HOUSE BILL No. 5121
September 30, 1997, Introduced by Reps. Alley, Middaugh and Profit and referred to the Committee on Tax Policy. A bill to amend 1986 PA 281, entitled "The local development financing act," by amending sections 2 and 11a (MCL 125.2152 and 125.2161a), sec- tion 2 as amended by 1996 PA 270 and section 11a as amended by 1996 PA 452. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 2. As used in this act: 2 (a) "Advance" means a transfer of funds made by a municipal- 3 ity to an authority or to another person on behalf of the author- 4 ity in anticipation of repayment by the authority. Evidence of 5 the intent to repay an advance may include, but is not limited 6 to, an executed agreement to repay, provisions contained in a tax 7 increment financing plan approved prior to the advance, or a 8 resolution of the authority or the municipality. 04044'97 * JLB 2 1 (b) "Assessed value" means 1 of the following: 2 (i) For valuations made before January 1, 1995, the state 3 equalized valuation as determined under the general property tax 4 act, Act No. 206 of the Public Acts of 1893, being 5 sections 211.1 to 211.157 of the Michigan Compiled Laws 1893 PA 6 206, MCL 211.1 TO 211.157. 7 (ii) For valuations made after December 31, 1994, the tax- 8 able value as determined under section 27a of Act No. 206 of the 9 Public Acts of 1893, being section 211.27a of the Michigan 10 Compiled Laws THE GENERAL PROPERTY TAX ACT, 1893 PA 206, MCL 11 211.27A. 12 (c) "Authority" means a local development finance authority 13 created pursuant to this act. 14 (d) "Authority district" means an area or areas within which 15 an authority exercises its powers. 16 (e) "Board" means the governing body of an authority. 17 (f) "Captured assessed value" means the amount in any 1 year 18 by which the current assessed value, as equalized, of the eligi- 19 ble property identified in the tax increment financing plan, 20 including the current assessed value of property for which spe- 21 cific local taxes are paid in lieu of property taxes as deter- 22 mined pursuant to subdivision (w), exceeds the initial assessed 23 value. The state tax commission shall prescribe the method for 24 calculating captured assessed value. 25 (g) "Certified industrial park" means an area of land desig- 26 nated by the department of commerce CONSUMER AND INDUSTRY 27 SERVICES as meeting all of the following requirements: 04044'97 * 3 1 (i) It contains not less than 40 acres of land. 2 (ii) It is zoned exclusively for use for eligible property. 3 (iii) It has a site plan or plat approved by the city, vil- 4 lage, or township in which the land is located. 5 (iv) The developer of the land agrees to comply with other 6 requirements, not inconsistent with subparagraphs (i) to (iii), 7 imposed upon property classified as a certified industrial park 8 by the department of commerce CONSUMER AND INDUSTRY SERVICES 9 under the certified industrial park program. Compliance with 10 these other requirements is not a prerequisite to meeting the 11 requirement of this subparagraph. 12 (h) "Chief executive officer" means the mayor or city man- 13 ager of a city, the president of a village, or, for other local 14 units of government or school districts, the person charged by 15 law with the supervision of the functions of the local unit of 16 government or school district. 17 (i) "Development plan" means that information and those 18 requirements for a development set forth in section 15. 19 (j) "Development program" means the implementation of a 20 development plan. 21 (k) "Eligible advance" means an advance made before 22 August 19, 1993. 23 (l) "Eligible obligation" means an obligation issued or 24 incurred by an authority or by a municipality on behalf of an 25 authority before August 19, 1993 and its subsequent refunding by 26 a qualified refunding obligation. 04044'97 * 4 1 (m) "Eligible property" means land improvements, buildings, 2 structures, and other real property, and machinery, equipment, 3 furniture, and fixtures, or any part or accessory thereof whether 4 completed or in the process of construction comprising an inte- 5 grated whole, located within an authority district, of which the 6 primary purpose and use is 1 of the following: 7 (i) The manufacture of goods or materials or the processing 8 of goods or materials by physical or chemical change. 