HB-6025, As Passed House, December 14, 2012HB-6025, As Passed Senate, December 14, 2012
SENATE SUBSTITUTE FOR
HOUSE BILL NO. 6025
A bill to create a metropolitan authority; to prescribe the
powers, duties, and jurisdictions of the metropolitan authority; to
prescribe the powers and duties of certain state officials; and to
levy, collect, and distribute a tax.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act shall be known and may be cited as the
"Michigan metropolitan areas metropolitan authority act".
Sec. 3. (1) The legislature finds and declares all of the
following:
(a) That there exists in this state a continuing need to
strengthen and revitalize the economy of this state and to organize
the activities of local government in metropolitan areas in a
manner that reduces governmental barriers to economic growth,
facilitates economic development, preserves communities and
strengthens neighborhoods, prevents or reduces unemployment, and
creates new employment opportunities.
(b) That under section 27 of article VII of the state
constitution of 1963, the legislature may establish in metropolitan
areas additional forms of government or authorities with power,
duties, and jurisdictions as the legislature shall provide.
(c) That it is necessary and appropriate for the promotion of
the health, safety, and welfare of the people of this state to
enable the formation of metropolitan governments designed to
perform multipurpose functions.
(d) That the formation of a metropolitan government under this
act and the powers conferred by this act constitute a necessary
program and serve a necessary public purpose.
(2) The purpose of this act is to do all of the following:
(a) Establish an authority to perform multipurpose functions
in the metropolitan areas of this state.
(b) Promote the public health, safety, welfare, convenience,
and prosperity of this state and its metropolitan areas.
Sec. 5. As used in this act:
(a) "Authority" means the metropolitan areas metropolitan
authority established under section 7.
(b) "Commercial personal property" means personal property
classified as commercial property under section 34c of the general
property tax act, 1893 PA 206, MCL 211.34c.
(c) "Commercial real property" means real property classified
as commercial real property under section 34c of the general
House Bill No. 6025 (S-1) as amended December 13, 2012
property tax act, 1893 PA 206, MCL 211.34c.
(d) "Council" means the metropolitan areas council established
under section 9.
(e) "Debt loss" means, for a municipality that is not a local
school district or intermediate school district, the amount of ad
valorem property taxes [and tax increment revenues] required to pay the
principal and interest
of obligations incurred before 2013 pledging [the tax increment revenues
or] the unlimited or
limited taxing power of the municipality, that are lost from the
exemptions provided by sections 9m, 9n, and 9o of the general
property tax act, 1893 PA 206, MCL 211.9m, 211.9n, and 211.9o.
(f) "Department" means the department of treasury.
(g) "Fiscal year" means either an annual period that begins on
October 1 and ends on September 30 or the fiscal year for the
authority established by the council.
(h) "Industrial personal property" means personal property
classified as industrial personal property under section 34c of the
general property tax act, 1893 PA 206, MCL 211.34c.
(i) "Industrial real property" means real property classified
as industrial real property under section 34c of the general
property tax act, 1893 PA 206, MCL 211.34c.
(j) "Metropolitan areas component tax" means that portion of
the use tax levied by the authority under the use tax act, 1937 PA
94, MCL 205.91 to 205.111.
(k) "Municipality" includes, but is not limited to, the
following:
(i) Counties.
(ii) Cities.
House Bill No. 6025 as amended December 12, 2012
as amended December 13, 2012
(iii) Villages.
(iv) Townships.
(v) Authorities, excluding an authority created under this
act.
(vi) Local school districts.
(vii) Intermediate school districts.
(viii) Community college districts.
(ix) Libraries.
(x) Other local and intergovernmental taxing units.
(l) "Qualified loss" means the amounts calculated under
sections 14, 15, and 16 <<that are not distributed to the municipality
under section 17(3)(a)>>.
(m) "Qualified municipality" means [a municipality that is a
community college district or] a municipality that
experienced a reduction in taxable value of more than [2.3%] as a
result of the exemption of industrial personal property and
commercial personal property under sections 9m, 9n, and 9o of the
general property tax act, 1893 PA 206, MCL 211.9m, 211.9n, and
211.9o. A municipality's reduction in taxable value shall be
calculated in the following manner:
(i) Calculate the total taxable value of all industrial
personal property and commercial personal property in the
municipality in 2013.
(ii) From the amount determined in subparagraph (i), subtract
the total taxable value of all industrial personal property and
commercial personal property in the municipality in the current
year.
