HB-5176, As Passed Senate, April 28, 2016

 

 

 

 

 

 

 

 

 

 

 

 

SENATE SUBSTITUTE FOR

 

HOUSE BILL NO. 5176

 

 

 

 

 

 

 

 

 

 

 

 

     A bill to amend 2014 PA 86, entitled

 

"Local community stabilization authority act,"

 

by amending sections 14, 17, and 21 (MCL 123.1354, 123.1357, and

 

123.1361), sections 14 and 17 as amended by 2015 PA 122; and to

 

repeal acts and parts of acts.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 14. (1) Not later than August 15, November 7, 2016, and

 

each August 15 September 7 thereafter, for each municipality that

 

is not a local school district, intermediate school district, or

 

tax increment finance authority, the department shall do all of the

 

following:

 

     (a) Calculate the municipality's personal property exemption

 

loss.

 


     (b) Multiply the municipality's personal property exemption

 

loss by the millage rates calculated under section 13(5).

 

     (c) Adjust the amount calculated under subdivision (b) by the

 

amount required to reflect the final order of a court or body of

 

competent jurisdiction related to any prior year calculation under

 

this subsection. An adjustment under this subdivision shall only be

 

made for municipalities for which changes in prior year taxable

 

values can be calculated from taxable values reported under section

 

151(1) of the state school aid act of 1979, 1979 PA 94, MCL

 

388.1751.

 

     (d) Adjust the amount calculated under subdivision (b), as

 

adjusted by subdivision (c), by the amount calculated under section

 

16a(2) for captured taxes levied by the municipality not including

 

taxes attributable to increased captured value.

 

     (2) Not later than August 15, November 7, 2016, and each

 

August 15 September 7 thereafter, for each municipality that is a

 

county, township, village, city, or authority that provides

 

essential services, the department shall do all of the following:

 

     (a) Add to the amount calculated under subsection (1)(a) any

 

increased value from expired tax exemptions for the current year.

 

     (b) Subtract from the amount calculated under subdivision (a)

 

the amount calculated under section 16a(2)(b) for the municipality,

 

not including any amount attributable to increased captured value.

 

     (c) Multiply the result of the calculation in subdivision (b)

 

by the millage rate calculated under section 13(5) for general

 

operating millage.

 

     (d) Multiply the result of the calculation in subdivision (c)

 


by the percentage of the municipality's general operating millage

 

used to fund the cost of essential services in the municipality's

 

fiscal year ending in 2012. The department shall calculate each

 

municipality's percentage of general operating millage used to fund

 

the cost of essential services in the municipality's fiscal year

 

ending in 2012, unless the municipality includes the calculation in

 

its comprehensive annual financial report for the municipality's

 

fiscal year ending in either 2014 or 2015 or otherwise reports the

 

calculation to the department in a form and in a manner prescribed

 

by the department.

 

     (e) Add to the result of the calculation in subdivision (d) an

 

amount calculated by multiplying the amount calculated under

 

subsection (2)(b) subdivision (b) by the millage rates calculated

 

under section 13(5) that are dedicated solely for the cost of

 

essential services levied on industrial personal property and

 

commercial personal property. A millage levied to fund a pension

 

under the fire fighters and police officers retirement act, 1937 PA

 

345, MCL 38.551 to 38.562, is dedicated solely for the cost of

 

essential services.

 

     (3) Not later than September 15, 2015, May 10, 2016, for each

 

municipality that is a city, the department shall do all of the

 

following:

 

     (a) Calculate the municipality's 2014 and 2015 small taxpayer

 

exemption loss.

 

     (b) Multiply the amount calculated under subdivision (a) 2014

 

small taxpayer exemption loss if greater than zero by the millage

 

rates calculated under section 13(5) for 2014, excluding debt

 


millage.

 

     (c) Multiply the amount calculated under subdivision (a) 2015

 

small taxpayer exemption loss if greater than zero by the millage

 

rates calculated under section 13(5) for 2015, excluding debt

 

millage.

