SENATE BILL No. 393

 

 

May 18, 2017, Introduced by Senators HORN, SHIRKEY and SCHMIDT and referred to the Committee on Economic Development and International Investment.

 

 

 

     A bill to provide for the establishment of certain tax

 

increment finance authorities; to prescribe the powers and duties

 

of the authorities; to correct and prevent deterioration in

 

residential, commercial, and industrial areas and certain other

 

areas; to authorize the acquisition and disposal of interests in

 

real and personal property; to authorize the creation and

 

implementation of development plans and development areas; to

 

promote residential and economic growth; to create certain boards;

 

to prescribe the powers and duties of certain boards; to authorize

 

the issuance of bonds and other evidences of indebtedness; to levy

 

certain taxes; to authorize the use of tax increment financing; to

 

prescribe powers and duties of certain state officials; to provide

 

for rule promulgation; to provide for enforcement of this act; and

 

to repeal acts and parts of acts.

 


THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

PART 1

 

GENERAL PROVISIONS

 

     Sec. 101. This act shall be known and may be cited as the

 

"recodified tax increment financing act".

 

     Sec. 102. (1) The repeal of a statute or section of law by

 

this act does not relinquish any penalty, forfeiture, or liability,

 

whether criminal or civil in nature, and that statute or section of

 

law shall be treated as still remaining in force as necessary for

 

the purpose of instituting or sustaining any proper action or

 

prosecution for the enforcement of the penalty, forfeiture, or

 

liability.

 

     (2) A bond, note, or any other obligation issued by or on

 

behalf of an authority under a statute or section of law repealed

 

by this act shall continue in effect under its original terms under

 

the corresponding part of this act.

 

     (3) A contractual right, duty, or obligation relating to an

 

authority under a statute or section of law repealed by this act

 

shall continue and remain with the authority under the

 

corresponding part of this act.

 

     (4) A development plan or a tax increment financing plan

 

developed by an authority under a statute or section of law

 

repealed by this act shall remain in effect with the authority

 

under the corresponding part of this act.

 

     Sec. 103. Members of a board of an authority created under a

 

statute or section of law repealed by this act with the same or

 

similar name and functions shall continue in office for the


duration of the terms of office for which they were appointed.

 

Members shall be appointed under this act only as terms of the

 

former members expire or vacancies occur. Members of the board of

 

an authority created under a statute or section of law repealed by

 

this act may be appointed to the new board to succeed themselves

 

subject to any limits for the total period of service set forth in

 

this act.

 

PART 2

 

DOWNTOWN DEVELOPMENT AUTHORITIES

 

     Sec. 201. As used in this part:

 

     (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.

 

     (c) "Authority" means a downtown development authority created

 

pursuant to this part.

 

     (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 (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) "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 part, the township superintendent or township

 

manager of a township.

 

     (i) "Development area" means that area to which a development

 

plan is applicable.

 

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

 

requirements for a development plan set forth in section 217.

 

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

 

development plan.

 

     (l) "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 part. 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 203(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) "Eligible advance" means an advance made before August 19,

 

1993.

 

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

 

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

 

of a municipality having legislative powers.

 

     (r) "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

 

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

 

     (t) "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 part. 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) "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) "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) "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 part 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 part 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.

 

     (C) In 1993, the authority or municipality on behalf of the

 

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.

 

     (C) The obligation is in the form of a written memorandum of

 

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) "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) "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 (cc)(ii) and the distributions

 

under section 213b 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 (cc)(ii) and the distributions

 

under section 213b 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 (cc)(ii) and

 

distributions under section 213b to repay the qualified refunding

 

obligation do not exceed $750,000.00.

 

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

 

obligation issued on February 13, 2008, and any subsequent

 

refundings of that obligation, issued before December 31, 2018.

 

Qualified refunding obligations issued under this subparagraph are

 

not subject to the requirements of section 305(2), (3), (5), and

 

(6), 501, 503, or 611 of the revised municipal finance act, 2001 PA

 

34, MCL 141.2305, 141.2501, 141.2503, and 141.2611. 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. Revenues described

 

in subdivision (cc)(ii) and distributions made under section 213b

 

in excess of the amount needed for current year debt service on an

 

obligation issued under this subparagraph may be paid to the

 

authority to the extent necessary to pay future years' debt service

 

on the obligation as determined by the board.

 

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

 

October 1 of each year.

 

     (cc) "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 part.

 

     (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.

 

     (C) Ad valorem property taxes exempted from capture under

 

section 203(3) or specific local taxes attributable to such ad

 

valorem property taxes.

 

     (D) Ad valorem property taxes levied under 1 or more of the

 

following or specific local taxes attributable to those ad valorem


property taxes:

 

     (I) The zoological authorities act, 2008 PA 49, MCL 123.1161

 

to 123.1183.

 

     (II) The art institute authorities act, 2010 PA 296, MCL

 

123.1201 to 123.1229.

 

     (III) Except as otherwise provided in section 203(3), ad

 

valorem property taxes or specific local taxes attributable to

 

those ad valorem property taxes levied for a separate millage for

 

public library purposes approved by the electors after December 31,

 

2016.

 

     (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 214(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 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. 201a. The legislature finds all of the following:

 

     (a) That there exists in this state conditions of property

 

value deterioration detrimental to the state economy and the

 

economic growth of the state and its local units of government.

 

     (b) That government programs are desirable and necessary to

 

eliminate the causes of property value deterioration thereby

 

benefiting the economic growth of the state.

 

     (c) That it is appropriate to finance these government

 

programs by means available to the state and local units of

 

government in the state, including tax increment financing.

 

     (d) That tax increment financing is a government financing

 

program that contributes to economic growth and development by

 

dedicating a portion of the increase in the tax base resulting from

 

economic growth and development to facilities, structures, or

 

improvements within a development area thereby facilitating

 

economic growth and development.

 

     (e) That it is necessary for the legislature to exercise its

 

power to legislate tax increment financing as authorized in this

 

part and in the exercise of this power to mandate the transfer of

 

tax increment revenues by city, village, township, school district,

 

and county treasurers to authorities created under this part in

 

order to effectuate the legislative government programs to

 

eliminate property value deterioration and to promote economic


growth.

 

     (f) That halting property value deterioration and promoting

 

economic growth in the state are essential governmental functions

 

and constitute essential public purposes.

 

     (g) That economic development strengthens the tax base upon

 

which local units of government rely and that government programs

 

to eliminate property value deterioration benefit local units of

 

government and are for the use of the local units of government.

 

     (h) That the provisions of this part are enacted to provide a

 

means for local units of government to eliminate property value

 

deterioration and to promote economic growth in the communities

 

served by those local units of government.

 

     Sec. 202. (1) Except as otherwise provided in this subsection,

 

a municipality may establish 1 authority. If, before November 1,

 

1985, a municipality establishes more than 1 authority, those

 

authorities may continue to exist as separate authorities. Under

 

the conditions described in section 203a, a municipality may have

 

more than 1 authority within that municipality's boundaries. A

 

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

 

created by this part.

 

     (2) An authority shall be a public body corporate which may

 

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

 

all the powers necessary to carry out the purpose of its

 

incorporation. The enumeration of a power in this part shall not be

 

construed as a limitation upon the general powers of an authority.

 

     Sec. 203. (1) When the governing body of a municipality

 

determines that it is necessary for the best interests of the


public to halt property value deterioration and increase property

 

tax valuation where possible in its business district, to eliminate

 

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

 

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

 

create and provide for the operation of an authority.

 

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

 

a date for the holding of a public hearing on the adoption of a

 

proposed ordinance creating the authority and designating the

 

boundaries of the downtown district. Notice of the public hearing

 

shall be published twice in a newspaper of general circulation in

 

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

 

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

 

governing body proposing to create the authority shall also mail

 

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

 

proposed district and for a public hearing to be held after

 

February 15, 1994 to the governing body of each taxing jurisdiction

 

levying taxes that would be subject to capture if the authority is

 

established and a tax increment financing plan is approved.

 

Beginning June 1, 2005, the notice of hearing within the time frame

 

described in this subsection shall be mailed by certified mail to

 

the governing body of each taxing jurisdiction levying taxes that

 

would be subject to capture if the authority is established and a

 

tax increment financing plan is approved. Failure of a property

 

taxpayer to receive the notice shall not invalidate these

 

proceedings. Notice of the hearing shall be posted in at least 20

 

conspicuous and public places in the proposed downtown district not

 

less than 20 days before the hearing. The notice shall state the


date, time, and place of the hearing, and shall describe the

 

boundaries of the proposed downtown district. A citizen, taxpayer,

 

or property owner of the municipality or an official from a taxing

 

jurisdiction with millage that would be subject to capture has the

 

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

 

and the boundaries of the proposed downtown district. The governing

 

body of the municipality shall not incorporate land into the

 

downtown district not included in the description contained in the

 

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

 

the downtown district in the final determination of the boundaries.

 

     (3) Not more than 60 days after a public hearing held after

 

February 15, 1994, the governing body of a taxing jurisdiction

 

levying ad valorem property taxes that would otherwise be subject

 

to capture may exempt its taxes from capture by adopting a

 

resolution to that effect and filing a copy with the clerk of the

 

municipality proposing to create the authority. The resolution

 

takes effect when filed with that clerk and remains effective until

 

a copy of a resolution rescinding that resolution is filed with

 

that clerk. If a separate millage for public library purposes was

 

levied before January 1, 2017, and all obligations and other

 

protected obligations of the authority are paid, then the levy is

 

exempt from capture under this part, unless the library board or

 

commission allows all or a portion of its taxes levied to be

 

included as tax increment revenues and subject to capture under

 

this part under the terms of a written agreement between the

 

library board or commission and the authority. The written

 

agreement shall be filed with the clerk of the municipality.


However, if a separate millage for public library purposes was

 

levied before January 1, 2017, and the authority alters or amends

 

the boundaries of a downtown district or extends the duration of

 

the existing finance plan, then the library board or commission

 

may, not later than 60 days after a public hearing is held under

 

this subsection, exempt all or a portion of its taxes from capture

 

by adopting a resolution to that effect and filing a copy with the

 

clerk of the municipality that created the authority. For ad

 

valorem property taxes or specific local taxes attributable to

 

those ad valorem property taxes levied for a separate millage for

 

public library purposes approved by the electors after December 31,

 

2016, a library board or commission may allow all or a portion of

 

its taxes levied to be included as tax increment revenues and

 

subject to capture under this part under the terms of a written

 

agreement between the library board or commission and the

 

authority. The written agreement shall be filed with the clerk of

 

the municipality. However, if the library was created under section

 

1 or 10a of 1877 PA 164, MCL 397.201 and 397.210a, or established

 

under 1869 LA 233, then any action of the library board or

 

commission under this subsection shall have the concurrence of the

 

chief executive officer of the city that created the library to be

 

effective, and, if the action of the library board or commission

 

involves any bond issued by this state or a state agency, the

 

concurrence of the state treasurer.

 

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

 

governing body of the municipality intends to proceed with the

 

establishment of the authority, it shall adopt, by majority vote of


its members, an ordinance establishing the authority and

 

designating the boundaries of the downtown district within which

 

the authority shall exercise its powers. The adoption of the

 

ordinance is subject to any applicable statutory or charter

 

provisions in respect to the approval or disapproval by the chief

 

executive or other officer of the municipality and the adoption of

 

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

 

with the secretary of state promptly after its adoption and shall

 

be published at least once in a newspaper of general circulation in

 

the municipality.

 

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

 

the boundaries of the downtown district to include or exclude lands

 

from the downtown district pursuant to the same requirements for

 

adopting the ordinance creating the authority.

 

     (6) A municipality that has created an authority may enter

 

into an agreement with an adjoining municipality that has created

 

an authority to jointly operate and administer those authorities

 

under an interlocal agreement under the urban cooperation act of

 

1967, 1967 (Ex Sess) PA 7, MCL 124.501 to 124.512.

 

     (7) A municipality that has created an authority may enter

 

into an agreement with a qualified township to operate its

 

authority in a downtown district in the qualified township under an

 

interlocal agreement under the urban cooperation act of 1967, 1967

 

(Ex Sess) PA 7, MCL 124.501 to 124.512. The interlocal agreement

 

between the municipality and the qualified township shall provide

 

for, but is not limited to, all of the following:

 

     (a) Size and makeup of the board.


     (b) Determination and modification of downtown district,

 

business district, and development area.

 

     (c) Modification of development area and development plan.

 

     (d) Issuance and repayment of obligations.

 

     (e) Capture of taxes.

 

     (f) Notice, hearing, and exemption of taxes from capture

 

provisions described in this section.

 

     Sec. 203a. If a downtown district is part of an area annexed

 

to or consolidated with another municipality, the authority

 

managing that district shall become an authority of the annexing or

 

consolidated municipality. Obligations of that authority incurred

 

under a development or tax increment plan, agreements related to a

 

development or tax increment plan, and bonds issued under this part

 

shall remain in effect following the annexation or consolidation.

 

     Sec. 203b. (1) An ordinance enacted by a municipality that has

 

a population of less than 50,000 establishing an authority,

 

creating a district, or approving a development plan or tax

 

increment financing plan, or an amendment to an authority,

 

district, or plan, and all actions taken under that ordinance,

 

including the issuance of bonds, are ratified and validated

 

notwithstanding that notice for the public hearing on the

 

establishment of the authority, creation of the district, or

 

approval of the development plan or tax increment financing plan,

 

or on the amendment, was not published, posted, or mailed at least

 

20 days before the hearing, if the notice was published or posted

 

at least 15 days before the hearing or the authority was

 

established in 1984 by a village that filed the ordinance with the


secretary of state not later than March, 1986. This section applies

 

only to an ordinance adopted by a municipality before February 1,

 

1991, and shall include any bonds or amounts to be used by the

 

authority to pay the principal of and interest on bonds that have

 

been issued or that are to be issued by the authority, the

 

incorporating municipality, or a county on behalf of the

 

incorporating municipality. An authority for which an ordinance or

 

amendment to the ordinance establishing the authority has been

 

published before February 1, 1991 is considered for purposes of

 

section 203(4) to have promptly filed the ordinance or amendment to

 

the ordinance with the secretary of state if the ordinance or

 

amendment to the ordinance is filed with the secretary of state

 

before October 1, 1991. As used in this section, "notice was

 

published" means publication of the notice occurred at least once.

 

     (2) A development plan and tax increment financing plan

 

approved by a resolution adopted by the village council of a

 

village having a population of less than 3,000 before June 15, 1988

 

rather than by adoption of an ordinance is ratified and validated,

 

if an amendment to the plans was adopted by the village council in

 

compliance with sections 18 and 19.

 

     (3) A development plan and tax increment financing plan

 

approved by a resolution adopted by the village council of a

 

village having a population of less than 7,000 before June 1, 1998

 

rather than by adoption of an ordinance is ratified and validated

 

if an amendment to the plans was adopted by the village council in

 

compliance with sections 18 and 19.

 

     Sec. 203c. The validity of the proceedings or findings


establishing an authority, or of the procedure, adequacy of notice,

 

or findings with respect to the approval of a development plan or

 

tax increment financing plan is conclusive with respect to the

 

capture of tax increment revenues for an other protected obligation

 

that is a bond issued after October 1, 1994.

 

     Sec. 203d. An ordinance enacted by a municipality that has a

 

population of greater than 1,000 and less than 2,000 establishing

 

an authority, creating a district, or approving a development plan

 

or tax increment financing plan, or an amendment to an authority,

 

district, or plan, and all actions taken or to be taken under that

 

ordinance, including the issuance of bonds, are ratified and

 

validated notwithstanding that notice for the public hearing on the

 

establishment of the authority, creation of the district, or

 

approval of the development plan or tax increment financing plan,

 

or on the amendment, was not published, posted, or mailed at least

 

20 days before the hearing, provided that the notice was either

 

published or posted at least 10 days before the hearing or that the

 

authority was established in 1990 by a municipality that filed the

 

ordinance with the secretary of state not later than July 1991.

 

This section applies only to an ordinance or an amendment adopted

 

by a municipality before January 1, 1999 and shall include any

 

bonds or amounts to be used by the authority to pay the principal

 

of and interest on bonds that have been issued or that are to be

 

issued by the authority or the incorporating municipality. An

 

authority for which an ordinance or amendment to the ordinance

 

establishing the authority has been published before February 1,

 

1991 is considered for purposes of section 203(3) to have promptly


filed the ordinance or amendment to the ordinance with the

 

secretary of state if the ordinance or amendment to the ordinance

 

is filed with the secretary of state before December 31, 2002. The

 

validity of the proceedings or findings establishing an authority

 

described in this section, or of the procedure, adequacy of notice,

 

or findings with respect to the approval of a development plan or

 

tax increment financing plan for an authority described in this

 

section is conclusive with respect to the capture of tax increment

 

revenues for a bond issued after June 1, 2002 and before June 1,

 

2006. As used in this section, "notice was either published or

 

posted" means either publication or posting of the notice occurred

 

at least once.

 

     Sec. 204. (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 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 203(7), the membership of the

 

board may be modified by the interlocal agreement described in

 

section 203(7).

