HB-5541, As Passed House, December 13, 2007

SUBSTITUTE FOR

HOUSE BILL NO. 5541

A bill to amend 1980 PA 450, entitled

"The tax increment finance authority act,"

(MCL 125.1801 to 125.1830) by adding section 12b.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 12b. (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

by an authority under section 14 used to repay an eligible advance,

an eligible obligation, or another protected obligation,

notwithstanding any other provision of this act, the authority,

with approval of the department 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.

(2) Not later than May 1, 2008 and April 1, 2009 and yearly

thereafter, 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.

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, other

protected obligations, and the payments due on each of those

obligations and advances in that fiscal year, and the total amount

of all the payments due on those obligations and advances 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 another 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 act

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 and August 1, 2009 and

yearly thereafter, 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 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.

(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.

(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 the lien of the pledge, whether or not

House Bill No. 5541 (H-1) as amended December 13, 2007

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 1 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 11b of the local development financing act, 1986 PA 281, MCL 125.2161b, section 15a of the brownfield redevelopment financing act, 1996 PA 381, MCL 125.2665a, and section 13c of 1975 PA 197, MCL 125.1663c, 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.]