(1) Upon receipt of a petition signed by not less than 10% of the electors in any township based on the highest vote cast at the last regular election for township officers of the township, addressed to the township board, requesting that a meeting be called of the electors in the township, to consider making a contract with any township, city, or village supporting and maintaining a free public circulating library and reading room under this act, or under any special act, for the use of its privileges by the residents of the township, the township board shall call a meeting of the electors of the township by posting a notice in at least 5 public places within the township not less than 10 days before the meeting. The electors present at the meeting shall determine whether the township shall enter into a contract for the use of a free public circulating library and reading room in any township, city, or village and the rate of taxation to be levied for the purpose of paying for that use if the electors decide to enter into such a contract. However, a tax so levied shall not exceed 1 mill of the state equalized valuation of the township. If a majority of those present and voting are in favor of the township contracting for the use of a free public circulating library and reading room maintained in any township, city, or village, the township board may enter into a contract and shall levy and collect the tax provided for in this subsection, which shall be placed in a fund to be known as the “library fund”. The money in the library fund shall be paid over by the township treasurer to the treasurer of the township, city, or village in which the library is located on the first day of January, February, and March of each year, to be disbursed under section 5. This subsection is not a limitation on the contractual power of a legislative body of a city, village, or township under section 13.

    (2) Notwithstanding any contrary provision in a township, city, or village charter, the governing board of a library of a township, city, or village supporting and maintaining a free public circulating library and reading room under this act, or under any special act, may enter into a contract with another township, city, or village to provide the residents of that other township, city, or village with the full use of the library and reading room, upon terms and conditions agreed upon between the governing board of the library and the legislative body of the other township, city, or village. A contract entered into under this subsection shall be executed for a term of 3 years, shall be automatically extended for an indefinite term after the initial 3-year period, and shall be terminable by either party only upon 6 months’ notice of the intent to terminate the contract.