(iii) From the amount determined in subparagraph (ii), add the
total taxable value of all property in the municipality in the
current year.
(iv) Divide the result of subparagraph (ii) by the result of
subparagraph (iii).
(n) "School debt loss" means the amount of revenue lost from
ad valorem property taxes specifically levied for the payment of
principal and interest of obligations approved by the electors
before January 1, 2013 or obligations pledging the unlimited taxing
power of a local school district or intermediate school district
incurred before January 1, 2013, as a result of the exemption of
industrial personal property and commercial personal property under
sections 9m, 9n, and 9o of the general property tax act, 1893 PA
206, MCL 211.9m, 211.9n and 211.9o.
(o) "School operating loss not reimbursed by the school aid
fund" means the amount of revenue lost from ad valorem property
taxes levied under section 1211 of the revised school code, 1976 PA
451, MCL 380.1211, as a result of the exemption of industrial
personal property and commercial personal property under sections
9m, 9n, and 9o of the general property tax act, 1893 PA 206, MCL
211.9m, 211.9n, and 211.9o, for mills other than basic school
operating mills, as that term is defined in section 2c of the use
tax act, 1937 PA 94, MCL 205.92c.
(p) "Taxable value" means that value determined under section
27a of the general property tax act, 1893 PA 206, MCL 211.27a.
(q) "Total qualified loss" means the total amount of qualified
losses of all municipalities, as determined by the department.
(r) "Total restricted qualified loss" means the total amount
of qualified losses for all qualified municipalities, as determined
by the department.
Sec. 7. (1) The metropolitan areas metropolitan authority is
established as a metropolitan government under section 27 of
article VII of the state constitution of 1963. The authority is a
public body corporate and a special authority. The authority is not
an agency or instrumentality of state government.
(2) The property of the authority is public property devoted
to an essential public and governmental purpose. Any income of the
authority is for a public and governmental purpose.
(3) Property of the authority and its income, activities, and
operations are exempt from all taxes and special assessments of
this state or a political subdivision of this state. Property of
the authority is exempt from any ad valorem property taxes levied
under the general property tax act, 1893 PA 206, MCL 211.1 to
211.155, or other law of this state authorizing the taxation of
real or personal property. The authority is an entity of government
for purposes of section 4a(1)(a) of the general sales tax act, 1933
PA 167, MCL 205.54a, and section 4(1)(h) of the use tax act, 1937
PA 94, MCL 205.94.
(4) The validity of the creation of the authority is presumed
unless held invalid by the court of appeals in an original action
filed in the court of appeals not later than 60 days after the
creation of the authority under this section. The court of appeals
has original jurisdiction to hear an action under this subsection.
The court shall hear the action in an expedited manner.
Sec. 9. (1) The metropolitan areas council is established as
the governing body of the authority. The powers, duties, functions,
and responsibilities of the authority are vested in the council.
The council shall consist of 5 residents of this state appointed by
the governor. Not less than 3 members of the council shall be
residents of separate metropolitan areas within this state. An
officer or employee of this state may not serve as a member of the
council.
(2) Of the members of the council initially appointed by the
governor, 1 member shall be appointed for an initial term of 5
years, 1 member shall be appointed for an initial term of 4 years,
1 member shall be appointed for an initial term of 3 years, 1
member shall be appointed for an initial term of 2 years, and 1
member shall be appointed for an initial term of 1 year. After the
initial appointments, a member of the council shall be appointed
for a term of 6 years. If a vacancy on the council occurs other
than by expiration of a term, the vacancy shall be filled in the
same manner as the original appointment for the balance of the
unexpired term. A member of the council may continue to serve until
a successor is appointed and qualified. The governor shall
designate a member of the council to serve as its chairperson at
the pleasure of the governor.
(3) An individual appointed as a member of the council shall
take the oath of office as provided under section 1 of article XI
of the state constitution of 1963.
(4) A member of the council shall serve without compensation
but may be reimbursed by the authority for necessary travel and
expenses to the extent not prohibited by law and consistent with a
reimbursement policy adopted by the council.
(5) A member of the council shall discharge the duties of his
or her position in a nonpartisan manner, in good faith, and with
the degree of diligence, care, and skill that an ordinarily prudent
person would exercise under similar circumstances in a like
position. In discharging his or her duties, a member of the
council, when acting in good faith, may rely upon any of the
following:
(a) The opinion of legal counsel for the authority.
(b) The report of an independent appraiser selected by the
council.
