HB-5691, As Passed Senate, December 19, 2008

SENATE SUBSTITUTE FOR

HOUSE BILL NO. 5691

A bill to amend 1985 PA 106, entitled

"State convention facility development act,"

by amending sections 3, 8, 9, 10, 12, and 20 (MCL 207.623, 207.628,

207.629, 207.630, 207.632, and 207.640), section 3 as amended by

2006 PA 609, sections 8, 9, and 10 as amended by 2007 PA 72, and

section 12 as amended by 2002 PA 237.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 3. As used in this act:

(a) "Accommodations" means the room or other space provided to

transient guests for dwelling, lodging, or sleeping, including

furnishings and other accessories, in a facility that is not a

campground, hospital, nursing home, emergency shelter, or community

mental health or community substance abuse treatment facility.

Accommodations do not include food or beverages.

(b) "Commissioner" means the state treasurer.

leased by a local governmental unit that are any combination of a

convention hall, auditorium, meeting rooms, and exhibition areas

that are separate and distinct and contiguous to each other, and

related adjacent public areas generally available to members of the

public for lease on a short-term basis for holding conventions,

meetings, exhibits, and similar events and the necessary site or

sites, together with appurtenant properties necessary and

convenient for use in connection with the facility.

(d) "Convention hotel" means a facility used in the business

of providing accommodations that has more than 80 rooms for

providing accommodations to transient guests and that complies with

all of the following:

(i) Located within a county having a population according to

the most recent decennial census of ~~750,000~~ 700,000 or more.

(ii) Located within a county that is 1 or more of the

following:

(A) A county ~~which~~ that has a convention facility with 350,000

square feet or more of total exhibit space.

(B) A county that has 2,000 or more rooms to provide

accommodations for transient guests.

(e) "Local governmental unit" means a county, township, city,

village, or a metropolitan authority formed under the regional

convention facility authority act.

(f) ~~(e)~~ "Person" means a natural person, partnership,

House Bill No. 5691 as amended December 19, 2008

fiduciary, association, corporation, or other entity.

(g) ~~(f)~~ "Room charge" means the charge imposed for the use or

occupancy of accommodations, excluding charges for food, beverages,

telephone services, the use tax imposed under the use tax act, 1937

PA 94, MCL 205.91 to 205.111, or like services paid in connection

with the charge. Room charge does not include reimbursement of the

assessment imposed by the community convention or tourism marketing

act, 1980 PA 395, MCL 141.871 to 141.880, the convention and

tourism marketing act, 1980 PA 383, MCL 141.881 to ~~141.1889~~

141.889, or this act.

(h) ~~(g)~~ "Transient guest" means a natural person staying less

than 30 consecutive days.

Sec. 8. (1) The collections from the tax imposed by section 4

shall be deposited in the state treasury, to the credit of the

convention facility development fund, which is hereby created

within the state treasury. Collections from the additional tax

imposed under section 1207 of the Michigan liquor control code of

1998, 1998 PA 58, MCL 436.2207, funds appropriated from the 21st

century jobs trust fund under subsection (4), and amounts

designated under section <<5(b)(iii)>> of the health and safety fund act,

1987

PA 264, MCL 141.475, shall also be deposited to the credit of the

convention facility development fund.

(2) The convention facility development fund shall be

distributed for certain state purposes and to local governmental

units for use only for 1 or more of the following purposes:

(a) Acquiring, constructing, improving, enlarging, renewing,

replacing, or leasing a convention facility.

(b) In conjunction with an activity listed in subdivision (a),

repairing, furnishing, and equipping the convention facility.

(d) General fund expenditures.

(e) In the case of a local governmental unit that is a

metropolitan authority, for any purpose authorized under the

regional convention facility authority act.

(3) A contract made by a local governmental unit for the

purposes included in subsection (2)(a) or (b) concerning a

convention facility funded by distributions pursuant to section 9

shall contain a fixed price or guaranteed maximum price for the

total cost of activities conducted for these purposes pursuant to

that contract.

(4) For the fiscal year ending September 30, 2009,

$9,000,000.00 is appropriated from the 21st century jobs trust fund

described in section 2 of the Michigan trust fund act, 2000 PA 489,

MCL 12.252, to an authority created under the regional convention

facility authority act for the purpose of developing a qualified

convention facility as defined under that act.

