LOCAL DEV. AUTHORITY REIMBURSEMENTS S.B. 1139:
FLOOR SUMMARY
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Senate Bill 1139 (as reported without amendment)
Sponsor: Senator Mike Nofs
Committee: Commerce and Tourism
CONTENT
The bill would amend the Local Development Financing Act (LDFA) to revise the 2009 deadline for a local development finance authority to apply with the Department of Treasury for approval to have taxes levied under the State Education Tax (SET) Act retained and paid to the authority. The bill also would revise the 2009 deadline for the Department to respond to an application.
Under the LDFA, if the amount of tax increment revenue lost as a result of the personal property tax exemption in the Revised School Code, the SET Act, the plant rehabilitation and industrial development Act (commonly called PA 198), and the General Property Tax Act will reduce the allowable school tax capture received in a fiscal year, a local development finance authority, with the approval of the Department of Treasury, may request the local tax collecting treasurer to retain and pay to the authority taxes levied under the SET Act to be used for certain purposes.
An authority eligible to have SET revenue retained and paid to it had to apply for approval with the Department of Treasury by June 15, 2008, and June 1, 2009, and must apply by June 1 of each subsequent year. The Department must approve, modify, or deny the application by August 15 of each year.
Under the bill, the 2009 deadline for an authority to apply for approval with the Department would be September 30. For 2009 only, the deadline for the Department to approve, modify, or deny the application would be 30 days after the bill's effective date.
MCL 125.2161b Legislative Analyst: Patrick Affholter
FISCAL IMPACT
The change in the 2009 deadlines would likely result in a small increase in the number of applications from local development finance authorities to the Michigan Department of Treasury. Given this change in the number of applications, the bill could result in a reduction in State revenue by an unknown amount related to the School Aid Fund and an increase in School Aid Fund expenditures by an unknown amount.
The reason for the increase in School Aid Fund expenditures is that the State is required to maintain per-pupil funding guarantees for any captured school operating taxes and/or captured State Education Tax.
Date Completed: 3-3-10 Fiscal Analyst: Eric Scorsone
Analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent. sb1139/0910