Bill Text: MI HB5070 | 2017-2018 | 99th Legislature | Introduced

Michigan House Bill 5070 (Prior Session Legislation)

Introduced

Bill Title: Economic development; tax increment financing; tax increment finance authorities into a single act; provide for. Creates new act & repeals 2004 PA 530 (MCL 125.2841 - 125.2866) & 2010 PA 250 (MCL 125.1871 - 125.1883).

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2017-10-11 - Bill Electronically Reproduced 10/10/2017 [HB5070 Detail]

Download: Michigan-2017-HB5070-Introduced.html

HOUSE BILL No. 5070

October 10, 2017, Introduced by Rep. Frederick and referred to the Committee on Local Government.

A bill to provide for the establishment of certain tax

increment finance authorities; to prescribe the powers and duties

of the authorities; to correct and prevent deterioration in

residential, commercial, and industrial areas and certain other

areas; to authorize the acquisition and disposal of interests in

real and personal property; to authorize the creation and

implementation of development plans and development areas; to

promote residential and economic growth; to create certain boards;

to prescribe the powers and duties of certain boards; to authorize

the issuance of bonds and other evidences of indebtedness; to levy

certain taxes; to authorize the use of tax increment financing; to

prescribe powers and duties of certain state officials; to provide

for rule promulgation; to provide for enforcement of this act; and

to repeal acts and parts of acts.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

PART 1

GENERAL PROVISIONS

Sec. 101. This act shall be known and may be cited as the

"recodified tax increment financing act".

Sec. 102. (1) The repeal of a statute or section of law by

this act does not relinquish any penalty, forfeiture, or liability,

whether criminal or civil in nature, and that statute or section of

law shall be treated as still remaining in force as necessary for

the purpose of instituting or sustaining any proper action or

prosecution for the enforcement of the penalty, forfeiture, or

liability.

(2) A bond, note, or any other obligation issued by or on

behalf of an authority under a statute or section of law repealed

by this act shall continue in effect under its original terms under

the corresponding part of this act.

(3) A contractual right, duty, or obligation relating to an

authority under a statute or section of law repealed by this act

shall continue and remain with the authority under the

corresponding part of this act.

(4) A development plan or a tax increment financing plan

developed by an authority under a statute or section of law

repealed by this act shall remain in effect with the authority

under the corresponding part of this act.

Sec. 103. Members of a board of an authority created under a

statute or section of law repealed by this act with the same or

similar name and functions shall continue in office for the

duration of the terms of office for which they were appointed.

Members shall be appointed under this act only as terms of the

former members expire or vacancies occur. Members of the board of

an authority created under a statute or section of law repealed by

this act may be appointed to the new board to succeed themselves

subject to any limits for the total period of service set forth in

this act.

PART 2

DOWNTOWN DEVELOPMENT AUTHORITIES

Sec. 201. As used in this part:

(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 211.155.

(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.

pursuant to this part.

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

(e) "Business district" means an area in the downtown of a

municipality zoned and used principally for business.

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

by which the current assessed value of the project area, including

the assessed value of property for which specific local taxes are

paid in lieu of property taxes as determined in subdivision (aa),

exceeds the initial assessed value. The state tax commission shall

prescribe the method for calculating captured assessed value.

(g) "Catalyst development project" means a project that is

located in a municipality with a population greater than 600,000,

is designated by the authority as a catalyst development project,

and is expected to result in at least $300,000,000.00 of capital

investment. There shall be no more than 1 catalyst development

project designated within each authority.

(h) "Chief executive officer" means the mayor or city manager

of a city, the president or village manager of a village, or the

supervisor of a township or, if designated by the township board

for purposes of this part, the township superintendent or township

manager of a township.

(i) "Development area" means that area to which a development

plan is applicable.

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

requirements for a development plan set forth in section 217.

(k) "Development program" means the implementation of the

development plan.

(l) "Downtown district" means that part of an area in a

business district that is specifically designated by ordinance of

the governing body of the municipality pursuant to this part. A

downtown district may include 1 or more separate and distinct

geographic areas in a business district as determined by the

municipality if the municipality enters into an agreement with a

qualified township under section 203(7) or if the municipality is a

city that surrounds another city and that other city lies between

the 2 separate and distinct geographic areas. If the downtown

district contains more than 1 separate and distinct geographic area

in the downtown district, the separate and distinct geographic

areas shall be considered 1 downtown district.

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

1993.

(n) "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.

(o) "Fire alarm system" means a system designed to detect and

annunciate the presence of fire, or by-products of fire. Fire alarm

system includes smoke detectors.

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

(q) "Governing body of a municipality" means the elected body

of a municipality having legislative powers.

(r) "Initial assessed value" means the assessed value, as

equalized, of all the taxable property within the boundaries of the

development area at the time the ordinance establishing the tax

increment financing plan is approved, as shown by the most recent

assessment roll of the municipality for which equalization has been

completed at the time the resolution is adopted. Property exempt

from taxation at the time of the determination of the initial

assessed value shall be included as zero. For the purpose of

determining initial assessed value, property for which a specific

local tax is paid in lieu of a property tax shall not be considered

to be property that is exempt from taxation. The initial assessed

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

of a property tax shall be determined as provided in subdivision

(aa). In the case of a municipality having a population of less

than 35,000 that established an authority prior to 1985, created a

district or districts, and approved a development plan or tax

increment financing plan or amendments to a plan, and which plan or

tax increment financing plan or amendments to a plan, and which

plan expired by its terms December 31, 1991, the initial assessed

value for the purpose of any plan or plan amendment adopted as an

extension of the expired plan shall be determined as if the plan

had not expired December 31, 1991. For a development area

designated before 1997 in which a renaissance zone has subsequently

been designated pursuant to the Michigan renaissance zone act, 1996

PA 376, MCL 125.2681 to 125.2696, the initial assessed value of the

development area otherwise determined under this subdivision shall

be reduced by the amount by which the current assessed value of the

development area was reduced in 1997 due to the exemption of

property under section 7ff of the general property tax act, 1893 PA

206, MCL 211.7ff, but in no case shall the initial assessed value

be less than zero.

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

(t) "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 part. 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.

(u) "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 the 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.

(v) "Operations" means office maintenance, including salaries

and expenses of employees, office supplies, consultation fees,

design costs, and other expenses incurred in the daily management

of the authority and planning of its activities.

(w) "Other protected obligation" means:

(i) A qualified refunding obligation issued to refund an

obligation described in subparagraph (ii), (iii), or (iv), 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 part before December 31, 1993, for which a contract for

final design is entered into by or on behalf of the municipality or

authority before March 1, 1994 or for which a written agreement

with a developer, titled preferred development agreement, was

entered into by or on behalf of the municipality or authority in

July 1993.

(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 part before August 19, 1993, and

undertaken and installed by that party in accordance with the

development agreement.

(iv) An obligation incurred by the authority evidenced by or

to finance a contract to purchase real property within a

development area or a contract to develop that property within the

development area, or both, if all of the following requirements are

met:

(A) The authority purchased the real property in 1993.

(B) Before June 30, 1995, the authority enters a contract for

the development of the real property located within the development

area.

authority received approval for a grant from both of the following:

(I) The department of natural resources for site reclamation

of the real property.

(II) The department of consumer and industry services for

development of the real property.

(v) An ongoing management or professional services contract

with the governing body of a county which was entered into before

March 1, 1994 and which 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.

(vi) A loan from a municipality to an authority if the loan

was approved by the legislative body of the municipality on April

18, 1994.

(vii) Funds expended to match a grant received by a

municipality on behalf of an authority for sidewalk improvements

from the Michigan department of transportation if the legislative

body of the municipality approved the grant application on April 5,

1993 and the grant was received by the municipality in June 1993.

(viii) For taxes captured in 1994, an obligation described in

this subparagraph issued or incurred to finance a project. An

obligation is considered issued or incurred to finance a project

described in this subparagraph only if all of the following are

met:

(A) The obligation requires raising capital for the project or

paying for the project, whether or not a borrowing is involved.

(B) The obligation was part of a development plan and the tax

increment financing plan was approved by a municipality on May 6,

1991.

understanding between a municipality and a public utility dated

October 27, 1994.

(D) The authority or municipality captured school taxes during

1994.

(ix) An obligation incurred after July 31, 2012 by an

authority, municipality, or other governmental unit to pay for

costs associated with a catalyst development project.

(x) "Public facility" means a street, plaza, pedestrian mall,

and any improvements to a street, plaza, or pedestrian mall

including street furniture and beautification, park, parking

facility, recreational facility, right-of-way, structure, waterway,

bridge, lake, pond, canal, utility line or pipe, building, and

access routes to any of the foregoing, designed and dedicated to

use by the public generally, or used by a public agency. Public

facility includes 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.

Public facility also includes the acquisition, construction,

improvement, and operation of a building owned or leased by the

authority to be used as a retail business incubator.

(y) "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 1 or more of the

following apply:

(i) The obligation is issued to refund a qualified refunding

obligation issued in November 1997 and any subsequent refundings of

that obligation issued before January 1, 2010 or the obligation is

issued to refund a qualified refunding obligation issued on May 15,

1997 and any subsequent refundings of that obligation issued before

January 1, 2010 in an authority in which 1 parcel or group of

parcels under common ownership represents 50% or more of the

taxable value captured within the tax increment finance district

and that will ultimately provide for at least a 40% reduction in

the taxable value of the property as part of a negotiated

settlement as a result of an appeal filed with the state tax

tribunal. Qualified refunding obligations issued under this

subparagraph are not subject to the requirements of section 611 of

the revised municipal finance act, 2001 PA 34, MCL 141.2611, if

issued before January 1, 2010. The duration of the development

program described in the tax increment financing plan relating to

the qualified refunding obligations issued under this subparagraph

is hereby extended to 1 year after the final date of maturity of

the qualified refunding obligations.