Sec. 9. (1) On Except as provided in subsection (4), on or

before the thirtieth day of each month, the state treasurer shall

make a distribution from the convention facility development fund

to a qualified local governmental unit. The distribution shall be

an amount equal to the sum of the collections from the excise tax

levied for accommodations under this act for the previous month

from the convention hotels in the county in which the convention

facility is or is to be located and in any county in which

House Bill No. 5691 as amended December 19, 2008

convention hotels are located that is contiguous to the county in

which the convention facility is located, or is to be located, ~~and~~

the additional tax imposed under section 1207 of the Michigan

liquor control code of 1998, 1998 PA 58, MCL 436.2207, for the

previous month received in the fund, and any distribution received

under section 5(b)(iii) of the health and safety fund act, 1987 PA

264, MCL 141.475 <<AND FROM THE 21ST CENTURY JOBS TRUST FUND UNDER

SECTION 8(4)>>. However, distributions for any state fiscal year

to any qualified local governmental unit under this section shall

not exceed an amount equal to the amount pledged, assigned, or

dedicated by the qualified local governmental unit pursuant to

section 11 for the payment during that state fiscal year of bonds,

obligations, or other evidences of indebtedness incurred for the

purposes specified in this act or the regional convention facility

authority act, plus operating deficit cost expenditures under

section 10, plus any amount necessary to maintain a fully funded

debt reserve or other reserves intended to secure the principal and

interest on the bonds, obligations, or other evidences of

indebtedness as contained in the resolution or ordinance

authorizing their issuance.

(2) Notwithstanding the distributions provided by subsection

(1), if a local governmental unit becomes a qualified local

governmental unit entitled to receive distributions from the tax

imposed under section 1207 of the Michigan liquor control code of

1998, 1998 PA 58, MCL 436.2207, or from the tax imposed by this act

in counties in which the convention facility is located or in a

county in which a convention hotel is located that is contiguous to

the county in which the convention facility is located, and from

any distribution under section 5(b)(iii) of the health and safety

fund act, 1987 PA 264, MCL 141.475, no other qualified local

governmental unit is entitled to distributions pursuant to this

section for which that qualified local governmental unit has

previously become entitled, until such time as that qualified local

governmental unit ownership or leasehold interest described in

subsection (3) is transferred to another local governmental unit.

If that transfer renders the transferee a qualified local

governmental unit, the transferee shall, immediately upon that

transfer, be entitled to the distributions to a qualified local

governmental unit provided in subsection (1) and the priority

provided to a qualified local governmental unit in this subsection,

notwithstanding that the amount of the distributions may increase

as a result of that transfer.

(3) As used in this act, "qualified local governmental unit"

means a city, village, township, county, or authority that is

located in, or includes within its territory or jurisdiction, a

county in which convention hotels are located and that either is

the owner or lessee of a convention facility with 350,000 square

feet or more of total exhibit space on July 30, 1985 or, if such a

convention facility does not exist, will be the owner or lessee of

a convention facility with 350,000 square feet or more of total

exhibit space through the application of distributions under this

section to the purchase or lease of a convention facility.

