SB-0428, As Passed House, September 10, 2009
SUBSTITUTE FOR
SENATE BILL NO. 428
A bill to amend 1986 PA 281, entitled
"The local development financing act,"
by amending sections 2, 3, 12, and 12a (MCL 125.2152, 125.2153,
125.2162, and 125.2162a), section 2 as amended by 2007 PA 200,
sections 3 and 12 as amended by 2000 PA 248, and section 12a as
amended by 2008 PA 105, and by adding section 12c.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 2. As used in this act:
(a) "Advance" means a transfer of funds made by a municipality
to an authority or to another person on behalf of the authority in
anticipation of repayment by the authority. Evidence of the intent
to repay an advance may include, but is not limited to, an executed
agreement to repay, provisions contained in a tax increment
financing plan approved prior to the advance, or a resolution of
the authority or the municipality.
(b) "Alternative energy technology" means equipment, component
parts, materials, electronic devices, testing equipment, and
related systems that are specifically designed, specifically
fabricated, and used primarily for 1 or more of the following:
(i) The storage, generation, reformation, or distribution of
clean fuels integrated within an alternative energy system or
alternative energy vehicle, not including an anaerobic digester
energy system or a hydroelectric energy system, for use within the
alternative energy system or alternative energy vehicle.
(ii) The process of generating and putting into a usable form
the energy generated by an alternative energy system. Alternative
energy technology does not include those component parts of an
alternative energy system that are required regardless of the
energy source.
(iii) Research and development of an alternative energy vehicle.
(iv) Research, development, and manufacturing of an alternative
energy system.
(v) Research, development, and manufacturing of an anaerobic
digester energy system.
(vi) Research, development, and manufacturing of a
hydroelectric energy system.
(c) "Alternative energy technology business" means a business
engaged in the research, development, or manufacturing of
alternative energy technology.
(d) (b)
"Assessed value" means 1
of the following:
(i) For valuations made before January 1, 1995, the state
equalized valuation as determined under the general property tax
act,
1893 PA 206, MCL 211.1 to 211.157 211.155.
(ii) For valuations made after December 31, 1994, the taxable
value as determined under section 27a of the general property tax
act, 1893 PA 206, MCL 211.27a.
(e) (c)
"Authority" means a local
development finance
authority created pursuant to this act.
(f) (d)
"Authority district"
means an area or areas within
which an authority exercises its powers.
(g) (e)
"Board" means the
governing body of an authority.
(h) (f)
"Business development
area" means an area designated
as a certified industrial park under this act prior to the
effective date of the amendatory act that added this subdivision,
or an area designated in the tax increment financing plan that
meets all of the following requirements:
(i) The area is zoned to allow its use for eligible property.
(ii) The area has a site plan or plat approved by the city,
village, or township in which the area is located.
(i) (g)
"Business incubator"
means real and personal property
that meets all of the following requirements:
(i) Is located in a certified technology park or a certified
alternative energy park.
(ii) Is subject to an agreement under section 12a or 12c.
(iii) Is developed for the primary purpose of attracting 1 or
more owners or tenants who will engage in activities that would
each separately qualify the property as eligible property under
subdivision
(p)(iii) (s)(iii).
(j) (h)
"Captured assessed value"
means the amount in any 1
year by which the current assessed value of the eligible property
identified in the tax increment financing plan or, for a certified
technology park, the real and personal property included in the tax
increment financing plan, including the current assessed value of
property for which specific local taxes are paid in lieu of
property
taxes as determined pursuant to subdivision (cc) (ff),
exceeds the initial assessed value. The state tax commission shall
prescribe the method for calculating captured assessed value.
(k) "Certified alternative energy park" means that portion of
an authority district designated by a written agreement entered
into pursuant to section 12c between the authority, the
municipality or municipalities, and the Michigan economic
development corporation.
(l) (i)
"Certified business park"
means a business development
area that has been designated by the Michigan economic development
corporation as meeting criteria established by the Michigan
economic development corporation. The criteria shall establish
standards for business development areas including, but not limited
to, use, types of building materials, landscaping, setbacks,
parking, storage areas, and management.
(m) (j)
"Certified technology
park" means that portion of the
authority district designated by a written agreement entered into
pursuant to section 12a between the authority, the municipality,
and the Michigan economic development corporation.
(n) (k)
"Chief executive officer"
means the mayor or city
manager of a city, the president of a village, or, for other local
units of government or school districts, the person charged by law
with the supervision of the functions of the local unit of
government or school district.
(o) (l) "Development
plan" means that information and those
requirements for a development set forth in section 15.
(p) (m)
"Development program"
means the implementation of a
development plan.
(q) (n)
"Eligible advance" means
an advance made before August
19, 1993.
(r) (o)
"Eligible obligation"
means an obligation issued or
incurred by an authority or by a municipality on behalf of an
authority before August 19, 1993 and its subsequent refunding by a
qualified refunding obligation. Eligible obligation includes an
authority's written agreement entered into before August 19, 1993
to pay an obligation issued after August 18, 1993 and before
December 31, 1996 by another entity on behalf of the authority.
(s) (p)
"Eligible property" means
land improvements,
buildings, structures, and other real property, and machinery,
equipment, furniture, and fixtures, or any part or accessory
thereof whether completed or in the process of construction
comprising an integrated whole, located within an authority
district, of which the primary purpose and use is or will be 1 of
the following:
(i) The manufacture of goods or materials or the processing of
goods or materials by physical or chemical change.
(ii) Agricultural processing.
(iii) A high technology activity.