(ii) The refunding obligation meets both of the following:

(A) 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.

(B) The net present value of the sum of the tax increment

revenues described in subdivision (cc)(ii) and the distributions

under section 213b 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 (cc)(ii) and the distributions

under section 213b to repay the obligation being refunded, as

calculated using a method approved by the department of treasury.

(iii) The obligation is issued to refund an other protected

obligation issued as a capital appreciation bond delivered to the

Michigan municipal bond authority on December 21, 1994 and any

subsequent refundings of that obligation issued before January 1,

2012. Qualified refunding obligations issued under this

subparagraph are not subject to the requirements of section 305(2),

(3), (5), and (6), section 501, section 503, or section 611 of the

revised municipal finance act, 2001 PA 34, MCL 141.2305, 141.2501,

141.2503, and 141.2611, if issued before January 1, 2012. The

duration of the development program described in the tax increment

financing plan relating to the qualified refunding obligations

issued under this subparagraph is extended to 1 year after the

final date of maturity of the qualified refunding obligations. The

obligation may be payable through the year 2025 at an interest rate

not exceeding the maximum rate permitted by law, notwithstanding

the bond maturity dates contained in the notice of intent to issue

bonds published by the municipality. An obligation issued under

this subparagraph is a qualified refunding obligation only to the

extent that revenues described in subdivision (cc)(ii) and

distributions under section 213b to repay the qualified refunding

obligation do not exceed $750,000.00.

(iv) The obligation is issued to refund a qualified refunding

obligation issued on February 13, 2008, and any subsequent

refundings of that obligation, issued before December 31, 2018.

Qualified refunding obligations issued under this subparagraph are

not subject to the requirements of section 305(2), (3), (5), and

(6), 501, 503, or 611 of the revised municipal finance act, 2001 PA

34, MCL 141.2305, 141.2501, 141.2503, and 141.2611. The duration of

the development program described in the tax increment financing

plan relating to the qualified refunding obligations issued under

this subparagraph is extended to 1 year after the final date of

maturity of the qualified refunding obligations. Revenues described

in subdivision (cc)(ii) and distributions made under section 213b

in excess of the amount needed for current year debt service on an

obligation issued under this subparagraph may be paid to the

authority to the extent necessary to pay future years' debt service

on the obligation as determined by the board.

(z) "Qualified township" means a township that meets all of

the following requirements:

(i) Was not eligible to create an authority prior to January

3, 2005.

(ii) Adjoins a municipality that previously created an

authority.

(iii) Along with the adjoining municipality that previously

created an authority, is a member of the same joint planning

commission under the joint municipal planning act, 2003 PA 226, MCL

125.131 to 125.143.

(aa) "Specific local tax" means a tax levied under 1974 PA

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

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

act, 1984 PA 385, MCL 207.701 to 207.718, and 1953 PA 189, MCL

211.181 to 211.182. The initial assessed value or current assessed

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

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

millage rate. 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.

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

October 1 of each year.

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

property taxes and specific local taxes attributable to the

application of the levy of all taxing jurisdictions upon the

captured assessed value of real and personal property in the

development area, 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 part.

(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), to repay eligible

advances, eligible obligations, and other protected obligations.

(iii) Tax increment revenues do not include any of the

following:

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

of the captured assessed value shared with taxing jurisdictions

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

value of property that may be excluded from captured assessed value

or specific local taxes attributable to such ad valorem property

taxes.

(B) 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

or specific local taxes attributable to such ad valorem property

taxes.

section 203(3) or specific local taxes attributable to such ad

valorem property taxes.

(D) Ad valorem property taxes levied under 1 or more of the

following or specific local taxes attributable to those ad valorem

property taxes:

(I) The zoological authorities act, 2008 PA 49, MCL 123.1161

to 123.1183.

(II) The art institute authorities act, 2010 PA 296, MCL

123.1201 to 123.1229.

(III) Except as otherwise provided in section 203(3), ad

valorem property taxes or specific local taxes attributable to

those ad valorem property taxes levied for a separate millage for

public library purposes approved by the electors after December 31,

2016.

(iv) The amount of tax increment revenues authorized to be

included under subparagraph (ii) or (v), and required to be

transmitted to the authority under section 214(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, 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) or (v).

(v) Tax increment revenues include ad valorem property taxes

and specific local taxes, in an annual amount and for each year

approved by the state treasurer, attributable to the levy by this

state under the state education tax act, 1993 PA 331, MCL 211.901

to 211.906, and by local or intermediate school districts, upon the

captured assessed value of real and personal property in the

development area of an authority established in a city with a

population of 600,000 or more to pay for, or reimburse an advance

for, not more than $8,000,000.00 for the demolition of buildings or

structures on public or privately owned property within a

development area that commences in 2005, or to pay the annual

principal of or interest on an obligation, the terms of which are

approved by the state treasurer, issued by an authority, or by a

city on behalf of an authority, to pay not more than $8,000,000.00

of the costs to demolish buildings or structures on public or

privately owned property within a development area that commences

in 2005.

(vi) Tax increment revenues include ad valorem property taxes

and specific local taxes attributable to the levy by this state

under the state education tax act, 1993 PA 331, MCL 211.201 to

211.906, and by local or intermediate school districts which were

levied on or after July 1, 2010, upon the captured assessed value

of real and personal property in the development area of an

authority established in a city with a population of 600,000 or

more to pay for, or reimburse an advance for, costs associated with

the land acquisition, preliminary site work, and construction of a

catalyst development project.

Sec. 201a. The legislature finds all of the following:

(a) That there exists in this state conditions of property

value deterioration detrimental to the state economy and the

economic growth of the state and its local units of government.

(b) That government programs are desirable and necessary to

eliminate the causes of property value deterioration thereby

benefiting the economic growth of the state.

programs by means available to the state and local units of

government in the state, including tax increment financing.

(d) That tax increment financing is a government financing

program that contributes to economic growth and development by

dedicating a portion of the increase in the tax base resulting from

economic growth and development to facilities, structures, or

improvements within a development area thereby facilitating

economic growth and development.

(e) That it is necessary for the legislature to exercise its

power to legislate tax increment financing as authorized in this

part and in the exercise of this power to mandate the transfer of

tax increment revenues by city, village, township, school district,

and county treasurers to authorities created under this part in

order to effectuate the legislative government programs to

eliminate property value deterioration and to promote economic

growth.

(f) That halting property value deterioration and promoting

economic growth in the state are essential governmental functions

and constitute essential public purposes.

(g) That economic development strengthens the tax base upon

which local units of government rely and that government programs

to eliminate property value deterioration benefit local units of

government and are for the use of the local units of government.

(h) That the provisions of this part are enacted to provide a

means for local units of government to eliminate property value

deterioration and to promote economic growth in the communities

served by those local units of government.

Sec. 202. (1) Except as otherwise provided in this subsection,

a municipality may establish 1 authority. If, before November 1,

1985, a municipality establishes more than 1 authority, those

authorities may continue to exist as separate authorities. Under

the conditions described in section 203a, a municipality may have

more than 1 authority within that municipality's boundaries. A

parcel of property shall not be included in more than 1 authority

created by this part.

(2) An authority shall be a public body corporate which may

sue and be sued in any court of this state. An authority possesses

all the powers necessary to carry out the purpose of its

incorporation. The enumeration of a power in this part shall not be

construed as a limitation upon the general powers of an authority.

Sec. 203. (1) When the governing body of a municipality

determines that it is necessary for the best interests of the

public to halt property value deterioration and increase property

tax valuation where possible in its business district, to eliminate

the causes of that deterioration, and to promote economic growth,

the governing body may, by resolution, declare its intention to

create and provide for the operation of an authority.

(2) In the resolution of intent, the governing body shall set

a date for the holding of a public hearing on the adoption of a

proposed ordinance creating the authority and designating the

boundaries of the downtown district. Notice of the public hearing

shall be published twice in a newspaper of general circulation in

the municipality, not less than 20 or more than 40 days before the

date of the hearing. Not less than 20 days before the hearing, the

governing body proposing to create the authority shall also mail

notice of the hearing to the property taxpayers of record in the

proposed district and for a public hearing to be held after

February 15, 1994 to the governing body of each taxing jurisdiction

levying taxes that would be subject to capture if the authority is

established and a tax increment financing plan is approved.

Beginning June 1, 2005, the notice of hearing within the time frame

described in this subsection shall be mailed by certified mail to

the governing body of each taxing jurisdiction levying taxes that

would be subject to capture if the authority is established and a

tax increment financing plan is approved. Failure of a property

taxpayer to receive the notice shall not invalidate these

proceedings. Notice of the hearing shall be posted in at least 20

conspicuous and public places in the proposed downtown district not

less than 20 days before the hearing. The notice shall state the

date, time, and place of the hearing, and shall describe the

boundaries of the proposed downtown district. A citizen, taxpayer,

or property owner of the municipality or an official from a taxing

jurisdiction with millage that would be subject to capture has the

right to be heard in regard to the establishment of the authority

and the boundaries of the proposed downtown district. The governing

body of the municipality shall not incorporate land into the

downtown district not included in the description contained in the

notice of public hearing, but it may eliminate described lands from

the downtown district in the final determination of the boundaries.