 

     (d) Add the amounts calculated under subdivisions (b) and (c).

 

     (e) Subtract from the amount calculated under subdivision (d)

 

Calculate the sum of the municipality's debt loss for 2014 and 2015

 

reimbursed under section 17(1)(a) for millages used to calculate

 

the amounts under subdivisions (b) and (c).

 

     (f) Subtract from the amount calculated under subdivision (e)

 

Calculate the amount of any tax increment small taxpayer loss for

 

captured taxes levied by the municipality in 2014 and 2015 for

 

millages used to calculate the amounts under subdivisions (b) and

 

(c).

 

     (4) Not later than August 15, September 7, 2016, and each

 

August 15 September 7 thereafter, for each municipality that is not

 

a local school district, intermediate school district, or tax

 

increment finance authority, the department shall do all of the

 

following:

 

     (a) Calculate the municipality's 2015 small taxpayer exemption

 

loss.

 

     (b) Multiply the municipality's 2015 small taxpayer exemption

 

loss by the millage rates calculated under section 13(5).

 

     (c) Adjust the amount calculated under subdivision (b) by the

 

amount required to reflect the final order of a court or body of

 

competent jurisdiction related to any prior year calculation under

 


this subsection. An adjustment under this subdivision shall only be

 

made for municipalities for which changes in prior year taxable

 

values can be calculated from taxable values reported under section

 

151(1) of the state school aid act of 1979, 1979 PA 94, MCL

 

388.1751.

 

     (d) Adjust the amount calculated under subdivision (b), as

 

adjusted by subdivision (c), by the amount calculated under section

 

16a(2) for captured taxes levied by the municipality not including

 

taxes attributable to increased captured value. The adjustment

 

under this subdivision shall only be made to the extent that the

 

adjustment made under subsection (1)(d) did not fully account for

 

all captured taxes levied by the municipality not including taxes

 

attributable to increased captured value.

 

     Sec. 17. (1) The legislature shall appropriate funds for all

 

of the following purposes:

 

     (a) For fiscal year 2014-2015 and fiscal year 2015-2016, to

 

the authority, an amount equal to all debt loss for municipalities

 

that are not a local school district, intermediate school district,

 

or tax increment finance authority, an amount equal to all school

 

debt loss for municipalities that are a local school district or

 

intermediate school district, and an amount equal to all tax

 

increment small taxpayer loss for municipalities that are a tax

 

increment finance authority.

 

     (b) For fiscal year 2014-2015 through fiscal year 2018-2019 an

 

amount equal to the necessary expenses incurred by the department

 

in implementing this act.

 

     (c) Beginning in fiscal year 2019-2020 and each fiscal year

 


thereafter, an amount equal to the necessary expenses incurred by

 

the authority and the department in implementing this act.

 

     (2) In fiscal year 2014-2015 and fiscal year 2015-2016, the

 

authority shall distribute to municipalities those funds

 

appropriated under subsection (1)(a). However, in fiscal year 2014-

 

2015, if the authority is not able to make the distribution under

 

this subsection, the department shall make the distribution under

 

this subsection on behalf of the authority.

 

     (3) For calendar years 2014 and 2015, the authority shall

 

distribute local community stabilization share revenue to each city

 

in an amount determined by multiplying the sum of the local

 

community stabilization share revenue for the calendar years and

 

the amounts calculated under section 14(3)(e) and (f) by a

 

fraction, the numerator of which is that city's amount calculated

 

under section 14(3) 14(3)(d) and the denominator of which is the

 

total amount calculated under section 14(3).14(3)(d), and

 

subtracting from the result each city's amounts calculated under

 

section 14(3)(e) and (f).

 

     (4) Beginning for calendar year 2016, the authority shall

 

distribute local community stabilization share revenue as follows

 

in the following order of priority:

 

     (a) The authority shall distribute to each municipality an

 

amount equal to all of the following:

 

     (i) 100% of that municipality's school debt loss in the

 

current year and 100% of its amount calculated under section 15.