(iv) The production of energy by the processing of goods or
materials by physical or chemical change by a small power
production facility as defined by the federal energy regulatory
commission pursuant to the public utility regulatory policies act
of 1978, Public Law 95-617, which facility is fueled primarily by
biomass or wood waste. This act does not affect a person's rights
or liabilities under law with respect to groundwater contamination
described in this subparagraph. This subparagraph applies only if
all of the following requirements are met:
(A) Tax increment revenues captured from the eligible property
will be used to finance, or will be pledged for debt service on tax
increment bonds used to finance, a public facility in or near the
authority district designed to reduce, eliminate, or prevent the
spread of identified soil and groundwater contamination, pursuant
to law.
(B) The board of the authority exercising powers within the
authority district where the eligible property is located adopted
an initial tax increment financing plan between January 1, 1991 and
May 1, 1991.
(C) The municipality that created the authority establishes a
special assessment district whereby not less than 50% of the
operating expenses of the public facility described in this
subparagraph will be paid for by special assessments. Not less than
50% of the amount specially assessed against all parcels in the
special assessment district shall be assessed against parcels owned
by parties potentially responsible for the identified groundwater
contamination pursuant to law.
(v) A business incubator.
(vi) An alternative energy technology business.
(t) (q)
"Fiscal year" means the
fiscal year of the authority.
(u) (r)
"Governing body" means
the elected body having
legislative powers of a municipality creating an authority under
this act.
(v) (s)
"High technology
activity" means that term as defined
in section 3 of the Michigan economic growth authority act, 1995 PA
24, MCL 207.803.
(w) (t)
"Initial assessed value"
means the assessed value of
the eligible property identified in the tax increment financing
plan or, for a certified technology park, the assessed value of any
real and personal property included in the tax increment financing
plan, at the time the resolution establishing the tax increment
financing plan is approved as shown by the most recent assessment
roll for which equalization has been completed at the time the
resolution is adopted or, for property that becomes eligible
property in other than a certified technology park after the date
the plan is approved, at the time the property becomes eligible
property. Property exempt from taxation at the time of the
determination of the initial assessed value shall be included as
zero. Property for which a specific local tax is paid in lieu of
property tax shall not be considered exempt from taxation. The
initial assessed value of property for which a specific local tax
was paid in lieu of property tax shall be determined as provided in
subdivision
(cc) (ff).
Senate Bill No. 428 as amended June 17, 2009
(x) (u)
"Michigan
economic development corporation" means the
public body corporate created under section 28 of article VII of
the state constitution of 1963 and the urban cooperation act of
1967, 1967 (Ex Sess) PA 7, MCL 124.501 to 124.512, by a contractual
interlocal agreement effective April 5, 1999 between local
participating economic development corporations formed under the
economic development corporations act, 1974 PA 338, MCL 125.1601 to
125.1636, and the Michigan strategic fund. If the Michigan economic
development corporation is unable for any reason to perform its
duties under this act, those duties may be exercised by the
Michigan strategic fund.
(y) (v)
"Michigan
strategic fund" means the Michigan strategic
fund as described in the Michigan strategic fund act, 1984 PA 270,
MCL 125.2001 to 125.2094.
(z) (w)
"Municipality" means a
city, village, or urban
township. <<However, for purposes of creating and operating a certified
alternative energy park, municipality includes townships that are not urban townships.>>
(aa) (x)
"Obligation" means a
written promise to pay, whether
evidenced by a contract, agreement, lease, sublease, bond, or note,
or a requirement to pay imposed by law. An obligation does not
include a payment required solely because of default upon an
obligation, employee salaries, or consideration paid for the use of
municipal offices. An obligation does not include those bonds that
have been economically defeased by refunding bonds issued under
this act. Obligation includes, but is not limited to, the
following:
(i) A requirement to pay proceeds derived from ad valorem
property taxes or taxes levied in lieu of ad valorem property
taxes.
(ii) A management contract or a contract for professional
services.
(iii) A payment required on a contract, agreement, bond, or note
if the requirement to make or assume the payment arose before
August 19, 1993.
(iv) A requirement to pay or reimburse a person for the cost of
insurance for, or to maintain, property subject to a lease, land
contract, purchase agreement, or other agreement.
(v) A letter of credit, paying agent, transfer agent, bond
registrar, or trustee fee associated with a contract, agreement,
bond, or note.
(bb) (y)
"On behalf of an
authority", in relation to an
eligible advance made by a municipality or an eligible obligation
or other protected obligation issued or incurred by a municipality,
means in anticipation that an authority would transfer tax
increment revenues or reimburse the municipality from tax increment
revenues in an amount sufficient to fully make payment required by
the eligible advance made by a municipality, or eligible obligation
or other protected obligation issued or incurred by the
municipality, if the anticipation of the transfer or receipt of tax
increment revenues from the authority is pursuant to or evidenced
by 1 or more of the following:
(i) A reimbursement agreement between the municipality and an
authority it established.
(ii) A requirement imposed by law that the authority transfer
tax increment revenues to the municipality.
(iii) A resolution of the authority agreeing to make payments to
the incorporating unit.
(iv) Provisions in a tax increment financing plan describing
the project for which the obligation was incurred.
(cc) (z)
"Other protected
obligation" means:
(i) A qualified refunding obligation issued to refund an
obligation described in subparagraph (ii) or (iii), an obligation that
is not a qualified refunding obligation that is issued to refund an
eligible obligation, or a qualified refunding obligation issued to
refund an obligation described in this subparagraph.
(ii) An obligation issued or incurred by an authority or by a
municipality on behalf of an authority after August 19, 1993, but
before December 31, 1994, to finance a project described in a tax
increment finance plan approved by the municipality in accordance
with this act before August 19, 1993, for which a contract for
final design is entered into by the municipality or authority
before March 1, 1994.