 

     Sec. 205. (1) The board may employ and fix the compensation of

 

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

 

municipality. The director shall serve at the pleasure of the

 

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

 

of director. Before entering upon the duties of his or her office,

 

the director shall take and subscribe to the constitutional oath,

 

and furnish bond, by posting a bond in the penal sum determined in

 

the ordinance establishing the authority payable to the authority

 

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

 

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

 

deemed an operating expense of the authority, payable from funds

 

available to the authority for expenses of operation. The director

 

shall be the chief executive officer of the authority. Subject to

 

the approval of the board, the director shall supervise, and be

 

responsible for, the preparation of plans and the performance of

 

the functions of the authority in the manner authorized by this

 

part. The director shall attend the meetings of the board, and

 

shall render to the board and to the governing body of the

 

municipality a regular report covering the activities and financial

 

condition of the authority. If the director is absent or disabled,

 

the board may designate a qualified person as acting director to

 

perform the duties of the office. Before entering upon the duties

 

of his or her office, the acting director shall take and subscribe

 

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


director shall furnish the board with information or reports

 

governing the operation of the authority as the board requires.

 

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

 

treasurer, who shall keep the financial records of the authority

 

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

 

the expenditure of funds of the authority. The treasurer shall

 

perform such other duties as may be delegated to him or her by the

 

board and shall furnish bond in an amount as prescribed by the

 

board.

 

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

 

secretary, who shall maintain custody of the official seal and of

 

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

 

maintained by the treasurer. The secretary shall attend meetings of

 

the board and keep a record of its proceedings, and shall perform

 

such other duties delegated by the board.

 

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

 

the proper performance of its duties. The legal counsel shall

 

represent the authority in actions brought by or against the

 

authority.

 

     (5) The board may employ other personnel deemed necessary by

 

the board.

 

     Sec. 206. The employees of an authority shall be eligible to

 

participate in municipal retirement and insurance programs of the

 

municipality as if they were civil service employees except that

 

the employees of an authority are not civil service employees.

 

     Sec. 207. (1) The board may:

 

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


the downtown district.

 

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

 

the downtown district.

 

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

 

remodeling, rehabilitation, restoration, preservation, or

 

reconstruction of a public facility, an existing building, or a

 

multiple-family dwelling unit which may be necessary or appropriate

 

to the execution of a plan which, in the opinion of the board, aids

 

in the economic growth of the downtown district.

 

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

 

facility within the development area 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.

 

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

 

which is chiefly responsible for planning in the municipality,

 

designed to halt the deterioration of property values in the

 

downtown district and to promote the economic growth of the

 

downtown district, and take such steps as may be necessary to

 

persuade property owners to implement the plans to the fullest

 

extent possible.

 

     (f) Implement any plan of development in the downtown district

 

necessary to achieve the purposes of this part, in accordance with

 

the powers of the authority as granted by this part.

 

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

 

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

 

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


and in a manner the authority considers proper or own, convey, or

 

otherwise dispose of, or lease as lessor or lessee, land and other

 

property, real or personal, or rights or interests in property,

 

which the authority determines is reasonably necessary to achieve

 

the purposes of this part, and to grant or acquire licenses,

 

easements, and options with respect to that property.

 

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

 

restore and preserve, equip, improve, maintain, repair, and operate

 

any building, including multiple-family dwellings, and any

 

necessary or desirable appurtenances to that property, within the

 

downtown district for the use, in whole or in part, of any public

 

or private person or corporation, or a combination of them.

 

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

 

use of any building or property under its control or any part

 

thereof, or facility therein, and pledge the fees, rents, and

 

charges for the payment of revenue bonds issued by the authority.

 

     (k) Lease any building or property under its control, or any

 

part of a building or property.

 

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

 

things of value from a public or private source.

 

     (m) Acquire and construct public facilities.

 

     (n) Create, operate, and fund marketing initiatives that

 

benefit only retail and general marketing of the downtown district.

 

     (o) Contract for broadband service and wireless technology

 

service in the downtown district.

 

     (p) Operate and perform all duties and exercise all

 

responsibilities described in this section in a qualified township


if the qualified township has entered into an agreement with the

 

municipality under section 203(7).

 

     (q) Create, operate, and fund a loan program to fund

 

improvements for existing buildings located in a downtown district

 

to make them marketable for sale or lease. The board may make loans

 

with interest at a market rate or may make loans with interest at a

 

below market rate, as determined by the board.

 

     (r) Create, operate, and fund retail business incubators in

 

the downtown district.

 

     (2) If it is the express determination of the board to create,

 

operate, or fund a retail business incubator in the downtown

 

district, the board shall give preference to tenants who will

 

provide goods or services that are not available or that are

 

underserved in the downtown area. If the board creates, operates,

 

or funds retail business incubators in the downtown district, the

 

board and each tenant who leases space in a retail business

 

incubator shall enter into a written contract that includes, but is

 

not limited to, all of the following:

 

     (a) The lease or rental rate that may be below the fair market

 

rate as determined by the board.

 

     (b) The requirement that a tenant may lease space in the

 

retail business incubator for a period not to exceed 18 months.

 

     (c) The terms of a joint operating plan with 1 or more other

 

businesses located in the downtown district.

 

     (d) A copy of the business plan of the tenant that contains

 

measurable goals and objectives.

 

     (e) The requirement that the tenant participate in basic


management classes, business seminars, or other business education

 

programs offered by the authority, the local chamber of commerce,

 

local community colleges, or institutions of higher education, as

 

determined by the board.

 

     Sec. 208. If a board created under this part serves as the

 

planning commission under the Michigan planning enabling act, 2008

 

PA 33, MCL 125.3801 to 125.3885, the board shall include planning

 

commission business in its agenda.

 

     Sec. 209. The authority shall be deemed an instrumentality of

 

a political subdivision for purposes of 1972 PA 227, MCL 213.321 to

 

213.332.

 

     Sec. 210. A municipality may take private property under 1911

 

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

 

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

 

in an approved development, on terms and conditions it deems

 

appropriate, and the taking, transfer, and use shall be considered

 

necessary for public purposes and for the benefit of the public.

 

     Sec. 211. (1) The activities of the authority shall be

 

financed from 1 or more of the following sources:

 

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

 

functions.

 

     (b) Proceeds of a tax imposed pursuant to section 212.

 

     (c) Money borrowed and to be repaid as authorized by sections

 

213 and 213a.

 

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

 

leased, licensed, or operated by the authority or under its

 

control, subject to the limitations imposed upon the authority by


trusts or other agreements.

 

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

 

under sections 214 to 216.

 

     (f) Proceeds from a special assessment district created as

 

provided by law.

 

     (g) Money obtained from other sources approved by the

 

governing body of the municipality or otherwise authorized by law

 

for use by the authority or the municipality to finance a

 

development program.

 

     (h) Money obtained pursuant to section 213b.

 

     (i) Revenue transferred pursuant to section 11a of chapter 2

 

of the city income tax act, 1964 PA 284, MCL 141.611a.

 

     (j) Revenue transferred pursuant to section 11b of chapter 2

 

of the city income tax act, 1964 PA 284, MCL 141.611b.

 

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

 

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

 

authority, subject to disbursement pursuant to this part. Except as

 

provided in this part, the municipality shall not obligate itself,

 

nor shall it ever be obligated to pay any sums from public funds,

 

other than money received by the municipality pursuant to this

 

section, for or on account of the activities of the authority.

 

     Sec. 212. (1) An authority with the approval of the municipal

 

governing body may levy an ad valorem tax on the real and tangible

 

personal property not exempt by law and as finally equalized in the

 

downtown district. The tax shall not be more than 1 mill if the

 

downtown district is in a municipality having a population of

 

1,000,000 or more, or not more than 2 mills if the downtown


district is in a municipality having a population of less than

 

1,000,000. The tax shall be collected by the municipality creating

 

the authority levying the tax. The municipality shall collect the

 

tax at the same time and in the same manner as it collects its

 

other ad valorem taxes. The tax shall be paid to the treasurer of

 

the authority and credited to the general fund of the authority for

 

purposes of the authority.

 

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

 

borrow money and issue its notes under the revised municipal

 

finance act, 2001 PA 34, MCL 141.2101 to 141.2821, in anticipation

 

of collection of the ad valorem tax authorized in this section.

 

     Sec. 213. The authority may borrow money and issue its

 

negotiable revenue bonds under the revenue bond act of 1933, 1933

 

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

 

authority shall not except as hereinafter provided be deemed a debt

 

of the municipality or the state. The municipality by majority vote

 

of the members of its governing body may pledge its full faith and

 

credit to support the authority's revenue bonds.

 

     Sec. 213a. (1) The authority may with approval of the local

 

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

 

finance all or part of the costs of acquiring or constructing

 

property in connection with the implementation of a development

 

plan in the downtown district or to refund or refund in advance

 

bonds or notes issued pursuant to this section. The costs which may

 

be financed by the issuance of revenue bonds or notes may include

 

the cost of purchasing, acquiring, constructing, improving,

 

enlarging, extending, or repairing property in connection with the


implementation of a development plan in the downtown district; any

 

engineering, architectural, legal, accounting, or financial

 

expenses; the costs necessary or incidental to the borrowing of

 

money; interest on the bonds or notes during the period of

 

construction; a reserve for payment of principal and interest on

 

the bonds or notes; and a reserve for operation and maintenance

 

until sufficient revenues have developed. The authority may secure

 

the bonds and notes by mortgage, assignment, or pledge of the

 

property and any money, revenues, or income received in connection

 

therewith.

 

     (2) A pledge made by the authority shall be valid and binding

 

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

 

the authority immediately shall be subject to the lien of the

 

pledge without a physical delivery, filing, or further act. The

 

lien of such a pledge shall be valid and binding as against parties

 

having claims of any kind in tort, contract, or otherwise, against

 

the authority, irrespective of whether the parties have notice of

 

the lien. Neither the resolution, the trust agreement, nor any

 

other instrument by which a pledge is created need be filed or

 

recorded.

 

     (3) Bonds or notes issued pursuant to this section shall be

 

exempt from all taxation in this state except inheritance and

 

transfer taxes, and the interest on the bonds or notes shall be

 

exempt from all taxation in this state, notwithstanding that the

 

interest may be subject to federal income tax.

 

     (4) The municipality shall not be liable on bonds or notes of

 

the authority issued pursuant to this section and the bonds or


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

 

shall contain on their face a statement to that effect.

 

     (5) The bonds and notes of the authority may be invested in by

 

all public officers, state agencies and political subdivisions,

 

insurance companies, banks, savings and loan associations,

 

investment companies, and fiduciaries and trustees, and may be

 

deposited with and received by all public officers and the agencies

 

and political subdivisions of this state for any purpose for which

 

the deposit of bonds is authorized.

 

     Sec. 213b. (1) If the amount of tax increment revenues lost as

 

a result of the reduction of taxes levied by local school districts

 

for school operating purposes required by the millage limitations

 

under section 1211 of the school code of 1976, 1976 PA 451, MCL

 

380.1211, reduced by the amount of tax increment revenues received

 

from the capture of taxes levied under or attributable to the state

 

education tax act, 1993 PA 331, MCL 211.901 to 211.906, will cause

 

the tax increment revenues received in a fiscal year by an

 

authority under section 215 to be insufficient to repay an eligible

 

advance or to pay an eligible obligation, the legislature shall

 

appropriate and distribute to the authority the amount described in

 

subsection (5).

 

     (2) Not less than 30 days before the first day of a fiscal

 

year, an authority eligible to retain tax increment revenues from

 

taxes levied by a local or intermediate school district or this

 

state or to receive a distribution under this section for that

 

fiscal year shall file a claim with the department of treasury. The

 

claim shall include the following information:


     (a) The property tax millage rates levied in 1993 by local

 

school districts within the jurisdictional area of the authority

 

for school operating purposes.

 

     (b) The property tax millage rates expected to be levied by

 

local school districts within the jurisdictional area of the

 

authority for school operating purposes for that fiscal year.

 

     (c) The tax increment revenues estimated to be received by the

 

authority for that fiscal year based upon actual property tax

 

levies of all taxing jurisdictions within the jurisdictional area

 

of the authority.

 

     (d) The tax increment revenues the authority estimates it

 

would have received for that fiscal year if property taxes were

 

levied by local school districts within the jurisdictional area of

 

the authority for school operating purposes at the millage rates

 

described in subdivision (a) and if no property taxes were levied

 

by this state under the state education tax act, 1993 PA 331, MCL

 

211.901 to 211.906.

 

     (e) A list and documentation of eligible obligations and

 

eligible advances and the payments due on each of those eligible

 

obligations or eligible advances in that fiscal year, and the total

 

amount of all the payments due on those eligible obligations and

 

eligible advances in that fiscal year.

 

     (f) The amount of money, other than tax increment revenues,

 

estimated to be received in that fiscal year by the authority that

 

is primarily pledged to, and to be used for, the payment of an

 

eligible obligation or the repayment of an eligible advance. That

 

amount shall not include excess tax increment revenues of the


authority that are permitted by law to be retained by the authority

 

for purposes that further the development program. However, that

 

amount shall include money to be obtained from sources authorized

 

by law, which law is enacted on or after December 1, 1993, for use

 

by the municipality or authority to finance a development project.

 

     (g) The amount of a distribution received pursuant to this

 

part for a fiscal year in excess of or less than the distribution

 

that would have been required if calculated upon actual tax

 

increment revenues received for that fiscal year.

 

     (h) A list and documentation of other protected obligations

 

and the payments due on each of those other protected obligations

 

in that fiscal year, and the total amount of all the payments due

 

on those other protected obligations in that fiscal year.

 

     (3) For the fiscal year that commences after September 30,

 

1993 and before October 1, 1994, an authority may make a claim with

 

all information required by subsection (2) at any time after March

 

15, 1994.

 

     (4) After review and verification of claims submitted pursuant

 

to this section, amounts appropriated by the state in compliance

 

with this part shall be distributed as 2 equal payments on March 1

 

and September 1 after receipt of a claim. An authority shall

 

allocate a distribution it receives for an eligible obligation

 

issued on behalf of a municipality to the municipality.

 

     (5) Subject to subsections (6) and (7), the aggregate amount

 

to be appropriated and distributed pursuant to this section to an

 

authority shall be the sum of the amounts determined pursuant to

 

subdivisions (a) and (b) minus the amount determined pursuant to


subdivision (c), as follows:

 

     (a) The amount by which the tax increment revenues the

 

authority would have received for the fiscal year, excluding taxes

 

exempt under section 7ff of the general property tax act, 1893 PA

 

206, MCL 211.7ff, if property taxes were levied by local school

 

districts for school operating purposes at the millage rates

 

described in subsection (2)(a) and if no property taxes were levied

 

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

 

211.906, exceed the tax increment revenues the authority actually

 

received for the fiscal year.

 

     (b) A shortfall required to be reported pursuant to subsection

 

(2)(g) that had not previously increased a distribution.

 

     (c) An excess amount required to be reported pursuant to

 

subsection (2)(g) that had not previously decreased a distribution.

 

     (6) The amount distributed under subsection (5) shall not

 

exceed the difference between the amount described in subsection

 

(2)(e) and the sum of the amounts described in subsection (2)(c)

 

and (f).

 

     (7) If, based upon the tax increment financing plan in effect

 

on August 19, 1993, the payment due on eligible obligations or

 

eligible advances anticipates the use of excess prior year tax

 

increment revenues permitted by law to be retained by the

 

authority, and if the sum of the amounts described in subsection

 

(2)(c) and (f) plus the amount to be distributed under subsections

 

(5) and (6) is less than the amount described in subsection (2)(e),

 

the amount to be distributed under subsections (5) and (6) shall be

 

increased by the amount of the shortfall. However, the amount


authorized to be distributed pursuant to this section shall not

 

exceed that portion of the cumulative difference, for each

 

preceding fiscal year, between the amount that could have been

 

distributed pursuant to subsection (5) and the amount actually

 

distributed pursuant to subsections (5) and (6) and this

 

subsection.

 

     (8) A distribution under this section replacing tax increment

 

revenues pledged by an authority or a municipality is subject to

 

the lien of the pledge, whether or not there has been physical

 

delivery of the distribution.

 

     (9) Obligations for which distributions are made pursuant to

 

this section are not a debt or liability of this state; do not

 

create or constitute an indebtedness, liability, or obligation of

 

this state; and are not and do not constitute a pledge of the faith

 

and credit of this state.

 

     (10) Not later than July 1 of each year, the authority shall

 

certify to the local tax collecting treasurer the amount of the

 

distribution required under subsection (5), calculated without

 

regard to the receipt of tax increment revenues attributable to

 

local or intermediate school district taxes or attributable to

 

taxes levied under the state education tax act, 1993 PA 331, MCL

 

211.901 to 211.906.

 

     (11) Calculations of distributions under this section and

 

claims reports required to be made under subsection (2) shall be

 

made on the basis of each development area of the authority.

 

     (12) The state tax commission may provide that the

 

reimbursement calculations under this section and the calculation


of allowable capture of school taxes shall be made for each

 

calendar year's tax increment revenues using a 12-month debt

 

payment period used by the authority and approved by the state tax

 

commission.