(c) Financial statements of the authority represented to the
member of the council to be correct by the officer of the authority
having charge of its books of account or stated in a written report
by an auditor or a certified public accountant, or a firm of
certified accountants, to reflect the financial condition of the
authority.
(6) Within not more than 30 days following appointment of the
initial members of the council, the council shall hold its first
meeting at a date and time determined by the chairperson of the
council. The council shall elect from among the members of the
council an individual to serve as vice-chairperson of the council
and secretary of the council and may elect other officers as the
council considers necessary. All officers under this subsection
shall be elected annually by the council.
(7) The council shall conduct its business at a public meeting
held in compliance with the open meetings act, 1976 PA 267, MCL
15.261 to 15.275. Public notice of the time, date, and place of the
meeting shall be given in the manner required by the open meetings
act, 1976 PA 267, MCL 15.261 to 15.275. The council shall adopt
bylaws consistent with the open meetings act, 1976 PA 267, MCL
15.261 to 15.275, governing its procedures and the holding of
meetings. After organization, the council shall adopt a schedule of
regular meetings and adopt a regular meeting date, place, and time.
A special meeting of the council may be called by the chairperson
of the council or as provided in bylaws adopted by the council.
Notice of a special meeting shall be given in the manner required
by the open meetings act, 1976 PA 267, MCL 15.261 to 15.275.
(8) The council shall keep a written or printed record of each
meeting, which record and any other document or record prepared,
owned, used, in the possession of, or retained by the authority in
the performance of an official function shall be made available to
the public in compliance with the freedom of information act, 1976
PA 442, MCL 15.231 to 15.246.
(9) The council shall provide for a system of accounts for the
authority to conform to a uniform system required by law and for
the auditing of the accounts of the authority. The council shall
obtain an annual audit of the authority by an independent certified
public accountant and report on the audit and auditing procedures
in the manner provided by sections 6 to 13 of the uniform budgeting
and accounting act, 1968 PA 2, MCL 141.426 to 141.433. The audit
also shall be in accordance with generally accepted government
auditing standards.
(10) Before the beginning of each fiscal year, the council
shall prepare a budget for the authority containing an itemized
statement of the estimated expenses and revenue of the authority
from all sources for the next fiscal year. Before final adoption of
the budget, the council shall hold a public hearing as required by
1963 (2nd Ex Sess) PA 43, MCL 141.411 to 141.415, and the open
meetings act, 1976 PA 267, MCL 15.261 to 15.275. The council shall
adopt a budget for the fiscal year in compliance with the uniform
budgeting and accounting act, 1968 PA 2, MCL 141.421 to 141.440a.
(11) The council shall adopt a procurement policy consistent
with the requirements of state law relating to procurement. The
procurement policy shall address all of the following:
(a) The purchase of, the contracting for, and the providing of
supplies, materials, services, insurance, utilities, third-party
financing, equipment, printing, and all other items as needed by
the authority to efficiently and effectively meet the needs of the
authority using competitive procurement methods to secure the best
value for the authority.
(b) That the council shall make all discretionary decisions
concerning the solicitation, award, amendment, cancellation, and
appeal of authority contracts.
(c) Control, supervision, management, and oversight of each
contract to which the authority is a party.
(d) Monitoring of contracts to assure the contract is being
performed in compliance with the terms of the contract and
applicable law.
(12) Members of the council are public servants subject to
1968 PA 317, MCL 15.321 to 15.330, and are subject to any other
applicable law with respect to conflicts of interest. The council
shall establish policies and procedures requiring periodic
disclosure of relationships which may give rise to conflicts of
interest. The council shall require that a member of the council
with a direct interest in any matter before the authority disclose
the member's interest before the council takes any action with
respect to the matter. The council shall establish an ethics manual
for the authority governing authority business and the conduct of
authority officers and employees. The authority shall establish
policies that are no less stringent than those provided for public
officers and employees by 1973 PA 196, MCL 15.341 to 15.348, and
coordinate efforts for the authority to preclude the opportunity
for and the occurrence of transactions by the authority that would
create a conflict of interest involving officers or employees of
the authority. At a minimum, the policies shall include compliance
by each officer or employee who regularly exercises significant
discretion over the award and management of authority procurements
with policies governing all of the following:
(a) Immediate disclosure of the existence and nature of any
financial interest that could reasonably be expected to create a
conflict of interest.
(b) Withdrawal by an officer or employee from participation in
or discussion or evaluation of any recommendation or decision
involving an authority procurement that would reasonably be
expected to create a conflict of interest for that officer or
employee.