(iii) An obligation incurred by an authority or municipality
after August 19, 1993, to reimburse a party to a development
agreement entered into by a municipality or authority before August
19, 1993, for a project described in a tax increment financing plan
approved in accordance with this act before August 19, 1993, and
undertaken and installed by that party in accordance with the
development agreement.
(iv) An ongoing management or professional services contract
with the governing body of a county that was entered into before
March 1, 1994 and that was preceded by a series of limited term
management or professional services contracts with the governing
body of the county, the last of which was entered into before
August 19, 1993.
(dd) (aa)
"Public facility" means 1
or more of the following:
(i) A street, road, bridge, storm water or sanitary sewer,
sewage treatment facility, facility designed to reduce, eliminate,
or prevent the spread of identified soil or groundwater
contamination, drainage system, retention basin, pretreatment
facility, waterway, waterline, water storage facility, rail line,
electric, gas, telephone or other communications, or any other type
of utility line or pipeline, or other similar or related structure
or improvement, together with necessary easements for the structure
or improvement. Except for rail lines, utility lines, or pipelines,
the structures or improvements described in this subparagraph shall
be either owned or used by a public agency, functionally connected
to similar or supporting facilities owned or used by a public
agency, or designed and dedicated to use by, for the benefit of, or
for the protection of the health, welfare, or safety of the public
generally, whether or not used by a single business entity. Any
road, street, or bridge shall be continuously open to public
access. A public facility shall be located on public property or in
a public, utility, or transportation easement or right-of-way.
(ii) The acquisition and disposal of land that is proposed or
intended to be used in the development of eligible property or an
interest in that land, demolition of structures, site preparation,
and relocation costs.
(iii) All administrative and real and personal property
acquisition and disposal costs related to a public facility
described in subparagraphs (i) and (iv), including, but not limited
to, architect's, engineer's, legal, and accounting fees as
permitted by the district's development plan.
(iv) An improvement to a facility used by the public or a
public facility as those terms are defined in section 1 of 1966 PA
1, MCL 125.1351, which improvement is made to comply with the
barrier free design requirements of the state construction code
promulgated under the Stille-DeRossett-Hale single state
construction code act, 1972 PA 230, MCL 125.1501 to 125.1531.
(v) All of the following costs approved by the Michigan
economic development corporation:
(A) Operational costs and the costs related to the
acquisition, improvement, preparation, demolition, disposal,
construction, reconstruction, remediation, rehabilitation,
restoration, preservation, maintenance, repair, furnishing, and
equipping of land and other assets that are or may become eligible
for depreciation under the internal revenue code of 1986 for a
business incubator located in a certified technology park or
certified alternative energy park.
(B) Costs related to the acquisition, improvement,
preparation, demolition, disposal, construction, reconstruction,
remediation, rehabilitation, restoration, preservation,
maintenance, repair, furnishing, and equipping of land and other
assets that, if privately owned, would be eligible for depreciation
under the internal revenue code of 1986 for laboratory facilities,
research and development facilities, conference facilities,
teleconference facilities, testing, training facilities, and
quality control facilities that are or that support eligible
property
under subdivision (p)(iii) (s)(iii),
that are owned by a
public entity, and that are located within a certified technology
park.
(C) Costs related to the acquisition, improvement,
preparation, demolition, disposal, construction, reconstruction,
remediation, rehabilitation, restoration, preservation,
maintenance, repair, furnishing, and equipping of land and other
assets that, if privately owned, would be eligible for depreciation
under the internal revenue code of 1986 for facilities that are or
that will support eligible property under subdivision (s)(vi), that
have been or will be owned by a public entity at the time such
costs are incurred, that are located within a certified alternative
energy park, and that have been or will be conveyed, by gift or
sale, by such public entity to an alternative energy technology
business.
(vi) Operating and planning costs included in a plan pursuant
to section 12(1)(f), including costs of marketing property within
the district and attracting development of eligible property within
the district.
(ee) (bb)
"Qualified refunding
obligation" means an obligation
issued or incurred by an authority or by a municipality on behalf
of an authority to refund an obligation if the refunding obligation
meets both of the following:
(i) The net present value of the principal and interest to be
paid on the refunding obligation, including the cost of issuance,
will be less than the net present value of the principal and
interest to be paid on the obligation being refunded, as calculated
using a method approved by the department of treasury.
(ii) The net present value of the sum of the tax increment
revenues
described in subdivision (ee)(ii) (hh)(ii) and the
distributions under section 11a to repay the refunding obligation
will not be greater than the net present value of the sum of the
tax
increment revenues described in subdivision (ee)(ii) (hh)(ii) and
the distributions under section 11a to repay the obligation being
refunded, as calculated using a method approved by the department
of treasury.
(ff) (cc)
"Specific local taxes"
means a tax levied under 1974
PA 198, MCL 207.551 to 207.572, the obsolete property
rehabilitation act, 2000 PA 146, MCL 125.2781 to 125.2797, the
commercial redevelopment act, 1978 PA 255, MCL 207.651 to 207.668,
the enterprise zone act, 1985 PA 224, MCL 125.2101 to 125.2123,
1953 PA 189, MCL 211.181 to 211.182, and the technology park
development act, 1984 PA 385, MCL 207.701 to 207.718. The initial
assessed value or current assessed value of property subject to a
specific local tax is the quotient of the specific local tax paid
divided by the ad valorem millage rate. However, after 1993, 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.
(gg) (dd)
"State fiscal year" means
the annual period
commencing October 1 of each year.
(hh) (ee)
"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 eligible property within the district
or, for purposes of a certified technology park or a certified
alternative energy park, real or personal property that is located
within the certified technology park and included within the tax
increment financing plan, subject to the following requirements:
(i) Tax increment revenues include ad valorem property taxes
and specific local taxes attributable to the application of the
levy of all taxing jurisdictions, other than the state pursuant to
the state education tax act, 1993 PA 331, MCL 211.901 to 211.906,
and local or intermediate school districts, upon the captured
assessed value of real and personal property in the development
area for any purpose authorized by this act.
