ADOPTED - OCTOBER 27, 2009
Agenda Item No. 13
Introduced by the County Services and Finance Committees of the:
INGHAM COUNTY BOARD OF COMMISSIONERS
RESOLUTION DESIGNATING A “RECOVERY ZONE” FOR RECOVERY ZONE FACILITY BONDS AND RECOVERY ZONE ECONOMIC DEVELOPMENT BONDS
RESOLUTION #09-359
WHEREAS, the American Recovery and Reinvestment Act of 2009, Pub. L. No. 111-5, 123 Stat. 115 (2009) (“ARRA”) was passed by Congress on February 13, 2009, and was signed by the President on February 17, 2009; and
WHEREAS, the ARRA provides Counties and large municipalities (an “Issuer” or the “Issuers”) with two new economic development tools which will permit the Issuers and their economic development corporations to issue (1) tax-exempt “private activity bonds” called “Recovery Zone Facility Bonds” (“RZFB’s”) for the benefit of a variety of private businesses for which tax-exempt bonds have not been available in the past to finance plant and equipment, and (2) taxable public purpose bonds called “Recovery Zone Economic Development Bonds” (“RZEDB’s”) to promote economic development and receive reimbursement from the U.S. Treasury Department of 45% of each interest payment on the bonds; and
WHEREAS, RZFB’s may be issued to finance certain depreciable property for any trade or business, commercial or industrial, but only if the property is located in a “Recovery Zone” designated by the Issuer and is purchased or constructed after such designation; and
WHEREAS, RZEDB’s may be issued to finance within the Recovery Zone capital expenditures paid or incurred for property in Recovery Zones, expenditures for public infrastructure and construction of public facilities, and expenditures for job training and educational programs; and
WHEREAS, the ARRA resulted in Ingham County receiving volume cap allocations of $13,855,000 for RZEDB’s and $20,782,000 for RZFB’s; and
WHEREAS, under the ARRA, a “Recovery Zone” is an area designated by the Issuer as having significant poverty, unemployment, home foreclosures or general distress; and
WHEREAS, the Internal Revenue Service has stated that the County may make the Recovery Zone designations in any reasonable manner as it determines in good faith in its discretion (Internal Revenue Bulletin 2009-26, Section 5.06); and
WHEREAS, the dramatic economic meltdown of the economy across the United States, and in the State of Michigan in particular, and the ensuing adverse effects on manufacturing and other businesses in the State and Ingham County have directly caused employment in the Ingham County to decline, layoffs to
ADOPTED - OCTOBER 27, 2009
Agenda Item No. 13
RESOLUTION #09-359
increase dramatically and home foreclosures to rise considerably, all directly resulting in unemployment and economic and general distress throughout the Ingham County, with Ingham County having an August unemployment rate of 12.1%, being approximately 25% higher than the national average and twice the rate 2007 rate, has had a record number of properties listed on the Ingham County Treasurer’s 2008 notice of Judicial Foreclosure Hearing, being a 42% increase in parcels published in the annual tax foreclosure notice since 2006, and has experienced a 96% increase from 2007 to 2008 of foreclosed properties; and
WHEREAS, the breadth of the distress suffered by the Ingham County, as represented by the loss of jobs, home foreclosures and rapidly declining property values, supports a finding by the Ingham County Board of Commissioners in good faith and within its discretion, that the entire County of Ingham qualifies as a “Recovery Zone” as contemplated by ARRA; and
WHEREAS, to continue to provide businesses within the Ingham County and those wishing to locate in the Ingham County the most favorable financing vehicles available in the United States today, and on the basis of the Board of Commissioners’ finding that the conditions precedent for qualifying as a “Recovery Zone” exist throughout Ingham County, the Board of Commissioners deems it in the best interests of the Ingham County to designate the entire County of Ingham a “Recovery Zone” within the meaning of ARRA; and
WHEREAS, the Board of Commissioners’ formal designation of the aforementioned area as a “Recovery Zone,” as required under the ARRA, will hereafter permit the acquisition or construction by businesses located and doing business within the Ingham County of property qualifying as “recovery zone property” in Ingham County to take advantage of RZFB’s, and permit the Ingham County to issue RZEDB’s to finance public property for economic development purposes, subject in each case to the aggregate amount of “recovery zone bond limitation” allocated under ARRA to Ingham County; and
WHEREAS, this action of the Board of Commissioners in designating a “Recovery Zone” reflects the Ingham County’s desire to assist qualifying businesses through the issuance of RZFB’s, but such action does not and will not ever constitute a desire or ability on the part of the Board of Commissioners to directly or indirectly lend the credit or any property of the Ingham County to any RZFB’s issued by the Ingham County, and any and all RZFB’s issued by the Ingham County will clearly and unequivocally state that the RZFB’s are payable solely and only out of the security provided by the businesses benefitted thereby and that Ingham County shall not be liable for any reason or under any circumstances on, or as a result of the issuance of or failure to issue, RZFB’s, the acquisition or construction of recovery zone property within the County of Ingham or the operation of such property within the County of Ingham.
THEREFORE BE IT RESOLVED that:
1. The Board of Commissioners finds that the conditions set forth in the ARRA for qualification of a geographic area as a “Recovery Zone,” including poverty, unemployment, home foreclosures and general distress exists throughout the County of Ingham.
ADOPTED - OCTOBER 27, 2009
Agenda Item No. 13
RESOLUTION #09-359
2. The Board of Commissioners hereby designates the entire County of Ingham as a “Recovery Zone” within the meaning of the ARRA, effective immediately.
3. Recovery Zone Facility Bonds issued by Ingham County shall in each and every case clearly and unequivocally state on their face that they are payable solely and only out of the security provided by the business benefited by them and that the County of Ingham shall not be liable for any reason or under any circumstances on, or as a result of the issuance of or failure to issue, the Recovery Zone Facility Bonds, or for any action taken by any person relating to the acquisition or construction of “recovery zone property” or for the operation of any such property.
4. The Chairperson of Board of Commissioners and/or the Chairperson’s designees are hereby authorized on behalf of Ingham County to take such action as may be necessary or appropriate to fulfill the purposes of this resolution, including but not limited to notification of the State of Michigan and the United
States government that Ingham County has designated the entire County of Ingham geographic area as a “Recovery Zone” under ARRA, and to establish procedures and conditions for the issuance by the Ingham County of RZFB’s and RZEDB’s, and to take such other action as may be necessary or desirable to satisfy any additional conditions or qualifications now existing or hereafter established under ARRA relating to Recovery Zone Facility Bonds and Recovery Zone Economic Development Bonds and the allocation of bond limitation therefore.
5. The provisions of this resolution shall take precedence over all or any portion of any resolution heretofore adopted by this Board of Commissioners in conflict herewith.
COUNTY SERVICES: Yeas: Celentino, Koenig, Holman, Copedge, Grebner, Vickers
Nays: None Absent: None Approved 10/20/09
FINANCE: Yeas: Grebner, Nolan, Bahar-Cook, Tennis, Davis, Dougan
Nays: None Absent: None Approved 10/21/09