House Introduced Bill 6513

HOUSE BILL No. 6513

November 7, 2002, Introduced by Rep. Jacobs and referred to the Committee on Commerce.

A bill to provide for the establishment of a corridor

improvement authority; to prescribe the powers and duties of the

authority; to correct and prevent deterioration in business dis-

tricts; to encourage historic preservation; to authorize the

acquisition and disposal of interests in real and personal prop-

erty; to authorize the creation and implementation of development

plans and development areas in the districts; to promote the eco-

nomic growth of the districts; to create a board; to prescribe

the powers and duties of the board; to authorize the levy and

collection of taxes; to authorize the issuance of bonds and other

evidences of indebtedness; to authorize the use of tax increment

financing; to prescribe powers and duties of certain state offi-

cials; to provide for rule promulgation; and to provide for

enforcement of the act.

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THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

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Sec. 1. This act shall be known and may be cited as the

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"corridor improvement authority act".

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Sec. 2. As used in this act:

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(a) "Advance" means a transfer of funds made by a municipal-

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ity to an authority or to another person on behalf of the author-

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ity in anticipation of repayment by the authority. Evidence of

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the intent to repay an advance may include, but is not limited

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to, an executed agreement to repay, provisions contained in a tax

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increment financing plan approved prior to the advance, or a res-

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olution of the authority or the municipality.

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(b) "Assessed value" means the taxable value as determined

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under section 27a of the general property tax act, 1893 PA 206,

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MCL 211.27a.

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(c) "Authority" means a corridor improvement authority cre-

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ated under this act.

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(d) "Board" means the governing body of an authority.

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(e) "Business district" means an area of a municipality

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zoned and used principally for business.

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(f) "Captured assessed value" means the amount in any 1 year

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by which the current assessed value of the development area,

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including the assessed value of property for which specific local

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taxes are paid in lieu of property taxes as determined in section

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3(e), exceeds the initial assessed value. The state tax commis-

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sion shall prescribe the method for calculating captured assessed

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value.

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(g) "Chief executive officer" means the mayor or city

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manager of a city, the president or village manager of a village,

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or the supervisor of a township or, if designated by the township

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board for purposes of this act, the township superintendent or

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township manager of a township.

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(h) "Development area" means that area described in section

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5 to which a development plan is applicable.

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(i) "Development plan" means that information and those

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requirements for a development area set forth in section 22.

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(j) "Development program" means the implementation of the

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development plan.

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(k) "Fiscal year" means the fiscal year of the authority.

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(l) "Governing body" or "governing body of a municipality"

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means the elected body of a municipality having legislative

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powers.

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(m) "Initial assessed value" means the assessed value, as

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equalized, of all the taxable property within the boundaries of

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the development area at the time the ordinance establishing the

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tax increment financing plan is approved, as shown by the most

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recent assessment roll of the municipality for which equalization

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has been completed at the time the resolution is adopted.

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Property exempt from taxation at the time of the determination of

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the initial assessed value shall be included as zero. For the

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purpose of determining initial assessed value, property for which

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a specific local tax is paid in lieu of a property tax shall not

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be considered to be property that is exempt from taxation. The

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initial assessed value of property for which a specific local tax

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was paid in lieu of a property tax shall be determined as

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provided in section 3(e).

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(n) "Land use plan" means a plan prepared under section 1 of

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the city and village zoning act, 1921 PA 207, MCL 125.581, or

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section 3 of the township zoning act, 1943 PA 184, MCL 125.273.

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(o) "Municipality" means a qualified local governmental unit

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as defined in section 2 of the obsolete property rehabilitation

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act, 2000 PA 146, MCL 125.2782.

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(p) "Obligation" means a written promise to pay, whether

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evidenced by a contract, agreement, lease, sublease, bond, or

11
note, or a requirement to pay imposed by law. An obligation does

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not include a payment required solely because of default upon an

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obligation, employee salaries, or consideration paid for the use

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of municipal offices. An obligation does not include those bonds

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that have been economically defeased by refunding bonds issued

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under this act. Obligation includes the following:

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(i) A requirement to pay proceeds derived from ad valorem

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property taxes or taxes levied in lieu of ad valorem property

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taxes.

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(ii) A management contract or a contract for professional

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services.

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(iii) A requirement to pay or reimburse a person for the

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cost of insurance for, or to maintain, property subject to a

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lease, land contract, purchase agreement, or other agreement.

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(iv) A letter of credit, paying agent, transfer agent, bond

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registrar, or trustee fee associated with a contract, agreement,

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bond, or note.

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Sec. 3. As used in this act:

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(a) "Operations" means office maintenance, including sala-

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ries and expenses of employees, office supplies, consultation

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fees, design costs, and other expenses incurred in the daily man-

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agement of the authority and planning of its activities.

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(b) "Parcel" means an identifiable unit of land that is

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treated as separate for valuation or zoning purposes.

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(c) "Public facility" means a street, plaza, pedestrian

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mall, and any improvements to a street, plaza, or pedestrian mall

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including street furniture and beautification, park, parking

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facility, recreational facility, right of way, structure, water-

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way, bridge, lake, pond, canal, utility line or pipe, or build-

13
ing, including access routes designed and dedicated to use by the

14
public generally, or used by a public agency. Public facility

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includes an improvement to a facility used by the public or a

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public facility as those terms are defined in section 1 of 1966

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PA 1, MCL 125.1351, if the improvement complies with the barrier

18
free design requirements of the state construction code promul-

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gated under the Stille-DeRossett-Hale single state construction

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code act, 1972 PA 230, MCL 125.1501 to 125.1531.

