Legislative findings; purpose.

(1) The ability of governmental units to issue bonds is essential to their ability to finance public improvements and other projects and programs that serve important public purposes and benefit the social and economic well-being of the people of the state.

(2) The exemption of interest on such bonds from federal income taxation has been a major feature of bonds issued by governmental units, by reducing interest costs to governmental units and enhancing the marketability of the bonds.

(3) The Internal Revenue Code of 1986, as amended, substantially curtails the purposes for, and conditions under which, bonds may be issued with interest exempt from federal income taxation, with the result that in order to provide financing for those purposes or under those conditions governmental units must in some instances, and in other instances may find it in their best interest to, issue bonds which bear interest not exempt from federal income taxation.

(4) Under the constitution and laws of the state, governmental units have the power to issue bonds that bear interest subject to federal income taxation, but currently lack procedures and other guidelines by which they may structure such financings for the applicable market or otherwise achieve the lowest effective borrowing cost or terms most suitable to the governmental unit, the project, or the financing program.

(5) The purpose to be achieved by taxable bonds in compliance with the provisions of this act are predominantly designed to serve the public purposes stated in this section, to supplement and complement the purposes established in other statutes authorizing the issuance to bonds, and such purposes under the State Constitution of providing for the health, safety, and welfare of the people.