Mich. Admin. Code R. 29.2166

Current through Vol. 24-22, December 15, 2024

Section R. 29.2166 - Local government bond rating test

Rule 66. Section 280.104 is amended to read as follows:

Section 280.104.

(a) A general purpose local government O/O, a local government, or any combination of owner, operator, or local government serving as a guarantor may satisfy the requirements of section 280.93 by having a currently outstanding issue or issues of general obligation bonds of $1,000,000.00 or more, excluding refunded obligations, with a Moody's rating of Aaa, Aa, A, or Baa or a Standard and Poor's rating of AAA, AA, A, or BBB. If a local government has multiple outstanding issues, or if a local government's bonds are rated by both Moody's and Standard and Poor's, then the lowest rating must be used to determine eligibility. Bonds that are backed by credit enhancement other than municipal bond insurance may not be considered in determining the amount of applicable bonds outstanding.

(b) A local government O/O or local government serving as a guarantor that is not a general-purpose local government and that does not have the legal authority to issue general obligation bonds may satisfy the requirements of section 280.93 by having a currently outstanding issue or issues of revenue bonds of $1,000,000.00 or more, excluding refunded issues, and having a Moody's rating of Aaa, Aa, A, or Baa or a Standard and Poor's rating of AAA, AA, A, or BBB as the lowest rating for any rated revenue bond issued by the local government. If bonds are rated by both Moody's and Standard and Poor's, then the lower rating for each bond must be used to determine eligibility. Bonds that are backed by credit enhancement may not be considered in determining the amount of applicable bonds outstanding.

(c) The local government O/O, a guarantor, or any combination or owner, operator, or guarantor shall maintain a copy of its bond rating published within the last 12 months by Moody's or Standard and Poor's.

(d) To demonstrate that it meets the local government bond rating test, the chief financial officer of a general-purpose local government O/O, a guarantor, or any combination of owner, operator, or guarantor shall sign a letter worded exactly as follows, except that the instructions in brackets are to be replaced by the relevant information and the brackets deleted:

Letter from Chief Financial Officer

I am the chief financial officer of [insert: name and address of local government owner or operator, or guarantor]. This letter is in support of the use of the bond rating test to demonstrate financial responsibility for [insert: "taking corrective action" and/or "compensating third parties for bodily injury and property damage"] caused by [insert: "sudden accidental releases" and/or "nonsudden accidental releases" or "accidental releases"] in the amount of at least [insert: dollar amount] per occurrence and [insert: dollar amount] annual aggregate arising from operating (an) underground storage tank(s).

Underground storage tanks at the following facilities are assured by this bond rating test: [List for each facility: the name and address of the facility where tanks are assured by the bond rating test].

The details of the issue date, maturity, outstanding amount, bond rating, and bond rating agency of all outstanding bond issues that are being used by [name of local government owner or operator, or guarantor] to demonstrate financial responsibility are as follows: [complete table]

Issue Maturity Outstanding Bond Bond Rating Agency

Date Date Amount Rating [Moody's or Standard and Poor's]

The total outstanding obligation of [insert amount], excluding refunded bond issues, exceeds the minimum amount of $1 million. All outstanding general obligation bonds issued by this government that have been rated by Moody's or Standard and Poor's are rated as at least investment grade (Moody's Baa or Standard and Poor's BBB) based on the most recent ratings published within the last 12 months. Neither rating service has provided notification within the last 12 months of downgrading of bond ratings below investment grade or of withdrawal of bond rating other than for repayment of outstanding bond issues.

I hereby certify that the wording of this letter is identical to the wording specified in 40 C.F.R. Part 280.104(d) as such regulations were constituted on the date shown immediately below.

[Signature]

[Name]

[Title]

[Date]

(e) To demonstrate that it meets the local government bond rating test, the chief financial officer of a local government O/O, a guarantor, or any other combination of owner, operator or guarantor, other than a general purpose government shall sign a letter worded exactly as follows, except that the instructions in brackets are to be replaced by the relevant information and the brackets deleted:

Letter from Chief Financial Officer

The details of the issue date, maturity, outstanding amount, bond rating, and bond rating agency of all outstanding revenue bond issues that are being used by [name of local government owner or operator, or guarantor] to demonstrate financial responsibility are as follows: [complete table]

Issue Maturity Outstanding Bond Bond Rating Agency

Date Date Amount Rating [Moody's or Standard and Poor's]

The total outstanding obligation of [insert amount], excluding refunded bond issues, exceeds the minimum amount of $1 million. All outstanding revenue bonds issued by this government that have been rated by Moody's or Standard and Poor's are rated as at least investment grade (Moody's Baa or Standard and Poor's BBB) based on the most recent ratings published within the last 12 months. The revenue bonds listed are not backed by third-party credit enhancement or are insured by a municipal bond insurance company. Neither rating service has provided notification within the last 12 months of downgrading of bond ratings below investment grade or of withdrawal of bond rating other than for repayment of outstanding bond issues.

I hereby certify that the wording of this letter is identical to the wording specified in 40 C.F.R. Part 280.104(e) as such regulations were constituted on the date shown immediately below.

[Signature]

[Name]

[Title]

[Date]

(f) The director of the implementing agency may require financial condition reports at any time from the local government O/O, local government guarantor, or any combination of owner, operator or guarantor. If the director finds, on the basis of financial condition reports or other information, that the local government O/O, guarantor, or any combination of owner, operator, or guarantor no longer meets the local government bond rating test requirements of section 280.104, then the local government O/O shall obtain alternative coverage within 30 days after notification of such a finding.

(g) If a local government O/O using the bond rating test to provide financial assurance finds that it no longer meets the bond rating test requirements, then the local government O/O shall obtain alternative coverage within 150 days of the change in status.

(h) If the local government O/O fails to obtain alternate assurance within 150 days of finding that it no longer meets the requirements of the bond rating test or within 30 days of notification by the director of the implanting agency that it no longer meets the requirements of the bond rating test, the O/O shall notify the director of this failure within 10 days.

Mich. Admin. Code R. 29.2166

1998-2000 AACS; 2018 MR 21, Eff. 11/14/2018