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(d) "Qualified refunding obligation" means an obligation

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issued or incurred by an authority or by a municipality on behalf

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of an authority to refund an obligation if the net present value

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of the principal and interest to be paid on the refunding obliga-

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tion, including the cost of issuance, will be less than the net

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present value of the principal and interest to be paid on the

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obligation being refunded, as calculated using a method approved

2
by the department of treasury.

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(e) "Specific local tax" means a tax levied under 1974 PA

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198, MCL 207.551 to 207.572, the commercial redevelopment act,

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1978 PA 255, MCL 207.651 to 207.668, the technology park develop-

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ment act, 1984 PA 385, MCL 207.701 to 207.718, or 1953 PA 189,

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MCL 211.181 to 211.182. The initial assessed value or current

8
assessed value of property subject to a specific local tax shall

9
be the quotient of the specific local tax paid divided by the ad

10
valorem millage rate. The state tax commission shall prescribe

11
the method for calculating the initial assessed value and current

12
assessed value of property for which a specific local tax was

13
paid in lieu of a property tax.

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(f) "State fiscal year" means the annual period commencing

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October 1 of each year.

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(g) "Tax increment revenues" means the amount of ad valorem

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property taxes and specific local taxes attributable to the

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application of the levy of all taxing jurisdictions upon the cap-

19
tured assessed value of real and personal property in the devel-

20
opment area. Tax increment revenues do not include any of the

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following:

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(i) Taxes under the state education tax act, 1993 PA 331,

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MCL 211.901 to 211.906.

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(ii) Taxes levied by local or intermediate school

25
districts.

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(iii) Ad valorem property taxes attributable either to a

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portion of the captured assessed value shared with taxing

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jurisdictions within the jurisdictional area of the authority or

2
to a portion of value of property that may be excluded from cap-

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tured assessed value or specific local taxes attributable to the

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ad valorem property taxes.

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(iv) Ad valorem property taxes excluded by the tax increment

6
financing plan of the authority from the determination of the

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amount of tax increment revenues to be transmitted to the author-

8
ity or specific local taxes attributable to the ad valorem prop-

9
erty taxes.

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(v) Ad valorem property taxes exempted from capture under

11
section 6(3) or specific local taxes attributable to the ad

12
valorem property taxes.

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Sec. 4. (1) Except as otherwise provided in this subsec-

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tion, a municipality may establish multiple authorities. A

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parcel of property shall not be included in more than 1 authority

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created under this act.

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(2) An authority is a public body corporate which may sue

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and be sued in any court of this state. An authority possesses

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all the powers necessary to carry out its purpose. The enumera-

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tion of a power in this act shall not be construed as a limita-

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tion upon the general powers of an authority.

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Sec. 5. (1) A development area shall only be established in

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a municipality and shall comply with all of the following

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criteria:

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(a) Contain at least 10 contiguous parcels.

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(b) The municipality's current land use plan allows

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commercial use for all parcels in the proposed development area.

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(c) Commercial use has been allowed under the local land use

2
plan for a continuous period of 30 years.

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(d) More than 1/2 of the ground floor square footage in the

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development area is classified as commercial real property under

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section 34c of the general property tax act, 1893 PA 206, MCL

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211.34c.

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(2) As used in this section, "commercial use" means a use

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for monetary gain or other remuneration.

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Sec. 6. (1) If the governing body of a municipality deter-

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mines that it is necessary for the best interests of the public

11
to halt property value deterioration and increase property tax

12
valuation where possible in a business district, to eliminate the

13
causes of that deterioration, and to promote economic growth, the

14
governing body may, by resolution, declare its intention to

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create and provide for the operation of an authority.

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(2) In the resolution of intent, the governing body shall

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set a date for a public hearing on the adoption of a proposed

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ordinance creating the authority and designating the boundaries

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of the development area. Notice of the public hearing shall be

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published twice in a newspaper of general circulation in the

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municipality, not less than 20 or more than 40 days before the

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date of the hearing. Not less than 20 days before the hearing,

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the governing body proposing to create the authority shall also

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mail notice of the hearing to the property taxpayers of record in

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the proposed development area and to the governing body of each

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taxing jurisdiction levying taxes that would be subject to

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capture if the authority is established and a tax increment

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financing plan is approved. Failure of a property taxpayer to

2
receive the notice does not invalidate these proceedings. Notice

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of the hearing shall be posted in at least 20 conspicuous and

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public places in the proposed development area not less than 20

5
days before the hearing. The notice shall state the date, time,

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and place of the hearing and shall describe the boundaries of the

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proposed development area. A citizen, taxpayer, or property

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owner of the municipality or an official from a taxing jurisdic-

9
tion with millage that would be subject to capture has the right

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to be heard in regard to the establishment of the authority and

11
the boundaries of the proposed development area. The governing

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body of the municipality shall not incorporate land into the

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development area not included in the description contained in the

14
notice of public hearing, but it may eliminate described lands

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from the development area in the final determination of the

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boundaries.

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(3) Not more than 60 days after the public hearing, the gov-

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erning body of a taxing jurisdiction levying ad valorem property

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taxes that would otherwise be subject to capture may exempt its

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taxes from capture by adopting a resolution to that effect and

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filing a copy with the clerk of the municipality proposing to

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create the authority. The resolution takes effect when filed

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with that clerk and remains effective until a copy of a resolu-

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tion rescinding that resolution is filed with that clerk.

