Section 27. Borrowing for loans to school districts
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State loans to school districts. Amount of loans. Qualified bonds. Repayment of loans, tax levy by school district. Bonds, state loans, repayment. Power to tax unlimited. Rights and obligations to remain unimpaired.
The state, in addition to any other borrowing power, may borrow from time to time such amounts as shall be required, pledge its faith and credit and issue its notes or bonds therefor, for the purpose of making loans to school districts as provided in this section.
Amount of loans
If the minimum amount which would otherwise be necessary for a school district to levy in any year to pay principal and interest on its qualified bonds, including any necessary allowances for estimated tax delinquencies, exceeds 13 mills on each dollar of its assessed valuation as finally equalized, or such lower millage as the legislature may prescribe, then the school district may elect to borrow all or any part of the excess from the state. In that event the state shall lend the excess amount to the school district for the payment of principal and interest. If for any reason any school district will be or is unable to pay the principal and interest on its qualified bonds when due, then the school district shall borrow and the state shall lend to it an amount sufficient to enable the school district to make the payment.
Qualified bonds
The term “qualified bonds” means general obligation bonds of school districts issued for capital expenditures, including refunding bonds, issued prior to May 4, 1955, or issued thereafter and qualified as provided by law pursuant to Section 27 or Section 28 of Article X of the Constitution of 1908 or pursuant to this section.
Repayment of loans, tax levy by school district
After a school district has received loans from the state, each year thereafter it shall levy for debt service, exclusive of levies for nonqualified bonds, not less than 13 mills or such lower millage as the legislature may prescribe, until the amount loaned has been repaid, and any tax collections therefrom in any year over and above the minimum requirements for principal and interest on qualified bonds shall be used toward the repayment of state loans. In any year when such levy would produce an amount in excess of the requirements and the amount due to the state, the levy may be reduced by the amount of the excess.
Bonds, state loans, repayment
Subject to the foregoing provisions, the legislature shall have the power to prescribe and to limit the procedure, terms and conditions for the qualification of bonds, for obtaining and making state loans, and for the repayment of loans.
Power to tax unlimited
The power to tax for the payment of principal and interest on bonds hereafter issued which are the general obligations of any school district, including refunding bonds, and for repayment of any state loans made to school districts, shall be without limitation as to rate or amount.
Rights and obligations to remain unimpaired
All rights acquired under Sections 27 and 28 of Article X of the Constitution of 1908, by holders of bonds heretofore issued, and all obligations assumed by the state or any school district under these sections, shall remain unimpaired.
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Borrowing for loans to school districts
The state may borrow from time to time such amounts as may be required but not to exceed an aggregate of $100,000,000.00, pledge its faith and credit and issue its notes or bonds therefor, for the purpose of making loans to school districts for the payment of principal and interest on school bonds heretofore or hereafter issued for acquiring, constructing, enlarging, improving and equipping school buildings and sites and for the funding or refunding of obligations incurred for 1 or more of the aforesaid purposes.
If the minimum amount necessary to be levied in any calendar year for the payment of principal and interest on the bonds of a school district issued prior to July 1, 1962, after deducting any funds pledged to and available for the payment thereof, shall exceed 13 mills on each dollar of its assessed valuation as last equalized by the state, then the state of Michigan shall loan such school district the amount of such excess, but all loans so made shall not exceed in the aggregate the sum of $100,000,000.00 and shall be subject to such terms and conditions as shall be prescribed by law. After a school district shall have received such a loan or loans from the state, it shall thereafter levy each year not less than the said 13 mills until the amount loaned has been repaid and any tax collections in any year over and above the minimum requirements for principal and interest shall be used towards the repayment of such loan or loans. The legislature shall prescribe the conditions upon which levies for bond principal and interest shall be included in computing the amount to be loaned by the state under this section, one of which conditions shall be that the maturities on the bonds of any future issue shall conform with statutory requirements, with the last maturity date not less than 25 years from the issuance date on the bonds.
The tax limitation prescribed in section 21 of this article shall not apply to tax levies for any future issue of school district bonds issued prior to July 1, 1962, including refunding bonds, and such tax levies shall be without limitation as to rate or amount: Provided, That the bonds of such issue last maturing shall be due in not less than 25 years from date of issuance but may be subject to prior redemption in accordance with the provisions thereof.