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HB 5030

Housing: housing development authority; note and bond purchase for cancellation; modify. Amends sec. 30 of 1966 PA 346 (MCL 125.1430).

2023-2024 Regular Session Introduced by Abraham Aiyash and 18 co-sponsors

HB 5030 allows MSHDA to decide when to cancel its own notes or bonds purchased, instead of automatic cancellation, to time market moves and reduce debt service.

assigned PA 191'24
#housing:housingdevelopmentauthority
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Bill Summary · HB 5030

Summary — HB 5030 (State Housing Development Authority Act; MCL 125.1430)

Title: Housing: housing development authority; note and bond purchase for cancellation; modify.
Primary change: Amends section 30 of the State Housing Development Authority Act (MCL 125.1430) to give the Michigan State Housing Development Authority (MSHDA) discretion to cancel notes or bonds it purchases from itself, rather than requiring immediate cancellation upon purchase.
Enacted: Public Act 191 of 2024. Approved by the Governor Jan. 16, 2025; effective April 2, 2025.

Purpose / Intent

The bill is intended to provide MSHDA greater flexibility in managing its debt portfolio. By allowing (instead of requiring) the authority to cancel its own notes or bonds immediately upon purchase, MSHDA can time cancellations to obtain more favorable market outcomes — for example, waiting out temporary market disruptions or high short-term rates — and thereby potentially reduce debt service costs and free resources for housing programs.

Key provisions

  • Amends MCL 125.1430 to change the purchase-and-cancel requirement:
    • Current law: when MSHDA purchases its own notes or bonds, those instruments “shall thereupon be canceled” at specified prices (either the then-applicable redemption price plus accrued interest, or, if not yet redeemable, the redemption price on the first date after purchase when they become redeemable plus accrued interest).
    • HB 5030: replaces the mandatory “shall cancel” with permissive language — the notes or bonds “may be canceled” under the same price limitations.
  • Retains the existing ability for MSHDA, by resolution, to authorize payment of a higher price when it determines doing so is in the authority’s best interests.

Who is affected

  • Primary: MSHDA — its debt management operations and treasury strategy.
  • Secondary/Indirect: MSHDA program participants (homebuyers, developers, affordable housing projects) to the extent debt-service savings enable expanded or more efficient programming.
  • No direct fiscal impact is anticipated for the State General Fund or local governments because MSHDA is funded from its restricted revenues.

Fiscal and policy impact

  • Fiscal effect: Indeterminate but likely positive for MSHDA (increased flexibility could generate savings when cancelling purchased debt at advantageous times). No expected fiscal impact on State General Fund or local units.
  • Policy effect: Improves MSHDA’s ability to manage variable-rate and market-sensitive debt; supporters testified it could save material sums (MSHDA estimated potential millions) and better preserve resources for housing initiatives.

Legislative history (selected)

  • Introduced Sept. 20, 2023 (Rep. Betsy Coffia).
  • Passed House June 12, 2024 (59–49, immediate effect granted by the House).
  • Passed Senate Dec. 19, 2024 (24–14).
  • Enrolled and presented to Governor; approved Jan. 16, 2025.
  • Assigned Public Act 191 of 2024; effective April 2, 2025.

Practical takeaway

HB 5030 makes a narrow but operationally important change: it converts an automatic requirement to cancel MSHDA-purchased authority debt into a discretionary tool, allowing MSHDA to time cancellations to market conditions and potentially reduce financing costs that fund housing programs.

Compiled from official sources — confirm details with the bill’s official record.

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