 

     Sec. 213c. (1) If the amount of tax increment revenues lost as

 

a result of the personal property tax exemptions provided by

 

section 1211(4) of the revised school code, 1976 PA 451, MCL

 

380.1211, section 3 of the state education tax act, 1993 PA 331,

 

MCL 211.903, section 14(4) of 1974 PA 198, MCL 207.564, and section

 

9k of the general property tax act, 1893 PA 206, MCL 211.9k, will

 

reduce the allowable school tax capture received in a fiscal year,

 

then, notwithstanding any other provision of this part, the

 

authority, with approval of the department of treasury under

 

subsection (3), may request the local tax collecting treasurer to

 

retain and pay to the authority taxes levied under the state

 

education tax act, 1993 PA 331, MCL 211.901 to 211.906, to be used

 

for the following:

 

     (a) To repay an eligible advance.

 

     (b) To repay an eligible obligation.

 

     (c) To repay an other protected obligation.

 

     (2) Not later than June 15, 2008, not later than September 30,

 

2009, and not later than June 1 of each subsequent year, except for

 

2011, not later than June 15, an authority eligible under

 

subsection (1) to have taxes levied under the state education tax

 

act, 1993 PA 331, MCL 211.901 to 211.906, retained and paid to the

 

authority under this section, shall apply for approval with the

 

department of treasury. The application for approval shall include


the following information:

 

     (a) The property tax millage rates expected to be levied by

 

local school districts within the jurisdictional area of the

 

authority for school operating purposes for that fiscal year.

 

     (b) The tax increment revenues estimated to be received by the

 

authority for that fiscal year based upon actual property tax

 

levies of all taxing jurisdictions within the jurisdictional area

 

of the authority.

 

     (c) The tax increment revenues the authority estimates it

 

would have received for that fiscal year if the personal property

 

tax exemptions described in subsection (1) were not in effect.

 

     (d) A list of eligible obligations, eligible advances, and

 

other protected obligations, the payments due on each of those in

 

that fiscal year, and the total amount of all the payments due on

 

all of those in that fiscal year.

 

     (e) The amount of money, other than tax increment revenues,

 

estimated to be received in that fiscal year by the authority that

 

is primarily pledged to, and to be used for, the payment of an

 

eligible obligation, the repayment of an eligible advance, or the

 

payment of an other protected obligation. That amount shall not

 

include excess tax increment revenues of the authority that are

 

permitted by law to be retained by the authority for purposes that

 

further the development program. However, that amount shall include

 

money to be obtained from sources authorized by law, which law is

 

enacted on or after December 1, 1993, for use by the municipality

 

or authority to finance a development plan.

 

     (f) The amount of a distribution received pursuant to this


part for a fiscal year in excess of or less than the distribution

 

that would have been required if calculated upon actual tax

 

increment revenues received for that fiscal year.

 

     (3) Not later than August 15, 2008; for 2009, not later than

 

February 3, 2010; for 2011 only, not later than 30 days after the

 

effective date of the amendatory act that amended this sentence;

 

and not later than August 15 for 2010, 2012, and each subsequent

 

year, based on the calculations under subsection (5), the

 

department of treasury shall approve, modify, or deny the

 

application for approval to have taxes levied under the state

 

education tax act, 1993 PA 331, MCL 211.901 to 211.906, retained

 

and paid to the authority under this section. If the application

 

for approval contains the information required under subsection

 

(2)(a) through (f) and appears to be in substantial compliance with

 

the provisions of this section, then the department of treasury

 

shall approve the application. If the application is denied by the

 

department of treasury, then the department of treasury shall

 

provide the opportunity for a representative of the authority to

 

discuss the denial within 21 days after the denial occurs and shall

 

sustain or modify its decision within 30 days after receiving

 

information from the authority. If the application for approval is

 

approved or modified by the department of treasury, the local tax

 

collecting treasurer shall retain and pay to the authority the

 

amount described in subsection (5) as approved by the department.

 

If the department of treasury denies the authority's application

 

for approval, the local tax collecting treasurer shall not retain

 

or pay to the authority the taxes levied under the state education


tax act, 1993 PA 331, MCL 211.901 to 211.906. An approval by the

 

department does not prohibit a subsequent audit of taxes retained

 

in accordance with the procedures currently authorized by law.

 

     (4) Each year the legislature shall appropriate and distribute

 

an amount sufficient to pay each authority the following:

 

     (a) If the amount to be retained and paid under subsection (3)

 

is less than the amount calculated under subsection (5), the

 

difference between those amounts.

 

     (b) If the application for approval is denied by the

 

department of treasury, an amount verified by the department equal

 

to the amount calculated under subsection (5).

 

     (5) Subject to subsection (6), the aggregate amount under this

 

section shall be the sum of the amounts determined under

 

subdivisions (a) and (b) minus the amount determined under

 

subdivision (c), as follows:

 

     (a) The amount by which the tax increment revenues the

 

authority would have received and retained for the fiscal year,

 

excluding taxes exempt under section 7ff of the general property

 

tax act, 1893 PA 206, MCL 211.7ff, if the personal property tax

 

exemptions described in subsection (1) were not in effect, exceed

 

the tax increment revenues the authority actually received for the

 

fiscal year.

 

     (b) A shortfall required to be reported under subsection

 

(2)(f) that had not previously increased a distribution.

 

     (c) An excess amount required to be reported under subsection

 

(2)(f) that had not previously decreased a distribution.

 

     (6) A distribution or taxes retained under this section


replacing tax increment revenues pledged by an authority or a

 

municipality are subject to any lien of the pledge described in

 

subsection (1), whether or not there has been physical delivery of

 

the distribution.

 

     (7) Obligations for which distributions are made under this

 

section are not a debt or liability of this state; do not create or

 

constitute an indebtedness, liability, or obligation of this state;

 

and are not and do not constitute a pledge of the faith and credit

 

of this state.

 

     (8) Not later than September 15 of each year, the authority

 

shall provide a copy of the application for approval approved by

 

the department of treasury to the local tax collecting treasurer

 

and provide the amount of the taxes retained and paid to the

 

authority under subsection (5).

 

     (9) Calculations of amounts retained and paid and

 

appropriations to be distributed under this section shall be made

 

on the basis of each development area of the authority.

 

     (10) The state tax commission may provide that the

 

reimbursement calculations under this section and the calculation

 

of allowable capture of school taxes shall be made for each

 

calendar year's tax increment revenues using a 12-month debt

 

payment period used by the authority and approved by the state tax

 

commission.

 

     (11) It is the intent of the legislature that, to the extent

 

that the total amount of taxes levied under the state education tax

 

act, 1993 PA 331, MCL 211.901 to 211.906, that are allowed to be

 

retained under this section and section 411b, section 15a of the


brownfield redevelopment financing act, 1996 PA 381, MCL 125.2665a,

 

and section 312b, exceeds the difference of the total school aid

 

fund revenue for the tax year minus the estimated amount of revenue

 

the school aid fund would have received for the tax year had the

 

tax exemptions described in subsection (1) and the earmark created

 

by section 515 of the Michigan business tax act, 2007 PA 36, MCL

 

208.1515, not taken effect, the general fund shall reimburse the

 

school aid fund the difference.

 

     Sec. 214. (1) When the authority determines that it is

 

necessary for the achievement of the purposes of this part, 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 217, 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 215. 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, 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 216(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, 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 218. 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. 215. (1) The municipal and county treasurers shall

 

transmit to the authority tax increment revenues.

 

     (2) The authority shall expend the tax increment revenues

 

received for the development program only pursuant to the tax

 

increment financing plan. Surplus funds shall revert

 

proportionately to the respective taxing bodies. These revenues

 

shall not be used to circumvent existing property tax limitations.

 

The governing body of the municipality may abolish the tax

 

increment financing plan when it finds that the purposes for which

 

it was established are accomplished. However, the tax increment

 

financing plan shall not be abolished, allowed to expire, or

 

otherwise terminate until the principal of, and interest on, bonds

 

issued pursuant to section 216 have been paid or funds sufficient

 

to make the payment have been segregated.

 

     Sec. 216. (1) The municipality may by resolution of its


governing body authorize, issue, and sell general obligation bonds

 

subject to the limitations set forth in this subsection to finance

 

the development program of the tax increment financing plan and

 

shall pledge its full faith and credit for the payment of the

 

bonds. The municipality may pledge as additional security for the

 

bonds any money received by the authority or the municipality

 

pursuant to section 211. The bonds are subject to the revised

 

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

 

the municipality may authorize the borrowing, the authority shall

 

submit an estimate of the anticipated tax increment revenues and

 

other revenue available under section 211 to be available for

 

payment of principal and interest on the bonds, to the governing

 

body of the municipality. This estimate shall be approved by the

 

governing body of the municipality by resolution adopted by

 

majority vote of the members of the governing body in the

 

resolution authorizing the bonds. If the governing body of the

 

municipality adopts the resolution authorizing the bonds, the

 

estimate of the anticipated tax increment revenues and other

 

revenue available under section 211 to be available for payment of

 

principal and interest on the bonds shall be conclusive for

 

purposes of this section. The bonds issued under this subsection

 

shall be considered a single series for the purposes of the revised

 

municipal finance act, 2001 PA 34, MCL 141.2101 to 141.2801.

 

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

 

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

 

limitations set forth in this subsection to finance the development

 

program of the tax increment financing plan. The tax increment


bonds issued by the authority under this subsection shall pledge

 

solely the tax increment revenues of a development area in which

 

the project is located or a development area from which tax

 

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

 

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

 

pursuant to this subsection may be secured by any other revenues

 

identified in section 211 as sources of financing for activities of

 

the authority that the authority shall specifically pledge in the

 

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

 

shall not be pledged to secure bonds issued pursuant to this

 

subsection. The bond issue may include a sum sufficient to pay

 

interest on the tax increment bonds until full development of tax

 

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

 

reasonable reserve for payment of principal and interest on the

 

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

 

the tax increment revenues and other revenues pledged by the

 

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

 

subject only to liens previously created. The resolution may

 

provide the terms upon which additional bonds may be issued of

 

equal standing and parity of lien as to the tax increment revenues

 

and other revenues pledged under the resolution. Bonds issued under

 

this subsection that pledge revenue received under section 211 for

 

repayment of the bonds are subject to the revised municipal finance

 

act, 2001 PA 34, MCL 141.2101 to 141.2821.

 

     (3) Notwithstanding any other provision of this part, if the

 

state treasurer determines that an authority or municipality can

 

issue a qualified refunding obligation and the authority or


municipality does not make a good-faith effort to issue the

 

qualified refunding obligation as determined by the state

 

treasurer, the state treasurer may reduce the amount claimed by the

 

authority or municipality under section 213b by an amount equal to

 

the net present value saving that would have been realized had the

 

authority or municipality refunded the obligation or the state

 

treasurer may require a reduction in the capture of tax increment

 

revenues from taxes levied by a local or intermediate school

 

district or this state by an amount equal to the net present value

 

savings that would have been realized had the authority or

 

municipality refunded the obligation. This subsection does not

 

authorize the state treasurer to require the authority or

 

municipality to pledge security greater than the security pledged

 

for the obligation being refunded.

 

     Sec. 217. (1) When a board decides to finance a project in the

 

downtown district by the use of revenue bonds as authorized in

 

section 213 or tax increment financing as authorized in sections

 

214, 215, and 216, it shall prepare a development plan.

 

     (2) The development plan shall contain all of the following:

 

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

 

relation to highways, streets, streams, or otherwise.

 

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

 

public facilities within the development area, shall designate the

 

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

 

private land uses then existing and proposed for the development

 

area, including residential, recreational, commercial, industrial,

 

educational, and other uses, and shall include a legal description


of the development area.

 

     (c) A description of existing improvements in the development

 

area to be demolished, repaired, or altered, a description of any

 

repairs and alterations, and an estimate of the time required for

 

completion.

 

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

 

improvements including rehabilitation contemplated for the

 

development area and an estimate of the time required for

 

completion.

 

     (e) A statement of the construction or stages of construction

 

planned, and the estimated time of completion of each stage.

 

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

 

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

 

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

 

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

 

from the municipality and the proposed terms.

 

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

 

streets, street levels, intersections, or utilities.

 

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

 

the proposed method of financing the development, and the ability

 

of the authority to arrange the financing.

 

     (j) Designation of the person or persons, natural or

 

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

 

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

 

project is being undertaken if that information is available to the

 

authority.

 

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


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

 

its completion, if there is no express or implied agreement between

 

the authority and persons, natural or corporate, that all or a

 

portion of the development will be leased, sold, or conveyed in any

 

manner to those persons.

 

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

 

development area and the number of families and individuals to be

 

displaced. If occupied residences are designated for acquisition

 

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

 

survey of the families and individuals to be displaced, including

 

their income and racial composition, a statistical description of

 

the housing supply in the community, including the number of

 

private and public units in existence or under construction, the

 

condition of those units in existence, the number of owner-occupied

 

and renter-occupied units, the annual rate of turnover of the

 

various types of housing and the range of rents and sale prices, an

 

estimate of the total demand for housing in the community, and the

 

estimated capacity of private and public housing available to

 

displaced families and individuals.

 

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

 

persons displaced by the development in any new housing in the

 

development area.

 

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

 

the development and financial assistance and reimbursement of

 

expenses, including litigation expenses and expenses incident to

 

the transfer of title, in accordance with the standards and

 

provisions of the federal uniform relocation assistance and real


property acquisition policies act of 1970, Public Law 91-646, 42

 

USC 4601.

 

     (o) A plan for compliance with 1972 PA 227, MCL 213.321 to

 

213.332.

 

     (p) Other material that the authority, local public agency, or

 

governing body considers pertinent.

 

     Sec. 218. (1) The governing body, before adoption of an

 

ordinance approving or amending a development plan or approving or

 

amending a tax increment financing plan, shall hold a public

 

hearing on the development plan. Notice of the time and place of

 

the hearing shall be given by publication twice in a newspaper of

 

general circulation designated by the municipality, the first of

 

which shall be not less than 20 days before the date set for the

 

hearing. Notice of the hearing shall be posted in at least 20

 

conspicuous and public places in the downtown district not less

 

than 20 days before the hearing. Notice shall also be mailed to all

 

property taxpayers of record in the downtown district not less than

 

20 days before the hearing. Beginning June 1, 2005, the notice of

 

hearing within the time frame described in this subsection shall be

 

mailed by certified mail to the governing body of each taxing

 

jurisdiction levying taxes that would be subject to capture if the

 

development plan or the tax increment financing plan is approved or

 

amended.

 

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

 

plan shall contain: a description of the proposed development area

 

in relation to highways, streets, streams, or otherwise; a

 

statement that maps, plats, and a description of the development


plan, including the method of relocating families and individuals

 

who may be displaced from the area, are available for public

 

inspection at a place designated in the notice, and that all

 

aspects of the development plan will be open for discussion at the

 

public hearing; and other information that the governing body

 

considers appropriate. At the time set for hearing, the governing

 

body shall provide an opportunity for interested persons to be

 

heard and shall receive and consider communications in writing with

 

reference to the development plan. The hearing shall provide the

 

fullest opportunity for expression of opinion, for argument on the

 

merits, and for introduction of documentary evidence pertinent to

 

the development plan. The governing body shall make and preserve a

 

record of the public hearing, including all data presented thereat.

 

     Sec. 219. (1) The governing body after a public hearing on the

 

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

 

notice of the hearing given in accordance with section 218, 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

 

217(2).


     (c) The proposed method of financing the development is

 

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 part.

 

     (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 part 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. 220. A person to be relocated under this part shall be


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

 

modified by court order for good cause.

 

     Sec. 221. (1) If a proposed development area has residing

 

within it 100 or more residents, a development area citizens

 

council shall be established at least 90 days before the public

 

hearing on the development or tax increment financing plan. The

 

development area citizens council shall be established by the

 

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

 

members of the development area citizens council shall be residents

 

of the development area and shall be appointed by the governing

 

body. A member of a development area citizens council shall be at

 

least 18 years of age.

 

     (2) A development area citizens council shall be

 

representative of the development area.

 

     Sec. 222. A development area citizens council established

 

pursuant to this part shall act an advisory body to the authority

 

and the governing body in the adoption of the development or tax

 

increment financing plans.

 

     Sec. 223. Periodically a representative of the authority

 

responsible for preparation of a development or tax increment

 

financing plan within the development area shall consult with and

 

advise the development area citizens council regarding the aspects

 

of a development plan, including the development of new housing for

 

relocation purposes located either inside or outside of the

 

development area. The consultation shall begin before any final

 

decisions by the authority and the governing body regarding a

 

development or tax increment financing plan. The consultation shall


continue throughout the preparation and implementation of the

 

development or tax increment financing plan.

 

     Sec. 224. (1) Meetings of the development area citizens

 

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

 

of the meetings shall be given by publication in a newspaper of

 

general circulation not less than 5 days before the dates set for

 

meetings of the development area citizens council. A person present

 

at those meetings shall have reasonable opportunity to be heard.

 

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

 

council, including information and data presented, shall be

 

maintained by the council.

 

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

 

receive from the authority information and technical assistance

 

relevant to the preparation of the development plan for the

 

development area.

 

     (4) Failure of a development area citizens council to organize

 

or to consult with and be advised by the authority, or failure to

 

advise the governing body, as provided in this part, shall not

 

preclude the adoption of a development plan by a municipality if

 

the municipality complies with the other provisions of this part.

