Bill Text: MI HB5024 | 2009-2010 | 95th Legislature | Introduced


Bill Title: Taxation; hotel-motel tax; state convention facilities development act; modify. Amends secs. 3, 8, 9, 10 & 12 of 1985 PA 106 (MCL 207.623 et seq.).

Spectrum: Partisan Bill (Republican 12-0)

Status: (Introduced - Dead) 2009-06-02 - Printed Bill Filed 05/29/2009 [HB5024 Detail]

Download: Michigan-2009-HB5024-Introduced.html

 

 

 

 

 

 

 

 

 

 

 

 

 

HOUSE BILL No. 5024

 

May 28, 2009, Introduced by Reps. Haines, Crawford, Knollenberg, Rick Jones, Agema, Elsenheimer, Rogers, Kowall, Daley, Marleau, Opsommer and Green and referred to the Committee on Commerce.

 

     A bill to amend 1985 PA 106, entitled

 

"State convention facility development act,"

 

by amending sections 3, 8, 9, 10, and 12 (MCL 207.623, 207.628,

 

207.629, 207.630, and 207.632), as amended by 2008 PA 553.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 3. As used in this act:

 

     (a) "Accommodations" means the room or other space provided to

 

transient guests for dwelling, lodging, or sleeping, including

 

furnishings and other accessories, in a facility that is not a

 

campground, hospital, nursing home, emergency shelter, or community

 

mental health or community substance abuse treatment facility.

 

Accommodations do not include food or beverages.

 

     (b) "Commissioner" means the state treasurer.

 


     (c) "Convention facility" means 1 or more facilities owned or

 

leased by a local governmental unit that are any combination of a

 

convention hall, auditorium, meeting rooms, and exhibition areas

 

that are separate and distinct and contiguous to each other, and

 

related adjacent public areas generally available to members of the

 

public for lease on a short-term basis for holding conventions,

 

meetings, exhibits, and similar events and the necessary site or

 

sites, together with appurtenant properties necessary and

 

convenient for use in connection with the facility.

 

     (d) "Convention hotel" means a facility used in the business

 

of providing accommodations that has more than 80 rooms for

 

providing accommodations to transient guests and that complies with

 

all of the following:

 

     (i) Located within a county having a population according to

 

the most recent decennial census of 700,000 or more.

 

     (ii) Located within a county that is 1 or more of the

 

following:

 

     (A) A county that has a publicly owned or leased convention

 

facility with 350,000 200,000 square feet or more of total exhibit

 

space.

 

     (B) A county that has 2,000 1,000 or more rooms to provide

 

accommodations for transient guests.

 

     (e) "Local governmental unit" means a county, township, city,

 

village, building authority, or a metropolitan authority formed

 

under the regional convention facility authority act.

 

     (f) "Person" means a natural person, partnership, fiduciary,

 

association, corporation, or other entity.

 


     (g) "Room charge" means the charge imposed for the use or

 

occupancy of accommodations, excluding charges for food, beverages,

 

telephone services, the use tax imposed under the use tax act, 1937

 

PA 94, MCL 205.91 to 205.111, or like services paid in connection

 

with the charge. Room charge does not include reimbursement of the

 

assessment imposed by the community convention or tourism marketing

 

act, 1980 PA 395, MCL 141.871 to 141.880, the convention and

 

tourism marketing act, 1980 PA 383, MCL 141.881 to 141.889, or this

 

act.

 

     (h) "Transient guest" means a natural person staying less than

 

30 consecutive days.

 

     Sec. 8. (1) The collections from the tax imposed by section 4

 

shall be deposited in the state treasury, to the credit of the

 

convention facility development fund, which is hereby created

 

within the state treasury. Collections from the additional tax

 

imposed under section 1207 of the Michigan liquor control code of

 

1998, 1998 PA 58, MCL 436.2207, funds appropriated from the 21st

 

century jobs trust fund under subsection (4), and amounts

 

designated under section 5(b)(iii) of the health and safety fund act,

 

1987 PA 264, MCL 141.475, shall also be deposited to the credit of

 

the convention facility development fund.