(3) Not more than 60 days after a public hearing held after

February 15, 1994, the governing body of a taxing jurisdiction

levying ad valorem property taxes that would otherwise be subject

to capture may exempt its taxes from capture by adopting a

resolution to that effect and filing a copy with the clerk of the

municipality proposing to create the authority. The resolution

takes effect when filed with that clerk and remains effective until

a copy of a resolution rescinding that resolution is filed with

that clerk. If a separate millage for public library purposes was

levied before January 1, 2017, and all obligations and other

protected obligations of the authority are paid, then the levy is

exempt from capture under this part, unless the library board or

commission allows all or a portion of its taxes levied to be

included as tax increment revenues and subject to capture under

this part under the terms of a written agreement between the

library board or commission and the authority. The written

agreement shall be filed with the clerk of the municipality.

However, if a separate millage for public library purposes was

levied before January 1, 2017, and the authority alters or amends

the boundaries of a downtown district or extends the duration of

the existing finance plan, then the library board or commission

may, not later than 60 days after a public hearing is held under

this subsection, exempt all or a portion of its taxes from capture

by adopting a resolution to that effect and filing a copy with the

clerk of the municipality that created the authority. For ad

valorem property taxes or specific local taxes attributable to

those ad valorem property taxes levied for a separate millage for

public library purposes approved by the electors after December 31,

2016, a library board or commission may allow all or a portion of

its taxes levied to be included as tax increment revenues and

subject to capture under this part under the terms of a written

agreement between the library board or commission and the

authority. The written agreement shall be filed with the clerk of

the municipality. However, if the library was created under section

1 or 10a of 1877 PA 164, MCL 397.201 and 397.210a, or established

under 1869 LA 233, then any action of the library board or

commission under this subsection shall have the concurrence of the

chief executive officer of the city that created the library to be

effective, and, if the action of the library board or commission

involves any bond issued by this state or a state agency, the

concurrence of the state treasurer.

(4) Not less than 60 days after the public hearing, if the

governing body of the municipality intends to proceed with the

establishment of the authority, it shall adopt, by majority vote of

its members, an ordinance establishing the authority and

designating the boundaries of the downtown district within which

the authority shall exercise its powers. The adoption of the

ordinance is subject to any applicable statutory or charter

provisions in respect to the approval or disapproval by the chief

executive or other officer of the municipality and the adoption of

an ordinance over his or her veto. This ordinance shall be filed

with the secretary of state promptly after its adoption and shall

be published at least once in a newspaper of general circulation in

the municipality.

(5) The governing body of the municipality may alter or amend

the boundaries of the downtown district to include or exclude lands

from the downtown district pursuant to the same requirements for

adopting the ordinance creating the authority.

(6) A municipality that has created an authority may enter

into an agreement with an adjoining municipality that has created

an authority to jointly operate and administer those authorities

under an interlocal agreement under the urban cooperation act of

1967, 1967 (Ex Sess) PA 7, MCL 124.501 to 124.512.

(7) A municipality that has created an authority may enter

into an agreement with a qualified township to operate its

authority in a downtown district in the qualified township under an

interlocal agreement under the urban cooperation act of 1967, 1967

(Ex Sess) PA 7, MCL 124.501 to 124.512. The interlocal agreement

between the municipality and the qualified township shall provide

for, but is not limited to, all of the following:

(a) Size and makeup of the board.

(b) Determination and modification of downtown district,

business district, and development area.

(d) Issuance and repayment of obligations.

(e) Capture of taxes.

(f) Notice, hearing, and exemption of taxes from capture

provisions described in this section.

Sec. 203a. If a downtown district is part of an area annexed

to or consolidated with another municipality, the authority

managing that district shall become an authority of the annexing or

consolidated municipality. Obligations of that authority incurred

under a development or tax increment plan, agreements related to a

development or tax increment plan, and bonds issued under this part

shall remain in effect following the annexation or consolidation.

Sec. 203b. (1) An ordinance enacted by a municipality that has

a population of less than 50,000 establishing an authority,

creating a district, or approving a development plan or tax

increment financing plan, or an amendment to an authority,

district, or plan, and all actions taken under that ordinance,

including the issuance of bonds, are ratified and validated

notwithstanding that notice for the public hearing on the

establishment of the authority, creation of the district, or

approval of the development plan or tax increment financing plan,

or on the amendment, was not published, posted, or mailed at least

20 days before the hearing, if the notice was published or posted

at least 15 days before the hearing or the authority was

established in 1984 by a village that filed the ordinance with the

secretary of state not later than March, 1986. This section applies

only to an ordinance adopted by a municipality before February 1,

1991, and shall include any bonds or amounts to be used by the

authority to pay the principal of and interest on bonds that have

been issued or that are to be issued by the authority, the

incorporating municipality, or a county on behalf of the

incorporating municipality. An authority for which an ordinance or

amendment to the ordinance establishing the authority has been

published before February 1, 1991 is considered for purposes of

section 203(4) to have promptly filed the ordinance or amendment to

the ordinance with the secretary of state if the ordinance or

amendment to the ordinance is filed with the secretary of state

before October 1, 1991. As used in this section, "notice was

published" means publication of the notice occurred at least once.

(2) A development plan and tax increment financing plan

approved by a resolution adopted by the village council of a

village having a population of less than 3,000 before June 15, 1988

rather than by adoption of an ordinance is ratified and validated,

if an amendment to the plans was adopted by the village council in

compliance with sections 18 and 19.

(3) A development plan and tax increment financing plan

approved by a resolution adopted by the village council of a

village having a population of less than 7,000 before June 1, 1998

rather than by adoption of an ordinance is ratified and validated

if an amendment to the plans was adopted by the village council in

compliance with sections 18 and 19.

Sec. 203c. The validity of the proceedings or findings

establishing an authority, or of the procedure, adequacy of notice,

or findings with respect to the approval of a development plan or

tax increment financing plan is conclusive with respect to the

capture of tax increment revenues for an other protected obligation

that is a bond issued after October 1, 1994.

Sec. 203d. An ordinance enacted by a municipality that has a

population of greater than 1,000 and less than 2,000 establishing

an authority, creating a district, or approving a development plan

or tax increment financing plan, or an amendment to an authority,

district, or plan, and all actions taken or to be taken under that

ordinance, including the issuance of bonds, are ratified and

validated notwithstanding that notice for the public hearing on the

establishment of the authority, creation of the district, or

approval of the development plan or tax increment financing plan,

or on the amendment, was not published, posted, or mailed at least

20 days before the hearing, provided that the notice was either

published or posted at least 10 days before the hearing or that the

authority was established in 1990 by a municipality that filed the

ordinance with the secretary of state not later than July 1991.

This section applies only to an ordinance or an amendment adopted

by a municipality before January 1, 1999 and shall include any

bonds or amounts to be used by the authority to pay the principal

of and interest on bonds that have been issued or that are to be

issued by the authority or the incorporating municipality. An

authority for which an ordinance or amendment to the ordinance

establishing the authority has been published before February 1,

1991 is considered for purposes of section 203(3) to have promptly

filed the ordinance or amendment to the ordinance with the

secretary of state if the ordinance or amendment to the ordinance

is filed with the secretary of state before December 31, 2002. The

validity of the proceedings or findings establishing an authority

described in this section, or of the procedure, adequacy of notice,

or findings with respect to the approval of a development plan or

tax increment financing plan for an authority described in this

section is conclusive with respect to the capture of tax increment

revenues for a bond issued after June 1, 2002 and before June 1,

2006. As used in this section, "notice was either published or

posted" means either publication or posting of the notice occurred

at least once.

Sec. 204. (1) Except as provided in subsections (7), (8), and

(9), an authority shall be under the supervision and control of a

board consisting of the chief executive officer of the municipality

and not less than 8 or more than 12 members as determined by the

governing body of the municipality. Members shall be appointed by

the chief executive officer of the municipality, subject to

approval by the governing body of the municipality. Not less than a

majority of the members shall be persons having an interest in

property located in the downtown district or officers, members,

trustees, principals, or employees of a legal entity having an

interest in property located in the downtown district. Not less

than 1 of the members shall be a resident of the downtown district,

if the downtown district has 100 or more persons residing within

it. Of the members first appointed, an equal number of the members,

as near as is practicable, shall be appointed for 1 year, 2 years,

3 years, and 4 years. A member shall hold office until the member's

successor is appointed. Thereafter, each member shall serve for a

term of 4 years. An appointment to fill a vacancy shall be made by

the chief executive officer of the municipality for the unexpired

term only. Members of the board shall serve without compensation,

but shall be reimbursed for actual and necessary expenses. The

chairperson of the board shall be elected by the board. The rules

of procedure or the bylaws of the authority may provide that a

person be appointed to the board in his or her capacity as a public

official, whether appointed or elected. The rules of procedure or

bylaws may also provide that the public official's term shall

expire upon expiration of his or her service as a public official.

In addition, the public official's membership on the board expires

on his or her resignation from office as a public official.

(2) Before assuming the duties of office, a member shall

qualify by taking and subscribing to the constitutional oath of

office.