9 (ii) Agricultural processing. 10 (iii) A high technology activity that has as its primary 11 purpose research, product development, engineering, laboratory 12 testing, or development of industrial technology. This subpara- 13 graph applies only to eligible property for which a tax increment 14 financing plan or development plan is adopted and bonds are 15 issued under this act before January 1, 1993. 16 (iv) The production of energy by the processing of goods or 17 materials by physical or chemical change by a small power produc- 18 tion facility as defined by the federal energy regulatory commis- 19 sion pursuant to the public utility regulatory policies act of 20 1978, Public Law 95-617, 92 Stat. 3117, which facility is fueled 21 primarily by biomass or wood waste. This act does not affect a 22 person's rights or liabilities under law with respect to ground- 23 water contamination described in this subparagraph. This sub- 24 paragraph applies only if all of the following requirements are 25 met: 26 (A) Tax increment revenues captured from the eligible 27 property will be used to finance, or will be pledged for debt 04044'97 * 5 1 service on tax increment bonds used to finance, a public facility 2 in or near the authority district designed to reduce, eliminate, 3 or prevent the spread of identified soil and groundwater contami- 4 nation, pursuant to law. 5 (B) The board of the authority exercising powers within the 6 authority district where the eligible property is located adopted 7 an initial tax increment financing plan between January 1, 1991 8 and May 1, 1991. 9 (C) The municipality that created the authority establishes 10 a special assessment district whereby not less than 50% of the 11 operating expenses of the public facility described in this sub- 12 paragraph will be paid for by special assessments. Not less than 13 50% of the amount specially assessed against all parcels in the 14 special assessment district shall be assessed against parcels 15 owned by parties potentially responsible for the identified 16 groundwater contamination pursuant to law. 17 (n) "Fiscal year" means the fiscal year of the authority. 18 (o) "Governing body" means the elected body having legisla- 19 tive powers of a municipality creating an authority under this 20 act. 21 (p) "Initial assessed value" means the assessed value, as 22 equalized, of the eligible property identified in the tax incre- 23 ment financing plan at the time the resolution establishing the 24 tax increment financing plan is approved as shown by the most 25 recent assessment roll for which equalization has been completed 26 at the time the resolution is adopted. Property exempt from 27 taxation at the time of the determination of the initial assessed 04044'97 * 6 1 value shall be included as zero. Property for which a specific 2 local tax is paid in lieu of property tax shall not be considered 3 exempt from taxation. The initial assessed value of property for 4 which a specific local tax was paid in lieu of property tax shall 5 be determined as provided in subdivision (w). 6 (q) "Municipality" means a city, village, or urban 7 township. 8 (r) "Obligation" means a written promise to pay, whether 9 evidenced by a contract, agreement, lease, sublease, bond, or 10 note, or a requirement to pay imposed by law. An obligation does 11 not include a payment required solely because of default upon an 12 obligation, employee salaries, or consideration paid for the use 13 of municipal offices. An obligation does not include those bonds 14 that have been economically defeased by refunding bonds issued 15 under this act. Obligation includes, but is not limited to, the 16 following: 17 (i) A requirement to pay proceeds derived from ad valorem 18 property taxes or taxes levied in lieu of ad valorem property 19 taxes. 20 (ii) A management contract or a contract for professional 21 services. 22 (iii) A payment required on a contract, agreement, bond, or 23 note if the requirement to make or assume the payment arose 24 before August 19, 1993. 25 (iv) A requirement to pay or reimburse a person for the cost 26 of insurance for, or to maintain, property subject to a lease, 27 land contract, purchase agreement, or other agreement. 