 

     (2) The convention facility development fund shall be

 

distributed for certain state purposes and to local governmental

 

units for use only for 1 or more of the following purposes:

 

     (a) Acquiring, constructing, improving, enlarging, renewing,

 

replacing, or leasing a convention facility.

 

     (b) In conjunction with an activity listed in subdivision (a),

 


repairing, furnishing, and equipping the convention facility.

 

     (c) Refinancing an activity listed in subdivision (a) or (b).

 

     (d) General fund expenditures.

 

     (e) In the case of a local governmental unit that is a

 

metropolitan authority, for any purpose authorized under the

 

regional convention facility authority act, 2008 PA 554, MCL

 

141.1351 to 141.1379.

 

     (3) A contract made by a local governmental unit for the

 

purposes included in subsection (2)(a) or (b) concerning a

 

convention facility funded by distributions pursuant to section 9

 

shall contain a fixed price or guaranteed maximum price for the

 

total cost of activities conducted for these purposes pursuant to

 

that contract.

 

     (4) For the fiscal year ending September 30, 2009,

 

$9,000,000.00 is appropriated from the 21st century jobs trust fund

 

described in section 2 of the Michigan trust fund act, 2000 PA 489,

 

MCL 12.252, to an authority created under the regional convention

 

facility authority act, 2008 PA 554, MCL 141.1351 to 141.1379, for

 

the purpose of developing a qualified convention facility as

 

defined under that act. If the transfer of a qualified convention

 

facility to a regional convention authority is disapproved by the

 

legislative body of a qualified city under section 19(1) of the

 

regional convention facility authority act, 2008 PA 554, MCL

 

141.1369, then for the fiscal year ending September 30, 2009, that

 

$9,000,000.00 is appropriated from the 21st century jobs trust fund

 

described in section 2 of the Michigan trust fund act, 2000 PA 489,

 

MCL 12.252, to a building authority for a county having a

 


population of not less than 1,000,000 and not more than 1,500,000

 

on the effective date of the amendatory act that added this

 

sentence for the purpose of developing a convention facility as

 

defined in this act.

 

     Sec. 9. (1) Except as provided in subsection (4) or (6), on or

 

before the thirtieth day of each month, the state treasurer shall

 

make a distribution from the convention facility development fund

 

to a qualified local governmental unit. The distribution shall be

 

an amount equal to the sum of the collections from the excise tax

 

levied for accommodations under this act for the previous month

 

from the convention hotels in the county in which the convention

 

facility is or is to be located and in any county in which

 

convention hotels are located that is contiguous to the county in

 

which the convention facility is located, or is to be located, the

 

additional tax imposed under section 1207 of the Michigan liquor

 

control code of 1998, 1998 PA 58, MCL 436.2207, for the previous

 

month received in the fund, and any distribution received under

 

section 5(b)(iii) of the health and safety fund act, 1987 PA 264, MCL

 

141.475, and from the 21st century jobs trust fund under section

 

8(4). However, distributions for any state fiscal year to any

 

qualified local governmental unit under this section shall not

 

exceed an amount equal to the amount pledged, assigned, or

 

dedicated by the qualified local governmental unit pursuant to

 

section 11 for the payment during that state fiscal year of bonds,

 

obligations, or other evidences of indebtedness incurred for the

 

purposes specified in this act or the regional convention facility

 

authority act, 2008 PA 554, MCL 141.1351 to 141.1379, plus

 


operating deficit cost expenditures under section 10, plus any

 

amount necessary to maintain a fully funded debt reserve or other

 

reserves intended to secure the principal and interest on the

 

bonds, obligations, or other evidences of indebtedness as contained

 

in the resolution or ordinance authorizing their issuance.

