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).]