(3) The business which the board may perform shall be

conducted at a public meeting of the board held in compliance with

the open meetings act, 1976 PA 267, MCL 15.261 to 15.275. Public

notice of the time, date, and place of the meeting shall be given

in the manner required by the open meetings act, 1976 PA 267, MCL

15.261 to 15.275. The board shall adopt rules consistent with the

open meetings act, 1976 PA 267, MCL 15.261 to 15.275, governing its

procedure and the holding of regular meetings, subject to the

approval of the governing body. Special meetings may be held if

called in the manner provided in the rules of the board.

(4) Pursuant to notice and after having been given an

opportunity to be heard, a member of the board may be removed for

cause by the governing body. Removal of a member is subject to

review by the circuit court.

(5) All expense items of the authority shall be publicized

monthly and the financial records shall always be open to the

public.

(6) In addition to the items and records prescribed in

subsection (5), a writing prepared, owned, used, in the possession

of, or retained by the board in the performance of an official

function shall be made available to the public in compliance with

the freedom of information act, 1976 PA 442, MCL 15.231 to 15.246.

(7) By resolution of its governing body, a municipality having

more than 1 authority may establish a single board to govern all

authorities in the municipality. The governing body may designate

the board of an existing authority as the board for all authorities

or may establish by resolution a new board in the same manner as

provided in subsection (1). A member of a board governing more than

1 authority may be a resident of or have an interest in property in

any of the downtown districts controlled by the board in order to

meet the requirements of this section.

(8) By ordinance, the governing body of a municipality that

has a population of less than 5,000 may have the municipality's

planning commission created pursuant to former 1931 PA 285 or the

Michigan planning enabling act, 2008 PA 33, MCL 125.3801 to

125.3885, serve as the board provided for in subsection (1).

(9) If a municipality enters into an agreement with a

qualified township under section 203(7), the membership of the

board may be modified by the interlocal agreement described in

section 203(7).

Sec. 205. (1) The board may employ and fix the compensation of

a director, subject to the approval of the governing body of the

municipality. The director shall serve at the pleasure of the

board. A member of the board is not eligible to hold the position

of director. Before entering upon the duties of his or her office,

the director shall take and subscribe to the constitutional oath,

and furnish bond, by posting a bond in the penal sum determined in

the ordinance establishing the authority payable to the authority

for use and benefit of the authority, approved by the board, and

filed with the municipal clerk. The premium on the bond shall be

deemed an operating expense of the authority, payable from funds

available to the authority for expenses of operation. The director

shall be the chief executive officer of the authority. Subject to

the approval of the board, the director shall supervise, and be

responsible for, the preparation of plans and the performance of

the functions of the authority in the manner authorized by this

part. The director shall attend the meetings of the board, and

shall render to the board and to the governing body of the

municipality a regular report covering the activities and financial

condition of the authority. If the director is absent or disabled,

the board may designate a qualified person as acting director to

perform the duties of the office. Before entering upon the duties

of his or her office, the acting director shall take and subscribe

to the oath, and furnish bond, as required of the director. The

director shall furnish the board with information or reports

governing the operation of the authority as the board requires.

(2) The board may employ and fix the compensation of a

treasurer, who shall keep the financial records of the authority

and who, together with the director, shall approve all vouchers for

the expenditure of funds of the authority. The treasurer shall

perform such other duties as may be delegated to him or her by the

board and shall furnish bond in an amount as prescribed by the

board.

(3) The board may employ and fix the compensation of a

secretary, who shall maintain custody of the official seal and of

records, books, documents, or other papers not required to be

maintained by the treasurer. The secretary shall attend meetings of

the board and keep a record of its proceedings, and shall perform

such other duties delegated by the board.

(4) The board may retain legal counsel to advise the board in

the proper performance of its duties. The legal counsel shall

represent the authority in actions brought by or against the

authority.

(5) The board may employ other personnel deemed necessary by

the board.

Sec. 206. The employees of an authority shall be eligible to

participate in municipal retirement and insurance programs of the

municipality as if they were civil service employees except that

the employees of an authority are not civil service employees.

Sec. 207. (1) The board may:

(a) Prepare an analysis of economic changes taking place in

the downtown district.

(b) Study and analyze the impact of metropolitan growth upon

the downtown district.

remodeling, rehabilitation, restoration, preservation, or

reconstruction of a public facility, an existing building, or a

multiple-family dwelling unit which may be necessary or appropriate

to the execution of a plan which, in the opinion of the board, aids

in the economic growth of the downtown district.

(d) Plan, propose, and implement an improvement to a public

facility within the development area 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.

(e) Develop long-range plans, in cooperation with the agency

which is chiefly responsible for planning in the municipality,

designed to halt the deterioration of property values in the

downtown district and to promote the economic growth of the

downtown district, and take such steps as may be necessary to

persuade property owners to implement the plans to the fullest

extent possible.

(f) Implement any plan of development in the downtown district

necessary to achieve the purposes of this part, in accordance with

the powers of the authority as granted by this part.

(g) Make and enter into contracts necessary or incidental to

the exercise of its powers and the performance of its duties.

(h) Acquire by purchase or otherwise, on terms and conditions

and in a manner the authority considers proper or own, convey, or

otherwise dispose of, or lease as lessor or lessee, land and other

property, real or personal, or rights or interests in property,

which the authority determines is reasonably necessary to achieve

the purposes of this part, and to grant or acquire licenses,

easements, and options with respect to that property.

(i) Improve land and construct, reconstruct, rehabilitate,

restore and preserve, equip, improve, maintain, repair, and operate

any building, including multiple-family dwellings, and any

necessary or desirable appurtenances to that property, within the

downtown district for the use, in whole or in part, of any public

or private person or corporation, or a combination of them.

(j) Fix, charge, and collect fees, rents, and charges for the

use of any building or property under its control or any part

thereof, or facility therein, and pledge the fees, rents, and

charges for the payment of revenue bonds issued by the authority.

(k) Lease any building or property under its control, or any

part of a building or property.

(l) Accept grants and donations of property, labor, or other

things of value from a public or private source.

(m) Acquire and construct public facilities.

(n) Create, operate, and fund marketing initiatives that

benefit only retail and general marketing of the downtown district.

(o) Contract for broadband service and wireless technology

service in the downtown district.

(p) Operate and perform all duties and exercise all

responsibilities described in this section in a qualified township

if the qualified township has entered into an agreement with the

municipality under section 203(7).

(q) Create, operate, and fund a loan program to fund

improvements for existing buildings located in a downtown district

to make them marketable for sale or lease. The board may make loans

with interest at a market rate or may make loans with interest at a

below market rate, as determined by the board.

(r) Create, operate, and fund retail business incubators in

the downtown district.

(2) If it is the express determination of the board to create,

operate, or fund a retail business incubator in the downtown

district, the board shall give preference to tenants who will

provide goods or services that are not available or that are

underserved in the downtown area. If the board creates, operates,

or funds retail business incubators in the downtown district, the

board and each tenant who leases space in a retail business

incubator shall enter into a written contract that includes, but is

not limited to, all of the following:

(a) The lease or rental rate that may be below the fair market

rate as determined by the board.

(b) The requirement that a tenant may lease space in the

retail business incubator for a period not to exceed 18 months.

businesses located in the downtown district.

(d) A copy of the business plan of the tenant that contains

measurable goals and objectives.

(e) The requirement that the tenant participate in basic

management classes, business seminars, or other business education

programs offered by the authority, the local chamber of commerce,

local community colleges, or institutions of higher education, as

determined by the board.

Sec. 208. If a board created under this part serves as the

planning commission under the Michigan planning enabling act, 2008

PA 33, MCL 125.3801 to 125.3885, the board shall include planning

commission business in its agenda.

Sec. 209. The authority shall be deemed an instrumentality of

a political subdivision for purposes of 1972 PA 227, MCL 213.321 to

213.332.

Sec. 210. A municipality may take private property under 1911

PA 149, MCL 213.21 to 213.25, for the purpose of transfer to the

authority, and may transfer the property to the authority for use

in an approved development, on terms and conditions it deems

appropriate, and the taking, transfer, and use shall be considered

necessary for public purposes and for the benefit of the public.

Sec. 211. (1) The activities of the authority shall be

financed from 1 or more of the following sources:

(a) Donations to the authority for the performance of its

functions.

(b) Proceeds of a tax imposed pursuant to section 212.

213 and 213a.

(d) Revenues from any property, building, or facility owned,

leased, licensed, or operated by the authority or under its

control, subject to the limitations imposed upon the authority by

trusts or other agreements.

(e) Proceeds of a tax increment financing plan, established

under sections 214 to 216.

(f) Proceeds from a special assessment district created as

provided by law.

(g) Money obtained from other sources approved by the

governing body of the municipality or otherwise authorized by law

for use by the authority or the municipality to finance a

development program.

(h) Money obtained pursuant to section 213b.

(i) Revenue transferred pursuant to section 11a of chapter 2

of the city income tax act, 1964 PA 284, MCL 141.611a.

(j) Revenue transferred pursuant to section 11b of chapter 2

of the city income tax act, 1964 PA 284, MCL 141.611b.

(2) Money received by the authority and not covered under

subsection (1) shall immediately be deposited to the credit of the

authority, subject to disbursement pursuant to this part. Except as

provided in this part, the municipality shall not obligate itself,

nor shall it ever be obligated to pay any sums from public funds,

other than money received by the municipality pursuant to this

section, for or on account of the activities of the authority.

