HB-5463, As Passed House, December 13, 2012HB-5463, As Passed Senate, December 5, 2012

SENATE SUBSTITUTE FOR

HOUSE BILL NO. 5463

A bill to amend 1975 PA 197, entitled

"An act to provide for the establishment of a downtown development

authority; to prescribe its powers and duties; to correct and

prevent deterioration in business districts; to encourage historic

preservation; to authorize the acquisition and disposal of

interests in real and personal property; to authorize the creation

and implementation of development plans in the districts; to

promote the economic growth of the districts; to create a board; to

prescribe its powers and duties; 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 reimburse downtown development authorities for

certain losses of tax increment revenues; and to prescribe the

powers and duties of certain state officials,"

by amending sections 1, 4, 14, and 19 (MCL 125.1651, 125.1654,

125.1664, and 125.1669), section 1 as amended by 2011 PA 24,

section 4 as amended by 2006 PA 279, and section 14 as amended by

1993 PA 323, and by adding section 28a.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 1. As used in this act:

(a) "Advance" means a transfer of funds made by a municipality

to an authority or to another person on behalf of the authority in

anticipation of repayment by the authority. Evidence of the intent

to repay an advance may include, but is not limited to, an executed

agreement to repay, provisions contained in a tax increment

financing plan approved prior to the advance, or a resolution of

the authority or the municipality.

(b) "Assessed value" means 1 of the following:

(i) For valuations made before January 1, 1995, the state

equalized valuation as determined under the general property tax

act, 1893 PA 206, MCL 211.1 to 211.155.

(ii) For valuations made after December 31, 1994, the taxable

value as determined under section 27a of the general property tax

act, 1893 PA 206, MCL 211.27a.

pursuant to this act.

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

(e) "Business district" means an area in the downtown of a

municipality zoned and used principally for business.

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

by which the current assessed value of the project area, including

the assessed value of property for which specific local taxes are

paid in lieu of property taxes as determined in subdivision ~~(z),~~

(aa), exceeds the initial assessed value. The state tax commission

shall prescribe the method for calculating captured assessed value.

(g) "Catalyst development project" means a project that is

located in a municipality with a population greater than 600,000,

is designated by the authority as a catalyst development project,

and is expected to result in at least $300,000,000.00 of capital

investment. There shall be no more than 1 catalyst development

project designated within each authority.

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

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

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

board for purposes of this act, the township superintendent or

township manager of a township.

(i) ~~(h)~~ "Development area" means that area to which a

development plan is applicable.

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

requirements for a development plan set forth in section 17.

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

development plan.

(l) ~~(k)~~ "Downtown district" means that part of an area in a

business district that is specifically designated by ordinance of

the governing body of the municipality pursuant to this act. A

downtown district may include 1 or more separate and distinct

geographic areas in a business district as determined by the

municipality if the municipality enters into an agreement with a

qualified township under section 3(7) or if the municipality is a

city that surrounds another city and that other city lies between

the 2 separate and distinct geographic areas. If the downtown

district contains more than 1 separate and distinct geographic area

in the downtown district, the separate and distinct geographic

areas shall be considered 1 downtown district.

(m) (l) "Eligible advance" means an advance made before August

19, 1993.

(n) ~~(m)~~ "Eligible obligation" means an obligation issued or

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

authority before August 19, 1993 and its subsequent refunding by a

qualified refunding obligation. Eligible obligation includes an

authority's written agreement entered into before August 19, 1993

to pay an obligation issued after August 18, 1993 and before

December 31, 1996 by another entity on behalf of the authority.

(o) ~~(n)~~ "Fire alarm system" means a system designed to detect

and annunciate the presence of fire, or by-products of fire. Fire

alarm system includes smoke detectors.

(p) ~~(o)~~ "Fiscal year" means the fiscal year of the authority.

(q) ~~(p)~~ "Governing body of a municipality" means the elected

body of a municipality having legislative powers.