~~(4) Notwithstanding any other provision of this act, after the~~

~~distributions under subsection (1), and before any distributions~~

~~under section 10, for fiscal year 2004-2005 only, $1,075,000.00~~

~~shall be distributed to the state sports tourism fund. The money~~

~~distributed to the state sports tourism fund described in this~~

~~subsection, including any funds appropriated in fiscal year 2005-~~

~~2006 from the state convention facility development fund, shall be~~

~~deducted from the money described in section 10(2)(a) before any~~

~~distribution is made under section 10(2)(a).~~

~~(5) The state sports tourism fund is created within the state~~

~~treasury.~~

~~(6) The state treasurer may receive money or other assets from~~

~~any source for deposit into the state sports tourism fund. The~~

~~state treasurer shall direct the investment of the state sports~~

~~tourism fund. The state treasurer shall credit to the state sports~~

~~tourism fund interest and earnings from the state sports tourism~~

~~fund investments.~~

~~(7) Money in the state sports tourism fund at the close of the~~

~~fiscal year shall remain in the state sports tourism fund and shall~~

~~not lapse to the general fund. However, money remaining in the fund~~

on ~~September 30, 2006, shall lapse to the convention facility~~

~~development fund.~~

~~(8) The department of treasury shall expend money from the~~

~~state sports tourism fund, upon appropriation, only for grants to~~

~~Super Bowl XL host committee functions related to hosting, staging,~~

~~or execution of Super Bowl XL activities or to reimburse a county~~

~~not more than $500,000.00 for contributions or grants already made~~

~~to the Super Bowl XL host committee for functions related to~~

~~hosting, staging, or execution of Super Bowl XL activities. Money~~

~~shall not be distributed to the state sports tourism fund that~~

~~impairs obligations, bonds, or other evidences of indebtedness~~

~~issued under this act.~~

~~(9) The department of treasury shall expend money from the~~

~~state sports tourism fund, upon appropriation of not more than~~

~~$1,000,000.00, for Super Bowl XL host committee functions related~~

~~to security operations of Super Bowl XL activities. Money shall not~~

~~be distributed to the state sports tourism fund that impairs~~

~~obligations, bonds, or other evidences of indebtedness issued under~~

~~this act.~~

~~(10) Notwithstanding any other provision of this act, after~~

~~the distributions under subsection (1) and before any distributions~~

~~under section 10, for the fiscal year ending~~ ~~September 30, 2007~~

~~only, $35,000,000.00 is transferred to the general fund and is~~

~~appropriated for general fund expenditures.~~

(4) Before the 2015-2016 fiscal year, collections from the

excise tax levied for accommodations under this act and collections

from the tax imposed under section 1207 of the Michigan liquor

control code of 1998, 1998 PA 58, MCL 436.2207, shall not be paid

to a qualified local governmental unit for the repayment of bonds,

obligations, or other evidences of indebtedness incurred after

2007.

Sec. 10. (1) Any money remaining in the convention facility

development fund that is not used for the bonds, obligations, or

other evidences of indebtedness described in section 9 shall be

distributed pursuant to subsection (2).

(2) Money in the convention facility development fund shall be

distributed as provided in subsection (4) in the following order of

priority in the following amounts:

(a) For each of the following fiscal years, the following

amounts shall be distributed to a metropolitan authority created

under the regional convention facility authority act for the

operational deficit costs of a qualified convention facility

operated by the authority under that act:

(i) $9,400,000.00 for the fiscal year ending September 30,

2009.

(ii) $11,000,000.00 each fiscal year for the fiscal years

ending September 30, 2010 and September 30, 2011.

(iii) $9,000,000.00 each fiscal year for the fiscal years ending

September 30, 2012 and September 30, 2013.

(iv) $8,000,000.00 each fiscal year for the fiscal years ending

September 30, 2014 and September 30, 2015.

(v) $7,000,000.00 for the fiscal year ending September 30,

2016.

(vi) $6,000,000.00 for the fiscal year ending September 30,

2017.

(vii) $5,000,000.00 each fiscal year for the fiscal years

ending September 30, 2018 and September 30, 2019.

(viii) $5,000,000.00 for the fiscal year ending September 30,

2020.

(ix) $5,000,000.00 for the fiscal year ending September 30,

2021.

(x) $5,000,000.00 for the fiscal year ending September 30,

2022.

(xi) $5,000,000.00 for the fiscal year ending September 30,

2023.

(b) ~~(a) An~~ For fiscal years ending before October 1, 2009, an

amount equal to the difference, if any, between the tax imposed

under this act in the preceding state fiscal year that is

designated under section 9 to a qualified local governmental unit

and the tax imposed under this act that is designated under section

9 in the state fiscal year immediately preceding the preceding

state fiscal year for the same local governmental unit shall be

distributed to that local governmental unit. This subdivision does

not apply unless a tax has been imposed under this act in the

entire 2 state fiscal years immediately preceding the state fiscal

year in which a distribution under this subdivision is made. Any

amount distributed under this subdivision shall be used by the

local governmental unit only for the retirement of outstanding

bonds, obligations, or other evidences of indebtedness incurred for

which distributions under section 9 are pledged. A distribution

under this subdivision shall not be made to the extent that the

obligations, bonds, or other evidences of indebtedness cannot be

retired or are not outstanding.

amount equal to that portion of the liquor tax collected under

section 1207 of the Michigan liquor control code of 1998, 1998 PA

58, MCL 436.2207, from licensees in counties in which convention

hotels are not located shall be distributed to those counties in

which convention hotels are not located in the same proportion that

the amount of tax collected under section 1207 of the Michigan

liquor control code of 1998, 1998 PA 58, MCL 436.2207, in the

preceding state fiscal year from the licensees in a county bears to

the total tax collections under section 1207 of the Michigan liquor

control code of 1998, 1998 PA 58, MCL 436.2207, in the preceding

state fiscal year from all counties in which convention hotels are

not located.