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(4) Not less than 60 days after the public hearing, if the

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governing body of the municipality intends to proceed with the

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establishment of the authority it shall adopt, by majority vote

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of its members, an ordinance establishing the authority and

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designating the boundaries of the development area within which

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the authority shall exercise its powers. The adoption of the

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ordinance is subject to any applicable statutory or charter pro-

5
visions in respect to the approval or disapproval by the chief

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executive or other officer of the municipality and the adoption

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of an ordinance over his or her veto. This ordinance shall be

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filed with the secretary of state promptly after its adoption and

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shall be published at least once in a newspaper of general circu-

10
lation in the municipality.

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(5) The governing body of the municipality may alter or

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amend the boundaries of the development area to include or

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exclude lands from the development area in the same manner as

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adopting the ordinance creating the authority.

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Sec. 7. If a development area is part of an area annexed to

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or consolidated with another municipality, the authority managing

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that development area shall become an authority of the annexing

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or consolidated municipality. Obligations of that authority

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incurred under a development or tax increment plan, agreements

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related to a development or tax increment plan, and bonds issued

21
under this act shall remain in effect following the annexation or

22
consolidation.

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Sec. 8. (1) Except as provided in subsections (7), (8), and

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(9), an authority shall be under the supervision and control of a

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board consisting of the chief executive officer of the municipal-

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ity and not less than 5 or more than 9 members as determined by

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the governing body of the municipality. Members shall be

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appointed by the chief executive officer of the municipality,

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subject to approval by the governing body of the municipality.

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Not less than a majority of the members shall be persons having

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an ownership or entrepreneurial interest in property located in

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the development area. At least 1 of the members shall be a resi-

6
dent of the development area or of an area within 2 miles of the

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development area. Of the members first appointed, an equal

8
number of the members, as near as is practicable, shall be

9
appointed for 1 year, 2 years, 3 years, and 4 years. A member

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shall hold office until the member's successor is appointed.

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After the initial appointment, each member shall serve for a term

12
of 4 years. An appointment to fill a vacancy shall be made by

13
the chief executive officer of the municipality for the unexpired

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term only. Members of the board shall serve without compensa-

15
tion, but shall be reimbursed for actual and necessary expenses.

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The chairperson of the board shall be elected by the board.

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(2) Before assuming the duties of office, a member shall

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qualify by taking and subscribing to the constitutional oath of

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office.

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(3) The proceedings and rules of the board are subject to

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the open meetings act, 1976 PA 267, MCL 15.261 to 15.275. The

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board shall adopt rules governing its procedure and the holding

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of regular meetings, subject to the approval of the governing

24
body. Special meetings may be held if called in the manner pro-

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vided in the rules of the board.

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(4) After having been given notice and an opportunity to be

27
heard, a member of the board may be removed for cause by the

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governing body. Removal of a member is subject to review by the

2
circuit court.

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(5) All expense items of the authority shall be publicized

4
monthly and the financial records shall always be open to the

5
public.

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(6) A writing prepared, owned, used, in the possession of,

7
or retained by the board in the performance of an official func-

8
tion is subject to the freedom of information act, 1976 PA 442,

9
MCL 15.231 to 15.246.

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(7) By resolution of its governing body, a municipality

11
having more than 1 authority may establish a single board to

12
govern all authorities in the municipality. The governing body

13
may designate the board of an existing authority as the board for

14
all authorities or may establish by resolution a new board in the

15
same manner as provided in subsection (1). A member of a board

16
governing more than 1 authority may be a resident of or have an

17
ownership or entrepreneuring interest in property in any of the

18
development areas controlled by the board in order to meet the

19
requirements of this section.

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(8) By ordinance, the governing body of a municipality that

21
has a population of less than 5,000 may have the municipality's

22
planning commission created under section 2 of 1931 PA 285, MCL

23
125.32, serve as the board provided for in subsection (1).

24
(9) If the boundaries of the development area are the same

25
as those of a business improvement district established under

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1961 PA 120, MCL 125.981 to 125.990m, the governing body of the

27
municipality may provide that the members of the board of the

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authority shall be the members of the board of the business

2
improvement district and 1 person in the development area or who

3
resides within 2 miles of any part of the development area.

4
Sec. 9. (1) The board may employ and fix the compensation

5
of a director, subject to the approval of the governing body of

6
the municipality. The director shall serve at the pleasure of

7
the board. A member of the board is not eligible to hold the

8
position of director. Before beginning his or her duties, the

9
director shall take and subscribe to the constitutional oath, and

10
furnish bond, by posting a bond in the sum determined in the

11
ordinance establishing the authority payable to the authority for

12
use and benefit of the authority, approved by the board, and

13
filed with the municipal clerk. The premium on the bond shall be

14
considered an operating expense of the authority, payable from

15
funds available to the authority for expenses of operation. The

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director shall be the chief executive officer of the authority.

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Subject to the approval of the board, the director shall super-

18
vise and be responsible for the preparation of plans and the per-

19
formance of the functions of the authority in the manner autho-

20
rized by this act. The director shall attend the meetings of the

21
board and shall provide to the board and to the governing body of

22
the municipality a regular report covering the activities and

23
financial condition of the authority. If the director is absent

24
or disabled, the board may designate a qualified person as acting

25
director to perform the duties of the office. Before beginning

26
his or her duties, the acting director shall take and subscribe

27
to the oath, and furnish bond, as required of the director. The

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director shall furnish the board with information or reports

2
governing the operation of the authority as the board requires.

3
(2) The board may employ and fix the compensation of a trea-

4
surer, who shall keep the financial records of the authority and

5
who, together with the director, shall approve all vouchers for

6
the expenditure of funds of the authority. The treasurer shall

7
perform all duties delegated to him or her by the board and shall

8
furnish bond in an amount prescribed by the board.