(r) ~~(q)~~ "Initial assessed value" means the assessed value, as

equalized, of all the taxable property within the boundaries of the

development area at the time the ordinance establishing the tax

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

assessment roll of the municipality for which equalization has been

completed at the time the resolution is adopted. Property exempt

from taxation at the time of the determination of the initial

assessed value shall be included as zero. For the purpose of

determining initial assessed value, property for which a specific

local tax is paid in lieu of a property tax shall not be considered

to be property that is exempt from taxation. The initial assessed

value of property for which a specific local tax was paid in lieu

of a property tax shall be determined as provided in subdivision

~~(z).~~ (aa). In the case of a municipality having a population of

less than 35,000 that established an authority prior to 1985,

created a district or districts, and approved a development plan or

tax increment financing plan or amendments to a plan, and which

plan or tax increment financing plan or amendments to a plan, and

which plan expired by its terms December 31, 1991, the initial

assessed value for the purpose of any plan or plan amendment

adopted as an extension of the expired plan shall be determined as

if the plan had not expired December 31, 1991. For a development

area designated before 1997 in which a renaissance zone has

subsequently been designated pursuant to the Michigan renaissance

zone act, 1996 PA 376, MCL 125.2681 to 125.2696, the initial

assessed value of the development area otherwise determined under

this subdivision shall be reduced by the amount by which the

current assessed value of the development area was reduced in 1997

due to the exemption of property under section 7ff of the general

property tax act, 1893 PA 206, MCL 211.7ff, but in no case shall

the initial assessed value be less than zero.

(s) ~~(r)~~ "Municipality" means a city, village, or township.

(t) ~~(s)~~ "Obligation" means a written promise to pay, whether

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

or a requirement to pay imposed by law. An obligation does not

include a payment required solely because of default upon an

obligation, employee salaries, or consideration paid for the use of

municipal offices. An obligation does not include those bonds that

have been economically defeased by refunding bonds issued under

this act. Obligation includes, but is not limited to, the

following:

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

property taxes or taxes levied in lieu of ad valorem property

taxes.

(ii) A management contract or a contract for professional

services.

(iii) A payment required on a contract, agreement, bond, or note

if the requirement to make or assume the payment arose before

August 19, 1993.

(iv) A requirement to pay or reimburse a person for the cost of

insurance for, or to maintain, property subject to a lease, land

contract, purchase agreement, or other agreement.

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

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

bond, or note.

(u) ~~(t)~~ "On behalf of an authority", in relation to an

eligible advance made by a municipality, or an eligible obligation

or other protected obligation issued or incurred by a municipality,

means in anticipation that an authority would transfer tax

increment revenues or reimburse the municipality from tax increment

revenues in an amount sufficient to fully make payment required by

the eligible advance made by the municipality, or eligible

obligation or other protected obligation issued or incurred by the

municipality, if the anticipation of the transfer or receipt of tax

increment revenues from the authority is pursuant to or evidenced

by 1 or more of the following:

(i) A reimbursement agreement between the municipality and an

authority it established.

(ii) A requirement imposed by law that the authority transfer

tax increment revenues to the municipality.

(iii) A resolution of the authority agreeing to make payments to

the incorporating unit.

(iv) Provisions in a tax increment financing plan describing

the project for which the obligation was incurred.

(v) ~~(u)~~ "Operations" means office maintenance, including

salaries and expenses of employees, office supplies, consultation

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

management of the authority and planning of its activities.

(w) ~~(v)~~ "Other protected obligation" means:

(i) A qualified refunding obligation issued to refund an

obligation described in subparagraph (ii), (iii), or (iv), an

obligation that is not a qualified refunding obligation that is

issued to refund an eligible obligation, or a qualified refunding

obligation issued to refund an obligation described in this

subparagraph.

(ii) An obligation issued or incurred by an authority or by a

municipality on behalf of an authority after August 19, 1993, but

before December 31, 1994, to finance a project described in a tax

increment finance plan approved by the municipality in accordance

with this act before December 31, 1993, for which a contract for

final design is entered into by or on behalf of the municipality or

authority before March 1, 1994 or for which a written agreement

with a developer, titled preferred development agreement, was

entered into by or on behalf of the municipality or authority in

July 1993.

(iii) An obligation incurred by an authority or municipality

after August 19, 1993, to reimburse a party to a development

agreement entered into by a municipality or authority before August

19, 1993, for a project described in a tax increment financing plan

approved in accordance with this act before August 19, 1993, and

undertaken and installed by that party in accordance with the

development agreement.

(iv) An obligation incurred by the authority evidenced by or to

finance a contract to purchase real property within a development

area or a contract to develop that property within the development

area, or both, if all of the following requirements are met:

(A) The authority purchased the real property in 1993.