(13) The governor may remove a member of the council from
office for gross neglect of duty, corrupt conduct in office, or any
other misfeasance or malfeasance in office.
Sec. 11. (1) The authority may exercise all of the following
powers, duties, functions, and responsibilities:
(a) Levy and distribute the metropolitan areas component tax
as provided under the use tax act, 1937 PA 94, MCL 205.91 to
205.111.
(b) Exercise the powers, duties, functions, and
responsibilities vested in the authority or the metropolitan
extension telecommunications rights-of-way oversight authority
under this act or the metropolitan extension telecommunications
rights-of-way oversight act, 2002 PA 48, MCL 484.3101 to 484.3120,
and other laws of this state.
(2) When exercising the powers, duties, functions, and
responsibilities vested in the authority under subsection (1), the
authority may do 1 or more of the following:
(a) Establish and maintain an office.
(b) Adopt, amend, and repeal bylaws for the regulation of its
affairs and the conduct of its business.
(c) Sue and be sued in its own name and plead and be
impleaded.
(d) Solicit, receive, and accept gifts or grants from any
public or private source.
(e) Employ personnel, contract for goods and services, and
enter into agreements with other governmental entities.
(f) Establish 1 or more depositories for authority money and
invest authority money under an investment policy consistent with
this act and 1943 PA 20, MCL 129.91 to 129.97a.
(g) Acquire, hold, and dispose of interests in property.
(h) Incur indebtedness, but only in the manner and to the
extent authorized by law.
(3) The powers, duties, functions, and responsibilities of the
authority may be exercised throughout this state, including all the
metropolitan areas of this state. The authority possesses the
jurisdiction to exercise its functions on a statewide basis and may
do other things and take other action necessary or convenient to
the exercise of the powers, duties, functions, and responsibilities
of the authority under this section if they relate to the purposes
and jurisdiction of the authority.
Sec. 13. (1) The authority has the exclusive power to levy the
metropolitan areas component tax under the use tax act, 1937 PA 94,
MCL 205.91 to 205.111.
(2) The department shall administer under the use tax act,
1937 PA 94, MCL 205.91 to 205.111, the receipt and collection of
the metropolitan areas component tax on behalf of the authority as
an agent of the authority. The authority may enter into an
agreement with the department relating to the receipt and
collection of the metropolitan areas component tax and the payment
of the authority revenue generated by the metropolitan areas
component tax to the authority.
(3) Money generated by the metropolitan area component tax is
money of the authority, not state funds, and shall not be deposited
in the state treasury as state funds.
Sec. 14. Not later than June 15, 2016, and each June 15
thereafter, each municipality that is not a local school district
or intermediate school district shall do all of the following:
(a) Calculate the total taxable value of all industrial
personal property and commercial personal property in the
municipality in 2013.
(b) From the amount determined in subdivision (a), subtract
the total taxable value of all industrial personal property and
commercial personal property in the municipality in the current
year.
(c) Multiply the result of the calculation in subdivision (b)
by the sum of the lowest rate of each individual millage levied by
that municipality in the period between 2012 and the year
immediately preceding the current year.
(d) Subtract from the result of the calculation in subdivision
(c) the amount of revenue the municipality is authorized to levy
for that year under section 4(1) of the local unit of government
essential services special assessment act, as adjusted by the
limitation provided in section 4(2) of the local unit of government
essential services special assessment act.
(e) Submit to the department the amount calculated under this
section.
Sec. 15. Not later than June 15, 2016, and each June 15
thereafter, each municipality that is a local school district shall
do all of the following:
(a) Calculate the total taxable value of all industrial
personal property and commercial personal property in the
municipality in 2013.
(b) From the amount determined in subdivision (a), subtract
the total taxable value of all industrial personal property and
commercial personal property in the municipality in the current
year.
(c) Multiply the result of the calculation in subdivision (b)
by the sum of the lowest rate of each individual millage levied
under section 1212 of the revised school code, 1976 PA 451, MCL
380.1212, and section 2 of 1917 PA 156, MCL 123.52, levied by that
municipality in the period between 2012 and the year immediately
preceding the current year.
(d) Submit to the department the amount calculated under
subdivision (c) and that municipality's school debt loss.
Sec. 16. Not later than June 15, 2016, and each June 15
thereafter, each municipality that is an intermediate school
district shall do all of the following:
(a) Calculate the total taxable value of all industrial
personal property and commercial personal property in the
municipality in 2013.