 

     (ii) 100% of that municipality's amount calculated under

 

section 16.

 


     (iii) 100% of that municipality's school operating loss not

 

reimbursed by the school aid fund in the current year.

 

     (iv) 100% of the amount calculated in section 14(2). However,

 

the amount distributed to a municipality under this subparagraph

 

shall not exceed the amount calculated in section 14(1)(d). All

 

distributions under this subparagraph shall be used to fund

 

essential services.

 

     (v) For a municipality that is a tax increment finance

 

authority, 100% of its amount calculated under section 16a(2).

 

     (vi) 100% of that municipality's amount calculated under

 

section 14(4).

 

     (b) Beginning for calendar year 2019, after the distributions

 

under subdivision (a), and subject to subparagraph (viii), the

 

authority shall distribute 5% of the remaining balance of the local

 

community stabilization share fund for the current calendar year to

 

each municipality that is not a local school district, intermediate

 

school district, or tax increment finance authority in an amount

 

determined as follows:

 

     (i) Calculate the total acquisition cost of all eligible

 

personal property in the municipality.

 

     (ii) Multiply the result of the calculation in subparagraph

 

(i) by the sum of the lowest rate of each individual millage levied

 

by the municipality in the period between 2012 and the year

 

immediately preceding the current year that is not used to

 

calculate a distribution under subdivision (a). (a)(i) to (iv). For

 

an individual millage rate not levied in 1 of the years, the lowest

 

millage rate is zero. A millage used to make the calculation under

 


this subparagraph must be eligible to be levied against both real

 

property and personal property.

 

     (iii) Divide the sum of the amounts calculated under

 

subparagraph (ii) for all municipalities subject to the calculation

 

by total qualified loss.

 

     (iv) Multiply the result of the calculation in subparagraph

 

(iii) by the amount calculated under section 16a(2) for captured

 

taxes levied by the municipality not including taxes attributable

 

to increased captured value.

 

     (v) Subtract from the amount calculated under subparagraph

 

(ii) the amount calculated under subparagraph (iv).

 

     (vi) Divide the result of the calculation in subparagraph (v)

 

by the sum of the calculation under subparagraph (v) for all

 

municipalities.

 

     (vii) Multiply the result of the calculation in subparagraph

 

(vi) by the amount to be distributed under this subdivision.

 

     (viii) For calendar year 2020, and each calendar year

 

thereafter, the percentage amount described in this subdivision

 

shall be increased an additional 5% each year, not to exceed 100%.

 

     (c) After the distributions in subdivisions (a) and (b), the

 

authority shall distribute the remaining balance of the local

 

community stabilization share fund for a calendar year to each

 

municipality in an amount determined by multiplying the remaining

 

balance by a fraction, the numerator of which is that

 

municipality's qualified loss and the denominator of which is the

 

total qualified loss.

 

     (5) The authority shall make the payments required by

 


subsection (3) not later than October 20, 2015, May 20, 2016, and

 

payments required by subsection (4) not later than on the following

 

dates:

 

     (a) For county allocated millage, November 20, 2016 and

 

thereafter September 20 of the year the millage is levied.

 

     (b) For county extra-voted millage, township millage, and

 

other millages levied 100% in December of a year, February 20 of

 

the following year.

 

     (c) For other millages, November 20, 2016 and thereafter

 

October 20 of the year the millage is levied.

 

     (6) If the authority has insufficient funds to make the

 

payments on the dates required in subsection (5), the department

 

shall advance to the authority the amount necessary for the

 

authority to make the required payments. The authority shall repay

 

the advance to the department from the local community

 

stabilization share.

 

     (7) For each fiscal year from fiscal year 2015-2016 through

 

fiscal year 2018-2019, the authority may use up to $300,000.00 of

 

the local community stabilization share revenue for purposes

 

consistent with implementing and administering this act.