(ii) Tax increment revenues include ad valorem property taxes
and specific local taxes attributable to the application of the
levy of the state pursuant to the state education tax act, 1993 PA
331, MCL 211.901 to 211.906, and local or intermediate school
districts upon the captured assessed value of real and personal
property in the development area in an amount equal to the amount
necessary, without regard to subparagraph (i), for the following
purposes:
(A) To repay eligible advances, eligible obligations, and
other protected obligations.
(B) To fund or to repay an advance or obligation issued by or
on behalf of an authority to fund the cost of public facilities
related to or for the benefit of eligible property located within a
certified technology park or a certified alternative energy park to
the extent the public facilities have been included in an agreement
under section 12a(3), not to exceed 50%, as determined by the state
treasurer, of the amounts levied by the state pursuant to the state
education tax act, 1993 PA 331, MCL 211.901 to 211.906, and local
and intermediate school districts for a period not to exceed 15
years, as determined by the state treasurer, if the state treasurer
determines that the capture under this subparagraph is necessary to
reduce unemployment, promote economic growth, and increase capital
investment in the municipality.
(iii) Tax increment revenues do not include any of the
following:
(A) Ad valorem property taxes or specific local taxes that are
excluded from and not made part of the tax increment financing
plan.
(B) Ad valorem property taxes and specific local taxes
attributable to 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.
(C) Ad valorem property taxes exempted from capture under
section 4(3) or specific local taxes attributable to such ad
valorem property taxes.
(D) 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 local taxes attributable to
such ad valorem property taxes.
(E) The amount of ad valorem property taxes or specific taxes
captured by a downtown development authority under 1975 PA 197, MCL
125.1651 to 125.1681, tax increment financing authority under the
tax increment finance authority act, 1980 PA 450, MCL 125.1801 to
125.1830, or brownfield redevelopment authority under the
brownfield redevelopment financing act, 1996 PA 381, MCL 125.2651
to 125.2672, if those taxes were captured by these other
authorities on the date that the initial assessed value of a parcel
of property was established under this act.
(iv) The amount of tax increment revenues authorized to be
included under subparagraph (ii), and required to be transmitted to
the authority under section 13(1), from ad valorem property taxes
and specific local taxes attributable to the application of the
levy of the state education tax act, 1993 PA 331, MCL 211.901 to
211.906, or a local school district or an intermediate school
district upon the captured assessed value of real and personal
property in a development area shall be determined separately for
the levy by the state, each school district, and each intermediate
school district as the product of sub-subparagraphs (A) and (B):
(A) The percentage that the total ad valorem taxes and
specific local taxes available for distribution by law to the
state, local school district, or intermediate school district,
respectively, bears to the aggregate amount of ad valorem millage
taxes and specific taxes available for distribution by law to the
state, each local school district, and each intermediate school
district.
(B) The maximum amount of ad valorem property taxes and
specific local taxes considered tax increment revenues under
subparagraph (ii).
(ii) (ff)
"Urban township" means a
township that meets 1 or
more of the following:
(i) Meets all of the following requirements:
(A) Has a population of 20,000 or more, or has a population of
10,000 or more but is located in a county with a population of
400,000 or more.
(B) Adopted a master zoning plan before February 1, 1987.
(C) Provides sewer, water, and other public services to all or
a part of the township.
(ii) Meets all of the following requirements:
(A) Has a population of less than 20,000.
(B) Is located in a county with a population of 250,000 or
more but less than 400,000, and that county is located in a
metropolitan statistical area.
(C) Has within its boundaries a parcel of property under
common ownership that is 800 acres or larger and is capable of
being served by a railroad, and located within 3 miles of a limited
access highway.
(D) Establishes an authority before December 31, 1998.
(iii) Meets all of the following requirements:
(A) Has a population of less than 20,000.
(B) Has a state equalized valuation for all real and personal
property located in the township of more than $200,000,000.00.
(C) Adopted a master zoning plan before February 1, 1987.
(D) Is a charter township under the charter township act, 1947
PA 359, MCL 42.1 to 42.34.
(E) Has within its boundaries a combination of parcels under
common ownership that is 800 acres or larger, is immediately
adjacent to a limited access highway, is capable of being served by
a railroad, and is immediately adjacent to an existing sewer line.
(F) Establishes an authority before March 1, 1999.
(iv) Meets all of the following requirements:
(A) Has a population of 13,000 or more.
(B) Is located in a county with a population of 150,000 or
more.
(C) Adopted a master zoning plan before February 1, 1987.
(v) Meets all of the following requirements:
(A) Is located in a county with a population of 1,000,000 or
more.
(B) Has a written agreement with an adjoining township to
develop 1 or more public facilities on contiguous property located
in both townships.
(C) Has a master plan in effect.
(vi) Meets all of the following requirements:
(A) Has a population of less than 10,000.
(B) Has a state equalized valuation for all real and personal
property located in the township of more than $280,000,000.00.
(C) Adopted a master zoning plan before February 1, 1987.
(D) Has within its boundaries a combination of parcels under
common ownership that is 199 acres or larger, is located within 1
mile of a limited access highway, and is located within 1 mile of
Senate Bill No. 428 as amended June 17, 2009
an existing sewer line.
(E) Has rail service.
(F) Establishes an authority before May 7, 2009.
(vii) Has joined an authority under section 3(2) which is
seeking or has entered into an agreement for a certified
alternative energy park.
Sec. 3. (1) Except as otherwise provided by subsection (2), a
municipality may establish not more than 1 authority under the
provisions of this act. An authority established under this
subsection shall exercise its powers in all authority districts.