 

     (2) Notwithstanding the distributions provided by subsection

 

(1), if a local governmental unit becomes a qualified local

 

governmental unit entitled to receive distributions from the tax

 

imposed under section 1207 of the Michigan liquor control code of

 

1998, 1998 PA 58, MCL 436.2207, or from the tax imposed by this act

 

in counties in which the convention facility is located or in a

 

county in which a convention hotel is located that is contiguous to

 

the county in which the convention facility is located, and from

 

any distribution under section 5(b)(iii) of the health and safety

 

fund act, 1987 PA 264, MCL 141.475, no other qualified local

 

governmental unit is entitled to distributions pursuant to this

 

section for which that qualified local governmental unit has

 

previously become entitled, until such time as that qualified local

 

governmental unit ownership or leasehold interest described in

 

subsection (3) (4) is transferred to another local governmental

 

unit. If that transfer renders the transferee a qualified local

 

governmental unit, the transferee shall, immediately upon that

 

transfer, be entitled to the distributions to a qualified local

 

governmental unit provided in subsection (1) and the priority

 

provided to a qualified local governmental unit in this subsection,

 

notwithstanding that the amount of the distributions may increase

 

as a result of that transfer.

 


     (3) Notwithstanding the provisions of subsection (2), if the

 

transfer of a qualified convention facility to a regional

 

convention authority is disapproved by the legislative body of a

 

qualified city under section 19(1) of the regional convention

 

facility authority act, 2008 PA 554, MCL 141.1369, then a

 

distribution from the convention facility development fund of

 

proceeds received under section 5(b)(iii) of the health and safety

 

fund act, 1987 PA 264, MCL 141.475, shall be made to a building

 

authority for a county having a population of not less than

 

1,000,000 and not more than 1,500,000 on the effective date of the

 

amendatory act that added this subsection for the purpose of

 

developing, leasing, or operating a convention facility as defined

 

in this act and no other qualified local governmental unit is

 

entitled to any distribution of proceeds received under section

 

5(b)(iii) of the health and safety fund act, 1987 PA 264, MCL

 

141.475.

 

     (4) (3) As used in this act, "qualified local governmental

 

unit" means, except as otherwise provided in this subsection, a

 

city, village, township, county, or authority that is located in,

 

or includes within its territory or jurisdiction, a county in which

 

convention hotels are located and that either is the owner or

 

lessee of a convention facility with 350,000 square feet or more of

 

total exhibit space on July 30, 1985 or, if such a convention

 

facility does not exist, will be the owner or lessee of a

 

convention facility with 350,000 square feet or more of total

 

exhibit space through the application of distributions under this

 

section to the purchase or lease of a convention facility. If the

 


transfer of a qualified convention facility to a regional

 

convention authority is disapproved by the legislative body of a

 

qualified city under section 19(1) of the regional convention

 

facility authority act, 2008 PA 554, MCL 141.1369, then for

 

purposes of any distribution from the convention facility

 

development of proceeds under section 5(b)(iii) of the health and

 

safety fund act, 1987 PA 264, MCL 141.475, qualified local

 

governmental unit means a building authority for a county having a

 

population of not less than 1,000,000 and not more than 1,500,000

 

on the effective date of the amendatory act that added this

 

sentence.

 

     (5) (4) Before the 2015-2016 fiscal year, collections from the

 

excise tax levied for accommodations under this act and collections

 

from the tax imposed under section 1207 of the Michigan liquor

 

control code of 1998, 1998 PA 58, MCL 436.2207, shall not be paid

 

to a qualified local governmental unit for the repayment of bonds,

 

obligations, or other evidences of indebtedness incurred after

 

2007.

 

     (6) If a building authority becomes a qualified local

 

governmental unit under subsection (4), collections from

 

distributions under section 5(b)(iii) of the health and safety fund

 

act, 1987 PA 264, MCL 141.475, shall be paid by the state treasurer

 

on or before the thirtieth day of each month to that qualified

 

local governmental unit.

 

     Sec. 10. (1) Any money remaining in the convention facility

 

development fund that is not used for the bonds, obligations, or

 

other evidences of indebtedness described in section 9 shall be

 


distributed pursuant to subsection (2).

 

     (2) Money in the convention facility development fund shall be

 

distributed as provided in subsection (4) in the following order of

 

priority in the following amounts:

 

     (a) For each of the following fiscal years, the following

 

amounts shall be distributed to a metropolitan authority created

 

under the regional convention facility authority act, 2008 PA 554,

 

MCL 141.1351 to 141.1379, for the operational deficit costs of a

 

qualified convention facility operated by the authority under that

 

act:

 

     (i) $9,400,000.00 for the fiscal year ending September 30,

 

2009.

