HB-5539, As Passed Senate, May 28, 2008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SENATE SUBSTITUTE FOR

 

HOUSE BILL NO. 5539

 

 

 

 

 

 

 

 

 

 

 

 

     A bill to amend 1996 PA 381, entitled

 

"Brownfield redevelopment financing act,"

 

(MCL 125.2651 to 125.2672) by adding section 15a.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 15a. (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 act, the

 


House Bill No. 5539 as amended May 27, 2008

 

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 advance made not later than 1 year after the

 

effective date of the amendatory act that added this section.

 

     (b) To repay an obligation issued or incurred not later than 1

 

year after the effective date of the amendatory act that added this

 

section.

 

     (c) To pay or reimburse a developer or owner of eligible

 

property or a municipality that created the authority for eligible

 

activities pursuant to a development and reimbursement agreement

 

entered into not later than 1 year after the effective date of the

 

amendatory act that added this section.

 

     (d) To pay for eligible activities identified in a brownfield

 

plan, or an amendment to that plan approved by board of the

 

authority not later than 90 days after the effective date of the

 

amendatory act that added this section if the plan contains all of

 

the following and the work plan for the capture of school taxes has

 

been approved within 1 year after the effective date of the

 

amendatory act that added this section:

 

     (i) A detailed description of the project.

 

     (ii) A statement of the estimated cost of the project.

 

     (iii) The specific location of the project.

 

     (iv) The name of any developer of the project.

 

     (2) <<Not later than June 15 of 2008 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 advances, obligations, development and

 

reimbursement agreements, and projects included in brownfield plans

 

described in subsection (1), and shall separately identify the

 

payments due on each of those advances, obligations, development

 

agreements, and eligible activities 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, or would be used for, the repayment of an

 

advance, the payment of an obligation, the payment of eligible

 

activities pursuant to a development and reimbursement agreement,

 


or the payment of eligible activities identified in a brownfield

 

plan described in subsection (1). 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, 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 of treasury. 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

 

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 12b

 

of the tax increment financing act, 1980 PA 450, MCL 125.1812b, 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.

 

     (12) As used in this section:

 

     (a) "Advance" means that term as defined in section 1 of 1975

 

PA 197, MCL 125.1651.

 

     (b) "Obligation" means that term as defined in section 1 of

 

1975 PA 197, MCL 125.1651.