(2) In addition to an authority established under subsection
(1), a municipality may join with 1 or more other municipality
located within the same county to establish an authority under this
act. An authority created under this subsection may only exercise
its powers in a certified technology park designated in an
agreement made under section 12a or a certified alternative energy
park under section 12c. A municipality shall not establish more
than 1 authority under this subsection <<for a certified technology park
and not more than 1 authority under this subsection for a certified alternative energy park>>.
(3) The authority shall be a public body corporate which may
sue and be sued in any court of this state. The authority possesses
all the powers necessary to carry out the purpose of its
incorporation. The enumeration of a power in this act shall not be
construed as a limitation upon the general powers of the authority.
The powers granted in this act to an authority may be exercised
notwithstanding that bonds are not issued by the authority.
Sec. 12. (1) If the board determines that it is necessary for
the achievement of the purposes of this act, the board shall
prepare and submit a tax increment financing plan to the governing
body. The plan shall be in compliance with section 13 and shall
include a development plan as provided in section 15. The plan
shall also contain the following:
(a) A statement of the reasons that the plan will result in
the development of captured assessed value that could not otherwise
be expected. The reasons may include, but are not limited to,
activities of the municipality, authority, or others undertaken
before formulation or adoption of the plan in reasonable
anticipation that the objectives of the plan would be achieved by
some means.
(b) An estimate of the captured assessed value for each year
of the plan. The plan may provide for the use of part or all of the
captured assessed value or, subject to subsection (3), of the tax
increment revenues attributable to the levy of any taxing
jurisdiction, but the portion intended to be used shall be clearly
stated in the plan. The board or the municipality creating the
authority may exclude from captured assessed value a percentage of
captured assessed value as specified in the plan or growth in
property value resulting solely from inflation. If excluded, the
plan shall set forth the method for excluding growth in property
value resulting solely from inflation.
(c) The estimated tax increment revenues for each year of the
plan.
(d) A detailed explanation of the tax increment procedure.
(e) The maximum amount of note or bonded indebtedness to be
incurred, if any.
(f) The amount of operating and planning expenditures of the
authority and municipality, the amount of advances extended by or
indebtedness incurred by the municipality, and the amount of
advances by others to be repaid from tax increment revenues.
(g) The costs of the plan anticipated to be paid from tax
increment revenues as received.
(h) The duration of the development plan and the tax increment
plan.
(i) An estimate of the impact of tax increment financing on
the revenues of all taxing jurisdictions in which the eligible
property is or is anticipated to be located.
(j) A legal description of the eligible property to which the
tax increment financing plan applies or shall apply upon
qualification as eligible property.
(k) An estimate of the number of jobs to be created as a
result of implementation of the tax increment financing plan.
(l) The proposed boundaries of a certified technology park to
be created under an agreement proposed to be entered into pursuant
to section 12a, an identification of the real property within the
certified technology park to be included in the tax increment
financing plan for purposes of determining tax increment revenues,
and whether personal property located in the certified technology
park is exempt from determining tax increment revenues.
(m) The proposed boundaries of a certified alternative energy
park to be created under an agreement proposed to be entered into
pursuant to section 12c, an identification of the real property
with the certified alternative energy park to be included in the
tax increment financing plan for purposes of determining tax
increment revenues, and whether personal property located in the
certified alternative energy park is exempt from determining tax
increment revenues.
(2) Except as provided in subsection (7), a tax increment
financing plan shall provide for the use of tax increment revenues
for public facilities for eligible property whose captured assessed
value produces the tax increment revenues or, to the extent the
eligible property is located within a business development area,
for other eligible property located in the business development
area. Public facilities for eligible property include the
development or improvement of access to and around, or within the
eligible property, of road facilities reasonably required by
traffic flow to be generated by the eligible property, and the
development or improvement of public facilities that are necessary
to service the eligible property, whether or not located on that
eligible property. If the eligible property identified in the tax
increment
financing plan is property to which section 2(p)(iv)
2(s)(iv) applies, the tax increment financing plan shall not provide
for the use of tax increment revenues for public facilities other
than those described in the development plan as of April 1, 1991.
Whether or not provided in the tax increment financing plan, if the
eligible property identified in the tax increment financing plan is
property
to which section 2(p)(iv) 2(s)(iv) applies,
then to the
extent that captured tax increment revenues are utilized for the
costs of cleanup of identified soil and groundwater contamination,
the captured tax increment revenues shall be first credited against
the shares of responsibility for the total costs of cleanup of
uncollectible parties who are responsible for the identified soil
and groundwater contamination pursuant to law, and then shall be
credited on a pro rata basis against the shares of responsibility
for the total costs of cleanup of other parties who are responsible
for the identified soil and groundwater contamination pursuant to
law.
(3) The percentage of taxes levied for school operating
purposes that is captured and used by the tax increment financing
plan and the tax increment financing plans under 1975 PA 197, MCL
125.1651 to 125.1681, the tax increment finance authority act, 1980
PA 450, MCL 125.1801 to 125.1830, and the brownfield redevelopment
financing act, 1996 PA 381, MCL 125.2651 to 125.2672, shall not be
greater than the percentage capture and use of taxes levied by a
municipality or county for operating purposes under the tax
increment financing plan and tax increment financing plans under
1975 PA 197, MCL 125.1651 to 125.1681, the tax increment finance
authority act, 1980 PA 450, MCL 125.1801 to 125.1830, and the
brownfield redevelopment financing act, 1996 PA 381, MCL 125.2651
to 125.2672. For purposes of the previous sentence, taxes levied by
a county for operating purposes include only millage allocated for
county or charter county purposes under the property tax limitation
act, 1933 PA 62, MCL 211.201 to 211.217a.