 

     (ii) $11,000,000.00 each fiscal year for the fiscal years

 

ending September 30, 2010 and September 30, 2011.

 

     (iii) $9,000,000.00 each fiscal year for the fiscal years ending

 

September 30, 2012 and September 30, 2013.

 

     (iv) $8,000,000.00 each fiscal year for the fiscal years ending

 

September 30, 2014 and September 30, 2015.

 

     (v) $7,000,000.00 for the fiscal year ending September 30,

 

2016.

 

     (vi) $6,000,000.00 for the fiscal year ending September 30,

 

2017.

 

     (vii) $5,000,000.00 each fiscal year for the fiscal years

 

ending September 30, 2018 and September 30, 2019.

 

     (viii) $5,000,000.00 for the fiscal year ending September 30,

 

2020.

 

     (ix) $5,000,000.00 for the fiscal year ending September 30,

 


2021.

 

     (x) $5,000,000.00 for the fiscal year ending September 30,

 

2022.

 

     (xi) $5,000,000.00 for the fiscal year ending September 30,

 

2023.

 

     (b) For fiscal years ending before October 1, 2009, an amount

 

equal to the difference, if any, between the tax imposed under this

 

act in the preceding state fiscal year that is designated under

 

section 9 to a qualified local governmental unit and the tax

 

imposed under this act that is designated under section 9 in the

 

state fiscal year immediately preceding the preceding state fiscal

 

year for the same local governmental unit shall be distributed to

 

that local governmental unit. This subdivision does not apply

 

unless a tax has been imposed under this act in the entire 2 state

 

fiscal years immediately preceding the state fiscal year in which a

 

distribution under this subdivision is made. Any amount distributed

 

under this subdivision shall be used by the local governmental unit

 

only for the retirement of outstanding bonds, obligations, or other

 

evidences of indebtedness incurred for which distributions under

 

section 9 are pledged. A distribution under this subdivision shall

 

not be made to the extent that the obligations, bonds, or other

 

evidences of indebtedness cannot be retired or are not outstanding.

 

     (c) For fiscal years ending before October 1, 2015, an amount

 

equal to that portion of the liquor tax collected under section

 

1207 of the Michigan liquor control code of 1998, 1998 PA 58, MCL

 

436.2207, from licensees in counties in which convention hotels are

 

not located shall be distributed to those counties in which

 


convention hotels are not located in the same proportion that the

 

amount of tax collected under section 1207 of the Michigan liquor

 

control code of 1998, 1998 PA 58, MCL 436.2207, in the preceding

 

state fiscal year from the licensees in a county bears to the total

 

tax collections under section 1207 of the Michigan liquor control

 

code of 1998, 1998 PA 58, MCL 436.2207, in the preceding state

 

fiscal year from all counties in which convention hotels are not

 

located.

 

     (d) For fiscal years ending before October 1, 2015, the

 

remaining money available after distributions under subdivisions

 

(a), (b), and (c) shall be distributed to each county in the

 

following amounts:

 

     (i) The amount of money available to be distributed under this

 

subdivision multiplied by the percentage of collections in the

 

preceding state fiscal year under section 1207 of the Michigan

 

liquor control code of 1998, 1998 PA 58, MCL 436.2207, from

 

licensees in counties in which convention hotels are not located

 

shall be distributed to each county in which convention hotels are

 

not located in the same proportion that the amount of tax collected

 

pursuant to section 1207 of the Michigan liquor control code of

 

1998, 1998 PA 58, MCL 436.2207, in the preceding state fiscal year

 

from licensees in that county bears to the total tax collections

 

from section 1207 of the Michigan liquor control code of 1998, 1998

 

PA 58, MCL 436.2207, in the preceding state fiscal year from all

 

counties in which convention hotels are not located.

