SB-1589, As Passed Senate, December 4, 2008

SUBSTITUTE FOR

SENATE BILL NO. 1589

A bill to amend 1867 PA 35, entitled

"An act to provide for the formation of street railway companies,

defining their powers and duties and authorizing the construction,

use, maintenance and ownership of street railways for the

transportation of passengers, and for accumulating, storing,

manufacturing, conducting, using, selling, furnishing and supplying

electricity and electric power, by such companies,"

by amending the title and section 23 (MCL 472.23); and to repeal

acts and parts of acts.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

TITLE

An act to provide for the formation of nonprofit street

railway companies, defining their powers and duties and authorizing

the construction, use, maintenance and ownership of street railways

for the transportation of passengers, and for accumulating,

storing, manufacturing, conducting, using, selling, furnishing and

supplying electricity and electric power, by such companies; to

prescribe powers and duties of certain state and local agencies and

officials; to provide remedies and penalties; to provide for the

establishment of a transit development finance zone; and to

authorize the use of tax increment financing.

Sec. 23. ~~If the directors of any company formed under this act~~

~~shall declare or pay any dividend when the company is insolvent, or~~

~~the payment of which would render it insolvent, or which would~~

~~diminish the amount of its capital stock, they and all stockholders~~

~~who shall knowingly accept or receive such dividend, shall be~~

~~jointly and severally individually liable for all the debts of such~~

~~company then existing and for all that shall be thereafter~~

~~contracted, while they shall respectively continue stockholders or~~

~~in office.~~

(1) At the request of a street railway, the department may

establish a transit development finance zone for a street railway

system if the department determines that it is necessary for the

best interests of the public to promote and finance transit

development in a zone. A parcel shall not be included in more than

1 zone created under this section.

(2) The boundaries of a zone shall be established by the

department and may include parcels that are not greater than 1/4

mile in distance from a street railway system operated by the

street railway. Before establishing a zone, the department shall

consult with affected municipalities, counties, street railways,

public transportation agencies, private transportation providers,

and any other person or entity that the department considers

Senate Bill No. 1589 as amended December 4, 2008

necessary before designating a zone. The department may conduct a

planning study and may designate a zone in advance of

implementation of street railway system service associated with a

zone.

(3) The department shall enter into an agreement with the

affected municipalities<<, A COUNTY WITH A POPULATION OF MORE THAN

2,000,000,>> and the street railway to create a zone.

The agreement shall include all of the following:

(a) The geographic boundaries of the zone, including both of

the following:

(i) The designation of boundaries of the zone in relation to

highways, streets, streams, lakes, other bodies of water, or

otherwise.

(ii) The location and extent of existing streets and other

public facilities within the zone, designating the location,

character, and extent of the categories of public and private land

uses then existing in the zone, including residential,

recreational, commercial, industrial, educational, and other uses,

and including a legal description of the zone.

(b) A tax increment financing plan for the zone.

parties under the agreement to help establish the zone.

(d) The requirement that amendments to the agreement must be

approved by the department, affected municipalities, <<A COUNTY WITH A

POPULATION OF MORE THAN 2,000,000,>> and the street

railway.

(e) Any other material that the department, affected

municipalities, <<COUNTY WITH A POPULATION OF MORE THAN 2,000,000,>> or

the street railway considers necessary or

appropriate.

(4) An agreement designating a zone and establishing its

boundaries under subsection (3) and any amendments to the agreement

shall be filed by the department with the secretary of state.

(5) A tax increment financing plan for a zone established

under this section shall include a detailed explanation of the tax

increment procedure and a statement of the estimated impact of tax

increment financing on the assessed value of all taxing

jurisdictions in which the zone is located. The plan shall provide

for the use of part or all of the captured assessed value by the

street railway for the expenses of operating the street railway,

with any portion used clearly stated in the tax increment financing

plan. The department and affected municipalities may exclude from

captured assessed value growth in property value resulting solely

from inflation. The plan shall set forth the method for excluding

growth in property value resulting solely from inflation. Before

including a tax increment financing plan in an agreement under

subsection (3), the department shall provide a reasonable

opportunity to the taxing jurisdictions levying taxes subject to

capture to meet with the department. The department shall fully

inform the taxing jurisdictions of the fiscal and economic

implications of the plan. The taxing jurisdictions may present

their recommendations to the department on the tax increment

financing plan.

(6) Before a tax increment financing plan is implemented, the

department shall enter into a contract with the street railway

included within the zone. The contract shall include, but not be

limited to, terms regarding the distribution of revenue.