04044'97 * 7 1 (v) A letter of credit, paying agent, transfer agent, bond 2 registrar, or trustee fee associated with a contract, agreement, 3 bond, or note. 4 (s) "On behalf of an authority", in relation to an eligible 5 advance made or an eligible obligation issued or incurred by a 6 municipality, means in anticipation that an authority would 7 transfer tax increment revenues or reimburse the municipality 8 from tax increment revenues in an amount sufficient to fully make 9 payment required by the eligible obligation issued or incurred by 10 the municipality, if the anticipation of the transfer or receipt 11 of tax increment revenues from the authority is pursuant to or 12 evidenced by 1 or more of the following: 13 (i) A reimbursement agreement between the municipality and 14 an authority it established. 15 (ii) A requirement imposed by law that the authority trans- 16 fer tax increment revenues to the municipality. 17 (iii) A resolution of the authority agreeing to make pay- 18 ments to the incorporating unit. 19 (iv) Provisions in a tax increment financing plan describing 20 the project for which the obligation was incurred. 21 (t) "Other protected obligation" means: 22 (i) A qualified refunding obligation issued to refund an 23 obligation described in subparagraph (ii) or (iii), an obligation 24 that is not a qualified refunding obligation that is issued to 25 refund an eligible obligation, or a qualified refunding obliga- 26 tion issued to refund an obligation described in this 27 subparagraph. 04044'97 * 8 1 (ii) An obligation issued or incurred by an authority or by 2 a municipality on behalf of an authority after August 19, 1993, 3 but before December 31, 1994, to finance a project described in a 4 tax increment finance plan approved by the municipality in 5 accordance with this act before August 19, 1993, for which a con- 6 tract for final design is entered into by the municipality or 7 authority before March 1, 1994. 8 (iii) An obligation incurred by an authority or municipality 9 after August 19, 1993, to reimburse a party to a development 10 agreement entered into by a municipality or authority before 11 August 19, 1993, for a project described in a tax increment 12 financing plan approved in accordance with this act before 13 August 19, 1993, and undertaken and installed by that party in 14 accordance with the development agreement. 15 (iv) An ongoing management or professional services contract 16 with the governing body of a county which was entered into before 17 March 1, 1994 and which was preceded by a series of limited term 18 management or professional services contracts with the governing 19 body of the county, the last of which was entered into before 20 August 19, 1993. 21 (v) THAT PORTION OF A BOND ISSUED BY AN AUTHORITY, OR BY A 22 MUNICIPALITY ON BEHALF OF AN AUTHORITY, AFTER AUGUST 19, 1993, TO 23 FINANCE A PROJECT DESCRIBED IN A TAX INCREMENT FINANCE PLAN 24 APPROVED BY THE MUNICIPALITY UNDER THIS ACT BEFORE DECEMBER 31, 25 1993, THAT IS PARTIALLY FUNDED BY A PUBLIC AGENCY GRANT FOR WHICH 26 A GRANT AGREEMENT IS SIGNED BEFORE DECEMBER 31, 1993. THE AMOUNT 27 OF THE OTHER PROTECTED OBLIGATION AS DEFINED IN THIS 04044'97 * 9 1 SUBPARAGRAPH, EXCLUDING INTEREST PAYMENTS, SHALL NOT EXCEED THE 2 MUNICIPALITY'S OR AUTHORITY'S REQUIRED CONTRIBUTION UNDER THE 3 GRANT. 4 (u) "Public facility" means 1 or more of the following: 5 (i) A street, road, bridge, sewer, sewage treatment facili- 6 ty, facility designed to reduce, eliminate, or prevent the spread 7 of identified soil or groundwater contamination, drainage system, 8 waterway, waterline, water storage facility, rail line, utility 9 line or pipeline, or other similar or related structure or 10 improvement, together with necessary easements for the structure 11 or improvement, owned or used by a public agency or functionally 12 connected to similar or supporting facilities owned or used by a 13 public agency, or designed and dedicated to use by, for the bene- 14 fit of, or for the protection of the health, welfare, or safety 15 of the public generally, whether or not used by a single business 16 entity, provided that any road, street, or bridge shall be con- 17 tinuously open to public access and that other facilities shall 18 be located in public easements or rights-of-way and sized to 19 accommodate reasonably foreseeable development of eligible prop- 20 erty in adjoining areas. 