(4) Except as otherwise provided by this subsection, approval
of the tax increment financing plan shall be in accordance with the
notice, hearing, disclosure, and approval provisions of sections 16
and 17. If the development plan is part of the tax increment
financing plan, only 1 hearing and approval procedure is required
for the 2 plans together. For a plan submitted by an authority
established by 2 or more municipalities under sections 3(2) and
4(7), the notice required by section 16 may be published jointly by
the municipalities in which the authority district is located. The
plan shall not be considered approved unless each governing body in
which the authority district is located makes the determinations
required by section 17 and approves the same plan, including the
same modifications, if any, made to the plan by any other governing
body.
(5) Before the public hearing on the tax increment financing
plan, the governing body shall provide a reasonable opportunity to
the taxing jurisdictions levying taxes subject to capture to
express their views and recommendations regarding the tax increment
financing plan. The authority shall fully inform the taxing
jurisdictions about the fiscal and economic implications of the
proposed tax increment financing plan. The taxing jurisdictions may
present their recommendations at the public hearing on the tax
increment financing plan. The authority may enter into agreements
with the taxing jurisdictions and the governing body of the
municipality in which the authority district is located to share a
portion of the captured assessed value of the district or to
distribute tax increment revenues among taxing jurisdictions. Upon
adoption of the plan, the collection and transmission of the amount
of tax increment revenues, as specified in this act, shall be
binding on all taxing units levying ad valorem property taxes or
specific local taxes against property located in the authority
district.
(6) Property qualified as a public facility under section
2(aa)(ii) 2(dd)(ii) that is acquired by an
authority may be sold,
conveyed, or otherwise disposed to any person, public or private,
for fair market value or reasonable monetary consideration
established by the authority with the concurrence of the Michigan
economic development corporation and the municipality in which the
eligible property is located based on a fair market value appraisal
from a fee appraiser only if the property is sold for fair market
value. Unless the property acquired by an authority was located
within
a certified business park, or a certified technology park,
or a certified alternative energy park at the time of disposition,
an authority shall remit all monetary proceeds received from the
sale or disposition of property that qualified as a public facility
under
section 2(aa)(ii) 2(dd)(ii) and
was purchased with tax
increment revenues to the taxing jurisdictions. Proceeds
distributed to taxing jurisdictions shall be remitted in proportion
to the amount of tax increment revenues attributable to each taxing
jurisdiction in the year the property was acquired. If the property
was acquired in part with funds other than tax increment revenues,
only that portion of the monetary proceeds received upon
disposition that represent the proportion of the cost of
acquisition paid with tax increment revenues is required to be
remitted to taxing jurisdictions. If the property is located within
a
certified business park, or a
certified technology park, or a
certified alternative energy park at the time of disposition, the
monetary proceeds received from the sale or disposition of that
property may be retained by the authority for any purpose necessary
to further the development program for the certified business park
or certified technology park in accordance with the tax increment
financing plan.
(7) The tax increment financing plan may provide for the use
of tax increment revenues from a certified technology park or a
certified alternative energy park for public facilities for any
eligible property located in the certified technology park or a
certified alternative energy park.
(8) If title to property qualified as a public facility under
section
2(aa)(ii) 2(dd)(ii) and
acquired by an authority with tax
increment revenues is sold, conveyed, or otherwise disposed of
pursuant to subsection (6) for less than fair market value, the
authority shall enter into an agreement relating to the use of the
property with the person to whom the property is sold, conveyed, or
disposed of, which agreement shall include a penalty provision
addressing repayment to the authority if any interest in the
property is sold, conveyed, or otherwise disposed of by the person
within 12 years after the person received title to the property
from the authority. This subsection shall not require enforcement
of a penalty provision for a conveyance incident to a merger,
acquisition, reorganization, sale-lease back transaction, employee
stock ownership plan, or other change in corporate or business form
or structure.
(9) The penalty provision described in subsection (8) shall
not be less than an amount equal to the difference between the fair
market value of the property when originally sold, conveyed, or
otherwise disposed of and the actual consideration paid by the
person to whom the property was originally sold, conveyed, or
otherwise disposed of.
Sec. 12a. (1) A municipality that has created an authority may
apply to the Michigan economic development corporation for
designation of all or a portion of the authority district as a
certified technology park and to enter into an agreement governing
the terms and conditions of the designation. The form of the
application shall be in a form specified by the Michigan economic
development corporation and shall include information the Michigan
economic development corporation determines necessary to make the
determinations required under this section.
(2) After receipt of an application, the Michigan economic
development corporation may designate, pursuant to an agreement
entered into under subsection (3), a certified technology park that
is determined by the Michigan economic development corporation to
satisfy 1 or more of the following criteria based on the
application:
(a) A demonstration of significant support from an institution
of higher education or a private research-based institute located
within the proximity of the proposed certified technology park, as
evidenced by, but not limited to, the following types of support:
(i) Grants of preferences for access to and commercialization
of intellectual property.
(ii) Access to laboratory and other facilities owned by or
under control of the institution of higher education or private
research-based institute.
(iii) Donations of services.
(iv) Access to telecommunication facilities and other
infrastructure.
(v) Financial commitments.
(vi) Access to faculty, staff, and students.
(vii) Opportunities for adjunct faculty and other types of
staff arrangements or affiliations.
(b) A demonstration of a significant commitment on behalf of
the institution of higher education or private research-based
institute to the commercialization of research produced at the
certified technology park, as evidenced by the intellectual
property and, if applicable, tenure policies that reward faculty
and staff for commercialization and collaboration with private
businesses.
(c) A demonstration that the proposed certified technology
park will be developed to take advantage of the unique
characteristics and specialties offered by the public and private
resources available in the area in which the proposed certified
technology park will be located.