 

     Sec. 225. In a development area where a citizens district

 

council established according to 1945 PA 344, MCL 125.71 to 125.84,

 

already exists the governing body may designate it as the

 

development area citizens council authorized by this part.

 

     Sec. 226. Within 20 days after the public hearing on a

 

development or tax increment financing plan, the development area

 

citizens council shall notify the governing body, in writing, of


its findings and recommendations concerning a proposed development

 

plan.

 

     Sec. 227. A development area citizens council may not be

 

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

 

situations:

 

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

 

population of the development area by the last federal decennial or

 

municipal census, a governing body, after public hearing with

 

notice thereof given in accordance with section 218 and by a 2/3

 

vote, may adopt an ordinance for the development area to eliminate

 

the necessity of a development area citizens council.

 

     (b) When there are less than 18 residents, real property

 

owners, or representatives of establishments located in the

 

development area eligible to serve on the development area citizens

 

council.

 

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

 

governing body.

 

     Sec. 228. (1) The director of the authority shall prepare and

 

submit for the approval of the board a budget for the operation of

 

the authority for the ensuing fiscal year. The budget shall be

 

prepared in the manner and contain the information required of

 

municipal departments. Before the budget may be adopted by the

 

board, it shall be approved by the governing body of the

 

municipality. Funds of the municipality shall not be included in

 

the budget of the authority except those funds authorized in this

 

part or by the governing body of the municipality.

 

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


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

 

auditing the funds against the funds of the authority, other than

 

those committed, which cost shall be paid annually by the board

 

pursuant to an appropriate item in its budget.

 

     Sec. 228a. 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.

 

     Sec. 229. (1) A public facility, building, or structure that

 

is determined by the municipality to have significant historical

 

interests shall be preserved in a manner as considered necessary by

 

the municipality in accordance with laws relative to the

 

preservation of historical sites. The preservation of facilities,

 

buildings, or structures determined to be historic sites by a

 

municipality shall include, at a minimum, equipping the historic

 

site with a fire alarm system.

 

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

 

exterior of sites listed on the state register of historic sites

 

and the national register of historic places to the applicable

 

historic district commission created under the local historic

 

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

 

state housing development authority for review.

 

     Sec. 230. (1) An authority that has completed the purposes for

 

which it was organized shall be dissolved by ordinance of the

 

governing body. The property and assets of the authority remaining

 

after the satisfaction of the obligations of the authority belong


to the municipality.

 

     (2) An authority established under this part before December

 

31, 1988, that is dissolved by ordinance of the governing body

 

before September 30, 1990 and that is reinstated by ordinance of

 

the governing body after notice and public hearing as provided in

 

section 203(2) shall not be invalidated pursuant to a claim that,

 

based upon the standards set forth in section 203(1), a governing

 

body improperly determined that the necessary conditions existed

 

for the reinstatement of an authority under this part if at the

 

time the governing body established the authority the governing

 

body determined or could have determined that the necessary

 

conditions existed for the establishment of an authority under this

 

part or could have determined that establishment of an authority

 

under this part would serve to promote economic growth and

 

notwithstanding that the boundaries of the downtown district are

 

altered at the time of reinstatement of the authority.

 

     (3) In the resolution of intent, the municipality shall set a

 

date for the holding of a public hearing on the adoption of a

 

proposed ordinance reinstating the authority. The procedure for

 

publishing the notice of hearing, holding the hearing, and adopting

 

the ordinance reinstating the authority shall be as provided in

 

section 203(2), (4), and (5).

 

     (4) The validity of the proceedings, findings, and

 

determinations reinstating an authority shall be conclusive unless

 

contested in a court of competent jurisdiction within 60 days after

 

the last of the following occurs:

 

     (a) Publication of the ordinance reinstating the authority as


adopted.

 

     (b) Filing of the ordinance reinstating the authority with the

 

secretary of state.

 

     (c) May 27, 1993.

 

PART 3

 

TAX INCREMENT FINANCE AUTHORITIES

 

     Sec. 301. As used in this part:

 

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

 

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

 

Evidence of the intent to repay an advance is required and may

 

include, but is not limited to, an executed agreement to repay,

 

provisions contained in a tax increment financing plan approved

 

before the advance or before August 14, 1993, 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, taxable

 

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

 

act, 1893 PA 206, MCL 211.27a.

 

     (c) "Authority" means a tax increment finance authority

 

created under this part.

 

     (d) "Authority district" means that area within which an

 

authority exercises its powers and within which 1 or more

 

development areas may exist.

 

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


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

 

by which the current assessed value of the development area,

 

including the assessed value of property for which specific local

 

taxes are paid in lieu of property taxes as determined in

 

subdivision (w), exceeds the initial assessed value. The state tax

 

commission shall prescribe the method for calculating captured

 

assessed value.

 

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

 

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

 

township.

 

     (h) "Development area" means that area to which a development

 

plan is applicable.

 

     (i) "Development area citizens council" or "council" means

 

that advisory body established pursuant to section 20.

 

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

 

requirements for a development set forth in section 16.

 

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

 

development plan.

 

     (l) "Eligible advance" means an advance made before August 19,

 

1993.

 

     (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.


Eligible obligation also includes an ongoing management contract or

 

contract for professional services or development services that was

 

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

 

authority in 1991, and related similar written agreements executed

 

before 1984, if the 1991 agreement both provides for automatic

 

annual renewal and incorporates by reference the prior related

 

agreements; however, receipt by an authority of tax increment

 

revenues authorized under subdivision (aa)(ii) in order to pay

 

costs arising under those contracts shall be limited to:

 

     (i) For taxes levied before July 1, 2005, the amount permitted

 

to be received by an authority for an eligible obligation as

 

provided in this part.

 

     (ii) For taxes levied after June 30, 2005 and before July 1,

 

2006, $3,000,000.00.

 

     (iii) For taxes levied after June 30, 2006 and before July 1,

 

2007, $3,000,000.00.

 

     (iv) For taxes levied after June 30, 2007 and before July 1,

 

2008, $3,000,000.00.

 

     (v) For taxes levied after June 30, 2008 and before July 1,

 

2009, $3,000,000.00.

 

     (vi) For taxes levied after June 30, 2009 and before July 1,

 

2010, $3,000,000.00.

 

     (vii) For taxes levied after June 30, 2010 and before July 1,

 

2011, $2,650,000.00.

 

     (viii) For taxes levied after June 30, 2011 and before July 1,

 

2012, $2,400,000.00.

 

     (ix) For taxes levied after June 30, 2012 and before July 1,


2013, $2,125,000.00.

 

     (x) For taxes levied after June 30, 2013 and before July 1,

 

2014, $1,500,000.00.

 

     (xi) For taxes levied after June 30, 2014 and before July 1,

 

2015, $1,150,000.00.

 

     (xii) For taxes levied after June 30, 2015, $0.00.

 

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

 

     (o) "Governing body" means the elected body of a municipality

 

having legislative powers.

 

     (p) "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 resolution 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

 

property that is exempt from taxation. The initial assessed value

 

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

 

tax shall be determined as provided in subdivision (w).

 

     (q) "Municipality" means a city.

 

     (r) "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 part. 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.

 

     (s) "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 a municipality, or the 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.

 

     (t) "Other protected obligation" means:

 

     (i) A qualified refunding obligation issued to refund an

 

obligation described in subparagraph (ii) or (iii), 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 part before December 31, 1993, for which a contract for

 

final design is entered into by the municipality or authority

 

before March 1, 1994.

 

     (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 part before August 19, 1993, and

 

undertaken and installed by that party in accordance with the

 

development agreement.

 

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

 

municipality on behalf of an authority to implement a project

 

described in a tax increment finance plan approved by the

 

municipality in accordance with this part before August 19, 1993,

 

that is located on land owned by a public university on the date

 

the tax increment financing plan is approved, and for which a

 

contract for final design is entered into before December 31, 1993.

 

     (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) An obligation issued or incurred by a municipality under

 

a contract executed on December 19, 1994 as subsequently amended

 

between the municipality and the authority to implement a project

 

described in a tax increment finance plan approved by the

 

municipality under this part before August 19, 1993 for which a

 

contract for final design was entered into by the municipality

 

before March 1, 1994 provided that final payment by the

 

municipality is made on or before December 31, 2001.

 

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

 

municipality on behalf of an authority that meets all of the


following qualifications:

 

     (A) The obligation is issued or incurred to finance a project

 

described in a tax increment financing plan approved before August

 

19, 1993 by a municipality in accordance with this part.

 

     (B) The obligation qualifies as an other protected obligation

 

under subparagraph (ii) and was issued or incurred by the authority

 

before December 31, 1994 for the purpose of financing the project.

 

     (C) A portion of the obligation issued or incurred by the

 

authority before December 31, 1994 for the purpose of financing the

 

project was retired prior to December 31, 1996.

 

     (D) The obligation does not exceed the dollar amount of the

 

portion of the obligation retired prior to December 31, 1996.

 

     (viii) An obligation incurred by an authority that meets both

 

of the following qualifications:

 

     (A) The obligation is a contract of lease originally executed

 

on December 20, 1994 between the municipality and the authority to

 

partially implement the authority's development plan and tax

 

increment financing plan.

 

     (B) The obligation qualifies as an obligation under

 

subparagraph (ii). The obligation described in this subparagraph

 

may be amended to extend cash rental payments for a period not to

 

exceed 30 years through the year 2039. The duration of the

 

development plan and tax increment financing plan described in this

 

subparagraph is extended to 1 year after the final date that the

 

extended cash rental payments are due.

 

     (u) "Public facility" means 1 or more of the following:

 

     (i) A street, plaza, or pedestrian mall, and any improvements


to a street, plaza, boulevard, alley, or pedestrian mall, including

 

street furniture and beautification, park, parking facility,

 

recreation facility, playground, school, library, public

 

institution or administration building, right of way, structure,

 

waterway, bridge, lake, pond, canal, utility line or pipeline,

 

transit-oriented development, transit-oriented facility, and other

 

similar facilities and necessary easements of these facilities

 

designed and dedicated to use by the public generally or used by a

 

public agency. As used in this subparagraph, public institution or

 

administration building includes, but is not limited to, a police

 

station, fire station, court building, or other public safety

 

facility.

 

     (ii) The acquisition and disposal of real and personal

 

property or interests in real and personal property, demolition of

 

structures, site preparation, relocation costs, building

 

rehabilitation, and all associated administrative costs, including,

 

but not limited to, architect's, engineer's, legal, and accounting

 

fees as contained in the resolution establishing the district's

 

development plan.

 

     (iii) 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.

 

     (v) "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 of the following

 

applies:

 

     (i) 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 (aa)(ii) and the distributions

 

under section 12a 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 (aa)(ii) and the distributions

 

under section 312a to repay the obligation being refunded, as

 

calculated using a method approved by the department of treasury.

 

     (ii) The refunding obligation is a tax increment refunding

 

bond issued to refund a refunding bond that is an other protected

 

obligation issued as a capital appreciation bond delivered to the

 

Michigan municipal bond authority on December 21, 1994, or bonds

 

issued to refund that bond, and the authority, by resolution of its

 

board, authorized issuance of the refunding obligation before

 

December 31, 2019 with a final maturity not later than 2039. The

 

municipality by majority vote of the members of its governing body

 

may pledge its full faith and credit for the payment of the

 

principal of and interest on the refunding obligation. A refunding

 

obligation issued under this subparagraph is not subject to the

 

requirements of section 305(2), (3), (5), or (6), 501, 503, or 611


of the revised municipal finance act, 2001 PA 34, MCL 141.2305,

 

141.2501, 141.2503, and 141.2611. The duration of the development

 

plan and the tax increment financing plan relating to the refunding

 

obligations described in this subparagraph is extended to 1 year

 

after the final date of maturity of the refunding obligation.

 

     (w) "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.

 

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

 

October 1 of each year.

 

     (y) "Tax increment district" or "district" means that area to

 

which the tax increment finance plan pertains.

 

     (z) "Tax increment financing plan" means that information and

 

those requirements set forth in sections 313 to 315.

 

     (aa) "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 part.

 

     (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.

 

     (C) Ad valorem property taxes levied under 1 or more of the

 

following or specific local taxes attributable to those ad valorem

 

property taxes:

 

     (I) The zoological authorities act, 2008 PA 49, MCL 123.1161

 

to 123.1183.

 

     (II) The art institute authorities act, 2010 PA 296, MCL

 

123.1201 to 123.1229.

 

     (III) Except as otherwise provided in section 303(6), ad

 

valorem property taxes or specific local taxes attributable to

 

those ad valorem property taxes levied for a separate millage for

 

public library purposes approved by the electors after December 31,

 

2016.

 

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

 

included under subparagraph (ii), and required to be transmitted to

 

the authority under section 314(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 which 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, bear 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).

 

     (bb) "Transit-oriented development" means infrastructure

 

improvements that are located within 1/2 mile of a transit station

 

or transit-oriented facility that promotes transit ridership or

 

passenger rail use as determined by the board and approved by the

 

municipality in which it is located.

 

     (cc) "Transit-oriented facility" means a facility that houses

 

a transit station in a manner that promotes transit ridership or

 

passenger rail use.

 

     Sec. 301a. This part shall be known and may be cited as "the

 

tax increment finance authority part".

 

     Sec. 302. (1) A municipality may establish not more than 1

 

authority. An authority shall exercise its powers in all

 

development areas designated pursuant to this part.

 

     (2) The authority shall be a public body corporate which may

 

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

 

all the powers necessary to carry out the purpose of its

 

incorporation. The enumeration of a power in this part shall not be

 

construed as a limitation upon the general powers of the authority.

 

The powers granted in this part to an authority may be exercised

 

notwithstanding that bonds are not issued by the authority.

 

     Sec. 303. (1) If the governing body of a municipality


determines that it is in the best interests of the public to halt a

 

decline in property values, increase property tax valuation,

 

eliminate the causes of the decline in property values, and to

 

promote growth in an area in the municipality, the governing body

 

of that municipality may declare by resolution its intention to

 

create and provide for the operation of an authority.

 

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

 

a date for the holding of a public hearing on the adoption of a

 

proposed resolution creating the authority and designating the

 

boundaries of the authority district. Notice of the public hearing

 

shall be published twice in a newspaper of general circulation in

 

the municipality, not less than 20 nor more than 40 days before the

 

date of the hearing. Notice shall also be mailed to the property

 

taxpayers of record in the proposed authority district not less

 

than 20 days before the hearing. Beginning June 1, 2005, the notice

 

of hearing within the time frame described in this subsection shall

 

be mailed by certified mail to the governing body of each taxing

 

jurisdiction levying taxes that would be subject to capture if the

 

authority is established and a tax increment financing plan is

 

approved. Failure to receive the notice shall not invalidate these

 

proceedings. The notice shall state the date, time, and place of

 

the hearing, and shall describe the boundaries of the proposed

 

authority district. At that hearing, a citizen, taxpayer, or

 

property owner of the municipality has the right to be heard in

 

regard to the establishment of the authority and the boundaries of

 

the proposed authority district. The governing body of the

 

municipality shall not incorporate land into the authority district


not included in the description contained in the notice of public

 

hearing, but it may eliminate described lands from the authority

 

district in the final determination of the boundaries.

 

     (3) After the public hearing, if the governing body intends to

 

proceed with the establishment of the authority, it shall adopt, by

 

majority vote of its members, a resolution establishing the

 

authority and designating the boundaries of the authority district

 

within which the authority shall exercise its powers. The adoption

 

of the resolution is subject to any applicable statutory or charter

 

provisions with respect to the approval or disapproval by the chief

 

executive or other officer of the municipality and the adoption of

 

a resolution over his or her veto. This resolution shall be filed

 

with the secretary of state promptly after its adoption and shall

 

be published at least once in a newspaper of general circulation in

 

the municipality.

 

     (4) The governing body may alter or amend the boundaries of

 

the authority district to include or exclude lands from the

 

authority district in accordance with the same requirements

 

prescribed for adopting the resolution creating the authority.

 

     (5) The validity of the proceedings establishing an authority

 

shall be conclusive unless contested in a court of competent

 

jurisdiction within 60 days after the last of the following takes

 

place:

 

     (a) Publication of the resolution as adopted.

 

     (b) Filing of the resolution with the secretary of state.

 

     (6) If a separate millage for public library purposes was

 

levied before January 1, 2017, and all obligations and other


protected obligations of the authority are paid, then the levy is

 

exempt from capture under this part, unless the library board or

 

commission allows all or a portion of its taxes levied to be

 

included as tax increment revenues and subject to capture under

 

this part under the terms of a written agreement between the

 

library board or commission and the authority. The written

 

agreement shall be filed with the clerk of the municipality.

 

However, if a separate millage for public library purposes was

 

levied before January 1, 2017, and the authority alters or amends

 

the boundaries of the authority district or extends the duration of

 

the existing finance plan, then the library board or commission

 

may, not later than 60 days after a public hearing is held under

 

this subsection, exempt all or a portion of its taxes from capture

 

by adopting a resolution to that effect and filing a copy with the

 

clerk of the municipality that created the authority. For ad

 

valorem property taxes or specific local taxes attributable to

 

those ad valorem property taxes levied for a separate millage for

 

public library purposes approved by the electors after December 31,

 

2016, a library board or commission may allow all or a portion of

 

its taxes levied to be included as tax increment revenues and

 

subject to capture under this part under the terms of a written

 

agreement between the library board or commission and the

 

authority. The written agreement shall be filed with the clerk of

 

the municipality. However, if the library was created under section

 

1 or 10a of 1877 PA 164, MCL 397.201 and 397.210a, or established

 

under 1869 LA 233, then any action of the library board or

 

commission under this subsection shall have the concurrence of the


chief executive officer of the city that created the library to be

 

effective.