 

     (ii) The amount of money available to be distributed under this

 

subdivision multiplied by the percentage of collections in the

 


preceding state fiscal year under section 1207 of the Michigan

 

liquor control code of 1998, 1998 PA 58, MCL 436.2207, from

 

licensees in counties in which convention hotels are located shall

 

be distributed to each county in which convention hotels are

 

located in the same proportion that the amount of tax collected

 

pursuant to section 1207 of the Michigan liquor control code of

 

1998, 1998 PA 58, MCL 436.2207, in the preceding state fiscal year

 

from licensees in that county bears to the total tax collections

 

from section 1207 of the Michigan liquor control code of 1998, 1998

 

PA 58, MCL 436.2207, in the preceding state fiscal year from all

 

counties in which convention hotels are located. However, in the

 

calculation of the proportion represented by a county's share of

 

distributions under this subparagraph, the amount of the tax

 

collected from licensees in the qualified local governmental unit

 

that received distributions under section 9 in fiscal year 2007-

 

2008 shall not be included.

 

     (e) For the fiscal year ending September 30, 2016, an amount

 

equal to the product of the total amount of tax collected under

 

section 1207 of the Michigan liquor control code of 1998, 1998 PA

 

58, MCL 436.2207, and distributed to all counties in the 2014-2015

 

fiscal year multiplied by 1.01 shall be distributed to all counties

 

as provided in this subdivision. For fiscal years beginning after

 

September 30, 2016, an amount equal to the product of the amount of

 

liquor tax distributions in the immediately preceding fiscal year

 

multiplied by 1.01, not to exceed the total amount of tax collected

 

under section 1207 of the Michigan liquor control code of 1998,

 

1998 PA 58, MCL 436.2207, shall be distributed to counties.

 


Distributions to each county under this subdivision shall be

 

calculated as follows:

 

     (i) The amount of money available to be distributed under this

 

subdivision multiplied by the percentage of collections in the

 

immediately preceding state fiscal year under section 1207 of the

 

Michigan liquor control code of 1998, 1998 PA 58, MCL 436.2207,

 

from licensees in counties in which convention hotels are not

 

located shall be distributed to each county in which convention

 

hotels are not located in the same proportion that the amount of

 

tax collected pursuant to section 1207 of the Michigan liquor

 

control code of 1998, 1998 PA 58, MCL 436.2207, in the immediately

 

preceding state fiscal year from licensees in that county bears to

 

the total tax collections from section 1207 of the Michigan liquor

 

control code of 1998, 1998 PA 58, MCL 436.2207, in the immediately

 

preceding state fiscal year from all counties in which convention

 

hotels are not located.

 

     (ii) The amount of money available to be distributed under this

 

subdivision multiplied by the percentage of collections in the

 

immediately preceding state fiscal year under section 1207 of the

 

Michigan liquor control code of 1998, 1998 PA 58, MCL 436.2207,

 

from licensees in counties in which convention hotels are located

 

shall be distributed to each county in which convention hotels are

 

located in the same proportion that the amount of tax collected

 

pursuant to section 1207 of the Michigan liquor control code of

 

1998, 1998 PA 58, MCL 436.2207, in the immediately preceding state

 

fiscal year from licensees in that county bears to the total tax

 

collections from section 1207 of the Michigan liquor control code

 


of 1998, 1998 PA 58, MCL 436.2207, in the immediately preceding

 

state fiscal year from all counties in which convention hotels are

 

located. However, in the calculation of the proportion represented

 

by a county's share of distributions under this subparagraph, the

 

amount of the tax collected from licensees in the qualified local

 

governmental unit that received distributions under section 9 in

 

the 2007-2008 state fiscal year shall not be included.

 

     (f) Beginning with the fiscal year ending on September 30,

 

2016, and each fiscal year thereafter, if the revenue in the

 

convention facility development fund exceeds the amounts

 

distributed under section 9 and the distributions under subdivision

 

(e), the excess shall be distributed to a qualified local

 

governmental unit that is a metropolitan authority to be used by

 

that qualified local governmental unit only for the retirement of

 

outstanding bonds, obligations, or other evidences of indebtedness

 

incurred for which distributions under section 9 are pledged and

 

for a qualified governmental unit that is a metropolitan authority

 

or next for the payment of any unfunded operational deficit costs

 

incurred during the prior fiscal year by a metropolitan authority

 

created under the regional convention facility authority act for

 

the operation of a qualified convention facility under that act.

