Governor Granholm Issues Executive Order Consolidating Public Finance Authorities into New Michigan Finance Authority

March 4, 2010

Consolidation part of governor's 29 government reforms outlined in January

LANSING - Governor Jennifer M. Granholm today issued Executive Order 2010-2 to further improve efficiency in state government by consolidating 10 public finance authorities into one Michigan Finance Authority.  The new finance authority will be an autonomous entity within the Department of Treasury and is one of the 29 government reforms outlined by the governor in January to transform Michigan government.

"Today's executive order is the latest in a series of actions to make Michigan government more efficient, responsive and cost effective," Granholm said.  "By consolidating several public finance authorities into one, we will be more nimble and improve coordination and efficiency."

Under the Granholm administration, the size of state government has shrunk.  The number of state departments has been reduced from 20 to 15, and nearly 300 obsolete state boards and commissions have been eliminated.  Ten more boards - the ones governing the public finance authorities being consolidated - are abolished by this executive order.

The Michigan Finance Authority will be comprised of the state treasurer along with six additional members to be appointed by the governor with the advice and consent of the Michigan Senate.  Each of the six members will have experience in a particular area, such as housing and community development or public finance-related issues.  The state treasurer will chair the authority.

The 10 public finance authorities whose functions will be consolidated into the Michigan Finance Authority are:

• Michigan Forest Finance Authority (bond and note issuance functions to be transferred; other functions and state forester to remain with the Department of Natural Resources and Energy);
• Michigan Higher Education Facilities Authority;
• Michigan Higher Education Assistance Authority (grant and scholarship programs transferred to the Department of Treasury);
• Michigan Higher Education Student Loan Authority;
• Michigan Municipal Bond Authority;
• Michigan Public Educational Facilities Authority;
• Michigan Tobacco Settlement Finance Authority;
• Michigan Underground Storage Tank Financial Assurance Authority;
• State Higher Education Facilities Commission; and
• State Hospital Finance Authority.

Also transferred to the Michigan Finance Authority is the authority of the Michigan Strategic Fund to finance the facilities of public and private schools and the authority of the State Land Bank Fast Track Authority to issue bonds and notes.

Executive Order 2010-2 also transfers the Michigan State Housing Development Authority and the State Land Bank Fast Track Authority from the Department of Energy, Labor and Economic Growth to the Department of Treasury.

The executive order does not impair the obligation of any bond or note already issued by any of the transferred entities.  Bonds and notes issued prior to the executive order's effective date will continue to be obligations of the transferred entities and not obligations of the state.

Pending legislative review, Executive Order 2010-2 will take effect May 30, 2010.

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