 

     Sec. 304. (1) The authority shall be under the supervision and

 

control of a board chosen by the governing body which may by

 

majority vote designate any 1 of the following to constitute the

 

board:

 

     (a) The board of directors of the economic development

 

corporation of the municipality established pursuant to the

 

economic development corporations act, 1974 PA 338, MCL 125.1601 to

 

125.1636.

 

     (b) The trustees of the board of a downtown development

 

authority established pursuant to part 2.

 

     (c) The trustees of the board of an urban redevelopment

 

corporation established pursuant to the urban redevelopment

 

corporations law, 1941 PA 250, MCL 125.901 to 125.922.

 

     (d) The members of the commission established pursuant to 1945

 

PA 344, MCL 125.71 to 125.84.

 

     (e) In a municipality that has a population of less than

 

5,000, the planning commission of the municipality established

 

pursuant to Michigan planning enabling act, 2008 PA 33, MCL

 

125.3801 to 125.3885.

 

     (f) Not less than 7 nor more than 13 persons appointed by the

 

chief executive officer of the municipality subject to the approval

 

of the governing body. Of the members appointed, an equal number,

 

as near as 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.

 

     (2) The chairperson of the board shall be elected by the

 

board.

 

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

 

qualify by taking and subscribing to the constitutional oath of

 

office.

 

     (4) The board shall adopt rules governing its procedure and

 

the holding of regular meetings, subject to the approval of the

 

governing body. Special meetings may be held when called in the

 

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

 

shall be open to the public, in accordance with the open meetings

 

act, 1976 PA 267, MCL 15.261 to 15.275.

 

     (5) Pursuant to notice and an opportunity to be heard, a

 

member of the board appointed pursuant to subsection (1)(f) may be

 

removed before the expiration of his or her term for cause by the

 

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

 

circuit court.

 

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

 

annually and the financial records shall be open to the public

 

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

 

to 15.246.

 

     Sec. 305. (1) The board may employ and fix the compensation of

 

a director, subject to the approval of the governing body. The

 

director shall serve at the pleasure of the board. A member of the


board is not eligible to hold the position of director. Before

 

entering upon the duties of the office, the director shall take and

 

subscribe to the constitutional oath and furnish bond by posting a

 

bond in the penal sum determined in the resolution establishing the

 

authority, payable to the authority for use and benefit of the

 

authority, approved by the board, and filed with the clerk of the

 

municipality. The premium on the bond shall be considered an

 

operating expense of the authority, payable from funds available to

 

the authority for expenses of operation. The director shall be the

 

chief executive office of the authority. Subject to the approval of

 

the board, the director shall supervise and be responsible for the

 

preparation of plans and the performance of the functions of the

 

authority in the manner authorized by this part. The director shall

 

attend the meetings of the board and shall render to the board and

 

to the governing body a regular report covering the activities and

 

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

 

disabled, the board may designate a qualified person as acting

 

director to perform the duties of the office. Before entering upon

 

the duties of the office, the acting director shall take and

 

subscribe to the constitutional oath and furnish bond as required

 

of the director. The director shall furnish the board with

 

information or reports governing the operation of the authority as

 

the board requires.

 

     (2) The board may appoint or employ and fix the compensation

 

of a treasurer who shall keep the financial records of the

 

authority, and who, together with the director, if a director is

 

appointed, shall approve all vouchers for the expenditure of funds


of the authority. The treasurer shall perform such other duties as

 

may be delegated by the board and shall furnish bond in an amount

 

as prescribed by the board.

 

     (3) The board may appoint or employ and fix the compensation

 

of a secretary, who shall maintain custody of the official seal and

 

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

 

maintained by the treasurer. The secretary shall attend meetings of

 

the board and keep a record of its proceedings and shall perform

 

such other duties as may be delegated by the board.

 

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

 

the proper performance of its duties. The legal counsel shall

 

represent the authority in actions brought by or against the

 

authority.

 

     (5) The board may employ other personnel considered necessary

 

by the board.

 

     (6) The employees of an authority may be eligible to

 

participate in municipal retirement and insurance programs of the

 

municipality as if they were civil service employees on the same

 

basis as civil service employees.

 

     Sec. 307. The board may:

 

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

 

the municipality and its environs as those changes relate to urban

 

deterioration in the development areas.

 

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

 

areas.

 

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

 

remodeling, rehabilitation, restoration, preservation, or


reconstruction of a public facility, an existing building, or a

 

multiple family dwelling unit which may be necessary or appropriate

 

to the execution of a plan which, in the opinion of the board, aids

 

in the revitalization and growth of the development area.

 

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

 

facility within the development area 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.

 

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

 

which is chiefly responsible for planning in the municipality,

 

designed to halt the decline of property values and to promote the

 

growth of the development area, and take such steps as may be

 

necessary to implement the plans to the fullest extent possible.

 

     (f) Implement any plan of development in a development area

 

necessary to achieve the purposes of this part, in accordance with

 

the powers of the authority as granted by this part.

 

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

 

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

 

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

 

and in a manner the authority considers proper, own, convey,

 

demolish, relocate, rehabilitate, or otherwise dispose of, or lease

 

as lessor or lessee, land and other property, real or personal, or

 

rights or interests therein, which the authority determines is

 

reasonably necessary to achieve the purposes of this part, and to

 

grant or acquire licenses, easements, and options with respect

 

thereto.


     (i) Improve land, prepare sites for buildings, including the

 

demolition of existing structures and construct, reconstruct,

 

rehabilitate, restore, and preserve, equip, improve, maintain,

 

repair, and operate any building, including any type of housing,

 

and any necessary or desirable appurtenances thereto, within the

 

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

 

private person or corporation, or a combination thereof.

 

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

 

use of any building or property or any part of a building or

 

property under its control, or a facility in the building or on the

 

property, and pledge the fees, rents, and charges for the payment

 

of revenue bonds issued by the authority.

 

     (k) Lease any building or property or part of a building or

 

property under its control.

 

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

 

things of value from a public or private source.

 

     (m) Acquire and construct public facilities.

 

     (n) Incur costs in connection with the performance of its

 

authorized functions, including but not limited to, administrative

 

costs, and architects, engineers, legal, and accounting fees.

 

     Sec. 308. If a board created under this part serves as the

 

planning commission under the Michigan planning enabling act, 2008

 

PA 33, MCL 125.3801 to 125.3885, the board shall include planning

 

commission business in its agenda.

 

     Sec. 309. The authority shall be considered an instrumentality

 

of a political subdivision for purposes of 1972 PA 227, MCL 213.321

 

to 213.332.


     Sec. 310. A municipality may take private property under 1980

 

PA 87, MCL 213.51 to 213.77 for the purpose of transfer to the

 

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

 

as authorized in the development program, on terms and conditions

 

it considers appropriate. The taking, transfer, and use shall be

 

considered necessary for public purposes and for the benefit of the

 

public.

 

     Sec. 311. The activities of the authority shall be financed

 

from 1 or more of the following sources:

 

     (a) Contributions to the authority for the performance of its

 

functions.

 

     (b) Revenues from any property, building, or facility owned,

 

leased, licensed, or operated by the authority or under its

 

control, subject to the limitations imposed upon the authority by

 

trusts or other agreements.

 

     (c) Tax increment revenues received pursuant to a tax

 

increment financing plan established under sections 313 to 315.

 

     (d) Proceeds of tax increment bonds issued pursuant to section

 

315.

 

     (e) Proceeds of revenue bonds issued pursuant to section 312.

 

     (f) Money obtained from any other sources approved by the

 

governing body of the municipality or otherwise authorized by law

 

for use by the authority or the municipality to finance a

 

development program.

 

     (g) Money obtained pursuant to section 312a.

 

     Sec. 312. (1) The authority may borrow money and issue its

 

negotiable revenue bonds pursuant to the revenue bond act of 1933,


1933 PA 94, MCL 141.101 to 141.140. Revenue bonds issued by the

 

authority shall not, except as hereinafter provided, be considered

 

a debt of the municipality or of the state.

 

     (2) The municipality by majority vote of the members of its

 

governing body may pledge its full faith and credit limited tax to

 

support the authority's revenue bonds.

 

     Sec. 312a. (1) If the amount of tax increment revenues lost as

 

a result of the reduction of taxes levied by local school districts

 

for school operating purposes required by the millage limitations

 

under section 1211 of the revised school code, 1976 PA 451, MCL

 

380.1211, reduced by the amount of tax increment revenues received

 

from the capture of taxes levied under or attributable to the state

 

education tax act, 1993 PA 331, MCL 211.901 to 211.906, will cause

 

the tax increment revenues received in a fiscal year by an

 

authority under section 314 to be insufficient to repay an eligible

 

advance or to pay an eligible obligation, the legislature shall

 

appropriate and distribute to the authority the amount described in

 

subsection (5).

 

     (2) Not less than 30 days before the first day of a fiscal

 

year, an authority eligible to retain tax increment revenues from

 

taxes levied by a local or intermediate school district or this

 

state, or to receive a distribution under this section for that

 

fiscal year shall file a claim with the department of treasury. The

 

claim shall include the following information:

 

     (a) The property tax millage rates levied in 1993 by local

 

school districts within the jurisdictional area of the authority

 

for school operating purposes.


     (b) The property tax millage rates expected to be levied by

 

local school districts within the jurisdictional area of the

 

authority for school operating purposes for that fiscal year.

 

     (c) The tax increment revenues estimated to be received by the

 

authority for that fiscal year based upon actual property tax

 

levies of all taxing jurisdictions within the jurisdictional area

 

of the authority plus any tax increment revenues the authority

 

would have received for the fiscal year from property that is

 

exempt from taxation pursuant to the Michigan renaissance zone act,

 

1996 PA 376, MCL 125.2681 to 125.2696, based on the property's

 

taxable value at the time the zone is designated.

 

     (d) The tax increment revenues the authority estimates it

 

would have received for that fiscal year if property taxes were

 

levied by local school districts within the jurisdictional area of

 

the authority for school operating purposes at the millage rates

 

described in subdivision (a) and if no property taxes were levied

 

by this state under the state education tax act, 1993 PA 331, MCL

 

211.901 to 211.906.

 

     (e) A list and documentation of eligible obligations and

 

eligible advances and the payments due on each of those eligible

 

obligations or eligible advances in that fiscal year, and the total

 

amount of all the payments due on those eligible obligations and

 

eligible advances in that fiscal year.

 

     (f) The amount of money, other than tax increment revenues,

 

estimated to be received in that fiscal year by the authority that

 

is primarily pledged to, and to be used for, the payment of an

 

eligible obligation or the repayment of an eligible advance. That


amount shall not include excess tax increment revenues of the

 

authority that are permitted by law to be retained by the authority

 

for purposes that further the development program. However, that

 

amount shall include money to be obtained from sources authorized

 

by law, which law is enacted on or after December 1, 1993, for use

 

by the municipality or authority to finance a development project.

 

     (g) The amount of a distribution received pursuant to this

 

part for a fiscal year in excess of or less than the distribution

 

that would have been required if calculated upon actual tax

 

increment revenues received for that fiscal year.

 

     (h) A list and documentation of other protected obligations

 

and the payments due on each of those other protected obligations

 

in that fiscal year, and the total amount of all the payments due

 

on those other protected obligations in that fiscal year.

 

     (3) For the fiscal year that commences after September 30,

 

1993 and before October 1, 1994, an authority may make a claim with

 

all information required by subsection (2) at any time after March

 

15, 1994.

 

     (4) After review and verification of claims submitted pursuant

 

to this section, amounts appropriated by the state in compliance

 

with this part shall be distributed as 2 equal payments on March 1

 

and September 1 after receipt of a claim. An authority shall

 

allocate a distribution it receives for an eligible obligation

 

issued on behalf of a municipality to the municipality.

 

     (5) Subject to subsections (6) and (7), the aggregate amount

 

to be appropriated and distributed pursuant to this section to an

 

authority shall be the sum of the amounts determined pursuant to


subdivisions (a) and (b) minus the amount determined pursuant to

 

subdivision (c), as follows:

 

     (a) The amount by which the tax increment revenues the

 

authority would have received for the fiscal year, if property

 

taxes were levied by local school districts on property, including

 

property that is exempt from taxation pursuant to the Michigan

 

renaissance zone act, 1996 PA 376, MCL 125.2681 to 125.2696, based

 

on the property's taxable value at the time the zone is designated,

 

for school operating purposes at the millage rates described in

 

subsection (2)(a) and if no property taxes were levied under the

 

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

 

exceed the sum of tax increment revenues the authority actually

 

received for the fiscal year plus any tax increment revenues the

 

authority would have received for the fiscal year from property

 

that is exempt from taxation pursuant to the Michigan renaissance

 

zone act, 1996 PA 376, MCL 125.2681 to 125.2696, based on the

 

property's taxable value at the time the zone is designated.

 

     (b) A shortfall required to be reported pursuant to subsection

 

(2)(g) that had not previously increased a distribution.

 

     (c) An excess amount required to be reported pursuant to

 

subsection (2)(g) that had not previously decreased a distribution.

 

     (6) The amount distributed under subsection (5) shall not

 

exceed the difference between the amount described in subsection

 

(2)(e) and the sum of the amounts described in subsection (2)(c)

 

and (f).

 

     (7) If, based upon the tax increment financing plan in effect

 

on August 19, 1993, the payment due on eligible obligations or


eligible advances anticipates the use of excess prior year tax

 

increment revenues permitted by law to be retained by the

 

authority, and if the sum of the amounts described in subsection

 

(2)(c) and (f) plus the amount to be distributed under subsections

 

(5) and (6) is less than the amount described in subsection (2)(e),

 

the amount to be distributed under subsections (5) and (6) shall be

 

increased by the amount of the shortfall. However, the amount

 

authorized to be distributed pursuant to this section shall not

 

exceed that portion of the cumulative difference, for each

 

preceding fiscal year, between the amount that could have been

 

distributed pursuant to subsection (5) and the amount actually

 

distributed pursuant to subsections (5) and (6) and this

 

subsection.

 

     (8) A distribution under this section replacing tax increment

 

revenues pledged by an authority or a municipality is subject to

 

the lien of the pledge, whether or not there has been physical

 

delivery of the distribution.

 

     (9) Obligations for which distributions are made pursuant to

 

this section are not a debt or liability of this state; do not

 

create or constitute an indebtedness, liability, or obligation of

 

this state; and are not and do not constitute a pledge of the faith

 

and credit of this state.

 

     (10) Not later than July 1 of each year, the authority shall

 

certify to the local tax collecting treasurer the amount of the

 

distribution required under subsection (5), calculated without

 

regard to the receipt of tax increment revenues attributable to

 

local or intermediate school district taxes or attributable to


taxes levied under the state education tax act, 1993 PA 331, MCL

 

211.901 to 211.906.

 

     (11) Calculations of distributions under this section and

 

claims reports required to be made under subsection (2) shall be

 

made on the basis of each development area of the authority.

 

     (12) The state tax commission may provide that the

 

reimbursement calculations under this section and the calculation

 

of allowable capture of school taxes shall be made for each

 

calendar year's tax increment revenues using a 12-month debt

 

payment period used by the authority and approved by the state tax

 

commission.

 

     Sec. 312b. (1) If the amount of tax increment revenues lost as

 

a result of the personal property tax exemptions provided by

 

section 1211(4) of the revised school code, 1976 PA 451, MCL

 

380.1211, section 3 of the state education tax act, 1993 PA 331,

 

MCL 211.903, section 14(4) of 1974 PA 198, MCL 207.564, and section

 

9k of the general property tax act, 1893 PA 206, MCL 211.9k, will

 

reduce the allowable school tax capture received in a fiscal year,

 

then, notwithstanding any other provision of this part, the

 

authority, with approval of the department of treasury under

 

subsection (3), may request the local tax collecting treasurer to

 

retain and pay to the authority taxes levied within the

 

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

 

211.901 to 211.906, to be used for the following:

 

     (a) To repay an eligible advance.

 

     (b) To repay an eligible obligation.

 

     (c) To repay an other protected obligation.


     (2) Not later than June 15, 2008, not later than September 30,

 

2009, and not later than June 1 of each subsequent year, an

 

authority eligible under subsection (1) to have taxes levied under

 

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

 

retained and paid to the authority under this section, shall apply

 

for approval with the department of treasury. The application for

 

approval shall include the following information:

 

     (a) The property tax millage rates expected to be levied by

 

local school districts within the jurisdictional area of the

 

authority for school operating purposes for that fiscal year.

 

     (b) The tax increment revenues estimated to be received by the

 

authority for that fiscal year based upon actual property tax

 

levies of all taxing jurisdictions within the jurisdictional area

 

of the authority.

 

     (c) The tax increment revenues the authority estimates it

 

would have received for that fiscal year if the personal property

 

tax exemptions described in subsection (1) were not in effect.