 

     (3) A distribution to a county pursuant to this section shall

 

be included for purposes of the calculations required to be made by

 

section 24e of the general property tax act, 1893 PA 206, MCL

 

211.24e. If the governing body of a taxing unit approves the

 

additional millage rate under section 24e of the general property

 

tax act, 1893 PA 206, MCL 211.24e, which is due to distributions

 


pursuant to this section, then an amount equal to 50% of the

 

distribution under this section shall be used for substance abuse

 

treatment within the taxing unit.

 

     (4) Beginning October 1, 2007 and each year thereafter, from

 

the revenue collected during the previous quarter, after

 

distributing the monthly payments under section 9(1), the state

 

treasurer shall make quarterly distributions under subsection

 

(2)(b) and (c) or under subsection (2)(e). From the revenue

 

collected in the last quarter of the state fiscal year, the state

 

treasurer shall make the distribution under subsection (2)(a) prior

 

to any distributions under subsection (2)(b) and (c) or (e).

 

     Sec. 12. (1) Subject to approval pursuant to section 11, a

 

local governmental unit may assign or pledge all or a portion of

 

the distribution of taxes that the local governmental unit is

 

eligible to receive under this act for payment of bonds,

 

obligations, or other evidences of indebtedness for the purposes

 

specified in section 8(2). If a local governmental unit assigns,

 

pledges, or, pursuant to section 11(3), dedicates all or a portion

 

of the distribution of taxes that the local governmental unit is

 

eligible to receive under this act for payment of bonds,

 

obligations, or other evidences of indebtedness incurred for the

 

purposes specified in this act, the state treasurer may transmit to

 

the duly appointed trustee or trustees for the bonds, obligations,

 

or other evidences of indebtedness, if any, the payment of the

 

distribution assigned, pledged, or dedicated by the local

 

governmental unit.

 

     (2) A local governmental unit that becomes a qualified local

 


governmental unit before May 1, 2008 shall not issue bonds,

 

obligations, or other evidences of indebtedness to which

 

distributions under section 9 are pledged in a principal amount

 

greater than $180,000,000.00. This limit does not apply to

 

refunding bonds, obligations, or other evidences of indebtedness

 

issued pursuant to section 11(2) or to bonds, obligations, or other

 

evidences of indebtedness to which distributions of taxes from the

 

convention facility development fund are dedicated under section

 

11(3). A local governmental unit regional authority that becomes a

 

qualified local governmental unit after December 1, 2008 shall not

 

issue bonds, obligations, or other evidences of indebtedness to

 

which distributions under section 9 are pledged in order to finance

 

a total cost for all projects undertaken by the qualified local

 

governmental unit that exceeds $299,000,000.00. A building

 

authority that becomes a qualified local governmental unit after

 

May 1, 2009 shall not issue bonds, obligations, or other evidences

 

of indebtedness to which distributions under section 9 are pledged

 

in order to finance a total cost for all projects undertaken by the

 

qualified local governmental unit that exceeds $135,000,000.00. The

 

cost of a project in addition to construction and acquisition costs

 

may include an allowance for legal, engineering, architectural, and

 

consulting services. The following shall not be considered costs of

 

a project and may be financed with the proceeds of bonds,

 

obligations, or other evidences of indebtedness for which section 9

 

distributions are pledged:

 

     (a) Interest on revenue obligations issued to finance the

 

project becoming due before the collection of the first revenues

 


available for the payment of those revenue obligations.

 

     (b) A reserve for the payment of principal, interest, and

 

redemption premiums on the revenue obligations of the qualified

 

local governmental unit, and other necessary incidental expenses

 

including, but not limited to, placement fees, fees or charges for

 

insurance, letters of credit, lines of credit, remarketing

 

agreements, or commitments to purchase obligations issued pursuant

 

to this act.

 

     (c) Fees or charges associated with an agreement to manage

 

payment, revenue, or interest rate exposure.

 

     (d) Any other fees or charges for any other security provided

 

to assure timely payment of the obligations.

 

     (e) Refunding bonds.

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