9
(3) The board may employ and fix the compensation of a sec-

10
retary, who shall maintain custody of the official seal and of

11
records, books, documents, or other papers not required to be

12
maintained by the treasurer. The secretary shall attend meetings

13
of the board and keep a record of its proceedings and shall per-

14
form other duties delegated by the board.

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(4) The board may retain legal counsel to advise the board

16
in the proper performance of its duties. The legal counsel shall

17
represent the authority in actions brought by or against the

18
authority.

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(5) The board may employ other personnel considered neces-

20
sary by the board.

21
Sec. 10. The employees of an authority shall be eligible to

22
participate in municipal retirement and insurance programs of the

23
municipality as if they were civil service employees except that

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the employees of an authority are not civil service employees.

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Sec. 11. The board may do any of the following:

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(a) Prepare an analysis of economic changes taking place in

27
the development area.

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(b) Study and analyze the impact of metropolitan growth upon

2
the development area.

3
(c) Plan and propose the construction, renovation, repair,

4
remodeling, rehabilitation, restoration, preservation, or recon-

5
struction of a public facility, an existing building, or a

6
multiple-family dwelling unit which may be necessary or appropri-

7
ate to the execution of a plan which, in the opinion of the

8
board, aids in the economic growth of the development area.

9
(d) Plan, propose, and implement an improvement to a public

10
facility within the development area to comply with the barrier

11
free design requirements of the state construction code promul-

12
gated under the Stille-DeRossett-Hale single state construction

13
code act, 1972 PA 230, MCL 125.1501 to 125.1531.

14
(e) Develop long-range plans, in cooperation with the agency

15
that is chiefly responsible for planning in the municipality,

16
designed to halt the deterioration of property values in the

17
development area and to promote the economic growth of the devel-

18
opment area, and take steps as may be necessary to persuade prop-

19
erty owners to implement the plans to the fullest extent

20
possible.

21
(f) Implement any plan of development in the development

22
area necessary to achieve the purposes of this act in accordance

23
with the powers of the authority granted by this act.

24
(g) Make and enter into contracts necessary or incidental to

25
the exercise of its powers and the performance of its duties.

26
(h) Acquire by purchase or otherwise, on terms and

27
conditions and in a manner the authority considers proper or own,

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convey, or otherwise dispose of, or lease as lessor or lessee,

2
land and other property, real or personal, or rights or interests

3
in the property, that the authority determines is reasonably nec-

4
essary to achieve the purposes of this act, and to grant or

5
acquire licenses, easements, and options.

6
(i) Improve land and construct, reconstruct, rehabilitate,

7
restore and preserve, equip, improve, maintain, repair, and oper-

8
ate any building, including multiple-family dwellings, and any

9
necessary or desirable appurtenances to those buildings, within

10
the development area for the use, in whole or in part, of any

11
public or private person or corporation, or a combination

12
thereof.

13
(j) Fix, charge, and collect fees, rents, and charges for

14
the use of any facility, building, or property under its control

15
or any part of the facility, building, or property, and pledge

16
the fees, rents, and charges for the payment of revenue bonds

17
issued by the authority.

18
(k) Lease, in whole or in part, any facility, building, or

19
property under its control.

20
(l) Accept grants and donations of property, labor, or other

21
things of value from a public or private source.

22
(m) Acquire and construct public facilities.

23
Sec. 12. If a board created under this act serves as the

24
planning commission under section 2 of 1931 PA 285, MCL 125.32,

25
the board shall include planning commission business in its

26
agenda.

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Sec. 13. The authority is an instrumentality of a political

2
subdivision for purposes of 1972 PA 227, MCL 213.321 to 213.332.

3
Sec. 14. A municipality may take private property under

4
1911 PA 149, MCL 213.21 to 213.25, for the purpose of transfer to

5
the authority, and may transfer the property to the authority for

6
use in an approved development, on terms and conditions it con-

7
siders appropriate, and the taking, transfer, and use shall be

8
considered necessary for public purposes and for the benefit of

9
the public.

10
Sec. 15. (1) The activities of the authority shall be

11
financed from 1 or more of the following sources:

12
(a) Donations to the authority for the performance of its

13
functions.

14
(b) Proceeds of a tax imposed under section 16.

15
(c) Money borrowed and to be repaid as authorized by sec-

16
tions 17 and 18.

17
(d) Revenues from any property, building, or facility owned,

18
leased, licensed, or operated by the authority or under its con-

19
trol, subject to the limitations imposed upon the authority by

20
trusts or other agreements.

21
(e) Proceeds of a tax increment financing plan established

22
under sections 19 to 21.

23
(f) Proceeds from a special assessment district created as

24
provided by law.

25
(g) Money obtained from other sources approved by the gov-

26
erning body of the municipality or otherwise authorized by law

07031'02 18

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for use by the authority or the municipality to finance a

2
development program.

3
(2) Money received by the authority and not covered under

4
subsection (1) shall immediately be deposited to the credit of

5
the authority, subject to disbursement under this act. Except as

6
provided in this act, the municipality shall not obligate itself,

7
and shall not be obligated, to pay any sums from public funds,

8
other than money received by the municipality under this section,

9
for or on account of the activities of the authority.

10
Sec. 16. (1) Subject to subsection (2), an authority with

11
the approval of the governing body may levy an ad valorem tax on

12
the real and tangible personal property not exempt by law and as

13
finally equalized in the development area. The tax shall not be

14
more than 1 mill if the development area is in a municipality

15
having a population of 750,000 or more, or not more than 2 mills

16
if the development area is in a municipality having a population

17
of less than 750,000. The tax shall be collected by the munici-

18
pality creating the authority levying the tax. The municipality

19
shall collect the tax at the same time and in the same manner as

20
it collects its other ad valorem taxes. The tax shall be paid to

21
the treasurer of the authority and credited to the general fund

22
of the authority for purposes of the authority.