(B) Before June 30, 1995, the authority enters a contract for

the development of the real property located within the development

area.

authority received approval for a grant from both of the following:

(I) The department of natural resources for site reclamation

of the real property.

(II) The department of consumer and industry services for

development of the real property.

(v) An ongoing management or professional services contract

with the governing body of a county which was entered into before

March 1, 1994 and which was preceded by a series of limited term

management or professional services contracts with the governing

body of the county, the last of which was entered into before

August 19, 1993.

(vi) A loan from a municipality to an authority if the loan was

approved by the legislative body of the municipality on April 18,

1994.

(vii) Funds expended to match a grant received by a

municipality on behalf of an authority for sidewalk improvements

from the Michigan department of transportation if the legislative

body of the municipality approved the grant application on April 5,

1993 and the grant was received by the municipality in June 1993.

(viii) For taxes captured in 1994, an obligation described in

this subparagraph issued or incurred to finance a project. An

obligation is considered issued or incurred to finance a project

described in this subparagraph only if all of the following are

met:

(A) The obligation requires raising capital for the project or

paying for the project, whether or not a borrowing is involved.

(B) The obligation was part of a development plan and the tax

increment financing plan was approved by a municipality on May 6,

1991.

understanding between a municipality and a public utility dated

October 27, 1994.

(D) The authority or municipality captured school taxes during

1994.

(ix) An obligation incurred after July 31, 2012 by an

authority, municipality, or other governmental unit to pay for

costs associated with a catalyst development project.

(x) ~~(w)~~ "Public facility" means a street, plaza, pedestrian

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

including street furniture and beautification, park, parking

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

bridge, lake, pond, canal, utility line or pipe, building, and

access routes to any of the foregoing, designed and dedicated to

use by the public generally, or used by a public agency. Public

facility includes an improvement to a facility used by the public

or a public facility as those terms are defined in section 1 of

1966 PA 1, MCL 125.1351, which improvement is made to comply with

the barrier free design requirements of the state construction code

promulgated under the Stille-DeRossett-Hale single state

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

Public facility also includes the acquisition, construction,

improvement, and operation of a building owned or leased by the

authority to be used as a retail business incubator.

(y) ~~(x)~~ "Qualified refunding obligation" means an obligation

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

of an authority to refund an obligation if 1 or more of the

following apply:

(i) The obligation is issued to refund a qualified refunding

obligation issued in November 1997 and any subsequent refundings of

that obligation issued before January 1, 2010 or the obligation is

issued to refund a qualified refunding obligation issued on May 15,

1997 and any subsequent refundings of that obligation issued before

January 1, 2010 in an authority in which 1 parcel or group of

parcels under common ownership represents 50% or more of the

taxable value captured within the tax increment finance district

and that will ultimately provide for at least a 40% reduction in

the taxable value of the property as part of a negotiated

settlement as a result of an appeal filed with the state tax

tribunal. Qualified refunding obligations issued under this

subparagraph are not subject to the requirements of section 611 of

the revised municipal finance act, 2001 PA 34, MCL 141.2611, if

issued before January 1, 2010. The duration of the development

program described in the tax increment financing plan relating to

the qualified refunding obligations issued under this subparagraph

is hereby extended to 1 year after the final date of maturity of

the qualified refunding obligations.

(ii) The refunding obligation meets both of the following:

(A) The net present value of the principal and interest to be

paid on the refunding obligation, including the cost of issuance,

will be less than the net present value of the principal and

interest to be paid on the obligation being refunded, as calculated

using a method approved by the department of treasury.

(B) The net present value of the sum of the tax increment

revenues described in subdivision ~~(bb)(~~ii) (cc)(ii) and the

distributions under section 13b to repay the refunding obligation

will not be greater than the net present value of the sum of the

tax increment revenues described in subdivision ~~(bb)(~~ii) (cc)(ii) and

the distributions under section 13b to repay the obligation being

refunded, as calculated using a method approved by the department

of treasury.