21 (ii) The acquisition and disposal of real and personal prop- 22 erty or an interest in that property, demolition of structures, 23 site preparation, relocation costs, building rehabilitation, and 24 all administrative costs related to a public facility, including, 25 but not limited to, architect's, engineer's, legal, and account- 26 ing fees as contained in the resolution establishing the 27 district's development plan. 04044'97 * 10 1 (iii) An improvement to a facility used by the public or a 2 public facility as those terms are defined in section 1 of Act 3 No. 1 of the Public Acts of 1966, being section 125.1351 of the 4 Michigan Compiled Laws 1966 PA 1, MCL 125.1351, which improve- 5 ment is made to comply with the barrier free design requirements 6 of the state construction code promulgated under the state con- 7 struction code act of 1972, Act No. 230 of the Public Acts of 8 1972, being sections 125.1501 to 125.1531 of the Michigan 9 Compiled Laws 1972 PA 230, MCL 125.1501 TO 125.1531. 10 (v) "Qualified refunding obligation" means an obligation 11 issued or incurred by an authority or by a municipality on behalf 12 of an authority to refund an obligation if the refunding obliga- 13 tion meets both of the following: 14 (i) The net present value of the principal and interest to 15 be paid on the refunding obligation, including the cost of issu- 16 ance, will be less than the net present value of the principal 17 and interest to be paid on the obligation being refunded, as cal- 18 culated using a method approved by the department of treasury. 19 (ii) The net present value of the sum of the tax increment 20 revenues described in subdivision (y)(ii) and the distributions 21 under section 11a to repay the refunding obligation will not be 22 greater than the net present value of the sum of the tax incre- 23 ment revenues described in subdivision (y)(ii) and the distribu- 24 tions under section 11a to repay the obligation being refunded, 25 as calculated using a method approved by the department of 26 treasury. 04044'97 * 11 1 (w) "Specific local taxes" means a tax levied under Act 2 No. 198 of the Public Acts of 1974, being sections 207.551 to 3 207.572 of the Michigan Compiled Laws 1974 PA 198, MCL 207.551 4 TO 207.572, the commercial redevelopment act, Act No. 255 of the 5 Public Acts of 1978, being sections 207.651 to 207.668 of the 6 Michigan Compiled Laws 1978 PA 255, MCL 207.651 TO 207.668, the 7 enterprise zone act, Act No. 224 of the Public Acts of 1985, 8 being sections 125.2101 to 125.2123 of the Michigan Compiled 9 Laws, Act No. 189 of the Public Acts of 1953, being sections 10 211.181 to 211.182 of the Michigan Compiled Laws 1985 PA 224, 11 MCL 125.2101 TO 125.2123, 1953 PA 189, MCL 211.181 TO 211.182, 12 and the technology park development act, Act No. 385 of the 13 Public Acts of 1984, being sections 207.701 to 207.718 of the 14 Michigan Compiled Laws 1984 PA 385, MCL 207.701 TO 207.718. The 15 initial assessed value or current assessed value of property 16 subject to a specific local tax is the quotient of the specific 17 local tax paid divided by the ad valorem millage rate. However, 18 after 1993, the state tax commission shall prescribe the method 19 for calculating the initial assessed value and current assessed 20 value of property for which a specific local tax was paid in lieu 21 of a property tax. 22 (x) "State fiscal year" means the annual period commencing 23 October 1 of each year. 24 (y) "Tax increment revenues" means the amount of ad valorem 25 property taxes and specific local taxes attributable to the 26 application of the levy of all taxing jurisdictions upon the 04044'97 * 12 1 capture assessed value of real and personal property in the 2 development area, subject to the following requirements: 3 (i) Tax increment revenues include ad valorem property taxes 4 and specific local taxes attributable to the application of the 5 levy of all taxing jurisdictions other than the state pursuant to 6 the state education tax act, Act No. 331 of the Public Acts