(d) The existence of or proposed development of a business
incubator within the proposed certified technology park that
exhibits the following types of resources and organization:
(i) Significant financial and other types of support from the
public or private resources in the area in which the proposed
certified technology park will be located.
(ii) A business plan exhibiting the economic utilization and
availability of resources and a likelihood of successful
development of technologies and research into viable business
enterprises.
(iii) A commitment to the employment of a qualified full-time
manager to supervise the development and operation of the business
incubator.
(e) The existence of a business plan for the proposed
certified technology park that identifies its objectives in a
clearly focused and measurable fashion and that addresses the
following matters:
(i) A commitment to new business formation.
(ii) The clustering of businesses, technology, and research.
(iii) The opportunity for and costs of development of properties
under common ownership or control.
(iv) The availability of and method proposed for development of
infrastructure and other improvements, including telecommunications
technology, necessary for the development of the proposed certified
technology park.
(v) Assumptions of costs and revenues related to the
development of the proposed certified technology park.
(f) A demonstrable and satisfactory assurance that the
proposed certified technology park can be developed to principally
contain
eligible property as defined by section 2(p)(iii) and (v)
2(s)(iii) and (v).
(3) An authority and a municipality that incorporated the
authority may enter into an agreement with the Michigan economic
development corporation establishing the terms and conditions
governing the certified technology park. Upon designation of the
certified technology park pursuant to the terms of the agreement,
the subsequent failure of any party to comply with the terms of the
agreement shall not result in the termination or rescission of the
designation of the area as a certified technology park. The
agreement shall include, but is not limited to, the following
provisions:
(a) A description of the area to be included within the
certified technology park.
(b) Covenants and restrictions, if any, upon all or a portion
of the properties contained within the certified technology park
and terms of enforcement of any covenants or restrictions.
(c) The financial commitments of any party to the agreement
and of any owner or developer of property within the certified
technology park.
(d) The terms of any commitment required from an institution
of higher education or private research-based institute for support
of the operations and activities at eligible properties within the
certified technology park.
(e) The terms of enforcement of the agreement, which may
include the definition of events of default, cure periods, legal
and equitable remedies and rights, and penalties and damages,
actual or liquidated, upon the occurrence of an event of default.
(f) The public facilities to be developed for the certified
technology park.
(g) The costs approved for public facilities under section
2(aa)
2(dd).
(4) If the Michigan economic development corporation has
determined that a sale price or rental value at below market rate
will assist in increasing employment or private investment in the
certified technology park, the authority and municipality have
authority to determine the sale price or rental value for public
facilities owned or developed by the authority and municipality in
the certified technology park at below market rate.
(5) If public facilities developed pursuant to an agreement
entered into under this section are conveyed or leased at less than
fair market value or at below market rates, the terms of the
conveyance or lease shall include legal and equitable remedies and
rights to assure the public facilities are used as eligible
property. Legal and equitable remedies and rights may include
penalties and actual or liquidated damages.
(6) Except as otherwise provided in this section, an agreement
designating a certified technology park may not be made after
December 31, 2002, but any agreement made on or before December 31,
2002 may be amended after that date. However, the Michigan economic
development corporation may enter into an agreement with a
municipality after December 31, 2002 and on or before December 31,
2005 if that municipality has adopted a resolution of interest to
create a certified technology park before December 31, 2002.
(7) The Michigan economic development corporation shall market
the certified technology parks and the certified business parks.
The Michigan economic development corporation and an authority may
contract with each other or any third party for these marketing
services.
(8) Except as otherwise provided in subsections (9) and (10),
the Michigan economic development corporation shall not designate
more than 10 certified technology parks. For purposes of this
subsection only, 2 certified technology parks located in a county
that contains a city with a population of more than 750,000, shall
be counted as 1 certified technology park. Not more than 7 of the
certified technology parks designated under this section may not
include a firm commitment from at least 1 business engaged in a
high technology activity creating a significant number of jobs.
(9) The Michigan economic development corporation may
designate an additional 5 certified technology parks after November
1, 2002 and before December 31, 2007. The Michigan economic
development corporation shall not accept applications for the
additional certified technology parks under this subsection until
after November 1, 2002.
(10) The Michigan economic development corporation may
designate an additional 3 certified technology parks after February
1, 2008 and before December 31, 2008. The Michigan economic
development corporation shall not accept applications for the
additional certified technology parks under this subsection until
after February 1, 2008.
(11) The Michigan economic development corporation shall give
priority to applications that include new business activity.
(12) For an authority established by 2 or more municipalities
under sections 3(2) and 4(7), each municipality in which the
authority district is located by a majority vote of the members of
its governing body may make a limited tax pledge to support the
authority's tax increment bonds issued under section 14 or, if
authorized by the voters of the municipality, may pledge its full
faith and credit for the payment of the principal of and interest
on the bonds. The municipalities that have made a pledge to support
the authority's tax increment bonds may approve by resolution an
agreement among themselves establishing obligations each may have
to the other party or parties to the agreement for reimbursement of
all or any portion of a payment made by a municipality related to
its pledge to support the authority's tax increment bonds.
(13) Not including certified technology parks designated under
subsection (8), but for certified technology parks designated under
subsections (9) and (10) only, this state shall do all of the
following:
(a) Reimburse intermediate school districts each year for all
tax revenue lost that was captured by an authority for a certified
technology park designated by the Michigan economic development
corporation after October 3, 2002.
(b) Reimburse local school districts each year for all tax
revenue lost that was captured by an authority for a certified
technology park designated by the Michigan economic development
corporation after October 3, 2002.