(iii) The obligation is issued to refund an other protected

obligation issued as a capital appreciation bond delivered to the

Michigan municipal bond authority on December 21, 1994 and any

subsequent refundings of that obligation issued before January 1,

2012. Qualified refunding obligations issued under this

subparagraph are not subject to the requirements of section 305(2),

(3), (5), and (6), section 501, section 503, or section 611 of the

revised municipal finance act, 2001 PA 34, MCL 141.2305, 141.2501,

141.2503, and 141.2611, if issued before January 1, 2012. The

duration of the development program described in the tax increment

financing plan relating to the qualified refunding obligations

issued under this subparagraph is extended to 1 year after the

final date of maturity of the qualified refunding obligations. The

obligation may be payable through the year 2025 at an interest rate

not exceeding the maximum rate permitted by law, notwithstanding

the bond maturity dates contained in the notice of intent to issue

bonds published by the municipality. An obligation issued under

this subparagraph is a qualified refunding obligation only to the

extent that revenues described in subdivision (bb)(ii) and

distributions under section 13b to repay the qualified refunding

obligation do not exceed $750,000.00.

(z) ~~(y)~~ "Qualified township" means a township that meets all

of the following requirements:

(i) Was not eligible to create an authority prior to January 3,

2005.

(ii) Adjoins a municipality that previously created an

authority.

(iii) Along with the adjoining municipality that previously

created an authority, is a member of the same joint planning

commission under the joint municipal planning act, 2003 PA 226, MCL

125.131 to 125.143.

(aa) ~~(z)~~ "Specific local tax" means a tax levied under 1974 PA

198, MCL 207.551 to 207.572, the commercial redevelopment act, 1978

PA 255, MCL 207.651 to 207.668, the technology park development

act, 1984 PA 385, MCL 207.701 to 207.718, and 1953 PA 189, MCL

211.181 to 211.182. The initial assessed value or current assessed

value of property subject to a specific local tax shall be the

quotient of the specific local tax paid divided by the ad valorem

millage rate. However, after 1993, the state tax commission shall

prescribe the method for calculating the initial assessed value and

current assessed value of property for which a specific local tax

was paid in lieu of a property tax.

(bb) ~~(aa)~~ "State fiscal year" means the annual period

commencing October 1 of each year.

(cc) ~~(bb)~~ "Tax increment revenues" means the amount of ad

valorem property taxes and specific local taxes attributable to the

application of the levy of all taxing jurisdictions upon the

captured assessed value of real and personal property in the

development area, subject to the following requirements:

(i) Tax increment revenues include ad valorem property taxes

and specific local taxes attributable to the application of the

levy of all taxing jurisdictions other than the state pursuant to

the state education tax act, 1993 PA 331, MCL 211.901 to 211.906,

and local or intermediate school districts upon the captured

assessed value of real and personal property in the development

area for any purpose authorized by this act.

(ii) Tax increment revenues include ad valorem property taxes

and specific local taxes attributable to the application of the

levy of the state pursuant to the state education tax act, 1993 PA

331, MCL 211.901 to 211.906, and local or intermediate school

districts upon the captured assessed value of real and personal

property in the development area in an amount equal to the amount

necessary, without regard to subparagraph (i), to repay eligible

advances, eligible obligations, and other protected obligations.

(iii) Tax increment revenues do not include any of the

following:

(A) Ad valorem property taxes attributable either to a portion

of the captured assessed value shared with taxing jurisdictions

within the jurisdictional area of the authority or to a portion of

value of property that may be excluded from captured assessed value

or specific local taxes attributable to such ad valorem property

taxes.

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

financing plan of the authority from the determination of the

amount of tax increment revenues to be transmitted to the authority

or specific local taxes attributable to such ad valorem property

taxes.

section 3(3) or specific local taxes attributable to such ad

valorem property taxes.

(iv) The amount of tax increment revenues authorized to be

included under subparagraph (ii) or (v), and required to be

transmitted to the authority under section 14(1), from ad valorem

property taxes and specific local taxes attributable to the

application of the levy of the state education tax act, 1993 PA

331, MCL 211.901 to 211.906, a local school district or an

intermediate school district upon the captured assessed value of

real and personal property in a development area shall be

determined separately for the levy by the state, each school

district, and each intermediate school district as the product of

sub-subparagraphs (A) and (B):

(A) The percentage that the total ad valorem taxes and

specific local taxes available for distribution by law to the

state, local school district, or intermediate school district,

respectively, bears to the aggregate amount of ad valorem millage

taxes and specific taxes available for distribution by law to the

state, each local school district, and each intermediate school

district.

(B) The maximum amount of ad valorem property taxes and

specific local taxes considered tax increment revenues under

subparagraph (ii) or (v).