(7) The municipal and county treasurers shall transmit tax

increment revenues to the street railway. The street railway shall

expend the tax increment revenues only under the terms of the tax

increment financing plan. Unused funds shall revert proportionately

to the respective taxing bodies. Tax increment revenues shall not

be used to circumvent existing property tax limitations. The

department may abolish the tax increment financing plan if it finds

that the purposes for which it was established are accomplished.

Annually, the street railway, with assistance from the department,

shall submit to the department and the state tax commission a

report on the status of the tax increment financing revenue. The

report shall include all of the following:

(a) The amount and source of tax increment revenue received by

the street railway.

(b) The amount and purpose of expenditures from tax increment

revenue.

(d) The captured assessed value retained within the zone.

(e) A description of operating expenditures of the street

railway.

(f) Any additional information the department or state tax

commission considers necessary.

(8) The state tax commission may institute proceedings to

compel enforcement of this section. The state tax commission may

promulgate rules necessary for the administration of this section

under the administrative procedures act of 1969, 1969 PA 306, MCL

24.201 to 24.328.

(9) The department of treasury and the state tax commission

may assist the department in performing duties and responsibilities

under this section.

(10) As used in this section:

(a) "Assessed value" means the taxable value as determined

under section 27a of the general property tax act, 1893 PA 206, MCL

211.27a.

(b) "Captured assessed value" means the amount in any 1 year

by which the current assessed value of a zone, including the

assessed value of property for which specific local taxes are paid

in lieu of property taxes, exceeds the initial assessed value. The

state tax commission shall prescribe the method for calculating

captured assessed value.

the taxable property within the boundaries of a zone at the time

the tax increment financing plan is approved by the department, as

shown by the most recent assessment roll of the municipality at the

time the plan is adopted. Property exempt from taxation at the time

of the determination of the initial assessed value shall be

included as zero. For the purpose of determining initial assessed

value, property for which a specific local tax is paid in lieu of a

property tax shall not be considered to be property that is exempt

from taxation.

(d) "Parcel" means an identifiable unit of land that is

treated as separate for valuation or zoning purposes.

(e) "Specific local tax" means a tax levied under 1974 PA 198,

MCL 207.551 to 207.572, the commercial redevelopment act, 1978 PA

255, MCL 207.651 to 207.668, the technology park development act,

1984 PA 385, MCL 207.701 to 207.718, the commercial rehabilitation

act, 2005 PA 210, MCL 207.841 to 207.856, or 1953 PA 189, MCL

211.181 to 211.182. The initial assessed value or current assessed

value of property subject to a specific local tax shall be the

quotient of the specific local tax paid divided by the ad valorem

millage rate. The state tax commission shall prescribe the method

for calculating the initial assessed value and current assessed

value of property for which a specific local tax was paid in lieu

of a property tax.

(f) "Tax increment revenues" means the amount of ad valorem

property taxes and specific local taxes attributable to the

application of the levy of all taxing jurisdictions upon the

captured assessed value of real and personal property in the zone.

Tax increment revenues do not include any of the following:

(i) Taxes under the state education tax act, 1993 PA 331, MCL

211.901 to 211.906.

(ii) Taxes levied by local or intermediate school districts.

(iii) Ad valorem property taxes attributable either to a portion

of the captured assessed value shared with taxing jurisdictions

within the jurisdictional area of the authority or to a portion of

value of property that may be excluded from captured assessed value

or specific local taxes attributable to the ad valorem property

taxes.

(iv) Ad valorem property taxes excluded by the tax increment

financing plan of the authority from the determination of the

amount of tax increment revenues to be transmitted to the authority

Senate Bill No. 1589 as amended December 4, 2008

or specific local taxes attributable to the ad valorem property

taxes.

(v) Ad valorem property taxes exempted from capture under

subsection (5) or specific local taxes attributable to the ad

valorem property taxes.

(vi) Ad valorem property taxes specifically levied for the

payment of principal and interest of obligations approved by the

electors or obligations pledging the unlimited taxing power of the

local governmental unit or specific taxes attributable to those ad

valorem property taxes.

(g) "Zone" means a transit development finance zone

established by the department under this section.

Enacting section 1. Sections 2, 4, 6, 8, 10, 12, 14, 15, 16,

18, 20, 22, 24, 25, 28, 29, 30, 31, 31a, 32, 34, 35, and 36 of 1867

PA 35, MCL 472.2, 472.4, 472.6, 472.8, 472.10, 472.12, 472.14,

472.15, 472.16, 472.18, 472.20, 472.22, 472.24, 472.25, 472.28,

472.29, 472.30, 472.31, 472.31a, 472.32, 472.34, 472.35, and

472.36, are repealed.

<<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) House Bill No. 6542.

(b) House Bill No. 6543.

(d) House Bill No. 6625.>>