(1) To provide for reimbursement to local units of government for taxes lost due to establishment of Sleeping Bear dunes national lakeshore, the department of treasury shall make payments in lieu of taxes for a period not to exceed 10 years from the date of purchase by the federal government, in accordance with the formula in this subsection. On the tax day first following transfer, the state treasurer shall determine the equalized valuation that existed prior to January 1, 1974 for each taxing jurisdiction from which the property was transferred and the rate of ad valorem taxation existing at the time of transfer. Subject to subsection (2), the state treasurer shall thereupon make payments to each taxing unit in an amount such that revenues received by the taxing unit from local taxes are equal to the amounts that would have been received had the existing tax rate been still in effect and had the equalized valuation been the same prior to transfer. On each succeeding tax day for 10 years thereafter the treasurer shall make further payments to each taxing unit but reduced by 1/10 per year from the amount originally paid.

    (2) If the amount appropriated for payment to all local units of government is less than the amount required for payment to all local units of government under subsection (1), the amount appropriated for payment to each local unit of government shall be distributed in the same proportion that the required payment to that local unit of government is to the total of all required payments.

    (3) The formula under subsection (1) shall apply to state-owned lands transferred under this act for which payments in lieu of taxes were previously made under former 1925 PA 91, or subpart 14 of part 21 of the natural resources and environmental protection act, 1994 PA 451, MCL 324.2152 to 324.2154.

    (4) On state-owned lands transferred under this act for which payments were previously made pursuant to former 1917 PA 116, or subpart 13 of part 21 of the natural resources and environmental protection act, 1994 PA 451, MCL 324.2150 to 324.2151, the annual payment shall continue for a period of 10 years at the rate existing at the time of transfer.

    (5) The treasurer or other officer charged with the collection of taxes for the assessing district shall forward a statement of payments due to the Lansing office of the state treasurer, which shall review the statement, and if the amount is determined pursuant to this act, pay the same from the state general fund.