Sec. 212. (1) An authority with the approval of the municipal

governing body may levy an ad valorem tax on the real and tangible

personal property not exempt by law and as finally equalized in the

downtown district. The tax shall not be more than 1 mill if the

downtown district is in a municipality having a population of

1,000,000 or more, or not more than 2 mills if the downtown

district is in a municipality having a population of less than

1,000,000. The tax shall be collected by the municipality creating

the authority levying the tax. The municipality shall collect the

tax at the same time and in the same manner as it collects its

other ad valorem taxes. The tax shall be paid to the treasurer of

the authority and credited to the general fund of the authority for

purposes of the authority.

(2) The municipality may at the request of the authority

borrow money and issue its notes under the revised municipal

finance act, 2001 PA 34, MCL 141.2101 to 141.2821, in anticipation

of collection of the ad valorem tax authorized in this section.

Sec. 213. The authority may borrow money and issue its

negotiable revenue bonds under the revenue bond act of 1933, 1933

PA 94, MCL 141.101 to 141.140. Revenue bonds issued by the

authority shall not except as hereinafter provided be deemed a debt

of the municipality or the state. The municipality by majority vote

of the members of its governing body may pledge its full faith and

credit to support the authority's revenue bonds.

Sec. 213a. (1) The authority may with approval of the local

governing body borrow money and issue its revenue bonds or notes to

finance all or part of the costs of acquiring or constructing

property in connection with the implementation of a development

plan in the downtown district or to refund or refund in advance

bonds or notes issued pursuant to this section. The costs which may

be financed by the issuance of revenue bonds or notes may include

the cost of purchasing, acquiring, constructing, improving,

enlarging, extending, or repairing property in connection with the

implementation of a development plan in the downtown district; any

engineering, architectural, legal, accounting, or financial

expenses; the costs necessary or incidental to the borrowing of

money; interest on the bonds or notes during the period of

construction; a reserve for payment of principal and interest on

the bonds or notes; and a reserve for operation and maintenance

until sufficient revenues have developed. The authority may secure

the bonds and notes by mortgage, assignment, or pledge of the

property and any money, revenues, or income received in connection

therewith.

(2) A pledge made by the authority shall be valid and binding

from the time the pledge is made. The money or property pledged by

the authority immediately shall be subject to the lien of the

pledge without a physical delivery, filing, or further act. The

lien of such a pledge shall be valid and binding as against parties

having claims of any kind in tort, contract, or otherwise, against

the authority, irrespective of whether the parties have notice of

the lien. Neither the resolution, the trust agreement, nor any

other instrument by which a pledge is created need be filed or

recorded.

(3) Bonds or notes issued pursuant to this section shall be

exempt from all taxation in this state except inheritance and

transfer taxes, and the interest on the bonds or notes shall be

exempt from all taxation in this state, notwithstanding that the

interest may be subject to federal income tax.

(4) The municipality shall not be liable on bonds or notes of

the authority issued pursuant to this section and the bonds or

notes shall not be a debt of the municipality. The bonds or notes

shall contain on their face a statement to that effect.

(5) The bonds and notes of the authority may be invested in by

all public officers, state agencies and political subdivisions,

insurance companies, banks, savings and loan associations,

investment companies, and fiduciaries and trustees, and may be

deposited with and received by all public officers and the agencies

and political subdivisions of this state for any purpose for which

the deposit of bonds is authorized.

Sec. 213b. (1) If the amount of tax increment revenues lost as

a result of the reduction of taxes levied by local school districts

for school operating purposes required by the millage limitations

under section 1211 of the school code of 1976, 1976 PA 451, MCL

380.1211, reduced by the amount of tax increment revenues received

from the capture of taxes levied under or attributable to the state

education tax act, 1993 PA 331, MCL 211.901 to 211.906, will cause

the tax increment revenues received in a fiscal year by an

authority under section 215 to be insufficient to repay an eligible

advance or to pay an eligible obligation, the legislature shall

appropriate and distribute to the authority the amount described in

subsection (5).

(2) Not less than 30 days before the first day of a fiscal

year, an authority eligible to retain tax increment revenues from

taxes levied by a local or intermediate school district or this

state or to receive a distribution under this section for that

fiscal year shall file a claim with the department of treasury. The

claim shall include the following information:

(a) The property tax millage rates levied in 1993 by local

school districts within the jurisdictional area of the authority

for school operating purposes.

(b) The property tax millage rates expected to be levied by

local school districts within the jurisdictional area of the

authority for school operating purposes for that fiscal year.

authority for that fiscal year based upon actual property tax

levies of all taxing jurisdictions within the jurisdictional area

of the authority.

(d) The tax increment revenues the authority estimates it

would have received for that fiscal year if property taxes were

levied by local school districts within the jurisdictional area of

the authority for school operating purposes at the millage rates

described in subdivision (a) and if no property taxes were levied

by this state under the state education tax act, 1993 PA 331, MCL

211.901 to 211.906.

(e) A list and documentation of eligible obligations and

eligible advances and the payments due on each of those eligible

obligations or eligible advances in that fiscal year, and the total

amount of all the payments due on those eligible obligations and

eligible advances in that fiscal year.

(f) The amount of money, other than tax increment revenues,

estimated to be received in that fiscal year by the authority that

is primarily pledged to, and to be used for, the payment of an

eligible obligation or the repayment of an eligible advance. That

amount shall not include excess tax increment revenues of the

authority that are permitted by law to be retained by the authority

for purposes that further the development program. However, that

amount shall include money to be obtained from sources authorized

by law, which law is enacted on or after December 1, 1993, for use

by the municipality or authority to finance a development project.

(g) The amount of a distribution received pursuant to this

part for a fiscal year in excess of or less than the distribution

that would have been required if calculated upon actual tax

increment revenues received for that fiscal year.

(h) A list and documentation of other protected obligations

and the payments due on each of those other protected obligations

in that fiscal year, and the total amount of all the payments due

on those other protected obligations in that fiscal year.

(3) For the fiscal year that commences after September 30,

1993 and before October 1, 1994, an authority may make a claim with

all information required by subsection (2) at any time after March

15, 1994.

(4) After review and verification of claims submitted pursuant

to this section, amounts appropriated by the state in compliance

with this part shall be distributed as 2 equal payments on March 1

and September 1 after receipt of a claim. An authority shall

allocate a distribution it receives for an eligible obligation

issued on behalf of a municipality to the municipality.

(5) Subject to subsections (6) and (7), the aggregate amount

to be appropriated and distributed pursuant to this section to an

authority shall be the sum of the amounts determined pursuant to

subdivisions (a) and (b) minus the amount determined pursuant to

subdivision (c), as follows:

(a) The amount by which the tax increment revenues the

authority would have received for the fiscal year, excluding taxes

exempt under section 7ff of the general property tax act, 1893 PA

206, MCL 211.7ff, if property taxes were levied by local school

districts for school operating purposes at the millage rates

described in subsection (2)(a) and if no property taxes were levied

under the state education tax act, 1993 PA 331, MCL 211.901 to

211.906, exceed the tax increment revenues the authority actually

received for the fiscal year.

(b) A shortfall required to be reported pursuant to subsection

(2)(g) that had not previously increased a distribution.

subsection (2)(g) that had not previously decreased a distribution.

(6) The amount distributed under subsection (5) shall not

exceed the difference between the amount described in subsection

(2)(e) and the sum of the amounts described in subsection (2)(c)

and (f).

(7) If, based upon the tax increment financing plan in effect

on August 19, 1993, the payment due on eligible obligations or

eligible advances anticipates the use of excess prior year tax

increment revenues permitted by law to be retained by the

authority, and if the sum of the amounts described in subsection

(2)(c) and (f) plus the amount to be distributed under subsections

(5) and (6) is less than the amount described in subsection (2)(e),

the amount to be distributed under subsections (5) and (6) shall be

increased by the amount of the shortfall. However, the amount

authorized to be distributed pursuant to this section shall not

exceed that portion of the cumulative difference, for each

preceding fiscal year, between the amount that could have been

distributed pursuant to subsection (5) and the amount actually

distributed pursuant to subsections (5) and (6) and this

subsection.

(8) A distribution under this section replacing tax increment

revenues pledged by an authority or a municipality is subject to

the lien of the pledge, whether or not there has been physical

delivery of the distribution.

(9) Obligations for which distributions are made pursuant to

this section are not a debt or liability of this state; do not

create or constitute an indebtedness, liability, or obligation of

this state; and are not and do not constitute a pledge of the faith

and credit of this state.

(10) Not later than July 1 of each year, the authority shall

certify to the local tax collecting treasurer the amount of the

distribution required under subsection (5), calculated without

regard to the receipt of tax increment revenues attributable to

local or intermediate school district taxes or attributable to

taxes levied under the state education tax act, 1993 PA 331, MCL

211.901 to 211.906.

(11) Calculations of distributions under this section and

claims reports required to be made under subsection (2) shall be

made on the basis of each development area of the authority.

(12) The state tax commission may provide that the

reimbursement calculations under this section and the calculation

of allowable capture of school taxes shall be made for each

calendar year's tax increment revenues using a 12-month debt

payment period used by the authority and approved by the state tax

commission.

