Bulletin 2 for the Revised Municipal Finance Act
EFFECTIVE DATE: March 25, 2003
SUBJECT: Bulletin 2; Act 34 of 2001
Governing Effective Date of
Qualifying Status Determination
Section 303(2) of Public Act 34 of 2001, the Revised Municipal Finance Act, requires each municipality to file an annual qualifying statement with the Department of Treasury within six months of the end of its fiscal year, or as otherwise provided by law. The Department is required to determine, within 30 business days of receiving a qualifying statement, whether the municipality should be granted or denied qualified status. If the Department grants qualified status, or fails to notify the municipality of its determination within 30 business days, the municipality then is authorized to issue municipal securities under the Act without further approval from the Department until 30 business days after the next qualifying statement is due, or until a new determination is made by the Department, whichever first occurs.
The Department is advised that the legal status of a municipal security might be placed in doubt in a circumstance in which all of the following conditions simultaneously occur:
A municipality that has been granted qualified status for the current period submits to the Department its qualifying statement for the ensuing period more than 30 business days prior to the expiration of the current period.
- The Department determines that the municipality will be denied qualified status for the ensuing period.
- The municipality is in the process of, but has not yet concluded, issuing one or more municipal securities at the time the nonqualified status determination is rendered by the Department.
It shall be the policy of the Department in respect to any municipality in which all of the conditions listed in the preceding paragraph simultaneously occur to issue a nonqualified status determination for the ensuing period with an effective date of the day after expiration of the existing qualified status. A municipality which submits its qualifying statement for the ensuing period more than 30 business days prior to the expiration of the current period shall simultaneously notify the Department in writing if the municipality is in the process of, but has not yet concluded, issuing one or more municipal securities.
Notwithstanding item 3 above, the Department maintains its authority to issue a nonqualified status determination, with an immediate effective date, if the Department concludes that the municipality submitted a qualifying statement or an application for any other municipal security in the preceding 12 months that was materially false or materially incorrect.
This bulletin is issued pursuant to Section 201(b) of the Revised Municipal Finance Act which authorizes the Department to issue bulletins or adopt rules to carry out the purposes of the Act.