 

     (d) A list of eligible obligations, eligible advances, and

 

other protected obligations, the payments due on each of those in

 

that fiscal year, and the total amount of all the payments due on

 

all of those in that fiscal year.

 

     (e) The amount of money, other than tax increment revenues,

 

estimated to be received in that fiscal year by the authority that

 

is primarily pledged to, and to be used for, the payment of an

 

eligible obligation, the repayment of an eligible advance, or the

 

payment of an other protected obligation. That amount shall not

 

include excess tax increment revenues of the authority that are


permitted by law to be retained by the authority for purposes that

 

further the development program. However, that amount shall include

 

money to be obtained from sources authorized by law, which law is

 

enacted on or after December 1, 1993, for use by the municipality

 

or authority to finance a development plan.

 

     (f) The amount of a distribution received pursuant to this

 

part for a fiscal year in excess of or less than the distribution

 

that would have been required if calculated upon actual tax

 

increment revenues received for that fiscal year.

 

     (3) Not later than August 15, 2008; for 2009 only, not later

 

than 30 days after the effective date of the amendatory act that

 

amended this sentence; and not later than August 15 of each

 

subsequent year, based on the calculations under subsection (5),

 

the department of treasury shall approve, modify, or deny the

 

application for approval to have taxes levied under the state

 

education tax act, 1993 PA 331, MCL 211.901 to 211.906, retained

 

and paid to the authority under this section. If the application

 

for approval contains the information required under subsection

 

(2)(a) through (f) and appears to be in substantial compliance with

 

the provisions of this section, then the department of treasury

 

shall approve the application. If the application is denied by the

 

department of treasury, then the department of treasury shall

 

provide the opportunity for a representative of the authority to

 

discuss the denial within 21 days after the denial occurs and shall

 

sustain or modify its decision within 30 days after receiving

 

information from the authority. If the application for approval is

 

approved or modified by the department of treasury, the local tax


collecting treasurer shall retain and pay to the authority the

 

amount described in subsection (5) as approved by the department.

 

If the department of treasury denies the authority's application

 

for approval, the local tax collecting treasurer shall not retain

 

or pay to the authority the taxes levied under the state education

 

tax act, 1993 PA 331, MCL 211.901 to 211.906. An approval by the

 

department does not prohibit a subsequent audit of taxes retained

 

in accordance with the procedures currently authorized by law.

 

     (4) Each year, the legislature shall appropriate and

 

distribute an amount sufficient to pay each authority the

 

following:

 

     (a) If the amount to be retained and paid under subsection (3)

 

is less than the amount calculated under subsection (5), the

 

difference between those amounts.

 

     (b) If the application for approval is denied by the

 

department of treasury, an amount verified by the department equal

 

to the amount calculated under subsection (5).

 

     (5) Subject to subsection (6), the aggregate amount under this

 

section shall be the sum of the amounts determined under

 

subdivisions (a) and (b) minus the amount determined under

 

subdivision (c), as follows:

 

     (a) The amount by which the tax increment revenues the

 

authority would have received and retained for the fiscal year,

 

excluding taxes exempt under section 7ff of the general property

 

tax act, 1893 PA 206, MCL 211.7ff, if the personal property tax

 

exemptions described in subsection (1) were not in effect, exceed

 

the tax increment revenues the authority actually received for the


fiscal year.

 

     (b) A shortfall required to be reported under subsection

 

(2)(f) that had not previously increased a distribution.

 

     (c) An excess amount required to be reported under subsection

 

(2)(f) that had not previously decreased a distribution.

 

     (6) A distribution or taxes retained under this section

 

replacing tax increment revenues pledged by an authority or a

 

municipality are subject to any lien of the pledge described in

 

subsection (1), whether or not there has been physical delivery of

 

the distribution.

 

     (7) Obligations for which distributions are made under this

 

section are not a debt or liability of this state; do not create or

 

constitute an indebtedness, liability, or obligation of this state;

 

and are not and do not constitute a pledge of the faith and credit

 

of this state.

 

     (8) Not later than September 15 of each year, the authority

 

shall provide a copy of the application for approval approved by

 

the department of treasury to the local tax collecting treasurer

 

and provide the amount of the taxes retained and paid to the

 

authority under subsection (5).

 

     (9) Calculations of amounts retained and paid and

 

appropriations to be distributed under this section shall be made

 

on the basis of each development area of the authority.

 

     (10) The state tax commission may provide that the

 

reimbursement calculations under this section and the calculation

 

of allowable capture of school taxes shall be made for each

 

calendar year's tax increment revenues using a 12-month debt


payment period used by the authority and approved by the state tax

 

commission.

 

     (11) It is the intent of the legislature that, to the extent

 

that the total amount of taxes levied under the state education tax

 

act, 1993 PA 331, MCL 211.901 to 211.906, that are allowed to be

 

retained under this section and section 411b, section 15a of the

 

brownfield redevelopment financing act, 1996 PA 381, MCL 125.2665a,

 

and section 213c, exceeds the difference of the total school aid

 

fund revenue for the tax year minus the estimated amount of revenue

 

the school aid fund would have received for the tax year had the

 

tax exemptions described in subsection (1) and the earmark created

 

by section 515 of the Michigan business tax act, 2007 PA 36, MCL

 

208.1515, not taken effect, the general fund shall reimburse the

 

school aid fund the difference.

 

     Sec. 313. (1) When the authority determines that it is

 

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

 

authority shall prepare and submit a tax increment financing plan

 

to the governing body. The plan shall be in compliance with section

 

314 and shall include a development plan as provided in section

 

316. The plan shall also contain the following:

 

     (a) A statement of the reasons that the plan will result in

 

the development of captured assessed value that could not otherwise

 

be expected. The reasons may include, but are not limited to,

 

activities of the municipality, authority, or others undertaken

 

before formulation or adoption of the plan in reasonable

 

anticipation that the objectives of the plan would be achieved by

 

some means.


     (b) An estimate of the captured assessed value for each year

 

of the plan. The plan may provide for the use of part or all of the

 

captured assessed value, but the portion intended to be used shall

 

be clearly stated in the 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. The percentage of taxes levied for school operating

 

purposes that is captured and used by the 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, 1933 PA 62, MCL

 

211.201 to 211.217a. This limitation 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, 1985 PA 224, MCL 125.2113.

 

     (c) The estimated tax increment revenues for each year of the

 

plan.

 

     (d) A detailed explanation of the tax increment procedure.

 

     (e) The maximum amount of bonded indebtedness to be incurred.

 

     (f) The amount of operating and planning expenditures of the

 

authority and municipality, the amount of advances extended by or

 

indebtedness incurred by the municipality, and the amount of

 

advances by others to be repaid from tax increment revenues.


     (g) The costs of the plan anticipated to be paid from tax

 

increment revenues as received.

 

     (h) The duration of the development plan and the tax increment

 

plan.

 

     (i) An estimate of the impact of tax increment financing on

 

the revenues of all taxing jurisdictions in which the development

 

area is located.

 

     (2) Approval of the tax increment financing plan shall be in

 

accordance with the notice, hearing, disclosure, and approval

 

provisions of sections 317 and 318. When the development plan is

 

part of the tax increment financing plan, only 1 hearing and

 

approval procedure is required for the 2 plans together.

 

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

 

plan, the governing body shall provide a reasonable opportunity to

 

the taxing jurisdictions in which the development is located to

 

express their views and recommendations regarding the tax increment

 

financing plan. The authority shall fully inform the taxing

 

jurisdictions about the fiscal and economic implications of the

 

proposed tax increment financing plan. 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.

 

     Sec. 314. (1) The municipal and county treasurers shall

 

transmit to the authority tax increment revenues.

 

     (2) The authority shall expend the tax increment revenues


received for the development program only in accordance with the

 

tax increment financing plan. Surplus funds may be retained by the

 

authority for the payment of the principal of and interest on

 

outstanding tax increment bonds or for other purposes that, by

 

resolution of the board, are determined to further the development

 

program. Any surplus funds not so used shall revert proportionately

 

to the respective taxing bodies. These revenues shall not be used

 

to circumvent existing property tax laws or a local charter that

 

provides a maximum authorized rate for levy of property taxes. The

 

governing body may abolish the tax increment financing plan when it

 

finds that the purposes for which the plan was established are

 

accomplished. However, the tax increment finance plan shall not be

 

abolished, allowed to expire, or otherwise terminate until the

 

principal of, and interest on, bonds issued pursuant to section 315

 

have been paid or funds sufficient to make the payment have been

 

segregated.

 

     Sec. 315. (1) By resolution of its board, the authority may

 

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

 

limitations set forth in this section, to finance a development

 

program. The bonds are subject to the revised municipal finance

 

act, 2001 PA 34, MCL 141.2101 to 141.2821. The bonds issued under

 

this section shall be considered a single series for the purposes

 

of the revised municipal finance act, 2001 PA 34, MCL 141.2101 to

 

141.2821.

 

     (2) The municipality by majority vote of the members of its

 

governing body may pledge its full faith and credit for the payment

 

of the principal of and interest on the authority's tax increment


bonds. The municipality may pledge as additional security for the

 

bonds any money received by the authority or the municipality

 

pursuant to section 311.

 

     (3) Notwithstanding any other provision of this part, if the

 

state treasurer determines that an authority or municipality can

 

issue a qualified refunding obligation and the authority or

 

municipality does not make a good-faith effort to issue the

 

qualified refunding obligation as determined by the state

 

treasurer, the state treasurer may reduce the amount claimed by the

 

authority or municipality under section 312a by an amount equal to

 

the net present value saving that would have been realized had the

 

authority or municipality refunded the obligation or the state

 

treasurer may require a reduction in the capture of tax increment

 

revenues from taxes levied by a local or intermediate school

 

district or this state by an amount equal to the net present value

 

savings that would have been realized had the authority or

 

municipality refunded the obligation. This subsection does not

 

authorize the state treasurer to require the authority or

 

municipality to pledge security greater than the security pledged

 

for the obligation being refunded.

 

     Sec. 316. (1) When a board decides to finance a project in a

 

development area pursuant to this part, it shall prepare a

 

development plan.

 

     (2) To the extent necessary to accomplish the proposed

 

development program the development plan shall contain:

 

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

 

relation to the boundaries of the authority district and any other


development areas within the authority district.

 

     (b) The designation of boundaries of the development area in

 

relation to highways, streets, or otherwise.

 

     (c) The location and extent of existing streets and other

 

public facilities within the development area and the location,

 

character, and extent of the categories of public and private land

 

uses then existing and proposed for the development area, including

 

residential, recreational, commercial, industrial, educational, and

 

other uses and shall include a legal description of the development

 

area.

 

     (d) A description of improvements to be made in the

 

development area, a description of any repairs and alterations

 

necessary to make those improvements, and an estimate of the time

 

required for completion of the improvements.

 

     (e) The location, extent, character, and estimated cost of the

 

improvements including rehabilitation contemplated for the

 

development area and an estimate of the time required for

 

completion.

 

     (f) A statement of the construction or stages of construction

 

planned, and the estimated time of completion of each stage.

 

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

 

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

 

     (h) A description of any portions of the development area

 

which the authority desires to sell, donate, exchange, or lease to

 

or from the municipality and the proposed terms.

 

     (i) A description of desired zoning changes and changes in

 

streets, street levels, intersections, and utilities.


     (j) An estimate of the cost of the development, a statement of

 

the proposed method of financing the development, and the ability

 

of the authority to arrange the financing.

 

     (k) Designation of the person or persons, natural or

 

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

 

leased, sold, or conveyed and for whose benefit the project is

 

being undertaken, if that information is available to the

 

authority.

 

     (l) The procedures for bidding for the leasing, purchasing, or

 

conveying of all or a portion of the development upon its

 

completion, if there is no express or implied agreement between the

 

authority and persons, natural or corporate, that all or a portion

 

of the development will be leased, sold, or conveyed to those

 

persons.

 

     (m) Estimates of the number of persons residing in the

 

development area and the number of families and individuals to be

 

displaced. If occupied residences are designated for acquisition

 

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

 

survey of the families and individuals to be displaced, including

 

their income and racial composition, a statistical description of

 

the housing supply in the community, including the number of

 

private and public units in existence or under construction, the

 

condition of those in existence, the number of owner-occupied and

 

renter-occupied units, the annual rate of turnover of the various

 

types of housing and the range of rents and sale prices, an

 

estimate of the total demand for housing in the community, and the

 

estimated capacity of private and public housing available to


displaced families and individuals.

 

     (n) A plan for establishing priority for the relocation of

 

persons displaced by the development in any new housing in the

 

development area.

 

     (o) Provision for the costs of relocating persons displaced by

 

the development, and financial assistance and reimbursement of

 

expenses, including litigation expenses and expenses incident to

 

the transfer of title, in accordance with the standards and

 

provisions of the federal uniform relocation assistance and real

 

property acquisition policies act of 1970, 42 USC 4601 to 4655.

 

     (p) A plan for compliance with 1972 PA 227, MCL 213.321 to

 

213.332.

 

     (q) Other material which the authority, local public agency,

 

or governing body considers pertinent.

 

     (3) It shall not be necessary for the board to prepare a

 

development plan pursuant to this section where a development plan

 

that adequately provides for accomplishing the proposed development

 

program has already been prepared by any of the organizations

 

described in section 314(1)(a) to (d) and where the development

 

plan has been approved by the board and governing body pursuant to

 

sections 317 and 318.

 

     Sec. 317. (1) The governing body, before adoption of a

 

resolution approving or amending a development plan or approving or

 

amending a tax increment financing plan, shall hold a public

 

hearing on the development plan. Notice of the time and place of

 

the hearing shall be given by publication twice in a newspaper of

 

general circulation designated by the municipality, the first of


which shall not be less than 20 days before the date set for the

 

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

 

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

 

hearing. Beginning June 1, 2005, the notice of hearing within the

 

time frame described in this subsection shall be mailed by

 

certified mail to the governing body of each taxing jurisdiction

 

levying taxes that would be subject to capture if the development

 

plan or the tax increment financing plan is approved or amended.

 

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

 

plan shall contain the following:

 

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

 

to highways, streets, streams, or otherwise.

 

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

 

development plan, including the method of relocating families and

 

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

 

public inspection at a place designated in the notice, and that all

 

aspects of the development plan will be open for discussion at the

 

public hearing.

 

     (c) Other information that the governing body considers

 

appropriate.

 

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

 

provide an opportunity for interested persons to be heard and shall

 

receive and consider communications in writing with reference

 

thereto. The hearing shall provide the fullest opportunity for

 

expression of opinion, for argument on the merits, and for

 

introduction of documentary evidence pertinent to the development

 

plan. The governing body shall make and preserve a record of the


public hearing, including all data presented at that time.

 

     Sec. 318. (1) The governing body, after a public hearing on

 

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

 

with notice of the hearing given pursuant to section 317, shall

 

determine whether the development plan or tax increment financing

 

plan constitutes a public purpose. If the governing body determines

 

that the development plan or tax increment financing plan

 

constitutes a public purpose, the governing body shall then approve

 

or reject the plan, or approve it with modification, by resolution

 

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) Whether the development plan meets the requirements set

 

forth in section 316(2) and the tax increment financing plan meets

 

the requirements set forth in section 313(1).

 

     (c) Whether the proposed method of financing the development

 

is feasible and the authority has the ability to arrange the

 

financing.

 

     (d) Whether the development is reasonable and necessary to

 

carry out the purposes of this part.

 

     (e) Whether the amount of captured assessed value estimated to

 

result from adoption of the plan is reasonable.

 

     (f) Whether the land to be acquired within the development

 

area is reasonably necessary to carry out the purposes of the plan

 

and the purposes of this part.

 

     (g) Whether the development plan is in reasonable accord with


the approved master plan of the municipality, if an approved master

 

plan exists.

 

     (h) Whether public services, such as fire and police

 

protection and utilities, are or will be adequate to service the

 

development area.

 

     (i) Whether changes in zoning, streets, street levels,

 

intersections, and utilities are reasonably necessary for the

 

project and for the municipality.

 

     (2) Except as provided in this subsection, amendments to an

 

approved development plan or tax increment plan must be submitted

 

by the authority to the governing body for approval or rejection

 

following the same notice and public hearing provisions that are

 

necessary for approval or rejection of the original plan. Notice

 

and hearing shall not be necessary for revisions in the estimates

 

of captured assessed value and tax increment revenues.

 

     (3) The procedure, adequacy of notice, and findings with

 

respect to purpose and captured assessed value shall be conclusive

 

unless contested in a court of competent jurisdiction within 60

 

days after adoption of the resolution adopting the plan. A plan

 

adopted before July 18, 1983 is validated and shall be conclusive

 

unless contested in a court of competent jurisdiction within 60

 

days after July 18, 1983. A plan in effect before July 18, 1983

 

shall not be contested to the extent that tax increment revenues

 

are necessary for the payment of principal and interest on

 

outstanding bonds issued pursuant to the plan and payable from the

 

tax increment revenues or to the extent the authority or

 

municipality has incurred other obligations or made commitments


dependent upon tax increment revenues.

 

     Sec. 319. A person to be relocated under this part shall be

 

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

 

modified by court order for good cause.