(d) ~~(c) The~~ For fiscal years ending before October 1, 2015,

the remaining money available after distributions under

subdivisions (a), ~~and~~ (b), and (c) shall be distributed to each

county in the following amounts:

(i) The amount of money available to be distributed under this

subdivision multiplied by the percentage of collections in the

preceding state fiscal year under section 1207 of the Michigan

liquor control code of 1998, 1998 PA 58, MCL 436.2207, from

licensees in counties in which convention hotels are not located

shall be distributed to each county in which convention hotels are

not located in the same proportion that the amount of tax collected

pursuant to section 1207 of the Michigan liquor control code of

1998, 1998 PA 58, MCL 436.2207, in the preceding state fiscal year

from licensees in that county bears to the total tax collections

from section 1207 of the Michigan liquor control code of 1998, 1998

PA 58, MCL 436.2207, in the preceding state fiscal year from all

counties in which convention hotels are not located.

(ii) The amount of money available to be distributed under this

subdivision multiplied by the percentage of collections in the

preceding state fiscal year under section 1207 of the Michigan

liquor control code of 1998, 1998 PA 58, MCL 436.2207, from

licensees in counties in which convention hotels are located shall

be distributed to each county in which convention hotels are

located in the same proportion that the amount of tax collected

pursuant to section 1207 of the Michigan liquor control code of

1998, 1998 PA 58, MCL 436.2207, in the preceding state fiscal year

from licensees in that county bears to the total tax collections

from section 1207 of the Michigan liquor control code of 1998, 1998

PA 58, MCL 436.2207, in the preceding state fiscal year from all

counties in which convention hotels are located. However, in the

calculation of the proportion represented by a county's share of

distributions under this subparagraph, the amount of the tax

collected from licensees in the qualified local governmental unit

that received distributions under section 9 in ~~the last state~~

fiscal year 2007-2008 shall not be included.

(e) For the fiscal year ending September 30, 2016, an amount

equal to the product of the total amount of tax collected under

section 1207 of the Michigan liquor control code of 1998, 1998 PA

58, MCL 436.2207, and distributed to all counties in the 2014-2015

fiscal year multiplied by 1.01 shall be distributed to all counties

as provided in this subdivision. For fiscal years beginning after

September 30, 2016, an amount equal to the product of the amount of

liquor tax distributions in the immediately preceding fiscal year

multiplied by 1.01, not to exceed the total amount of tax collected

under section 1207 of the Michigan liquor control code of 1998,

1998 PA 58, MCL 436.2207, shall be distributed to counties.

Distributions to each county under this subdivision shall be

calculated as follows:

(i) The amount of money available to be distributed under this

subdivision multiplied by the percentage of collections in the

immediately preceding state fiscal year under section 1207 of the

Michigan liquor control code of 1998, 1998 PA 58, MCL 436.2207,

from licensees in counties in which convention hotels are not

located shall be distributed to each county in which convention

hotels are not located in the same proportion that the amount of

tax collected pursuant to section 1207 of the Michigan liquor

control code of 1998, 1998 PA 58, MCL 436.2207, in the immediately

preceding state fiscal year from licensees in that county bears to

the total tax collections from section 1207 of the Michigan liquor

control code of 1998, 1998 PA 58, MCL 436.2207, in the immediately

preceding state fiscal year from all counties in which convention

hotels are not located.

(ii) The amount of money available to be distributed under this

subdivision multiplied by the percentage of collections in the

immediately preceding state fiscal year under section 1207 of the

Michigan liquor control code of 1998, 1998 PA 58, MCL 436.2207,

from licensees in counties in which convention hotels are located

shall be distributed to each county in which convention hotels are

located in the same proportion that the amount of tax collected

pursuant to section 1207 of the Michigan liquor control code of

1998, 1998 PA 58, MCL 436.2207, in the immediately preceding state

fiscal year from licensees in that county bears to the total tax

collections from section 1207 of the Michigan liquor control code

of 1998, 1998 PA 58, MCL 436.2207, in the immediately preceding

state fiscal year from all counties in which convention hotels are

located. However, in the calculation of the proportion represented

by a county's share of distributions under this subparagraph, the

amount of the tax collected from licensees in the qualified local

governmental unit that received distributions under section 9 in

the 2007-2008 state fiscal year shall not be included.