Sec. 213c. (1) If the amount of tax increment revenues lost as

a result of the personal property tax exemptions provided by

section 1211(4) of the revised school code, 1976 PA 451, MCL

380.1211, section 3 of the state education tax act, 1993 PA 331,

MCL 211.903, section 14(4) of 1974 PA 198, MCL 207.564, and section

9k of the general property tax act, 1893 PA 206, MCL 211.9k, will

reduce the allowable school tax capture received in a fiscal year,

then, notwithstanding any other provision of this part, the

authority, with approval of the department of treasury under

subsection (3), may request the local tax collecting treasurer to

retain and pay to the authority taxes levied under the state

education tax act, 1993 PA 331, MCL 211.901 to 211.906, to be used

for the following:

(a) To repay an eligible advance.

(b) To repay an eligible obligation.

(2) Not later than June 15, 2008, not later than September 30,

2009, and not later than June 1 of each subsequent year, except for

2011, not later than June 15, an authority eligible under

subsection (1) to have taxes levied under the state education tax

act, 1993 PA 331, MCL 211.901 to 211.906, retained and paid to the

authority under this section, shall apply for approval with the

department of treasury. The application for approval shall include

the following information:

(a) The property tax millage rates expected to be levied by

local school districts within the jurisdictional area of the

authority for school operating purposes for that fiscal year.

(b) The tax increment revenues estimated to be received by the

authority for that fiscal year based upon actual property tax

levies of all taxing jurisdictions within the jurisdictional area

of the authority.

would have received for that fiscal year if the personal property

tax exemptions described in subsection (1) were not in effect.

(d) A list of eligible obligations, eligible advances, and

other protected obligations, the payments due on each of those in

that fiscal year, and the total amount of all the payments due on

all of those in that fiscal year.

(e) The amount of money, other than tax increment revenues,

estimated to be received in that fiscal year by the authority that

is primarily pledged to, and to be used for, the payment of an

eligible obligation, the repayment of an eligible advance, or the

payment of an other protected obligation. That amount shall not

include excess tax increment revenues of the authority that are

permitted by law to be retained by the authority for purposes that

further the development program. However, that amount shall include

money to be obtained from sources authorized by law, which law is

enacted on or after December 1, 1993, for use by the municipality

or authority to finance a development plan.

(f) The amount of a distribution received pursuant to this

part for a fiscal year in excess of or less than the distribution

that would have been required if calculated upon actual tax

increment revenues received for that fiscal year.

(3) Not later than August 15, 2008; for 2009, not later than

February 3, 2010; for 2011 only, not later than 30 days after the

effective date of the amendatory act that amended this sentence;

and not later than August 15 for 2010, 2012, and each subsequent

year, based on the calculations under subsection (5), the

department of treasury shall approve, modify, or deny the

application for approval to have taxes levied under the state

education tax act, 1993 PA 331, MCL 211.901 to 211.906, retained

and paid to the authority under this section. If the application

for approval contains the information required under subsection

(2)(a) through (f) and appears to be in substantial compliance with

the provisions of this section, then the department of treasury

shall approve the application. If the application is denied by the

department of treasury, then the department of treasury shall

provide the opportunity for a representative of the authority to

discuss the denial within 21 days after the denial occurs and shall

sustain or modify its decision within 30 days after receiving

information from the authority. If the application for approval is

approved or modified by the department of treasury, the local tax

collecting treasurer shall retain and pay to the authority the

amount described in subsection (5) as approved by the department.

If the department of treasury denies the authority's application

for approval, the local tax collecting treasurer shall not retain

or pay to the authority the taxes levied under the state education

tax act, 1993 PA 331, MCL 211.901 to 211.906. An approval by the

department does not prohibit a subsequent audit of taxes retained

in accordance with the procedures currently authorized by law.

(4) Each year the legislature shall appropriate and distribute

an amount sufficient to pay each authority the following:

(a) If the amount to be retained and paid under subsection (3)

is less than the amount calculated under subsection (5), the

difference between those amounts.

(b) If the application for approval is denied by the

department of treasury, an amount verified by the department equal

to the amount calculated under subsection (5).

(5) Subject to subsection (6), the aggregate amount under this

section shall be the sum of the amounts determined under

subdivisions (a) and (b) minus the amount determined under

subdivision (c), as follows:

(a) The amount by which the tax increment revenues the

authority would have received and retained for the fiscal year,

excluding taxes exempt under section 7ff of the general property

tax act, 1893 PA 206, MCL 211.7ff, if the personal property tax

exemptions described in subsection (1) were not in effect, exceed

the tax increment revenues the authority actually received for the

fiscal year.

(b) A shortfall required to be reported under subsection

(2)(f) that had not previously increased a distribution.

(2)(f) that had not previously decreased a distribution.

(6) A distribution or taxes retained under this section

replacing tax increment revenues pledged by an authority or a

municipality are subject to any lien of the pledge described in

subsection (1), whether or not there has been physical delivery of

the distribution.

(7) Obligations for which distributions are made under this

section are not a debt or liability of this state; do not create or

constitute an indebtedness, liability, or obligation of this state;

and are not and do not constitute a pledge of the faith and credit

of this state.

(8) Not later than September 15 of each year, the authority

shall provide a copy of the application for approval approved by

the department of treasury to the local tax collecting treasurer

and provide the amount of the taxes retained and paid to the

authority under subsection (5).

(9) Calculations of amounts retained and paid and

appropriations to be distributed under this section shall be made

on the basis of each development area of the authority.

(10) The state tax commission may provide that the

reimbursement calculations under this section and the calculation

of allowable capture of school taxes shall be made for each

calendar year's tax increment revenues using a 12-month debt

payment period used by the authority and approved by the state tax

commission.

(11) It is the intent of the legislature that, to the extent

that the total amount of taxes levied under the state education tax

act, 1993 PA 331, MCL 211.901 to 211.906, that are allowed to be

retained under this section and section 411b, section 15a of the

brownfield redevelopment financing act, 1996 PA 381, MCL 125.2665a,

and section 312b, exceeds the difference of the total school aid

fund revenue for the tax year minus the estimated amount of revenue

the school aid fund would have received for the tax year had the

tax exemptions described in subsection (1) and the earmark created

by section 515 of the Michigan business tax act, 2007 PA 36, MCL

208.1515, not taken effect, the general fund shall reimburse the

school aid fund the difference.

Sec. 214. (1) When the authority determines that it is

necessary for the achievement of the purposes of this part, the

authority shall prepare and submit a tax increment financing plan

to the governing body of the municipality. The plan shall include a

development plan as provided in section 217, a detailed explanation

of the tax increment procedure, the maximum amount of bonded

indebtedness to be incurred, and the duration of the program, and

shall be in compliance with section 215. The plan shall contain a

statement of the estimated impact of tax increment financing on the

assessed values of all taxing jurisdictions in which the

development area is located. The plan may provide for the use of

part or all of the captured assessed value, but the portion

intended to be used by the authority shall be clearly stated in the

tax increment financing plan. The authority or municipality may

exclude from captured assessed value growth in property value

resulting solely from inflation. The plan shall set forth the

method for excluding growth in property value resulting solely from

inflation.

(2) The percentage of taxes levied for school operating

purposes that is captured and used by the tax increment financing

plan shall not be greater than the plan's percentage capture and

use of taxes levied by a municipality or county for operating

purposes. 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. For purposes of this

subsection, tax increment revenues used to pay bonds issued by a

municipality under section 216(1) shall be considered to be used by

the tax increment financing plan rather than shared with the

municipality. The limitation of this subsection does not apply to

the portion of the captured assessed value shared pursuant to an

agreement entered into before 1989 with a county or with a city in

which an enterprise zone is approved under section 13 of the

enterprise zone act, 1985 PA 224, MCL 125.2113.

(3) Approval of the tax increment financing plan shall be

pursuant to the notice, hearing, and disclosure provisions of

section 218. 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.

(4) 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 meet

with the governing body. The authority shall fully inform the

taxing jurisdictions of the fiscal and economic implications of the

proposed development area. 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 development area is located to share a portion of the

captured assessed value of the district.

(5) A tax increment financing plan may be modified if the

modification is approved by the governing body upon notice and

after public hearings and agreements as are required for approval

of the original plan.

(6) Under a tax increment financing plan that includes a

catalyst development project, an authority may pledge available tax

increment revenues of the authority as security for any bonds

issued to develop and construct a catalyst development project.

Sec. 215. (1) The municipal and county treasurers shall

transmit to the authority tax increment revenues.

(2) The authority shall expend the tax increment revenues

received for the development program only pursuant to the tax

increment financing plan. Surplus funds shall revert

proportionately to the respective taxing bodies. These revenues

shall not be used to circumvent existing property tax limitations.

The governing body of the municipality may abolish the tax

increment financing plan when it finds that the purposes for which

it was established are accomplished. However, the tax increment

financing plan shall not be abolished, allowed to expire, or

otherwise terminate until the principal of, and interest on, bonds

issued pursuant to section 216 have been paid or funds sufficient

to make the payment have been segregated.