23
(2) The municipality may at the request of the authority

24
borrow money and issue its notes under the revised municipal

25
finance act, 2001 PA 34, MCL 141.2101 to 141.2821, in anticipa-

26
tion of collection of the ad valorem tax authorized in this

27
section.

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(3) The authority may levy the tax only if all of the

2
following occur:

3
(a) The proposal for a tax is submitted to the voters of a

4
municipality by resolution of the governing body.

5
(b) The ballot proposal for the tax states the amount and

6
duration of the tax and the purposes for which the tax may be

7
used.

8
(c) The proposal for a tax is adopted by a resolution of the

9
board and certified by the board, not later than 60 days before

10
the election, to the clerk of each county in which all or part of

11
the territory of the authority is located for inclusion on the

12
ballot.

13
(d) The proposal is certified for inclusion on the ballot at

14
the next eligible election, as specified by the board's

15
resolution.

16
(e) A majority of the voters in the municipality voting on

17
the tax at a statewide general or primary election approve the

18
tax.

19
Sec. 17. The authority may borrow money and issue its nego-

20
tiable revenue bonds under the revenue bond act of 1933, 1933

21
PA 94, MCL 141.101 to 141.140. Revenue bonds issued by the

22
authority are not a debt of the municipality unless the munici-

23
pality by majority vote of the members of its governing body

24
pledges its full faith and credit to support the authority's rev-

25
enue bonds. Revenue bonds issued by the authority are never a

26
debt of the state.

07031'02 20

1
Sec. 18. (1) The authority may with approval of the local

2
governing body borrow money and issue its revenue bonds or notes

3
to finance all or part of the costs of acquiring or constructing

4
property in connection with either of the following:

5
(a) The implementation of a development plan in the develop-

6
ment area.

7
(b) The refund, or refund in advance, of bonds or notes

8
issued under this section.

9
(2) Any of the following may be financed by the issuance of

10
revenue bonds or notes:

11
(a) The cost of purchasing, acquiring, constructing, improv-

12
ing, enlarging, extending, or repairing property in connection

13
with the implementation of a development plan in the development

14
area.

15
(b) Any engineering, architectural, legal, accounting, or

16
financial expenses.

17
(c) The costs necessary or incidental to the borrowing of

18
money.

19
(d) Interest on the bonds or notes during the period of

20
construction.

21
(e) A reserve for payment of principal and interest on the

22
bonds or notes.

23
(f) A reserve for operation and maintenance until sufficient

24
revenues have developed.

25
(3) The authority may secure the bonds and notes by mort-

26
gage, assignment, or pledge of the property and any money,

27
revenues, or income received in connection with the property.

07031'02 21

1
(4) A pledge made by the authority is valid and binding from

2
the time the pledge is made. The money or property pledged by

3
the authority immediately is subject to the lien of the pledge

4
without a physical delivery, filing, or further act. The lien of

5
a pledge is valid and binding against parties having claims of

6
any kind in tort, contract, or otherwise, against the authority,

7
whether or not the parties have notice of the lien. Neither the

8
resolution, the trust agreement, nor any other instrument by

9
which a pledge is created must be filed or recorded to be

10
enforceable.

11
(5) Bonds or notes issued under this section are exempt from

12
all taxation in this state except inheritance and transfer taxes,

13
and the interest on the bonds or notes is exempt from all taxa-

14
tion in this state, notwithstanding that the interest may be

15
subject to federal income tax.

16
(6) The municipality is not liable on bonds or notes of the

17
authority issued under this section, and the bonds or notes are

18
not a debt of the municipality. The bonds or notes shall contain

19
on their face a statement to that effect.

20
(7) The bonds and notes of the authority may be invested in

21
by all public officers, state agencies and political subdivi-

22
sions, insurance companies, banks, savings and loan associations,

23
investment companies, and fiduciaries and trustees, and may be

24
deposited with and received by all public officers and the agen-

25
cies and political subdivisions of this state for any purpose for

26
which the deposit of bonds is authorized.

07031'02 22

1
Sec. 19. (1) If the authority determines that it is

2
necessary for the achievement of the purposes of this act, the

3
authority shall prepare and submit a tax increment financing plan

4
to the governing body of the municipality. The plan shall

5
include a development plan as provided in section 21, a detailed

6
explanation of the tax increment procedure, the maximum amount of

7
bonded indebtedness to be incurred, and the duration of the pro-

8
gram, and shall be in compliance with section 20. The plan shall

9
contain a statement of the estimated impact of tax increment

10
financing on the assessed values of all taxing jurisdictions in

11
which the development area is located. The plan may provide for

12
the use of part or all of the captured assessed value, but the

13
portion intended to be used by the authority shall be clearly

14
stated in the tax increment financing plan. The authority or

15
municipality may exclude from captured assessed value growth in

16
property value resulting solely from inflation. The plan shall

17
set forth the method for excluding growth in property value

18
resulting solely from inflation.

19
(2) Approval of the tax increment financing plan shall

20
comply with the notice, hearing, and disclosure provisions of

21
section 23. If the development plan is part of the tax increment

22
financing plan, only 1 hearing and approval procedure is required

23
for the 2 plans together.

