SB-1222, As Passed House, December 20, 2018

SB-1222, As Passed Senate, December 6, 2018

SENATE BILL No. 1222

November 28, 2018, Introduced by Senator NOFS and referred to the Committee on Economic Development and International Investment.

A bill to amend 1996 PA 381, entitled

"Brownfield redevelopment financing act,"

by amending section 15a (MCL 125.2665a), as amended by 2016 PA 471.

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)~~ 1211(1) and (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

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 before June 5, 2008.

(b) To repay an obligation issued or incurred before June 5,

2008.

property or a municipality that created the authority for eligible

activities pursuant to a development and reimbursement agreement

entered into not before June 5, 2008.

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

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

authority before September 3, 2008 if the plan contains all of the

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

been approved before June 5, 2009:

(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 each year, or for 2013 only,

before March 28, 2014, 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 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 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 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. For fiscal years beginning January 1, 2019 and

thereafter, the amount under this subdivision shall be calculated

using the greater of the following:

(i) The captured assessed value of industrial personal

property, commercial personal property, and the personal property

component of exemption certificates granted under 1974 PA 198, MCL

207.551 to 207.572, that are sited on property classified as either

industrial or commercial, for the authority's fiscal year ending in

the current year.

(ii) The 2013 captured assessed value of industrial personal

property, commercial personal property, and the personal property

component of exemption certificates granted under 1974 PA 198, MCL

207.551 to 207.572, that are sited on property classified as either

industrial or commercial.

(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

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 finance authority act, 1980 PA 450, MCL~~

~~125.1812b, and section 13c of 1975 PA 197, MCL 125.1663c,~~ sections

213c, 312b, and 411b of the recodified tax increment financing act,

2018 PA 57, MCL 125.4213c, 125.4312b, and 125.4411b, 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.~~201 of the recodified tax increment financing