(f) Beginning with the fiscal year ending on September 30,

2016, and each fiscal year thereafter, if the revenue in the

convention facility development fund exceeds the amounts

distributed under section 9 and the distributions under subdivision

(e), the excess shall be distributed to a qualified local

governmental unit that is a metropolitan authority to be used by

that qualified local governmental unit only for the retirement of

outstanding bonds, obligations, or other evidences of indebtedness

incurred for which distributions under section 9 are pledged and

for a qualified governmental unit that is a metropolitan authority

or next for the payment of any unfunded operational deficit costs

incurred during the prior fiscal year by a metropolitan authority

created under the regional convention facility authority act for

the operation of a qualified convention facility under that act.

(3) A distribution to a county pursuant to this section shall

be included for purposes of the calculations required to be made by

section 24e of the general property tax act, 1893 PA 206, MCL

211.24e. If the governing body of a taxing unit approves the

additional millage rate under section 24e of the general property

tax act, 1893 PA 206, MCL 211.24e, which is due to distributions

pursuant to this section, then an amount equal to 50% of the

distribution under this section shall be used for substance abuse

treatment within the taxing unit.

(4) Beginning October 1, 2007 and each year thereafter, from

the revenue collected during the previous quarter, after

distributing the monthly payments under section 9(1), the state

treasurer shall make quarterly distributions under subsection

(2)(b) and (c) or under subsection (2)(e). From the revenue

collected in the last quarter of the state fiscal year, the state

treasurer shall make the distribution under subsection (2)(a) prior

to any distributions under subsection (2)(b) and (c) or (e).

Sec. 12. (1) Subject to approval pursuant to section 11, a

local governmental unit may assign or pledge all or a portion of

the distribution of taxes that the local governmental unit is

eligible to receive under this act for payment of bonds,

obligations, or other evidences of indebtedness for the purposes

specified in section 8(2). If a local governmental unit assigns,

pledges, or, pursuant to section 11(3), dedicates all or a portion

of the distribution of taxes that the local governmental unit is

eligible to receive under this act for payment of bonds,

obligations, or other evidences of indebtedness incurred for the

purposes specified in this act, the state treasurer may transmit to

the duly appointed trustee or trustees for the bonds, obligations,

or other evidences of indebtedness, if any, the payment of the

distribution assigned, pledged, or dedicated by the local

governmental unit.

(2) A local governmental unit that becomes a qualified local

governmental unit before May 1, 2008 shall not issue bonds,

obligations, or other evidences of indebtedness to which

distributions under section 9 are pledged in a principal amount

House Bill No. 5691 as amended December 19, 2008

greater than $180,000,000.00. This limit does not apply to

refunding bonds, obligations, or other evidences of indebtedness

issued pursuant to section 11(2) or to bonds, obligations, or other

evidences of indebtedness to which distributions of taxes from the

convention facility development fund are dedicated under section

11(3). A local governmental unit that becomes a qualified local

governmental unit after December 1, 2008 shall not issue bonds,

obligations, or other evidences of indebtedness to which

distributions under section 9 are pledged in order to finance a

<<TOTAL>> cost <<FOR ALL PROJECTS UNDERTAKEN BY THE QUALIFIED LOCAL

GOVERNMENTAL UNIT>> that exceeds $299,000,000.00. The cost of <<A>>

project in addition to construction and acquisition costs may

include an allowance for legal, engineering, architectural, and

consulting services. The following shall not be considered costs of

<<A>> project and may be financed with the proceeds of bonds,

obligations, or other evidences of indebtedness for which section 9

distributions are pledged:

(a) Interest on revenue obligations issued to finance the

project becoming due before the collection of the first revenues

available for the payment of those revenue obligations.

(b) A reserve for the payment of principal, interest, and

redemption premiums on the revenue obligations of the qualified

local governmental unit, and other necessary incidental expenses

including, but not limited to, placement fees, fees or charges for

insurance, letters of credit, lines of credit, remarketing

agreements, or commitments to purchase obligations issued pursuant

to this act.

House Bill No. 5691 as amended December 19, 2008

payment, revenue, or interest rate exposure.

(d) Any other fees or charges for any other security provided

to assure timely payment of the obligations.

(e) Refunding bonds.

Sec. 20. The tax imposed by this act shall not be levied after

the earlier of December 31, ~~2015~~ 2039 or 30 days after all bonds,

notes, or other obligations issued by a metropolitan authority

formed under the regional convention facility authority act for

purposes authorized under that act are retired.

Enacting section 1. This amendatory act does not take effect

unless all of the following bills of the 94th Legislature are

enacted into law:

(a) Senate Bill No. 1630.

(b) Senate Bill No. 1633.

<<(c) Senate Bill No. 880.

(d) Senate Bill No. 881.>>