HB-5541, As Passed Senate, May 28, 2008

SENATE 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,

then, notwithstanding any other provision of this act, the

authority, with approval of the department of treasury under

House Bill No. 5541 as amended May 27, 2008

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.

(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.

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 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 of each 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.

(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 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.