 

     (8) The authority shall distribute local community

 

stabilization share revenue under this section as follows:

 

     (a) From fiscal year 2015-2016 local community stabilization

 

share revenue, $19,200,000.00 for calendar years 2014 and 2015 and

 

$76,900,000.00 for calendar year 2016.

 

     (b) From fiscal year 2016-2017 local community stabilization

 

share revenue, $297,400,000.00 for calendar year 2016 and

 


$83,200,000.00 for calendar year 2017.

 

     (c) From fiscal year 2017-2018 local community stabilization

 

share revenue, $321,500,000.00 for calendar year 2017 and

 

$89,000,000.00 for calendar year 2018.

 

     (d) From fiscal year 2018-2019 local community stabilization

 

share revenue, $341,800,000.00 for calendar year 2018 and

 

$95,900,000.00 for calendar year 2019.

 

     (e) From fiscal year 2019-2020 local community stabilization

 

share revenue, $364,500,000.00 for calendar year 2019 and

 

$101,400,000.00 for calendar year 2020.

 

     (f) From fiscal year 2020-2021 local community stabilization

 

share revenue, $383,500,000.00 for calendar year 2020 and

 

$108,000,000.00 for calendar year 2021.

 

     (g) From fiscal year 2021-2022 local community stabilization

 

share revenue, $405,700,000.00 for calendar year 2021 and

 

$115,600,000.00 for calendar year 2022.

 

     (h) From fiscal year 2022-2023 local community stabilization

 

share revenue, $428,300,000.00 for calendar year 2022 and

 

$119,700,000.00 for calendar year 2023.

 

     (i) From fiscal year 2023-2024 local community stabilization

 

share revenue, $438,900,000.00 for calendar year 2023 and

 

$122,800,000.00 for calendar year 2024.

 

     (j) From fiscal year 2024-2025 local community stabilization

 

share revenue, $445,800,000.00 for calendar year 2024 and

 

$124,000,000.00 for calendar year 2025.

 

     (k) From fiscal year 2025-2026 local community stabilization

 

share revenue, $447,100,000.00 for calendar year 2025 and

 


$124,300,000.00 for calendar year 2026.

 

     (l) From fiscal year 2026-2027 local community stabilization

 

share revenue, $447,700,000.00 for calendar year 2026 and

 

$124,500,000.00 for calendar year 2027.

 

     (m) From fiscal year 2027-2028 local community stabilization

 

share revenue, $448,000,000.00 for calendar year 2027 and

 

$124,600,000.00 for calendar year 2028.

 

     (n) From the local community stabilization share revenue for

 

fiscal year 2028-2029 and each fiscal year thereafter, the

 

authority shall increase the prior fiscal year's 2 distribution

 

amounts under this subsection by the personal property growth

 

factor, the first amount for the calendar year in which the fiscal

 

year begins and the second amount for the calendar year in which

 

the fiscal year ends. As used in this subdivision, "personal

 

property growth factor" means that term as defined in section 2c of

 

the use tax act, 1937 PA 94, MCL 205.92c.

 

     Sec. 21. From the amount received under section 17, a

 

municipality shall first replace debt loss or school debt loss, as

 

applicable. A municipality shall not receive a distribution under

 

this act if it has increased its millage rate without voter

 

approval to replace debt loss or school debt loss, as applicable,

 

that otherwise would be reimbursed under this act.

 

     (1) If a municipality does not adjust its debt millage rate to

 

reflect reimbursement for the small taxpayer exemption loss under

 

section 17(1)(a), the reimbursement under section 17(1)(a) shall be

 

reduced by the excess debt taxes levied.

 

     (2) A municipality shall use the amount received under section

 


17(4) for debt millage to pay debt. If a payment under section

 

17(4) for debt millage is not used to pay debt, the amount not used

 

to pay debt shall be deducted from a subsequent payment under

 

section 17(4).

 

     Enacting section 1. Section 20 of the local community

 

stabilization authority act, 2014 PA 86, MCL 123.1360, is repealed.