24
(3) Before the public hearing on the tax increment financing

25
plan, the governing body shall provide a reasonable opportunity

26
to the taxing jurisdictions levying taxes subject to capture to

27
meet with the governing body. The authority shall fully inform

07031'02 23

1
the taxing jurisdictions of the fiscal and economic implications

2
of the proposed development area. The taxing jurisdictions may

3
present their recommendations at the public hearing on the tax

4
increment financing plan. The authority may enter into agree-

5
ments with the taxing jurisdictions and the governing body of the

6
municipality in which the development area is located to share a

7
portion of the captured assessed value of the development area.

8
(4) A tax increment financing plan may be modified if the

9
modification is approved by the governing body upon notice and

10
after public hearings and agreements as are required for approval

11
of the original plan.

12
Sec. 20. (1) The municipal and county treasurers shall

13
transmit tax increment revenues to the authority.

14
(2) The authority shall expend the tax increment revenues

15
received for the development program only under the terms of the

16
tax increment financing plan. Unused funds shall revert propor-

17
tionately to the respective taxing bodies. Tax increment reve-

18
nues shall not be used to circumvent existing property tax

19
limitations. The governing body of the municipality may abolish

20
the tax increment financing plan if it finds that the purposes

21
for which it was established are accomplished. However, the tax

22
increment financing plan shall not be abolished until the princi-

23
pal of, and interest on, bonds issued under section 21 have been

24
paid or funds sufficient to make the payment have been

25
segregated.

26
(3) Annually the authority shall submit to the governing

27
body of the municipality and the state tax commission a report on

07031'02 24

1
the status of the tax increment financing account. The report

2
shall be published in a newspaper of general circulation in the

3
municipality and shall include the following:

4
(a) The amount and source of revenue in the account.

5
(b) The amount in any bond reserve account.

6
(c) The amount and purpose of expenditures from the

7
account.

8
(d) The amount of principal and interest on any outstanding

9
bonded indebtedness.

10
(e) The initial assessed value of the project area.

11
(f) The captured assessed value retained by the authority.

12
(g) The tax increment revenues received.

13
(h) The number of jobs created as a result of the implemen-

14
tation of the tax increment financing plan.

15
(i) Any additional information the governing body or the

16
state tax commission considers necessary.

17
Sec. 21. (1) The municipality may by resolution of its gov-

18
erning body and subject to voter approval authorize, issue, and

19
sell general obligation bonds subject to the limitations set

20
forth in this subsection to finance the development program of

21
the tax increment financing plan and shall pledge its full faith

22
and credit for the payment of the bonds. The municipality may

23
pledge as additional security for the bonds any money received by

24
the authority or the municipality under section 15. The bonds

25
are subject to the revised municipal finance act, 2001 PA 34,

26
MCL 141.2101 to 141.2821. Before the municipality may authorize

27
the borrowing, the authority shall submit an estimate of the

07031'02 25

1
anticipated tax increment revenues and other revenue available

2
under section 15 to be available for payment of principal and

3
interest on the bonds, to the governing body of the

4
municipality. This estimate shall be approved by the governing

5
body of the municipality by resolution adopted by majority vote

6
of the members of the governing body in the resolution authoriz-

7
ing the bonds. If the governing body of the municipality adopts

8
the resolution authorizing the bonds, the estimate of the antici-

9
pated tax increment revenues and other revenue available under

10
section 15 to be available for payment of principal and interest

11
on the bonds shall be conclusive for purposes of this section.

12
The bonds issued under this subsection shall be considered a

13
single series for the purposes of the revised municipal finance

14
act, 2001 PA 34, MCL 141.2101 to 141.2801.

15
(2) By resolution of its governing body, the authority may

16
authorize, issue, and sell tax increment bonds subject to the

17
limitations set forth in this subsection to finance the develop-

18
ment program of the tax increment financing plan. The tax incre-

19
ment bonds issued by the authority under this subsection shall

20
pledge solely the tax increment revenues of a development area in

21
which the project is located or a development area from which tax

22
increment revenues may be used for this project, or both. In

23
addition or in the alternative, the bonds issued by the authority

24
under this subsection may be secured by any other revenues iden-

25
tified in section 15 as sources of financing for activities of

26
the authority that the authority shall specifically pledge in the

27
resolution. However, the full faith and credit of the

07031'02 26

1
municipality shall not be pledged to secure bonds issued under

2
this subsection. The bond issue may include a sum sufficient to

3
pay interest on the tax increment bonds until full development of

4
tax increment revenues from the project and also a sum to provide

5
a reasonable reserve for payment of principal and interest on the

6
bonds. The resolution authorizing the bonds shall create a lien

7
on the tax increment revenues and other revenues pledged by the

8
resolution that shall be a statutory lien and shall be a first

9
lien subject only to liens previously created. The resolution

10
may provide the terms upon which additional bonds may be issued

11
of equal standing and parity of lien as to the tax increment rev-

12
enues and other revenues pledged under the resolution. Bonds

13
issued under this subsection that pledge revenue received under

14
section 15 for repayment of the bonds are subject to the revised

15
municipal finance act, 2001 PA 34, MCL 141.2101 to 141.2821.

16
Sec. 22. (1) If a board decides to finance a project in a

17
development area by the use of revenue bonds as authorized in

18
section 17 or tax increment financing as authorized in sections

19
19, 20, and 21, it shall prepare a development plan.

20
(2) The development plan shall contain all of the

21
following:

22
(a) The designation of boundaries of the development area in

23
relation to highways, streets, streams, or otherwise.

24
(b) The location and extent of existing streets and other

25
public facilities within the development area, designating the

26
location, character, and extent of the categories of public and

27
private land uses then existing and proposed for the development

07031'02 27

1
area, including residential, recreational, commercial,

2
industrial, educational, and other uses, and including a legal

3
description of the development area.