(c) Reimburse the school aid fund from funds other than those
appropriated in section 11 of the state school aid act of 1979,
1979 PA 94, MCL 388.1611, for an amount equal to the reimbursement
calculations under subdivisions (a) and (b) and for all revenue
lost that was captured by an authority for a certified technology
park designated by the Michigan economic development corporation
after October 3, 2002. Foundation allowances calculated under
section 20 of the state school aid act of 1979, 1979 PA 94, MCL
388.1620, shall not be reduced as a result of tax revenue lost that
was captured by an authority for a certified technology park
designated by the Michigan economic development corporation under
subsection (9) or (10) after October 3, 2002.
Sec. 12c. (1) A municipality that has created an authority may
apply to the Michigan economic development corporation for
designation of all or a portion of the authority district as a
certified alternative energy park and to enter into an agreement
governing the terms and conditions of the designation. The form of
the application shall be in a form specified by the Michigan
economic development corporation and shall include information the
Michigan economic development corporation determines necessary to
make the determinations required under this section.
(2) After receipt of an application, the Michigan economic
development corporation may designate, pursuant to an agreement
entered into under subsection (3), a certified alternative energy
park that is determined by the Michigan economic development
corporation to satisfy 1 or more of the following criteria based on
the application:
(a) A demonstration that the proposed alternative energy park
will be developed to take advantage of the unique characteristics
and specialties offered by public and private resources available
in the area in which the proposed certified alternative energy park
will be located.
(b) The existence of or strong likelihood of attracting
alternative energy technology businesses to the proposed
alternative energy park by exhibiting the following types of
resources and organization:
(i) Significant financial and other types of support from the
public or private resources in the area.
(ii) Proposed or actual ownership of land in sufficient
quantity as to attract 1 or more major alternative energy
technology businesses.
(c) The existence of a business plan for the proposed
certified alternative energy park that identifies its objectives in
a clearly focused and measurable fashion and that addresses the
following matters:
(i) A commitment to new business formation or major business
attraction.
(ii) The clustering of businesses, technology, and research
within the region.
(iii) The opportunity for and costs of development of properties
under common ownership or control.
(iv) The availability of and method proposed for development
and sale or conveyance of shovel-ready sites to include
infrastructure and other improvements, including telecommunications
technology, necessary for the successful development of the
proposed certified alternative energy park.
(v) Assumptions of costs and revenues related to the
development of the proposed certified alternative energy park.
(f) A demonstrable and satisfactory assurance that the
proposed certified alternative energy park can be developed to
principally contain eligible property as defined by section 2(s)(v)
and (vi).
(3) An authority and a municipality that incorporated the
authority may enter into an agreement with the Michigan economic
development corporation establishing the terms and conditions
governing the certified alternative energy park. Upon designation
of the certified alternative energy park pursuant to the terms of
the agreement, the subsequent failure of any party to comply with
the terms of the agreement shall not result in the termination or
rescission of the designation of the area as a certified
alternative energy park. The agreement shall include, but is not
limited to, the following provisions:
(a) A description of the area to be included within the
certified alternative energy park.
(b) Covenants and restrictions, if any, upon all or a portion
of the properties contained within the certified alternative energy
park and terms of enforcement of any covenants or restrictions.
(c) The financial commitments of any party to the agreement
and of any owner or developer of property, including sale or
transfer of ownership or options thereto upon designation of a
certified alternative energy park for property within the certified
alternative energy park.
(d) The terms of enforcement of the agreement, which may
include the definition of events of default, cure periods, legal
and equitable remedies and rights, and penalties and damages,
actual or liquidated, upon the occurrence of an event of default.
(e) Proposed method of ownership of the land within the
certified alternative energy park.
(f) The costs approved for public facilities under section
2(dd).
(g) Proposed method of operating the certified alternative
energy park.
(4) If the Michigan economic development corporation has
determined that a sale price or rental value at below market rate
will assist in increasing employment or private investment in the
certified alternative energy park, the authority and municipality
have authority to determine the sale price or rental value for
public facilities owned or developed by the authority and
municipality in the certified alternative energy park at below
market rate.
(5) If public facilities developed pursuant to an agreement
entered into under this section are conveyed or leased at less than
fair market value or at below market rates, the terms of the
conveyance or lease shall include legal and equitable remedies and
rights to assure that the public facilities are used as eligible
property. Legal and equitable remedies and rights may include
penalties and actual or liquidated damages.
(6) Except as otherwise provided in this section, an agreement
designating a certified alternative energy park may not be made
after December 31, 2011, but any agreement made on or before
December 31, 2011 may be amended after that date.
(7) The Michigan economic development corporation shall not
designate more than 10 certified alternative energy parks. For
purposes of this subsection only, certified alternative energy
parks located in the same county shall be counted as 1 certified
alternative energy park.
(8) For an authority established by 2 or more municipalities
under sections 3(2) and 4(7), each municipality in which the
authority district is located by a majority vote of the members of
its governing body may make a limited tax pledge to support the
authority’s tax increment bonds issued under section 14 or, if
authorized by the voters of the municipality, may pledge its full
faith and credit for the payment of the principal of and interest
on the bonds. The municipalities that have made a pledge to support
the authority’s tax increment bonds may approve by resolution an
agreement among themselves establishing obligations each may have
to the other party or parties to the agreement for reimbursement of
all or any portion of a payment made by a municipality related to
its pledge to support the authority’s tax increment bonds.
(9) Upon approval of the Michigan economic development
corporation, the certified alternative energy park may be owned and
operated by an economic development corporation created under the
economic development corporations act, 1974 PA 338, MCL 125.1601 to
125.1636, or other public body agreeable to all members.
Enacting section 1. This amendatory act does not take effect
unless all of the following bills of the 95th Legislature are
enacted into law:
(a) Senate Bill No. 358.
(b) Senate Bill No. 493.
(c) House Bill No. 4674.