Sec. 216. (1) The municipality may by resolution of its

governing body authorize, issue, and sell general obligation bonds

subject to the limitations set forth in this subsection to finance

the development program of the tax increment financing plan and

shall pledge its full faith and credit for the payment of the

bonds. The municipality may pledge as additional security for the

bonds any money received by the authority or the municipality

pursuant to section 211. The bonds are subject to the revised

municipal finance act, 2001 PA 34, MCL 141.2101 to 141.2821. Before

the municipality may authorize the borrowing, the authority shall

submit an estimate of the anticipated tax increment revenues and

other revenue available under section 211 to be available for

payment of principal and interest on the bonds, to the governing

body of the municipality. This estimate shall be approved by the

governing body of the municipality by resolution adopted by

majority vote of the members of the governing body in the

resolution authorizing the bonds. If the governing body of the

municipality adopts the resolution authorizing the bonds, the

estimate of the anticipated tax increment revenues and other

revenue available under section 211 to be available for payment of

principal and interest on the bonds shall be conclusive for

purposes of this section. The bonds issued under this subsection

shall be considered a single series for the purposes of the revised

municipal finance act, 2001 PA 34, MCL 141.2101 to 141.2801.

(2) By resolution of its governing body, the authority may

authorize, issue, and sell tax increment bonds subject to the

limitations set forth in this subsection to finance the development

program of the tax increment financing plan. The tax increment

bonds issued by the authority under this subsection shall pledge

solely the tax increment revenues of a development area in which

the project is located or a development area from which tax

increment revenues may be used for this project, or both. In

addition or in the alternative, the bonds issued by the authority

pursuant to this subsection may be secured by any other revenues

identified in section 211 as sources of financing for activities of

the authority that the authority shall specifically pledge in the

resolution. However, the full faith and credit of the municipality

shall not be pledged to secure bonds issued pursuant to this

subsection. The bond issue may include a sum sufficient to pay

interest on the tax increment bonds until full development of tax

increment revenues from the project and also a sum to provide a

reasonable reserve for payment of principal and interest on the

bonds. The resolution authorizing the bonds shall create a lien on

the tax increment revenues and other revenues pledged by the

resolution that shall be a statutory lien and shall be a first lien

subject only to liens previously created. The resolution may

provide the terms upon which additional bonds may be issued of

equal standing and parity of lien as to the tax increment revenues

and other revenues pledged under the resolution. Bonds issued under

this subsection that pledge revenue received under section 211 for

repayment of the bonds are subject to the revised municipal finance

act, 2001 PA 34, MCL 141.2101 to 141.2821.

(3) Notwithstanding any other provision of this part, if the

state treasurer determines that an authority or municipality can

issue a qualified refunding obligation and the authority or

municipality does not make a good-faith effort to issue the

qualified refunding obligation as determined by the state

treasurer, the state treasurer may reduce the amount claimed by the

authority or municipality under section 213b by an amount equal to

the net present value saving that would have been realized had the

authority or municipality refunded the obligation or the state

treasurer may require a reduction in the capture of tax increment

revenues from taxes levied by a local or intermediate school

district or this state by an amount equal to the net present value

savings that would have been realized had the authority or

municipality refunded the obligation. This subsection does not

authorize the state treasurer to require the authority or

municipality to pledge security greater than the security pledged

for the obligation being refunded.

Sec. 217. (1) When a board decides to finance a project in the

downtown district by the use of revenue bonds as authorized in

section 213 or tax increment financing as authorized in sections

214, 215, and 216, it shall prepare a development plan.

(2) The development plan shall contain all of the following:

(a) The designation of boundaries of the development area in

relation to highways, streets, streams, or otherwise.

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

public facilities within the development area, shall designate the

location, character, and extent of the categories of public and

private land uses then existing and proposed for the development

area, including residential, recreational, commercial, industrial,

educational, and other uses, and shall include a legal description

of the development area.

area to be demolished, repaired, or altered, a description of any

repairs and alterations, and an estimate of the time required for

completion.

(d) The location, extent, character, and estimated cost of the

improvements including rehabilitation contemplated for the

development area and an estimate of the time required for

completion.

(e) A statement of the construction or stages of construction

planned, and the estimated time of completion of each stage.

(f) A description of any parts of the development area to be

left as open space and the use contemplated for the space.

(g) A description of any portions of the development area that

the authority desires to sell, donate, exchange, or lease to or

from the municipality and the proposed terms.

(h) A description of desired zoning changes and changes in

streets, street levels, intersections, or utilities.

(i) An estimate of the cost of the development, a statement of

the proposed method of financing the development, and the ability

of the authority to arrange the financing.

(j) Designation of the person or persons, natural or

corporate, to whom all or a portion of the development is to be

leased, sold, or conveyed in any manner and for whose benefit the

project is being undertaken if that information is available to the

authority.

(k) The procedures for bidding for the leasing, purchasing, or

conveying in any manner of all or a portion of the development upon

its completion, if there is no express or implied agreement between

the authority and persons, natural or corporate, that all or a

portion of the development will be leased, sold, or conveyed in any

manner to those persons.

(l) Estimates of the number of persons residing in the

development area and the number of families and individuals to be

displaced. If occupied residences are designated for acquisition

and clearance by the authority, a development plan shall include a

survey of the families and individuals to be displaced, including

their income and racial composition, a statistical description of

the housing supply in the community, including the number of

private and public units in existence or under construction, the

condition of those units in existence, the number of owner-occupied

and renter-occupied units, the annual rate of turnover of the

various types of housing and the range of rents and sale prices, an

estimate of the total demand for housing in the community, and the

estimated capacity of private and public housing available to

displaced families and individuals.

(m) A plan for establishing priority for the relocation of

persons displaced by the development in any new housing in the

development area.

(n) Provision for the costs of relocating persons displaced by

the development and financial assistance and reimbursement of

expenses, including litigation expenses and expenses incident to

the transfer of title, in accordance with the standards and

provisions of the federal uniform relocation assistance and real

property acquisition policies act of 1970, Public Law 91-646, 42

USC 4601.

(o) A plan for compliance with 1972 PA 227, MCL 213.321 to

213.332.

(p) Other material that the authority, local public agency, or

governing body considers pertinent.

Sec. 218. (1) The governing body, before adoption of an

ordinance approving or amending a development plan or approving or

amending a tax increment financing plan, shall hold a public

hearing on the development plan. Notice of the time and place of

the hearing shall be given by publication twice in a newspaper of

general circulation designated by the municipality, the first of

which shall be not less than 20 days before the date set for the

hearing. Notice of the hearing shall be posted in at least 20

conspicuous and public places in the downtown district not less

than 20 days before the hearing. Notice shall also be mailed to all

property taxpayers of record in the downtown district not less than

20 days before the hearing. Beginning June 1, 2005, the notice of

hearing within the time frame described in this subsection shall be

mailed by certified mail to the governing body of each taxing

jurisdiction levying taxes that would be subject to capture if the

development plan or the tax increment financing plan is approved or

amended.

(2) Notice of the time and place of hearing on a development

plan shall contain: a description of the proposed development area

in relation to highways, streets, streams, or otherwise; a

statement that maps, plats, and a description of the development

plan, including the method of relocating families and individuals

who may be displaced from the area, are available for public

inspection at a place designated in the notice, and that all

aspects of the development plan will be open for discussion at the

public hearing; and other information that the governing body

considers appropriate. At the time set for hearing, the governing

body shall provide an opportunity for interested persons to be

heard and shall receive and consider communications in writing with

reference to the development plan. The hearing shall provide the

fullest opportunity for expression of opinion, for argument on the

merits, and for introduction of documentary evidence pertinent to

the development plan. The governing body shall make and preserve a

record of the public hearing, including all data presented thereat.

Sec. 219. (1) The governing body after a public hearing on the

development plan or the tax increment financing plan, or both, with

notice of the hearing given in accordance with section 218, shall

determine whether the development plan or tax increment financing

plan constitutes a public purpose. If it determines that the

development plan or tax increment financing plan constitutes a

public purpose, it shall then approve or reject the plan, or

approve it with modification, by ordinance based on the following

considerations:

(a) The findings and recommendations of a development area

citizens council, if a development area citizens council was

formed.

(b) The plan meets the requirements set forth in section

217(2).

feasible and the authority has the ability to arrange the

financing.

(d) The development is reasonable and necessary to carry out

the purposes of this part.

(e) The land included within the development area to be

acquired is reasonably necessary to carry out the purposes of the

plan and of this part in an efficient and economically satisfactory

manner.

(f) The development plan is in reasonable accord with the

master plan of the municipality.

(g) Public services, such as fire and police protection and

utilities, are or will be adequate to service the project area.

(h) Changes in zoning, streets, street levels, intersections,

and utilities are reasonably necessary for the project and for the

municipality.

(2) Amendments to an approved development plan or tax

increment plan must be submitted by the authority to the governing

body for approval or rejection.

(3) Proposed amendments made to an approved development plan

to incorporate a catalyst development project plan shall be

submitted by the authority to the Michigan strategic fund for

approval or rejection of that part of the plan relating to the

catalyst development project. Amendments not approved or rejected

under this subsection by the Michigan strategic fund within 45 days

of submission for approval shall be considered approved.

Sec. 220. A person to be relocated under this part shall be

given not less than 90 days' written notice to vacate unless

modified by court order for good cause.

Sec. 221. (1) If a proposed development area has residing

within it 100 or more residents, a development area citizens

council shall be established at least 90 days before the public

hearing on the development or tax increment financing plan. The

development area citizens council shall be established by the

governing body and shall consist of not less than 9 members. The

members of the development area citizens council shall be residents

of the development area and shall be appointed by the governing

body. A member of a development area citizens council shall be at

least 18 years of age.

(2) A development area citizens council shall be

representative of the development area.