4
(c) A description of existing improvements in the develop-

5
ment area to be demolished, repaired, or altered, a description

6
of any repairs and alterations, and an estimate of the time

7
required for completion.

8
(d) The location, extent, character, and estimated cost of

9
the improvements including rehabilitation contemplated for the

10
development area and an estimate of the time required for

11
completion.

12
(e) A statement of the construction or stages of construc-

13
tion planned, and the estimated time of completion of each

14
stage.

15
(f) A description of any parts of the development area to be

16
left as open space and the use contemplated for the space.

17
(g) A description of any portions of the development area

18
that the authority desires to sell, donate, exchange, or lease to

19
or from the municipality and the proposed terms.

20
(h) A description of desired zoning changes and changes in

21
streets, street levels, intersections, or utilities.

22
(i) An estimate of the cost of the development, a statement

23
of the proposed method of financing the development, and the

24
ability of the authority to arrange the financing.

25
(j) Designation of the person or persons, natural or corpo-

26
rate, to whom all or a portion of the development is to be

27
leased, sold, or conveyed in any manner and for whose benefit the

07031'02 28

1
project is being undertaken if that information is available to

2
the authority.

3
(k) The procedures for bidding for the leasing, purchasing,

4
or conveying in any manner of all or a portion of the development

5
upon its completion, if there is no express or implied agreement

6
between the authority and persons, natural or corporate, that all

7
or a portion of the development will be leased, sold, or conveyed

8
in any manner to those persons.

9
(l) Estimates of the number of persons residing in the

10
development area and the number of families and individuals to be

11
displaced. If occupied residences are designated for acquisition

12
and clearance by the authority, a development plan shall include

13
a survey of the families and individuals to be displaced, includ-

14
ing their income and racial composition, a statistical descrip-

15
tion of the housing supply in the community, including the number

16
of private and public units in existence or under construction,

17
the condition of those units in existence, the number of

18
owner-occupied and renter-occupied units, the annual rate of

19
turnover of the various types of housing and the range of rents

20
and sale prices, an estimate of the total demand for housing in

21
the community, and the estimated capacity of private and public

22
housing available to displaced families and individuals.

23
(m) A plan for establishing priority for the relocation of

24
persons displaced by the development in any new housing in the

25
development area.

26
(n) Provision for the costs of relocating persons displaced

27
by the development and financial assistance and reimbursement of

07031'02 29

1
expenses, including litigation expenses and expenses incident to

2
the transfer of title, in accordance with the standards and pro-

3
visions of the uniform relocation assistance and real property

4
acquisition policies act of 1970, Public Law 91-646, 84

5
Stat. 1894, et seq.

6
(o) A plan for compliance with 1972 PA 221, MCL 213.321 to

7
213.332.

8
(p) The requirement that amendments to an approved develop-

9
ment plan or tax increment plan must be submitted by the author-

10
ity to the governing body for approval or rejection.

11
(q) Other material that the authority, local public agency,

12
or governing body considers pertinent.

13
Sec. 23. (1) The governing body, before adoption of an

14
ordinance approving a development plan or tax increment financing

15
plan, shall hold a public hearing on the development plan.

16
Notice of the time and place of the hearing shall be given by

17
publication twice in a newspaper of general circulation desig-

18
nated by the municipality, the first of which shall be not less

19
than 20 days before the date set for the hearing. Notice of the

20
hearing shall be posted in at least 20 conspicuous and public

21
places in the development area not less than 20 days before the

22
hearing. Notice shall also be mailed to all property taxpayers

23
of record in the development area not less than 20 days before

24
the hearing.

25
(2) Notice of the time and place of hearing on a development

26
plan shall contain all of the following:

07031'02 30

1
(a) A description of the proposed development area in

2
relation to highways, streets, streams, or otherwise.

3
(b) A statement that maps, plats, and a description of the

4
development plan, including the method of relocating families and

5
individuals who may be displaced from the area, are available for

6
public inspection at a place designated in the notice.

7
(c) A statement that all aspects of the development plan

8
will be open for discussion at the public hearing.

9
(d) Other information that the governing body considers

10
appropriate.

11
(3) At the time set for the hearing, the governing body

12
shall provide an opportunity for interested persons to speak and

13
shall receive and consider communications in writing. The hear-

14
ing shall provide the fullest opportunity for expression of opin-

15
ion, for argument on the merits, and for consideration of docu-

16
mentary evidence pertinent to the development plan. The govern-

17
ing body shall make and preserve a record of the public hearing,

18
including all data presented at the hearing.

19
Sec. 24. The governing body after a public hearing on the

20
development plan or the tax increment financing plan, or both,

21
with notice given under section 23, shall determine whether the

22
development plan or tax increment financing plan constitutes a

23
public purpose. If it determines that the development plan or

24
tax increment financing plan constitutes a public purpose, it

25
shall by ordinance approve or reject the plan, or approve it with

26
modification, based on the following considerations:

07031'02 31

1
(a) The findings and recommendations of a development area

2
citizens council, if a development area citizens council was

3
formed.

4
(b) The plan meets the requirements under section 21(2).

5
(c) The proposed method of financing the development is fea-

6
sible and the authority has the ability to arrange the

7
financing.

8
(d) The development is reasonable and necessary to carry out

9
the purposes of this act.

10
(e) The land included within the development area to be

11
acquired is reasonably necessary to carry out the purposes of the

12
plan and of this act in an efficient and economically satisfac-

13
tory manner.

