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HB 4842

Property: state buildings; pool of obligations to meet interim financing needs; modify. Amends sec. 8 of 1964 PA 183 (MCL 830.418).

2023-2024 Regular Session Introduced by Kelly Breen and 6 co-sponsors

HB 4842 eliminates the five-year maturity for SBA interim financing pools, tying pool duration to tax rules and reducing state issuance and admin costs.

assigned PA 228'24
#property:statebuildings
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Bill Summary · HB 4842

Summary — HB 4842 (Enacted as Public Act 228 of 2024)

Status: Enacted — Public Act 228 of 2024
Sponsor: Rep. Natalie Price
Statute amended: 1964 PA 183, sec. 8 (MCL 830.418)
Effective date: April 2, 2025

Main purpose

HB 4842 eliminates a statutory requirement that obligations issued by the State Building Authority (SBA) as part of an interim financing "pool of obligations" must mature (be fully payable to creditor(s)) no later than five years after the pool is established. The substitute version instead provides that projects placed in a pool may remain in the pool for a duration permitted under applicable tax rules and laws.

Key provisions / changes

  • Deletes the five-year maturity requirement for obligations issued under an SBA interim financing pool (previous law required pool obligations to mature within five years).
  • Replaces that fixed maturity rule with a rules-based duration tied to tax law — i.e., projects may remain in a pool for a period allowed under tax rules and laws.
  • Leaves existing SBA authority otherwise intact (SBA issues revenue obligations payable solely from “true rental,” funds, and pledged security; not a general obligation of the State).
  • The analysis references the SBA’s existing aggregate principal limit for revenue obligations (noted in committee materials as $2.7 billion).

Who is affected

  • State Building Authority — greater flexibility in structuring interim financings and pools of obligations.
  • Department of Treasury — reduced frequency of work tied to issuing and reissuing pool series (credit rating reviews, fee payments, staff time).
  • State agencies and institutions that use SBA-financed facilities (including public universities and community colleges) — indirect effects via changes to how interim financing is managed.
  • Investors and credit rating agencies — potentially fewer periodic reissues of pooled obligations to review.

Local governments: no fiscal impact identified.

Fiscal and policy impacts

  • Anticipated modest cost savings for state government: reduced issuance and administrative costs, fewer credit‑rating reevaluations, and less staff time every five years when new pool series would previously be required.
  • No significant change to State’s overall debt exposure or the legal nature of SBA revenue obligations (they remain payable solely from pledged revenues and are not State general obligations).

Rationale noted in committee reports

Supporters argued the five‑year reissuance requirement was unnecessary and imposed avoidable costs. Tying pool duration to tax rules allows longer interim financing where permitted, reducing administrative/transactional expense.

Legislative timeline (selected)

  • Introduced: June 22, 2023 (Rep. Natalie Price)
  • Passed House: April 18, 2024
  • Passed Senate / House concurred: December 10, 2024
  • Presented to Governor / Approved: January 17, 2025
  • Filed with Secretary of State: January 17, 2025
  • Effective: April 2, 2025 (Public Act 228 of 2024)

For statutory detail, see amended MCL 830.418 (section 8 of 1964 PA 183).

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

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