(b) From the amount determined in subdivision (a), subtract
the total taxable value of all industrial personal property and
commercial personal property in the municipality in the current
year.
(c) Multiply the result of the calculation in subdivision (b)
by the sum of the lowest rate of each individual millage levied by
the municipality, excluding debt millage, in the period between
2012 and the year immediately preceding the current year.
(d) Submit to the department the amount calculated under
subdivision (c) and that municipality's school debt loss.
House Bill No. 6025 as amended December 12, 2012
Sec. 17. (1) The legislature shall appropriate funds for all
of the following purposes:
(a) For fiscal year 2013-2014 and fiscal year 2014-2015, an
amount equal to all debt loss for municipalities that are not a
local school district or intermediate school district, and an
amount equal to all school debt loss for municipalities that are a
local school district or intermediate school district.
(b) Beginning in fiscal year 2013-2014 and each fiscal year
thereafter, an amount equal to the necessary expenses incurred by
the authority and the department in implementing this act.
(2) In fiscal year 2013-2014 and fiscal year 2014-2015, the
authority shall distribute to municipalities those funds
appropriated under subsection (1)(a).
(3) Beginning in fiscal year 2015-2016, the authority shall
distribute metropolitan areas component tax funds as follows in the
following order of priority:
(a) The authority shall distribute to each municipality an
amount equal to 100% of that municipality's school debt loss<<, 100%
of that municipality's amount calculated under section 16(c),>> and
100% of that municipality's school operating loss not reimbursed by
the school aid fund.
(b) Beginning in fiscal year 2017-2018, 5% of the amount
remaining after the distribution under subdivision (a) shall be
distributed to each municipality as follows:
(i) Calculate the total taxable value of all industrial real
property in the municipality on which is located personal property
exempt under sections 9m and 9n of the general property tax act,
1893 PA 206, MCL 211.9m and 211.9n.
House Bill No. 6025 (S-1) as amended December 13, 2012
(ii) Multiply the result of the calculation in subparagraph (i)
by the sum of the lowest rate of each individual millage levied by
the municipality in the period between 2012 and the year
immediately preceding the current year [that is not used to calculate a
distribution under subdivision (a) and that is not used to calculate the distribution under section 21(3) of the use tax act, 1937 PA 94, MCL 205.111].
(iii) Divide the result of the calculation in subparagraph (ii)
by the sum of the calculation under subparagraph (ii) for all
municipalities.
(iv) Multiply the result of the calculation in subparagraph (iii)
by the amount to be distributed under this subdivision.
(v) For fiscal year 2018-2019, and each fiscal year
thereafter, the percentage amount described in this subdivision
shall be increased an additional 5% each year, not to exceed 100%.
(c) After the distributions in subdivisions (a) and (b), the
authority shall distribute the remaining balance of that fiscal
year's metropolitan areas component tax fund to each qualified
municipality in an amount determined by multiplying the remaining
balance by a fraction, the numerator of which is that qualified
municipality's qualified loss and the denominator of which is the
total restricted qualified loss.
Sec. 18. (1) Beginning in fiscal year 2015-2016, and each
fiscal year thereafter, the department shall determine the amount
of the distributions under this act.
(2) Each municipality shall submit to the department
sufficient information for the department to make its calculations
under this act, as determined by the department.
Sec. 19. From the amount received under section 17, a
municipality shall first replace debt loss or school debt loss, as
House Bill No. 6025 (S-1) as amended December 13, 2012
applicable. A municipality shall not receive a distribution under
this act if it has increased its millage rate to replace a debt
loss or school debt loss, as applicable.
Sec. 20. This act shall be construed to effectuate the
legislative intent and the purposes of this act as complete and
independent authorization for the performance of each and every act
and thing authorized in the act, and all powers granted in this act
shall be broadly interpreted to effectuate the intent and purposes
of this act and not as to limitation of powers.
[Enacting section 1. This act does not take effect unless House
Bill No. 6026 of the 96th Legislature is approved by a majority of the qualified electors of this state voting on the question at an election to be held on the August regular election date in 2014.
Enacting section 2. If House Bill No. 6026 of the 96th Legislature is not approved by the majority of the qualified electors of this state voting on the question at an election to be held on the August regular election in 2014, for fiscal year 2013-2014 and fiscal year 2014-2015, the legislature shall appropriate an amount sufficient to make the appropriations described in section 17(1)(a).]