14
(f) The development plan is in reasonable accord with the

15
land use plan of the municipality.

16
(g) Public services, such as fire and police protection and

17
utilities, are or will be adequate to service the project area.

18
(h) Changes in zoning, streets, street levels, intersec-

19
tions, and utilities are reasonably necessary for the project and

20
for the municipality.

21
Sec. 25. A person to be relocated under this act shall be

22
given not less than 90 days' written notice to vacate unless mod-

23
ified by court order issued for good cause and after a hearing.

24
Sec. 26. (1) If 100 or more individuals reside in a pro-

25
posed development area, a development area citizens council shall

26
be established at least 90 days before the public hearing on the

27
development plan or tax increment financing plan. The

07031'02 32

1
development area citizens council shall be established by the

2
governing body and shall consist of not less than 9 members. The

3
members of the development area citizens council shall be resi-

4
dents of the development area and shall be appointed by the gov-

5
erning body. A member of a development area citizens council

6
shall be at least 18 years of age.

7
(2) A development area citizens council shall be representa-

8
tive of the development area.

9
(3) A development area citizens council established under

10
this act shall act as an advisory body to the authority and the

11
governing body in the adoption of the development or tax incre-

12
ment financing plans.

13
Sec. 27. Periodically a representative of the authority

14
responsible for preparation of a development plan or tax incre-

15
ment financing plan within the development area shall consult

16
with and advise the development area citizens council regarding

17
the aspects of a development plan, including the development of

18
new housing for relocation purposes located either inside or out-

19
side of the development area. The consultation shall begin

20
before the authority or the governing body makes any final deci-

21
sions regarding a development or tax increment financing plan.

22
The consultation shall continue throughout the preparation and

23
implementation of the development plan or tax increment financing

24
plan.

25
Sec. 28. (1) Meetings of the development area citizens

26
council shall be open to the public. Notice of the time and

27
place of the meetings shall be given by publication in a

07031'02 33

1
newspaper of general circulation not less than 5 days before the

2
dates set for meetings of the development area citizens council.

3
A person present at those meetings shall have reasonable opportu-

4
nity to be heard.

5
(2) A record of the meetings of a development area citizens

6
council, including information and data presented, shall be main-

7
tained by the council.

8
(3) A development area citizens council may request of and

9
receive from the authority information and technical assistance

10
relevant to the preparation of the development plan for the

11
development area.

12
(4) Failure of a development area citizens council to orga-

13
nize or to consult with and be advised by the authority, or fail-

14
ure to advise the governing body, as provided in this act, shall

15
not preclude the adoption of a development plan by a municipality

16
if the municipality complies with the other provisions of this

17
act.

18
Sec. 29. In a development area where a citizens district

19
council established under 1945 PA 344, MCL 125.71 to 125.84,

20
already exists, the governing body may designate it as the devel-

21
opment area citizens council authorized by this act.

22
Sec. 30. Within 20 days after the public hearing on a

23
development plan or tax increment financing plan, the development

24
area citizens council shall notify the governing body, in writ-

25
ing, of its findings and recommendations concerning a proposed

26
development plan.

07031'02 34

1
Sec. 31. A development area citizens council is not

2
required and, if formed, may be dissolved in any of the following

3
situations:

4
(a) On petition of not less than 20% of the adult resident

5
population of the development area by the last federal decennial

6
or municipal census, a governing body, after public hearing with

7
notice of the hearing given in accordance with section 23 and by

8
a 2/3 vote, may adopt an ordinance for the development area to

9
eliminate the necessity of a development area citizens council.

10
(b) If there are fewer than 18 residents, real property

11
owners, or representatives of establishments located in the

12
development area eligible to serve on the development area citi-

13
zens council.

14
(c) Upon termination of the authority by ordinance of the

15
governing body.

16
Sec. 32. (1) The director of the authority shall submit a

17
budget to the board for the operation of the authority for each

18
fiscal year before the beginning of the fiscal year. The budget

19
shall be prepared in the manner and contain the information

20
required of municipal departments. After review by the board,

21
the budget shall be submitted to the governing body. The govern-

22
ing body must approve the budget before the board may adopt the

23
budget. Unless authorized by the governing body or this act,

24
funds of the municipality shall not be included in the budget of

25
the authority.

26
(2) The governing body of the municipality may assess a

27
reasonable pro rata share of the funds for the cost of handling

07031'02 35

1
and auditing the funds against the funds of the authority, other

2
than those committed, which shall be paid annually by the board

3
pursuant to an appropriate item in its budget.

4
Sec. 33. (1) A public facility, building, or structure that

5
is determined by the municipality to have significant historical

6
interests shall be preserved in a manner considered necessary by

7
the municipality in accordance with laws relative to the preser-

8
vation of historical sites.

9
(2) An authority shall refer all proposed changes to the

10
exterior of sites listed on the state register of historic sites

11
and the national register of historic places to the applicable

12
historic district commission created under the local historic

13
districts act, 1970 PA 169, MCL 399.201 to 399.215, or the

14
department of history, arts, and libraries for review.

15
Sec. 34. An authority that has completed the purposes for

16
which it was organized shall be dissolved by ordinance of the

17
governing body. The property and assets of the authority remain-

18
ing after the satisfaction of the obligations of the authority

19
belong to the municipality.

20
Sec. 35. (1) The state tax commission may institute pro-

21
ceedings to compel enforcement of this act.

22
(2) The state tax commission may promulgate rules necessary

23
for the administration of this act under the administrative pro-

24
cedures act of 1969, 1969 PA 306, MCL 24.201 to 24.328.

07031'02 Final page. LBO