1. The ordinance or resolution authorizing the issuance of any municipal securities that bear interest at a variable rate or any securities described in subsection 3, or any trust indenture or other instrument appertaining thereto, may fix a rate or rates of interest or provide for the determination of the rate or rates from time to time by a designated agent according to the procedure specified in that ordinance or other instrument, which procedure must include the parameters within which the rate may be fixed by that agent. The rate so determined must approximate the rates then being paid for other securities which contain similar provisions and have an equivalent rating. A governing body of a municipality may contract with or select any person to make that determination. 2. A governing body of a municipality may enter into an agreement with a third party for an assurance of payment of the principal of, the interest on, or premiums, if any, due in connection with any municipal securities issued by the governing body. The obligation of the governing body to reimburse that third party for any advances made pursuant to that agreement may be provided in that agreement, recited in those securities or evidenced by another instrument as designated in the ordinance or resolution authorizing the issuance of those securities or any other instrument appertaining thereto. The governing body may assign its rights under that agreement. 3. A municipality may, in accordance with the provisions of this subsection, issue any securities it is otherwise authorized to issue as commercial paper to fund the cost of any project or to refinance any commercial paper or other securities previously issued by that municipality. The term of any commercial paper issued pursuant to this subsection must not exceed 270 days. An agent may be appointed to fix the rates of interest and maturity dates for the commercial paper. Any commercial paper issued pursuant to this subsection may be refunded by any other commercial paper or other securities as may be specified in the ordinance or resolution authorizing the issuance of the commercial paper and the program under which the commercial paper is issued, without any further action by the governing body of the municipality or any other governmental entity, subject to the limitations provided in this section and any limitations provided in that ordinance or resolution. The ordinance or resolution authorizing the issuance of the commercial paper and the program under which the commercial paper is issued: (a) Must state the maximum principal amount of commercial paper that may be outstanding at any time; and (b) Except as otherwise provided in this paragraph, may provide that any amount of the commercial paper which is issued and subsequently retired and repaid, other than through a refunding with commercial paper issued under the same program, may be reissued in an amount that does not exceed the amount previously issued, without any reauthorization of those obligations, if the proceeds of that reissued commercial paper are used only for the purposes specified in that ordinance or resolution. The authority granted pursuant to this paragraph may be exercised under a program for the issuance of commercial paper that comprises a general obligation of the municipality only if: (1) The municipality indicates an intention to exercise that authority in the proposal to incur that general obligation debt which it submits to the debt management commission; (2) The maximum principal amount of commercial paper which is authorized to be outstanding is counted against any applicable debt limit of the municipality; and (3) The program terminates: (I) Within 6 years, if the commercial paper comprises a general obligation of the municipality; or (II) Within 10 years, if the commercial paper comprises a special obligation of the municipality.
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