(v) Tax increment revenues include ad valorem property taxes

and specific local taxes, in an annual amount and for each year

approved by the state treasurer, attributable to the levy by this

state under the state education tax act, 1993 PA 331, MCL 211.901

to 211.906, and by local or intermediate school districts, upon the

captured assessed value of real and personal property in the

development area of an authority established in a city with a

population of ~~750,000~~ 600,000 or more to pay for, or reimburse an

advance for, not more than $8,000,000.00 for the demolition of

buildings or structures on public or privately owned property

within a development area that commences in 2005, or to pay the

annual principal of or interest on an obligation, the terms of

which are approved by the state treasurer, issued by an authority,

or by a city on behalf of an authority, to pay not more than

$8,000,000.00 of the costs to demolish buildings or structures on

public or privately owned property within a development area that

commences in 2005.

(vi) Tax increment revenues include ad valorem property taxes

and specific local taxes attributable to the levy by this state

under the state education tax act, 1993 PA 331, MCL 211.201 to

211.906, and by local or intermediate school districts which were

levied on or after July 1, 2010, upon the captured assessed value

of real and personal property in the development area of an

authority established in a city with a population of 600,000 or

more to pay for, or reimburse an advance for, costs associated with

the land acquisition, preliminary site work, and construction of a

catalyst development project.

Sec. 4. (1) Except as provided in subsections (7), (8), and

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

board consisting of the chief executive officer of the municipality

and not less than 8 or more than 12 members as determined by the

governing body of the municipality. Members shall be appointed by

the chief executive officer of the municipality, subject to

approval by the governing body of the municipality. Not less than a

majority of the members shall be persons having an interest in

property located in the downtown district or officers, members,

trustees, principals, or employees of a legal entity having an

interest in property located in the downtown district. Not less

than 1 of the members shall be a resident of the downtown district,

if the downtown district has 100 or more persons residing within

it. Of the members first appointed, an equal number of the members,

as near as is practicable, shall be appointed for 1 year, 2 years,

3 years, and 4 years. A member shall hold office until the member's

successor is appointed. Thereafter, each member shall serve for a

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

the chief executive officer of the municipality for the unexpired

term only. Members of the board shall serve without compensation,

but shall be reimbursed for actual and necessary expenses. The

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

of procedure or the bylaws of the authority may provide that a

person be appointed to the board in his or her capacity as a public

official, whether appointed or elected. The rules of procedure or

bylaws may also provide that the public official's term shall

expire upon expiration of his or her service as a public official.

In addition, the public official's membership on the board expires

on his or her resignation from office as a public official.

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

qualify by taking and subscribing to the constitutional oath of

office.

(3) The business which the board may perform shall be

conducted at a public meeting of the board held in compliance with

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

notice of the time, date, and place of the meeting shall be given

in the manner required by the open meetings act, 1976 PA 267, MCL

15.261 to 15.275. The board shall adopt rules consistent with the

open meetings act, 1976 PA 267, MCL 15.261 to 15.275, governing its

procedure and the holding of regular meetings, subject to the

approval of the governing body. Special meetings may be held if

called in the manner provided in the rules of the board.

(4) Pursuant to notice and after having been given an

opportunity to be heard, a member of the board may be removed for

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

review by the circuit court.

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

monthly and the financial records shall always be open to the

public.

(6) In addition to the items and records prescribed in

subsection (5), a writing prepared, owned, used, in the possession

of, or retained by the board in the performance of an official

function shall be made available to the public in compliance with

the freedom of information act, 1976 PA 442, MCL 15.231 to 15.246.

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

more than 1 authority may establish a single board to govern all

authorities in the municipality. The governing body may designate

the board of an existing authority as the board for all authorities

or may establish by resolution a new board in the same manner as

provided in subsection (1). A member of a board governing more than

1 authority may be a resident of or have an interest in property in

any of the downtown districts controlled by the board in order to

meet the requirements of this section.

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

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

planning commission created pursuant to former 1931 PA 285 ~~, MCL~~

~~125.31 to 125.45,~~ or the Michigan planning enabling act, 2008 PA

33, MCL 125.3801 to 125.3885, serve as the board provided for in

subsection (1).

(9) If a municipality enters into an agreement with a

qualified township under section 3(7), the membership of the board

may be modified by the interlocal agreement described in section

3(7).