of 7 1993, being sections 211.901 to 211.906 of the Michigan Compiled 8 Laws 1993 PA 331, MCL 211.901 TO 211.906, and local or interme- 9 diate school districts upon the captured assessed value of real 10 and personal property in the development area for any purpose 11 authorized by this act. 12 (ii) Tax increment revenues include ad valorem property 13 taxes and specific local taxes attributable to the application of 14 the levy of the state pursuant to Act No. 331 of the Public Acts 15 of 1993 THE STATE EDUCATION TAX ACT, 1993 PA 331, MCL 211.901 TO 16 211.906, and local or intermediate school districts upon the cap- 17 tured assessed value of real and personal property in the devel- 18 opment area in an amount equal to the amount necessary, without 19 regard to subparagraph (i), to repay eligible advances, eligible 20 obligations, and other protected obligations. 21 (iii) Tax increment revenues do not include any of the 22 following: 23 (A) Ad valorem property taxes or specific local taxes 24 attributable either to a portion of the captured assessed value 25 shared with taxing jurisdictions within the jurisdictional area 26 of the authority or to a portion of value of property that may be 27 excluded from captured assessed value. 04044'97 * 13 1 (B) Ad valorem property taxes and specific local taxes 2 attributable to ad valorem property taxes excluded by the tax 3 increment financing plan of the authority from the determination 4 of the amount of tax increment revenues to be transmitted to the 5 authority. 6 (C) Ad valorem property taxes exempted from capture under 7 section 4(3) or specific local taxes attributable to such ad 8 valorem property taxes. 9 (D) Ad valorem property taxes specifically levied for the 10 payment of principal and interest of obligations approved by the 11 electors or obligations pledging the unlimited taxing power of 12 the local governmental unit or specific local taxes attributable 13 to such ad valorem property taxes. 14 (iv) The amount of tax increment revenues authorized to be 15 included under subparagraph (ii), and required to be transmitted 16 to the authority under section 13(1), from ad valorem property 17 taxes and specific local taxes attributable to the application of 18 the levy of the state education tax act, 1993 PA 331, MCL 211.901 19 TO 211.906, a local school district or an intermediate school 20 district upon the captured assessed value of real and personal 21 property in a development area shall be determined separately for 22 the levy by the state, each school district, and each intermedi- 23 ate school district as the product of sub-subparagraphs (A) and 24 (B): 25 (A) The percentage which the total ad valorem taxes and spe- 26 cific local taxes available for distribution by law to the state, 27 local school district, or intermediate school district, 04044'97 * 14 1 respectively, bears to the aggregate amount of ad valorem millage 2 taxes and specific taxes available for distribution by law to the 3 state, each local school district, and each intermediate school 4 district. 5 (B) The maximum amount of ad valorem property taxes and spe- 6 cific local taxes considered tax increment revenues under sub- 7 paragraph (ii). 8 (z) "Urban township" means a township that meets all of the 9 following requirements: 10 (i) Has a population of 20,000 or more, or has a population 11 of 10,000 or more but is located in a county with a population of 12 400,000 or more. 13 (ii) Adopted a master zoning plan before February 1, 1987. 14 (iii) Provides sewer, water, and other public services to 15 all or a part of the township. 16 Sec. 11a. (1) If the amount of tax increment revenues lost 17 as a result of the reduction of taxes levied by local school dis- 18 tricts for school operating purposes required by the millage lim- 19 itations under section 1211 of the revised school code, Act 20 No. 451 of the Public Acts of 1976, being section 380.1211 of the 21 Michigan Compiled Laws 1976 PA 451, MCL 380.1211, reduced by the 22 amount of tax increment revenues received from the capture of 23 taxes levied under or attributable to the state education tax 24 act, Act No. 331 of the Public Acts of 1993, being 25 sections 211.901 to 211.906 of the Michigan Compiled Laws 1993 26 PA 331, MCL 211.901 TO 211.906, will cause the tax increment 27 revenues received in a fiscal year by an authority under 04044'97 * 15 1 section 13 to be insufficient to repay an eligible advance or to 2 pay an eligible obligation, the legislature shall appropriate and 3 distribute to the authority the amount described in 4 subsection (5). 