 

     Sec. 320. (1) A development area citizens council shall be

 

established if the proposed development area has 100 or more

 

persons residing within it and a change in zoning or a taking of

 

property by eminent domain is necessary to accomplish the proposed

 

development program. The council shall act as an advisory body to

 

the authority and the governing body in the adoption of the

 

development plan or tax increment financing plan.

 

     (2) If a development area citizens council is required, the

 

council shall be appointed by the governing body, and shall consist

 

of not less than 9 members. Each member shall be at least 18 years

 

of age and reside in the development area. The council shall be

 

established at least 60 days before the public hearing on the

 

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

 

     (3) If a development area citizens council is required

 

pursuant to subsection (1) and if the authority was established

 

pursuant to section 304(1)(a), (b), (c), or (d), a council

 

established in conjunction with any of those boards or commissions,

 

may serve in an advisory capacity to the authority, if the

 

authority determines it is representative of the development area.

 

     Sec. 321. Periodically a representative of the authority

 

responsible for preparation of a development or tax increment

 

financing plan within the development area shall consult with and

 

advise the development area citizens council regarding the aspects


of a development plan, including the development of new housing for

 

relocation purposes located either inside or outside of the

 

development area. The consultation shall begin before any final

 

decisions by the authority and the governing body regarding a

 

development or tax increment financing plan. The consultation shall

 

continue throughout the preparation and implementation of the

 

development or tax increment financing plan.

 

     Sec. 322. (1) Meetings of the council shall be open to the

 

public. Notice of the time and place of the meetings shall be

 

posted in at least 10 conspicuous places in the development area

 

accessible to the public not less than 5 days before the dates set

 

for meetings of the council. A person present at those meetings

 

shall have reasonable opportunity to be heard.

 

     (2) A record of the meetings of a council, including

 

information and data presented, shall be maintained by the council.

 

     (3) A council may request of and receive from the authority

 

information and technical assistance relevant to the preparation of

 

the development plan for the development area.

 

     (4) Failure of a council to organize or to consult with and be

 

advised by the authority, or failure to advise the governing body,

 

as provided in this part, shall not preclude the adoption of a

 

development plan by a municipality if the municipality complies

 

with the other provisions of this part.

 

     Sec. 323. Within 20 days after the public hearing on a

 

development or tax increment financing plan, the council, if

 

established, shall notify the governing body, in writing, of its

 

findings and recommendations concerning a proposed development


plan.

 

     Sec. 324. A development area citizens council may not be

 

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

 

situations:

 

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

 

population of the development area by the last federal decennial or

 

municipal census, a governing body, after public hearing with

 

notice given in accordance with section 317 and by a 2/3 vote, may

 

adopt a resolution eliminating the necessity of a council for the

 

development area.

 

     (b) If there are less than 18 residents located in the

 

development area eligible to serve on the council.

 

     (c) Upon termination of the authority by resolution of the

 

governing body.

 

     Sec. 325. (1) The director of the authority shall prepare and

 

submit for the approval of the board a budget for the operation of

 

the authority for the ensuing fiscal year. The budget shall be

 

prepared in the manner and contain the information required of

 

municipal departments. Before the budget may be adopted by the

 

board, it shall be approved by the governing body. Funds of the

 

municipality shall not be included in the budget of the authority

 

except those funds authorized in this part or by the governing

 

body.

 

     (2) The governing body may assess a reasonable pro rata share

 

of the funds for the cost of handling and auditing the funds

 

against the funds of the authority, other than those committed for

 

designated purposes, which cost shall be paid annually by the board


pursuant to an appropriate item in its budget.

 

     Sec. 326. (1) A public facility, building, or structure which

 

is determined by the municipality to have significant historical

 

interests shall be preserved in a manner as considered necessary by

 

the municipality in accordance with laws relative to the

 

preservation of historical sites.

 

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

 

exterior of sites listed on the state register of historic sites

 

and the national register of historic places to the applicable

 

historic district commission created under the local historic

 

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

 

state housing development authority for review.

 

     Sec. 327. An authority which has completed the purposes for

 

which it was organized shall be dissolved by resolution of the

 

governing body. The property and assets of the authority remaining

 

after the satisfaction of the obligations of the authority shall

 

belong to the municipality.

 

     Sec. 328. Notwithstanding the limitation provided by section

 

302(1) on having more than 1 authority, if an authority district is

 

part of an area annexed to or consolidated with another

 

municipality, the authority managing that authority district shall

 

become an authority of the annexing or consolidated municipality.

 

All obligations of that authority incurred pursuant to development

 

plans or tax increment plans, all agreements related to the plans,

 

and bonds issued pursuant to this part shall remain in effect

 

following the annexation or consolidation.

 

     Sec. 329. (1) Beginning January 1, 1987, a new authority or


authority district shall not be created and the boundaries of an

 

authority district shall not be expanded to include additional

 

land.

 

     (2) A tax increment finance authority, authority district,

 

development area, development plan, or tax increment financing plan

 

established under this part before December 30, 1986 shall not be

 

invalidated pursuant to a claim that based on the standards set

 

forth in section 303(1), a governing body improperly determined

 

that the necessary conditions existed for the establishment of a

 

tax increment financing authority under this part, if, at the time

 

the governing body established the authority, the governing body

 

could have determined that establishment of an authority under this

 

part would serve to create jobs or promote economic development

 

growth.

 

     (3) A development area created or expanded after December 29,

 

1986 shall be subject to the requirements of section 303(1).

 

PART 4

 

LOCAL DEVELOPMENT FINANCE AUTHORITIES

 

     Sec. 401. (1) The legislature finds all of the following:

 

     (a) That there exists in this state conditions of

 

unemployment, underemployment, and joblessness detrimental to the

 

state economy and the economic growth of the state economy.

 

     (b) That government programs are desirable and necessary to

 

eliminate the causes of unemployment, underemployment, and

 

joblessness therefore benefiting the economic growth of the state.

 

     (c) That it is appropriate to finance these government

 

programs by means available to the state and local units of


government, including tax increment financing.

 

     (d) That tax increment financing is a government financing

 

program which contributes to economic growth and development by

 

dedicating a portion of the tax base resulting from the economic

 

growth and development to certain public facilities and structures

 

or improvements of the type designed and dedicated to public use

 

and thereby facilitate certain projects which create economic

 

growth and development.

 

     (e) That it is necessary for the legislature to exercise the

 

sovereign power to legislate tax increment financing as authorized

 

in this part and in the exercise of this sovereign power to mandate

 

the transfer of tax increment revenues by city, village, township,

 

school district, and county treasurers to authorities created under

 

this part in order to effectuate the legislated government programs

 

to eliminate the conditions of unemployment, underemployment, and

 

joblessness and to promote state economic growth.

 

     (f) That the creation of jobs and the promotion of economic

 

growth in the state are essential governmental functions and

 

constitute essential public purposes.

 

     (g) That the creation of jobs and the promotion of economic

 

growth stabilize and strengthen the tax bases upon which local

 

units of government rely and that government programs to eliminate

 

causes of unemployment, underemployment, and joblessness benefit

 

local units of government and are for the use of those local units

 

of government.

 

     (h) That the provisions of this part are enacted to provide a

 

means for local units of government to eliminate the conditions of


unemployment, underemployment, and joblessness and to promote

 

economic growth in the communities served by these local units of

 

government.

 

     (2) This part shall be known and may be cited as "the local

 

development financing part".

 

     Sec. 402. As used in this part:

 

     (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) "Alternative energy technology" means equipment, component

 

parts, materials, electronic devices, testing equipment, and

 

related systems that are specifically designed, specifically

 

fabricated, and used primarily for 1 or more of the following:

 

     (i) The storage, generation, reformation, or distribution of

 

clean fuels integrated within an alternative energy system or

 

alternative energy vehicle, not including an anaerobic digester

 

energy system or a hydroelectric energy system, for use within the

 

alternative energy system or alternative energy vehicle.

 

     (ii) The process of generating and putting into a usable form

 

the energy generated by an alternative energy system. Alternative

 

energy technology does not include those component parts of an

 

alternative energy system that are required regardless of the

 

energy source.


     (iii) Research and development of an alternative energy

 

vehicle.

 

     (iv) Research, development, and manufacturing of an

 

alternative energy system.

 

     (v) Research, development, and manufacturing of an anaerobic

 

digester energy system.

 

     (vi) Research, development, and manufacturing of a

 

hydroelectric energy system.

 

     (c) "Alternative energy technology business" means a business

 

engaged in the research, development, or manufacturing of

 

alternative energy technology or a business located in an authority

 

district that includes a military installation that was operated by

 

the United States Department of Defense and closed after 1980.

 

     (d) "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.

 

     (e) "Authority" means a local development finance authority

 

created pursuant to this part.

 

     (f) "Authority district" means an area or areas within which

 

an authority exercises its powers.

 

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

 

     (h) "Business development area" means an area designated as a

 

certified industrial park under this part prior to June 29, 2000,


or an area designated in the tax increment financing plan that

 

meets all of the following requirements:

 

     (i) The area is zoned to allow its use for eligible property.

 

     (ii) The area has a site plan or plat approved by the city,

 

village, or township in which the area is located.

 

     (i) "Business incubator" means real and personal property that

 

meets all of the following requirements:

 

     (i) Is located in a certified technology park or a certified

 

alternative energy park.

 

     (ii) Is subject to an agreement under section 412a or 412c.

 

     (iii) Is developed for the primary purpose of attracting 1 or

 

more owners or tenants who will engage in activities that would

 

each separately qualify the property as eligible property under

 

subdivision (s)(iii).

 

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

 

by which the current assessed value of the eligible property

 

identified in the tax increment financing plan or, for a certified

 

technology park, a certified alternative energy park, or a Next

 

Michigan development area, the real and personal property included

 

in the tax increment financing plan, including the current assessed

 

value of property for which specific local taxes are paid in lieu

 

of property taxes as determined pursuant to subdivision (hh),

 

exceeds the initial assessed value. The state tax commission shall

 

prescribe the method for calculating captured assessed value.

 

Except as otherwise provided in this part, tax abated property in a

 

renaissance zone as defined under section 3 of the Michigan

 

renaissance zone act, 1996 PA 376, MCL 125.2683, shall be excluded


from the calculation of captured assessed value to the extent that

 

the property is exempt from ad valorem property taxes or specific

 

local taxes.

 

     (k) "Certified alternative energy park" means that portion of

 

an authority district designated by a written agreement entered

 

into pursuant to section 412c between the authority, the

 

municipality or municipalities, and the Michigan economic

 

development corporation.

 

     (l) "Certified business park" means a business development

 

area that has been designated by the Michigan economic development

 

corporation as meeting criteria established by the Michigan

 

economic development corporation. The criteria shall establish

 

standards for business development areas including, but not limited

 

to, use, types of building materials, landscaping, setbacks,

 

parking, storage areas, and management.

 

     (m) "Certified technology park" means that portion of the

 

authority district designated by a written agreement entered into

 

pursuant to section 412a between the authority, the municipality,

 

and the Michigan economic development corporation.

 

     (n) "Chief executive officer" means the mayor or city manager

 

of a city, the president of a village, or, for other local units of

 

government or school districts, the person charged by law with the

 

supervision of the functions of the local unit of government or

 

school district.

 

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

 

requirements for a development set forth in section 415.

 

     (p) "Development program" means the implementation of a


development plan.

 

     (q) "Eligible advance" means an advance made before August 19,

 

1993.

 

     (r) "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.

 

     (s) "Eligible property" means land improvements, buildings,

 

structures, and other real property, and machinery, equipment,

 

furniture, and fixtures, or any part or accessory thereof whether

 

completed or in the process of construction comprising an

 

integrated whole, located within an authority district, of which

 

the primary purpose and use is or will be 1 of the following:

 

     (i) The manufacture of goods or materials or the processing of

 

goods or materials by physical or chemical change.

 

     (ii) Agricultural processing.

 

     (iii) A high technology activity.

 

     (iv) The production of energy by the processing of goods or

 

materials by physical or chemical change by a small power

 

production facility as defined by the Federal Energy Regulatory

 

Commission pursuant to the public utility regulatory policies act

 

of 1978, Public Law 95-617, which facility is fueled primarily by

 

biomass or wood waste. This part does not affect a person's rights

 

or liabilities under law with respect to groundwater contamination


described in this subparagraph. This subparagraph applies only if

 

all of the following requirements are met:

 

     (A) Tax increment revenues captured from the eligible property

 

will be used to finance, or will be pledged for debt service on tax

 

increment bonds used to finance, a public facility in or near the

 

authority district designed to reduce, eliminate, or prevent the

 

spread of identified soil and groundwater contamination, pursuant

 

to law.

 

     (B) The board of the authority exercising powers within the

 

authority district where the eligible property is located adopted

 

an initial tax increment financing plan between January 1, 1991 and

 

May 1, 1991.

 

     (C) The municipality that created the authority establishes a

 

special assessment district whereby not less than 50% of the

 

operating expenses of the public facility described in this

 

subparagraph will be paid for by special assessments. Not less than

 

50% of the amount specially assessed against all parcels in the

 

special assessment district shall be assessed against parcels owned

 

by parties potentially responsible for the identified groundwater

 

contamination pursuant to law.

 

     (v) A business incubator.

 

     (vi) An alternative energy technology business.

 

     (vii) A transit-oriented facility.

 

     (viii) A transit-oriented development.

 

     (ix) An eligible Next Michigan business, as that term is

 

defined in section 3 of the Michigan economic growth authority act,

 

1995 PA 24, MCL 207.803, and other businesses within a Next


Michigan development area, but only to the extent designated as

 

eligible property within a development plan approved by a Next

 

Michigan development corporation.

 

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

 

     (u) "Governing body" means, except as otherwise provided in

 

this subdivision, the elected body having legislative powers of a

 

municipality creating an authority under this part. For a Next

 

Michigan development corporation, governing body means the

 

executive committee of the Next Michigan development corporation,

 

unless otherwise provided in the interlocal agreement or articles

 

of incorporation creating the Next Michigan development corporation

 

or the governing body of an eligible urban entity or its designee

 

as provided in the next Michigan development act, 2010 PA 275, MCL

 

125.2951 to 125.2959.

 

     (v) "High-technology activity" means that term as defined in

 

section 3 of the Michigan economic growth authority act, 1995 PA

 

24, MCL 207.803.

 

     (w) "Initial assessed value" means the assessed value of the

 

eligible property identified in the tax increment financing plan

 

or, for a certified technology park, a certified alternative energy

 

park, or a Next Michigan development area, the assessed value of

 

any real and personal property included in the tax increment

 

financing plan, at the time the resolution establishing the tax

 

increment financing plan is approved as shown by the most recent

 

assessment roll for which equalization has been completed at the

 

time the resolution is adopted or, for property that becomes

 

eligible property in other than a certified technology park or a


certified alternative energy park after the date the plan is

 

approved, at the time the property becomes eligible property.

 

Property exempt from taxation at the time of the determination of

 

the initial assessed value shall be included as zero. Property for

 

which a specific local tax is paid in lieu of property tax shall

 

not be considered exempt from taxation. The initial assessed value

 

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

 

property tax shall be determined as provided in subdivision (hh).

 

     (x) "Michigan economic development corporation" means the

 

public body corporate created under section 28 of article VII of

 

the state constitution of 1963 and the urban cooperation act of

 

1967, 1967 (Ex Sess) PA 7, MCL 124.501 to 124.512, by a contractual

 

interlocal agreement effective April 5, 1999 between local

 

participating economic development corporations formed under the

 

economic development corporations act, 1974 PA 338, MCL 125.1601 to

 

125.1636, and the Michigan strategic fund. If the Michigan economic

 

development corporation is unable for any reason to perform its

 

duties under this part, those duties may be exercised by the

 

Michigan strategic fund.

 

     (y) "Michigan strategic fund" means the Michigan strategic

 

fund as described in the Michigan strategic fund act, 1984 PA 270,

 

MCL 125.2001 to 125.2094.

 

     (z) "Municipality" means a city, village, or urban township.

 

However, for purposes of creating and operating a certified

 

alternative energy park or a certified technology park,

 

municipality includes townships that are not urban townships.

 

     (aa) "Next Michigan development area" means a portion of an


authority district designated by a Next Michigan development

 

corporation under section 412e to which a development plan is

 

applicable.

 

     (bb) "Next Michigan development corporation" means that term

 

as defined in section 3 of the next Michigan development act, 2010

 

PA 275, MCL 125.2953.

 

     (cc) "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 part. 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.

 

     (dd) "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 a 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.

 

     (ee) "Other protected obligation" means:

 

     (i) A qualified refunding obligation issued to refund an

 

obligation described in subparagraph (ii) or (iii), 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 part before August 19, 1993, for which a contract for

 

final design is entered into by the municipality or authority

 

before March 1, 1994.

 

     (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 part before August 19, 1993, and

 

undertaken and installed by that party in accordance with the

 

development agreement.

 

     (iv) An ongoing management or professional services contract

 

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

 

March 1, 1994 and that 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.