Sec. 14. (1) When the authority determines that it is

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

authority shall prepare and submit a tax increment financing plan

to the governing body of the municipality. The plan shall include a

development plan as provided in section 17, a detailed explanation

of the tax increment procedure, the maximum amount of bonded

indebtedness to be incurred, and the duration of the program, and

shall be in compliance with section 15. The plan shall contain a

statement of the estimated impact of tax increment financing on the

assessed values of all taxing jurisdictions in which the

development area is located. The plan may provide for the use of

part or all of the captured assessed value, but the portion

intended to be used by the authority shall be clearly stated in the

tax increment financing plan. The authority or municipality may

exclude from captured assessed value growth in property value

resulting solely from inflation. The plan shall set forth the

method for excluding growth in property value resulting solely from

inflation.

(2) The percentage of taxes levied for school operating

purposes that is captured and used by the tax increment financing

plan shall not be greater than the plan's percentage capture and

use of taxes levied by a municipality or county for operating

purposes. For purposes of the previous sentence, taxes levied by a

county for operating purposes include only millage allocated for

county or charter county purposes under the property tax limitation

act, ~~Act No. 62 of the Public Acts of 1933, being sections 211.201~~

~~to 211.217a of the Michigan Compiled Laws.~~ 1933 PA 62, MCL 211.201

to 211.217a. For purposes of this subsection, tax increment

revenues used to pay bonds issued by a municipality under section

16(1) shall be considered to be used by the tax increment financing

plan rather than shared with the municipality. The limitation of

this subsection does not apply to the portion of the captured

assessed value shared pursuant to an agreement entered into before

1989 with a county or with a city in which an enterprise zone is

approved under section 13 of the enterprise zone act, ~~Act No. 224~~

~~of the Public Acts of 1985, being section 125.2113 of the Michigan~~

~~Compiled Laws.~~1985 PA 224, MCL 125.2113.

(3) Approval of the tax increment financing plan shall be

pursuant to the notice, hearing, and disclosure provisions of

section 18. If the development plan is part of the tax increment

financing plan, only 1 hearing and approval procedure is required

for the 2 plans together.

(4) Before the public hearing on the tax increment financing

plan, the governing body shall provide a reasonable opportunity to

the taxing jurisdictions levying taxes subject to capture to meet

with the governing body. The authority shall fully inform the

taxing jurisdictions of the fiscal and economic implications of the

proposed development area. The taxing jurisdictions may present

their recommendations at the public hearing on the tax increment

financing plan. The authority may enter into agreements with the

taxing jurisdictions and the governing body of the municipality in

which the development area is located to share a portion of the

captured assessed value of the district.

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

modification is approved by the governing body upon notice and

after public hearings and agreements as are required for approval

of the original plan.

(6) Under a tax increment financing plan that includes a

catalyst development project, an authority may pledge available tax

increment revenues of the authority as security for any bonds

issued to develop and construct a catalyst development project.

Sec. 19. (1) The governing body after a public hearing on the

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

notice ~~thereof~~ of the hearing given in accordance with section 18,

shall determine whether the development plan or tax increment

financing plan constitutes a public purpose. If it determines that

the development plan or tax increment financing plan constitutes a

public purpose, it shall then approve or reject the plan, or

approve it with modification, by ordinance based on the following

considerations:

(a) The findings and recommendations of a development area

citizens council, if a development area citizens council was

formed.

(b) The plan meets the requirements set forth in section 17

(2).

feasible and the authority has the ability to arrange the

financing.

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

the purposes of this act.

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

acquired is reasonably necessary to carry out the purposes of the

plan and of this act in an efficient and economically satisfactory

manner.

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

master plan of the municipality.

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

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

(h) Changes in zoning, streets, street levels, intersections,

and utilities are reasonably necessary for the project and for the

municipality.

(2) Amendments to an approved development plan or tax

increment plan must be submitted by the authority to the governing

body for approval or rejection.

(3) Proposed amendments made to an approved development plan

to incorporate a catalyst development project plan shall be

submitted by the authority to the Michigan strategic fund for

approval or rejection of that part of the plan relating to the

catalyst development project. Amendments not approved or rejected

under this subsection by the Michigan strategic fund within 45 days

of submission for approval shall be considered approved.

Sec. 28a. Beginning January 1, 2010, the authority shall be

exempt from all taxation on its earnings or property. Instruments

of conveyance from an authority are exempt from transfer taxes

under 1966 PA 134, MCL 207.501 to 207.513, and the state real

estate transfer tax act, 1993 PA 330, MCL 207.521 to 207.537.