5 (2) Not less than 30 days before the first day of a fiscal 6 year, an authority eligible to retain tax increment revenues from 7 taxes levied by a local or intermediate school district or this 8 state or to receive a distribution under this section for that 9 fiscal year shall file a claim with the department of treasury. 10 The claim shall include the following information: 11 (a) The property tax millage rates levied in 1993 by local 12 school districts within the jurisdictional area of the authority 13 for school operating purposes. 14 (b) The property tax millage rates expected to be levied by 15 local school districts within the jurisdictional area of the 16 authority for school operating purposes for that fiscal year. 17 (c) The tax increment revenues estimated to be received by 18 the authority for that fiscal year based upon actual property tax 19 levies of all taxing jurisdictions within the jurisdictional area 20 of the authority plus any tax increment revenues the authority 21 would have received for the fiscal year from property that is 22 exempt from taxation pursuant to the Michigan renaissance zone 23 act, Act No. 376 of the Public Acts of 1996, being 24 sections 125.2681 to 125.2696 of the Michigan Compiled Laws 1996 25 PA 376, MCL 125.2681 TO 125.2696, based on the property's taxable 26 value at the time the zone is designated. 04044'97 * 16 1 (d) The tax increment revenues the authority estimates it 2 would have received for that fiscal year if property taxes were 3 levied by local school districts within the jurisdictional area 4 of the authority for school operating purposes at the millage 5 rates described in subdivision (a) and if no property taxes were 6 levied by this state under Act No. 331 of the Public Acts of 7 1993 THE STATE EDUCATION TAX ACT, 1993 PA 331, MCL 211.901 TO 8 211.906. 9 (e) A list and documentation of eligible obligations , AND 10 eligible advances , and other protected obligations and the 11 payments due on each of those eligible obligations , OR eligi- 12 ble advances , or other protected obligations in that fiscal 13 year, and the total amount of all the payments due on those eli- 14 gible obligations , AND eligible advances , and other pro- 15 tected obligations in that fiscal year. 16 (f) The amount of money, other than tax increment revenues, 17 estimated to be received in that fiscal year by the authority 18 that is primarily pledged to, and to be used for, the payment of 19 an eligible obligation or the repayment of an eligible advance. 20 That amount shall not include excess tax increment revenues of 21 the authority that are permitted by law to be retained by the 22 authority for purposes that further the development program. 23 However, that amount shall include money to be obtained from 24 sources authorized by law, which law is enacted on or after 25 December 1, 1993, for use by the municipality or authority to 26 finance a development project. 04044'97 * 17 1 (g) The amount of a distribution received pursuant to this 2 act for a fiscal year in excess of or less than the distribution 3 that would have been required if calculated upon actual tax 4 increment revenues received for that fiscal year. 5 (H) A LIST AND DOCUMENTATION OF OTHER PROTECTED OBLIGATIONS 6 AND THE PAYMENTS DUE ON EACH OF THOSE OTHER PROTECTED OBLIGATIONS 7 IN THAT FISCAL YEAR, AND THE TOTAL AMOUNT OF ALL THE PAYMENTS DUE 8 ON THOSE OTHER PROTECTED OBLIGATIONS IN THAT FISCAL YEAR. 9 (3) For the fiscal year that commences after September 30, 10 1993 and before October 1, 1994, an authority may make a claim 11 with all information required by subsection (2) at any time after 12 March 15, 1994. 13 (4) After review and verification of claims submitted pursu- 14 ant to this section, amounts appropriated by the state in compli- 15 ance with this act shall be distributed as 2 equal payments on 16 March 1 and September 1 after receipt of a claim. An authority 17 shall allocate a distribution it receives for an eligible obliga- 18 tion issued on behalf of a municipality to the municipality. 