mandatory redemption refunding securities.

Municipalities must set aside tax collections for debt service on municipal securities, with amounts for unlimited tax pledges held in trust for security holders.

For securities authorized before December 23, 1978, or approved by electors, municipalities may levy taxes without rate or amount limitations, and unlimited tax pledges constitute a statutory first lien on pledged taxes.

For securities authorized after December 22, 1978, without voter approval, municipalities must set aside collected taxes as a first budget obligation, subject to applicable charter, statutory, or constitutional rate limitations.

Surplus money remaining in debt retirement funds after all securities are retired shall be used to pay other outstanding municipal securities, then deposited in the general fund, in order of priority.