HB-5705, As Passed Senate, December 4, 2012

SUBSTITUTE FOR

HOUSE BILL NO. 5705

(As amended December 4, 2012)

<<A bill to amend 1990 PA 100, entitled

"City utility users tax act,"

by amending section 2 of chapter 1 (MCL 141.1152), as amended by

2011 PA 57, and by adding sections 8a and 8b to chapter 1.>>

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

CHAPTER 1

Sec. 2. (1) The governing body of a city having a population

of 600,000 or more, by a lawfully adopted ordinance that

incorporates by reference the uniform city utility users tax

ordinance set forth in chapter 2, may levy, assess, and collect

from those users in that city a utility users tax as provided in

the ordinance. However, a uniform city utility users tax ordinance

containing substantially the same provisions provided for in

chapter 2 adopted by the governing body of a city before June 13,

1990 that has not been rescinded by that governing body is

considered an ordinance adopted under this act and a tax imposed

and collected under that ordinance is revived. The governing body

shall set the rate of tax in increments of 1/4 of 1% that shall not

exceed 5%. If a city currently eligible to levy a tax under this

act enters into a contract with a lighting authority, in which it

pledges revenues from the taxes levied under this act, the city is

authorized to levy the tax under this act until all related

outstanding bonds of the lighting authority have been paid

notwithstanding the population of that city.

(2) A uniform city utility users tax ordinance may be lawfully

adopted or unless revenues have been otherwise pledged rescinded by

the governing body at any time and its adoption shall become

effective on the first day of any month, following adoption of the

ordinance, as specified in the ordinance. The ordinance may be

rescinded at any time by the governing body in the same manner in

which the ordinance was adopted and with appropriate enforcement,

collection, and refund provisions with respect to liabilities

incurred before the effective date of its rescission. The ordinance

shall not be amended except as provided by the legislature. A

village and a city under 600,000 population shall not impose and

collect a utility users tax except as otherwise provided in

subsection (1). A city that adopts or rescinds the tax shall notify

within 7 days by certified mail all public utilities or resale

customers affected by the action of the governing body. Except as

otherwise provided in this section, a city now having or that may

attain a population of 600,000 or more shall not impose a utility

users tax except by adopting the entire uniform city utility users

tax ordinance as set forth in chapter 2.

(3) The administrator, as that term is defined in chapter 2,

of the tax shall file a report indicating the total amount of

revenue collected in the prior fiscal year with the state revenue

commissioner by August 1 of each year, beginning on August 1, 1985.

The administrator shall make the report available to the public at

the same time.

(4) ~~The~~ Unless revenues have been otherwise pledged to pay

bonds issued by a lighting authority, the revenue generated from

this tax shall be placed directly in the budget of the police

department of a city described in this act and shall be used

exclusively to retain or hire police officers.

(5) Notwithstanding subsection (4) or any ordinance of a city

to the contrary, a city that forms a lighting authority shall pay

$12,500,000.00 annually to that lighting authority from the

proceeds of the tax authorized under this act. If the lighting

authority issues bonds pursuant to a contract with the city under

this act and pledges revenues from taxes levied under this act,

those revenues shall be deposited and used as provided in this act.

After a contract described in this subsection is entered into, the

trustee, after setting aside funds as required by the trust

indenture, shall pay to the lighting authority $12,500,000.00, less

the amount set aside. The trust indenture shall provide that the

remaining revenues be returned to the city. Nothing in this

subsection shall obligate a city or trustee to remit to the

lighting authority more than is collected from taxes levied under

this act.

(6) ~~(5)~~ As used in this section, "police officer" means a

police officer, investigator, or police sergeant.

(7) As used in this act, "lighting authority" means a lighting

authority created under the municipal lighting authority act.

Sec. 8a. Notwithstanding any ordinance of a city levying a tax

authorized by this act, if a city levying the tax authorized by

this act enters into a contract with a lighting authority, all of

the following shall apply:

(a) The city shall send notice to each public utility and

resale customer to remit taxes collected under this act to a

trustee until notified by that trustee to return the funds to the

city.

(b) After receiving a notice described in subdivision (a),

each public utility and resale customer so notified shall remit

taxes as directed by the notice to the trustee until notified by

the trustee to remit taxes to the city.

customer to remit taxes collected under this act to the city within

45 days of the retirement of debt service on the bonds issued by a

lighting authority.

Sec. 8b. Notwithstanding any ordinance of a city levying the

tax or any other provision of this act, any utility, resale

customer, other entity, or person that collects a tax or any money

represented to be a tax authorized under this act holds the amount

so collected in trust for the benefit of the city, or for

House Bill No. 5705 as amended June 14, 2012

bondholders secured by a pledge with a lighting authority.

House Bill NO. 5705 as amended June 14, 2012

House Bill No. 5705 (H-1) as amended June 7, 2012

as amended June 14, 2012

[Enacting section 1. This amendatory act does not take effect unless all of the following bills of the 96th Legislature are enacted into law:

(a) Senate Bill No. 970.

(b) House Bill No. 5688.]