 

     (ff) "Public facility" means 1 or more of the following:

 

     (i) A street, road, bridge, storm water or sanitary sewer,

 

sewage treatment facility, facility designed to reduce, eliminate,

 

or prevent the spread of identified soil or groundwater

 

contamination, drainage system, retention basin, pretreatment

 

facility, waterway, waterline, water storage facility, rail line,

 

electric, gas, telephone or other communications, or any other type


of utility line or pipeline, transit-oriented facility, transit-

 

oriented development, or other similar or related structure or

 

improvement, together with necessary easements for the structure or

 

improvement. Except for rail lines, utility lines, or pipelines,

 

the structures or improvements described in this subparagraph shall

 

be either owned or used by a public agency, functionally connected

 

to similar or supporting facilities owned or used by a public

 

agency, or designed and dedicated to use by, for the benefit of, or

 

for the protection of the health, welfare, or safety of the public

 

generally, whether or not used by a single business entity. Any

 

road, street, or bridge shall be continuously open to public

 

access. A public facility shall be located on public property or in

 

a public, utility, or transportation easement or right-of-way.

 

     (ii) The acquisition and disposal of land that is proposed or

 

intended to be used in the development of eligible property or an

 

interest in that land, demolition of structures, site preparation,

 

and relocation costs.

 

     (iii) All administrative and real and personal property

 

acquisition and disposal costs related to a public facility

 

described in subparagraphs (i) and (iv), including, but not limited

 

to, architect's, engineer's, legal, and accounting fees as

 

permitted by the district's development plan.

 

     (iv) 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.

 

     (v) All of the following costs approved by the Michigan

 

economic development corporation:

 

     (A) Operational costs and the costs related to the

 

acquisition, improvement, preparation, demolition, disposal,

 

construction, reconstruction, remediation, rehabilitation,

 

restoration, preservation, maintenance, repair, furnishing, and

 

equipping of land and other assets that are or may become eligible

 

for depreciation under the internal revenue code of 1986 for a

 

business incubator located in a certified technology park or

 

certified alternative energy park.

 

     (B) Costs related to the acquisition, improvement,

 

preparation, demolition, disposal, construction, reconstruction,

 

remediation, rehabilitation, restoration, preservation,

 

maintenance, repair, furnishing, and equipping of land and other

 

assets that, if privately owned, would be eligible for depreciation

 

under the internal revenue code of 1986 for laboratory facilities,

 

research and development facilities, conference facilities,

 

teleconference facilities, testing, training facilities, and

 

quality control facilities that are or that support eligible

 

property under subdivision (s)(iii), that are owned by a public

 

entity, and that are located within a certified technology park.

 

     (C) Costs related to the acquisition, improvement,

 

preparation, demolition, disposal, construction, reconstruction,

 

remediation, rehabilitation, restoration, preservation,

 

maintenance, repair, furnishing, and equipping of land and other

 

assets that, if privately owned, would be eligible for depreciation


under the internal revenue code of 1986 for facilities that are or

 

that will support eligible property under subdivision (s)(vi), that

 

have been or will be owned by a public entity at the time such

 

costs are incurred, that are located within a certified alternative

 

energy park, and that have been or will be conveyed, by gift or

 

sale, by such public entity to an alternative energy technology

 

business.

 

     (vi) Operating and planning costs included in a plan pursuant

 

to section 412(1)(f), including costs of marketing property within

 

the district and attracting development of eligible property within

 

the district.

 

     (gg) "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 the refunding obligation

 

meets both of the following:

 

     (i) 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.

 

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

 

revenues described in subdivision (jj)(ii) and the distributions

 

under section 411a 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 (jj)(ii) and the distributions

 

under section 411a to repay the obligation being refunded, as

 

calculated using a method approved by the department of treasury.


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

 

198, MCL 207.551 to 207.572, the obsolete property rehabilitation

 

act, 2000 PA 146, MCL 125.2781 to 125.2797, the commercial

 

redevelopment act, 1978 PA 255, MCL 207.651 to 207.668, the

 

enterprise zone act, 1985 PA 224, MCL 125.2101 to 125.2123, 1953 PA

 

189, MCL 211.181 to 211.182, and the technology park development

 

act, 1984 PA 385, MCL 207.701 to 207.718. The initial assessed

 

value or current assessed value of property subject to a specific

 

local tax is 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.

 

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

 

October 1 of each year.

 

     (jj) "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 eligible property within the district

 

or, for purposes of a certified technology park, a Next Michigan

 

development area, or a certified alternative energy park, real or

 

personal property that is located within the certified technology

 

park, a Next Michigan development area, or a certified alternative

 

energy park and included within the tax increment financing plan,

 

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 part.

 

     (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), for the following

 

purposes:

 

     (A) To repay eligible advances, eligible obligations, and

 

other protected obligations.

 

     (B) To fund or to repay an advance or obligation issued by or

 

on behalf of an authority to fund the cost of public facilities

 

related to or for the benefit of eligible property located within a

 

certified technology park or a certified alternative energy park to

 

the extent the public facilities have been included in an agreement

 

under section 412a(3), 412b, or 412c(3), not to exceed 50%, as

 

determined by the state treasurer, of the amounts levied by the

 

state pursuant to the state education tax act, 1993 PA 331, MCL

 

211.901 to 211.906, and local and intermediate school districts for

 

a period, except as otherwise provided in this sub-subparagraph,

 

not to exceed 15 years, as determined by the state treasurer, if

 

the state treasurer determines that the capture under this sub-


subparagraph is necessary to reduce unemployment, promote economic

 

growth, and increase capital investment in the municipality.

 

However, upon approval of the state treasurer and the president of

 

the Michigan economic development corporation, a certified

 

technology park may capture under this sub-subparagraph for an

 

additional period of 5 years if the authority agrees to additional

 

reporting requirements and modifies its tax increment financing

 

plan to include regional collaboration as determined by the state

 

treasurer and the president of the Michigan economic development

 

corporation. In addition, upon approval of the state treasurer and

 

the president of the Michigan economic development corporation, if

 

a municipality that has created a certified technology park that

 

has entered into an agreement with another authority that does not

 

contain a certified technology park to designate a distinct

 

geographic area under section 412b, that authority that has created

 

the certified technology park and the associated distinct

 

geographic area may both capture under this sub-subparagraph for an

 

additional period of 15 years as determined by the state treasurer

 

and the president of the Michigan economic development corporation.

 

     (C) To fund the cost of public facilities related to or for

 

the benefit of eligible property located within a Next Michigan

 

development area to the extent that the public facilities have been

 

included in a development plan, not to exceed 50%, as determined by

 

the state treasurer, of the amounts levied by the state pursuant to

 

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

 

and local and intermediate school districts for a period not to

 

exceed 15 years, as determined by the state treasurer, if the state


treasurer determines that the capture under this sub-subparagraph

 

is necessary to reduce unemployment, promote economic growth, and

 

increase capital investment in the authority district.

 

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

 

following:

 

     (A) Ad valorem property taxes or specific local taxes that are

 

excluded from and not made part of the tax increment financing

 

plan. Ad valorem personal property taxes or specific local taxes

 

associated with personal property may be excluded from and may not

 

be part of the tax increment financing plan.

 

     (B) Ad valorem property taxes and specific local taxes

 

attributable to 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.

 

     (C) Ad valorem property taxes exempted from capture under

 

section 404(3) or specific local taxes attributable to such ad

 

valorem property taxes.

 

     (D) Ad valorem property taxes specifically levied for the

 

payment of principal and interest of obligations approved by the

 

electors or obligations pledging the unlimited taxing power of the

 

local governmental unit or specific local taxes attributable to

 

such ad valorem property taxes.

 

     (E) The amount of ad valorem property taxes or specific taxes

 

captured by a downtown development authority under part 2, tax

 

increment financing authority under part 3, or brownfield

 

redevelopment authority under the brownfield redevelopment


financing act, 1996 PA 381, MCL 125.2651 to 125.2672, if those

 

taxes were captured by these other authorities on the date that the

 

initial assessed value of a parcel of property was established

 

under this part.

 

     (F) Ad valorem property taxes levied under 1 or more of the

 

following or specific local taxes attributable to those ad valorem

 

property taxes:

 

     (I) The zoological authorities act, 2008 PA 49, MCL 123.1161

 

to 123.1183.

 

     (II) The art institute authorities act, 2010 PA 296, MCL

 

123.1201 to 123.1229.

 

     (III) Except as otherwise provided in section 404(3), ad

 

valorem property taxes or specific local taxes attributable to

 

those ad valorem property taxes levied for a separate millage for

 

public library purposes approved by the electors after December 31,

 

2016.

 

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

 

included under subparagraph (ii), and required to be transmitted to

 

the authority under section 413(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, or 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).

 

     (kk) "Transit-oriented development" means infrastructure

 

improvements that are located within 1/2 mile of a transit station

 

or transit-oriented facility that promotes transit ridership or

 

passenger rail use as determined by the board and approved by the

 

municipality in which it is located.

 

     (ll) "Transit-oriented facility" means a facility that houses

 

a transit station in a manner that promotes transit ridership or

 

passenger rail use.

 

     (mm) "Urban township" means a township that meets 1 or more of

 

the following:

 

     (i) Meets all of the following requirements:

 

     (A) Has a population of 20,000 or more, or has a population of

 

10,000 or more but is located in a county with a population of

 

400,000 or more.

 

     (B) Adopted a master zoning plan before February 1, 1987.

 

     (C) Provides sewer, water, and other public services to all or

 

a part of the township.

 

     (ii) Meets all of the following requirements:


     (A) Has a population of less than 20,000.

 

     (B) Is located in a county with a population of 250,000 or

 

more but less than 400,000, and that county is located in a

 

metropolitan statistical area.

 

     (C) Has within its boundaries a parcel of property under

 

common ownership that is 800 acres or larger and is capable of

 

being served by a railroad, and located within 3 miles of a limited

 

access highway.

 

     (D) Establishes an authority before December 31, 1998.

 

     (iii) Meets all of the following requirements:

 

     (A) Has a population of less than 20,000.

 

     (B) Has a state equalized valuation for all real and personal

 

property located in the township of more than $200,000,000.00.

 

     (C) Adopted a master zoning plan before February 1, 1987.

 

     (D) Is a charter township under the charter township act, 1947

 

PA 359, MCL 42.1 to 42.34.

 

     (E) Has within its boundaries a combination of parcels under

 

common ownership that is 800 acres or larger, is immediately

 

adjacent to a limited access highway, is capable of being served by

 

a railroad, and is immediately adjacent to an existing sewer line.

 

     (F) Establishes an authority before March 1, 1999.

 

     (iv) Meets all of the following requirements:

 

     (A) Has a population of 13,000 or more.

 

     (B) Is located in a county with a population of 150,000 or

 

more.

 

     (C) Adopted a master zoning plan before February 1, 1987.

 

     (v) Meets all of the following requirements:


     (A) Is located in a county with a population of 1,000,000 or

 

more.

 

     (B) Has a written agreement with an adjoining township to

 

develop 1 or more public facilities on contiguous property located

 

in both townships.

 

     (C) Has a master plan in effect.

 

     (vi) Meets all of the following requirements:

 

     (A) Has a population of less than 10,000.

 

     (B) Has a state equalized valuation for all real and personal

 

property located in the township of more than $280,000,000.00.

 

     (C) Adopted a master zoning plan before February 1, 1987.

 

     (D) Has within its boundaries a combination of parcels under

 

common ownership that is 199 acres or larger, is located within 1

 

mile of a limited access highway, and is located within 1 mile of

 

an existing sewer line.

 

     (E) Has rail service.

 

     (F) Establishes an authority before May 7, 2009.

 

     (vii) Has joined an authority under section 403(2) which is

 

seeking or has entered into an agreement for a certified technology

 

park.

 

     (viii) Has established an authority which is seeking or has

 

entered into an agreement for a certified alternative energy park.

 

     Sec. 403. (1) Except as otherwise provided by subsection (2),

 

a municipality may establish not more than 1 authority under the

 

provisions of this part. An authority established under this

 

subsection shall exercise its powers in all authority districts.

 

     (2) In addition to an authority established under subsection


(1), a municipality may join with 1 or more other municipalities

 

located within the same county to establish an authority under this

 

part. An authority created under this subsection may only exercise

 

its powers in a certified technology park designated in an

 

agreement made under section 412a or 412b or in a certified

 

alternative energy park designated in an agreement under section

 

412c. A municipality shall not establish more than 1 authority

 

under this subsection.

 

     (3) A Next Michigan development corporation may establish not

 

more than 1 authority under the provisions of this part. An

 

authority established under this subsection shall exercise its

 

powers within its authority district and in all Next Michigan

 

development areas. The authority district in which the authority

 

may exercise its powers shall include all or part of the territory

 

of a Next Michigan development corporation, as determined by the

 

governing body of the Next Michigan development corporation.

 

     (4) The authority shall be a public body corporate which may

 

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

 

all the powers necessary to carry out the purpose of its

 

incorporation. The enumeration of a power in this part shall not be

 

construed as a limitation upon the general powers of the authority.

 

The powers granted in this part to an authority may be exercised

 

notwithstanding that bonds are not issued by the authority.

 

     Sec. 404. (1) The governing body of a municipality may declare

 

by resolution adopted by a majority of its members elected and

 

serving its intention to create and provide for the operation of an

 

authority.


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

 

to create the authority shall set a date for holding a public

 

hearing on the adoption of a proposed resolution creating the

 

authority and designating the boundaries of the authority district

 

or districts. Notice of the public hearing shall be published twice

 

in a newspaper of general circulation in the municipality, not less

 

than 20 nor more than 40 days before the date of the hearing.

 

Except as otherwise provided in subsection (8), not less than 20

 

days before the hearing, the governing body proposing to create the

 

authority shall also mail notice of the hearing to the property

 

taxpayers of record in a proposed authority district and, for a

 

public hearing to be held after February 15, 1994, to the governing

 

body of each taxing jurisdiction levying taxes that would be

 

subject to capture if the authority is established and a tax

 

increment financing plan is approved. Beginning June 1, 2005, the

 

notice of hearing within the time frame described in this

 

subsection shall be mailed by certified mail to the governing body

 

of each taxing jurisdiction levying taxes that would be subject to

 

capture if the authority is established and a tax increment

 

financing plan is approved. Failure of a property taxpayer to

 

receive the notice shall not invalidate these proceedings. The

 

notice shall state the date, time, and place of the hearing, and

 

shall describe the boundaries of the proposed authority district or

 

districts. At that hearing, a resident, taxpayer, or property owner

 

from a taxing jurisdiction in which the proposed district is

 

located or an official from a taxing jurisdiction with millage that

 

would be subject to capture has the right to be heard in regard to


the establishment of the authority and the boundaries of that

 

proposed authority district. The governing body of the municipality

 

in which a proposed district is to be located shall not incorporate

 

land into an authority district not included in the description

 

contained in the notice of public hearing, but it may eliminate

 

lands described in the notice of public hearing from an authority

 

district in the final determination of the boundaries.

 

     (3) Except as otherwise provided in subsection (8), not more

 

than 60 days after a public hearing held after February 15, 1994,

 

the governing body of a taxing jurisdiction with millage that would

 

otherwise be subject to capture may exempt its taxes from capture

 

by adopting a resolution to that effect and filing a copy with the

 

clerk of the municipality proposing to create the authority.

 

However, a resolution by a governing body of a taxing jurisdiction

 

to exempt its taxes from capture is not effective for the capture

 

of taxes that are used for a certified technology park or a

 

certified alternative energy park. The resolution takes effect when

 

filed with that clerk and remains effective until a copy of a

 

resolution rescinding that resolution is filed with that clerk. If

 

a separate millage for public library purposes was levied before

 

January 1, 2017, and all obligations and other protected

 

obligations of the authority are paid, then the levy is exempt from

 

capture under this part, unless the library board or commission

 

allows all or a portion of its taxes levied to be included as tax

 

increment revenues and subject to capture under this part under the

 

terms of a written agreement between the library board or

 

commission and the authority. The written agreement shall be filed


with the clerk of the municipality. However, if a separate millage

 

for public library purposes was levied before January 1, 2017, and

 

the authority alters or amends the boundaries of the authority

 

district or extends the duration of the existing finance plan, then

 

the library board or commission may, not later than 60 days after a

 

public hearing is held under this subsection, exempt all or a

 

portion of its taxes from capture by adopting a resolution to that

 

effect and filing a copy with the clerk of the municipality that

 

created the authority. For ad valorem property taxes or specific

 

local taxes attributable to those ad valorem property taxes levied

 

for a separate millage for public library purposes approved by the

 

electors after December 31, 2016, a library board or commission may

 

allow all or a portion of its taxes levied to be included as tax

 

increment revenues and subject to capture under this part under the

 

terms of a written agreement between the library board or

 

commission and the authority. The written agreement shall be filed

 

with the clerk of the municipality. However, if the library was

 

created under section 1 or 10a of 1877 PA 164, MCL 397.201 and

 

397.210a, or established under 1869 LA 233, then any action of the

 

library board or commission under this subsection shall have the

 

concurrence of the chief executive officer of the city that created

 

the library to be effective.

 

     (4) Except as otherwise provided in subsection (8), not less

 

than 60 days after the public hearing or a shorter period as

 

determined by the governing body for a certified technology park or

 

a certified alternative energy park, if the governing body creating

 

the authority intends to proceed with the establishment of the


authority, it shall adopt, by majority vote of its members elected

 

and serving, a resolution establishing the authority and

 

designating the boundaries of the authority district or districts

 

within which the authority shall exercise its powers. The adoption

 

of the resolution is subject to any applicable statutory or charter