19 (5) Subject to subsections (6) and (7), the aggregate amount 20 to be appropriated and distributed pursuant to this section to an 21 authority shall be the sum of the amounts determined pursuant to 22 subdivisions (a) and (b) minus the amount determined pursuant to 23 subdivision (c), as follows: 24 (a) The amount by which the tax increment revenues the 25 authority would have received for the fiscal year, if property 26 taxes were levied by local school districts on property, 27 including property that is exempt from taxation pursuant to Act 04044'97 * 18 1 No. 376 of the Public Acts of 1996 THE MICHIGAN RENAISSANCE ZONE 2 ACT, 1996 PA 376, MCL 125.2681 TO 125.2696, based on the 3 property's taxable value at the time the zone is designated, for 4 school operating purposes at the millage rates described in 5 subsection (2)(a) and if no property taxes were levied under Act 6 No. 331 of the Public Acts of 1993 THE STATE EDUCATION TAX ACT, 7 1993 PA 331, MCL 211.901 TO 211.906, exceed the sum of tax incre- 8 ment revenues the authority actually received for the fiscal year 9 plus any tax increment revenues the authority would have received 10 for the fiscal year from property that is exempt from taxation 11 pursuant to Act No. 376 of the Public Acts of 1996 THE MICHIGAN 12 RENAISSANCE ZONE ACT, 1996 PA 376, MCL 125.2681 TO 125.2696, 13 based on the property's taxable value at the time the zone is 14 designated. 15 (b) A shortfall required to be reported pursuant to 16 subsection (2)(g) that had not previously increased a 17 distribution. 18 (c) An excess amount required to be reported pursuant to 19 subsection (2)(g) that had not previously decreased a 20 distribution. 21 (6) The amount distributed under subsection (5) shall not 22 exceed the difference between the amount described in 23 subsection (2)(e) and the sum of the amounts described in 24 subsection (2)(c) and (f). 25 (7) If, based upon the tax increment financing plan in 26 effect on August 19, 1993, the payment due on eligible 27 obligations or eligible advances anticipates the use of excess 04044'97 * 19 1 prior year tax increment revenues permitted by law to be retained 2 by the authority, and if the sum of the amounts described in 3 subsection (2)(c) and (f) plus the amount to be distributed under 4 subsections (5) and (6) is less than the amount described in 5 subsection (2)(e), the amount to be distributed under subsections 6 (5) and (6) shall be increased by the amount of the shortfall. 7 However, the amount authorized to be distributed pursuant to this 8 section shall not exceed that portion of the cumulative differ- 9 ence, for each preceding fiscal year, between the amount that 10 could have been distributed pursuant to subsection (5) and the 11 amount actually distributed pursuant to subsections (5) and (6) 12 and this subsection. 13 (8) A distribution under this section replacing tax incre- 14 ment revenues pledged by an authority or a municipality is 15 subject to the lien of the pledge, whether or not there has been 16 physical delivery of the distribution. 17 (9) Obligations for which distributions are made pursuant to 18 this section are not a debt or liability of this state; do not 19 create or constitute an indebtedness, liability, or obligation of 20 this state; and are not and do not constitute a pledge of the 21 faith and credit of this state. 22 (10) Not later than July 1 of each year, the authority shall 23 certify to the local tax collecting treasurer the amount of the 24 distribution required under subsection (5), calculated without 25 regard to the receipt of tax increment revenues attributable to 26 local or intermediate school district operating taxes or 27 attributable to taxes levied under Act No. 331 of the Public 04044'97 * 20 1 Acts of 1993 THE STATE EDUCATION TAX ACT, 1993 PA 331, MCL 2 211.901 TO 211.906. 3 (11) Calculations of distributions under this section and 4 claims reports required to be made under subsection (2) shall be 5 made on the basis of each development area of the authority. 04044'97 * Final page. 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