SENATE BILL No. 428

April 1, 2009, Introduced by Senator ALLEN and referred to the Committee on Commerce and Tourism.

A bill to amend 1986 PA 281, entitled

"The local development financing act,"

by amending sections 2, 12, and 12a (MCL 125.2152, 125.2162, and

125.2162a), section 2 as amended by 2007 PA 200, section 12 as

amended by 2000 PA 248, and section 12a as amended by 2008 PA 105.

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) "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.

created pursuant to this act.

(d) "Authority district" means an area or areas within which

an authority exercises its powers.

(e) "Board" means the governing body of an authority.

(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.

(g) "Business incubator" means real and personal property that

meets all of the following requirements:

(i) Is located in a certified technology park.

(ii) Is subject to an agreement under section 12a.

(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).

(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), exceeds

the initial assessed value. The state tax commission shall

prescribe the method for calculating captured assessed value.

(i) "Certified business park" means a business development

area that has been designated by the Michigan ~~economic development~~

~~corporation~~ strategic fund as meeting criteria established by the

Michigan ~~economic development corporation~~ strategic fund. 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.

(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~~ strategic fund.

(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.

(l) "Development plan" means that information and those

requirements for a development set forth in section 15.

(m) "Development program" means the implementation of a

development plan.

(n) "Eligible advance" means an advance made before August 19,

1993.

(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.

(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.

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.

(q) "Fiscal year" means the fiscal year of the authority.

(r) "Governing body" means the elected body having legislative

powers of a municipality creating an authority under this act.

(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.

(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).

(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.

(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.

(w) "Municipality" means a city, village, or urban township.

(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.

(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.

(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.

(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~~ strategic fund:

(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.

(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), that are owned by a public

entity, and that are located within a certified technology park.

(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.

(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) 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) and the distributions

under section 11a to repay the obligation being refunded, as

calculated using a method approved by the department of treasury.

(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.

(dd) "State fiscal year" means the annual period commencing

October 1 of each year.

(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, 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 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.

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).

(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.

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.

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.

(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.

(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.

(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.

(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

an existing sewer line.

(E) Has rail service.

(F) Establishes an authority before May 7, 2009.

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.

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.

(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)

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) 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) 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~~ strategic fund 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 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) 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 certified technology 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 for

public facilities for any eligible property located in the

certified technology park.

(8) If title to property qualified as a public facility under

section 2(aa)(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~~ strategic

fund 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~~ strategic fund and shall include

information the Michigan ~~economic development corporation~~ strategic

fund determines necessary to make the determinations required under

this section.

(2) After receipt of an application, the Michigan ~~economic~~

~~development corporation~~ strategic fund may designate, pursuant to

an agreement entered into under subsection (3), a certified

technology park that is determined by the Michigan ~~economic~~

~~development corporation~~ strategic fund 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.

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).

(3) An authority and a municipality that incorporated the

authority may enter into an agreement with the Michigan ~~economic~~

~~development corporation~~ strategic fund 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.

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).

(4) If the Michigan ~~economic development corporation~~ strategic

fund 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~~ strategic

fund shall market the certified technology parks and the certified

business parks. The Michigan ~~economic development corporation~~

strategic fund 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~~ strategic fund 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~~ strategic

fund may designate an additional 3 certified technology parks after

February 1, 2008 and before December 31, 2008. The Michigan

~~economic development corporation~~ strategic fund shall not accept

applications for the additional certified technology parks under

this subsection until after February 1, 2008.

(11) The Michigan ~~economic development corporation~~ strategic

fund 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 or Michigan strategic fund 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 or Michigan strategic fund after October 3, 2002.

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 or

Michigan strategic fund 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