Bill will save taxpayer money, cut red tape and facilitate infrastructure investment at community colleges, universities
State Rep. Natalie Price (D-Berkley) delivers a speech on her bill on Tuesday, Nov. 14, 2023, at the Michigan Capitol in Lansing.
LANSING, Mich., April 18, 2024 — State Rep. Natalie Price’s (D-Berkley) House Bill 4842 passed the Michigan House of Representatives this afternoon. The legislation amends Public Act 183 of 1964, which regulates the State Building Authority, to eliminate the requirement that pools of obligation be fully payable to the creditor(s) within five years. The State Building Authority finances capital outlay building projects by issuing obligation pools, such as commercial paper, which is a short-term debt similar to bonds.
“This bill will provide the State Building Authority flexibility in the issuing of commercial paper, helping to fund major capital outlays more efficiently,” Price said. “Commercial paper is a key tool to finance projects, including infrastructure upgrades at community colleges and universities. The current requirements around pools of obligation maturation stand in the way of working most efficiently for Michigan residents. I’m glad the Legislature is one step closer to cutting this red tape and saving taxpayer money.”
Commercial paper is used to provide short-term access to funding for short-term cash flow flexibility. When instituted, Michigan’s program was the first of its kind in the nation. Following its significant success, the built-in sunset is no longer needed. The current requirements necessitate significant legal and ratings agency fees, and HB 4842 would eliminate that need.
HB 4842 next heads to the state Senate for consideration.
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