Sec. 222. A development area citizens council established

pursuant to this part shall act an advisory body to the authority

and the governing body in the adoption of the development or tax

increment financing plans.

Sec. 223. Periodically a representative of the authority

responsible for preparation of a development or tax increment

financing plan within the development area shall consult with and

advise the development area citizens council regarding the aspects

of a development plan, including the development of new housing for

relocation purposes located either inside or outside of the

development area. The consultation shall begin before any final

decisions by the authority and the governing body regarding a

development or tax increment financing plan. The consultation shall

continue throughout the preparation and implementation of the

development or tax increment financing plan.

Sec. 224. (1) Meetings of the development area citizens

council shall be open to the public. Notice of the time and place

of the meetings shall be given by publication in a newspaper of

general circulation not less than 5 days before the dates set for

meetings of the development area citizens council. A person present

at those meetings shall have reasonable opportunity to be heard.

(2) A record of the meetings of a development area citizens

council, including information and data presented, shall be

maintained by the council.

(3) A development area citizens council may request of and

receive from the authority information and technical assistance

relevant to the preparation of the development plan for the

development area.

(4) Failure of a development area citizens council to organize

or to consult with and be advised by the authority, or failure to

advise the governing body, as provided in this part, shall not

preclude the adoption of a development plan by a municipality if

the municipality complies with the other provisions of this part.

Sec. 225. In a development area where a citizens district

council established according to 1945 PA 344, MCL 125.71 to 125.84,

already exists the governing body may designate it as the

development area citizens council authorized by this part.

Sec. 226. Within 20 days after the public hearing on a

development or tax increment financing plan, the development area

citizens council shall notify the governing body, in writing, of

its findings and recommendations concerning a proposed development

plan.

Sec. 227. A development area citizens council may not be

required and, if formed, may be dissolved in any of the following

situations:

(a) On petition of not less than 20% of the adult resident

population of the development area by the last federal decennial or

municipal census, a governing body, after public hearing with

notice thereof given in accordance with section 218 and by a 2/3

vote, may adopt an ordinance for the development area to eliminate

the necessity of a development area citizens council.

(b) When there are less than 18 residents, real property

owners, or representatives of establishments located in the

development area eligible to serve on the development area citizens

council.

governing body.

Sec. 228. (1) The director of the authority shall prepare and

submit for the approval of the board a budget for the operation of

the authority for the ensuing fiscal year. The budget shall be

prepared in the manner and contain the information required of

municipal departments. Before the budget may be adopted by the

board, it shall be approved by the governing body of the

municipality. Funds of the municipality shall not be included in

the budget of the authority except those funds authorized in this

part or by the governing body of the municipality.

(2) The governing body of the municipality may assess a

reasonable pro rata share of the funds for the cost of handling and

auditing the funds against the funds of the authority, other than

those committed, which cost shall be paid annually by the board

pursuant to an appropriate item in its budget.

Sec. 228a. Beginning January 1, 2010, the authority shall be

exempt from all taxation on its earnings or property. Instruments

of conveyance from an authority are exempt from transfer taxes

under 1966 PA 134, MCL 207.501 to 207.513, and the state real

estate transfer tax act, 1993 PA 330, MCL 207.521 to 207.537.

Sec. 229. (1) A public facility, building, or structure that

is determined by the municipality to have significant historical

interests shall be preserved in a manner as considered necessary by

the municipality in accordance with laws relative to the

preservation of historical sites. The preservation of facilities,

buildings, or structures determined to be historic sites by a

municipality shall include, at a minimum, equipping the historic

site with a fire alarm system.

(2) An authority shall refer all proposed changes to the

exterior of sites listed on the state register of historic sites

and the national register of historic places to the applicable

historic district commission created under the local historic

districts act, 1970 PA 169, MCL 399.201 to 399.215, or the Michigan

state housing development authority for review.

Sec. 230. (1) An authority that has completed the purposes for

which it was organized shall be dissolved by ordinance of the

governing body. The property and assets of the authority remaining

after the satisfaction of the obligations of the authority belong

to the municipality.

(2) An authority established under this part before December

31, 1988, that is dissolved by ordinance of the governing body

before September 30, 1990 and that is reinstated by ordinance of

the governing body after notice and public hearing as provided in

section 203(2) shall not be invalidated pursuant to a claim that,

based upon the standards set forth in section 203(1), a governing

body improperly determined that the necessary conditions existed

for the reinstatement of an authority under this part if at the

time the governing body established the authority the governing

body determined or could have determined that the necessary

conditions existed for the establishment of an authority under this

part or could have determined that establishment of an authority

under this part would serve to promote economic growth and

notwithstanding that the boundaries of the downtown district are

altered at the time of reinstatement of the authority.

(3) In the resolution of intent, the municipality shall set a

date for the holding of a public hearing on the adoption of a

proposed ordinance reinstating the authority. The procedure for

publishing the notice of hearing, holding the hearing, and adopting

the ordinance reinstating the authority shall be as provided in

section 203(2), (4), and (5).

(4) The validity of the proceedings, findings, and

determinations reinstating an authority shall be conclusive unless

contested in a court of competent jurisdiction within 60 days after

the last of the following occurs:

(a) Publication of the ordinance reinstating the authority as

adopted.

(b) Filing of the ordinance reinstating the authority with the

secretary of state.

PART 3

TAX INCREMENT FINANCE AUTHORITIES

Sec. 301. As used in this part:

(a) "Advance" means a transfer of funds made by a municipality

to an authority or to another person on behalf of the authority.

Evidence of the intent to repay an advance is required and may

include, but is not limited to, an executed agreement to repay,

provisions contained in a tax increment financing plan approved

before the advance or before August 14, 1993, 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 211.155.

(ii) For valuations made after December 31, 1994, taxable

value as determined under section 27a of the general property tax

act, 1893 PA 206, MCL 211.27a.

created under this part.

(d) "Authority district" means that area within which an

authority exercises its powers and within which 1 or more

development areas may exist.

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

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

by which the current assessed value of the development area,

including the assessed value of property for which specific local

taxes are paid in lieu of property taxes as determined in

subdivision (w), exceeds the initial assessed value. The state tax

commission shall prescribe the method for calculating captured

assessed value.

(g) "Chief executive officer" means the mayor or city manager

of a city, the president of a village, or the supervisor of a

township.

(h) "Development area" means that area to which a development

plan is applicable.

(i) "Development area citizens council" or "council" means

that advisory body established pursuant to section 20.

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

requirements for a development set forth in section 16.

(k) "Development program" means the implementation of the

development plan.

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

1993.

(m) "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.

Eligible obligation also includes an ongoing management contract or

contract for professional services or development services that was

entered into by the authority or a municipality on behalf of the

authority in 1991, and related similar written agreements executed

before 1984, if the 1991 agreement both provides for automatic

annual renewal and incorporates by reference the prior related

agreements; however, receipt by an authority of tax increment

revenues authorized under subdivision (aa)(ii) in order to pay

costs arising under those contracts shall be limited to:

(i) For taxes levied before July 1, 2005, the amount permitted

to be received by an authority for an eligible obligation as

provided in this part.

(ii) For taxes levied after June 30, 2005 and before July 1,

2006, $3,000,000.00.

(iii) For taxes levied after June 30, 2006 and before July 1,

2007, $3,000,000.00.

(iv) For taxes levied after June 30, 2007 and before July 1,

2008, $3,000,000.00.

(v) For taxes levied after June 30, 2008 and before July 1,

2009, $3,000,000.00.

(vi) For taxes levied after June 30, 2009 and before July 1,

2010, $3,000,000.00.

(vii) For taxes levied after June 30, 2010 and before July 1,

2011, $2,650,000.00.

(viii) For taxes levied after June 30, 2011 and before July 1,

2012, $2,400,000.00.

(ix) For taxes levied after June 30, 2012 and before July 1,

2013, $2,125,000.00.

(x) For taxes levied after June 30, 2013 and before July 1,

2014, $1,500,000.00.

(xi) For taxes levied after June 30, 2014 and before July 1,

2015, $1,150,000.00.

(xii) For taxes levied after June 30, 2015, $0.00.

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

(o) "Governing body" means the elected body of a municipality

having legislative powers.

(p) "Initial assessed value" means the assessed value, as

equalized, of all the taxable property within the boundaries of the

development area at the time the resolution establishing the tax

increment financing plan is approved as shown by the most recent

assessment roll of the municipality for which equalization has been

completed at the time the resolution is adopted. Property exempt

from taxation at the time of the determination of the initial

assessed value shall be included as zero. For the purpose of

determining initial assessed value, property for which a specific

local tax is paid in lieu of a property tax shall not be considered

property that is exempt from taxation. The initial assessed value

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

tax shall be determined as provided in subdivision (w).

(q) "Municipality" means a city.

(r) "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 part. 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.

(s) "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 the 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.

(t) "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 part before December 31, 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 part before August 19, 1993, and

undertaken and installed by that party in accordance with the

development agreement.

(iv) An obligation issued or incurred by an authority or by a

municipality on behalf of an authority to implement a project

described in a tax increment finance plan approved by the

municipality in accordance with this part before August 19, 1993,

that is located on land owned by a public university on the date

the tax increment financing plan is approved, and for which a

contract for final design is entered into before December 31, 1993.

(v) An ongoing management or professional services contract

with the governing body of a county which was entered into before

March 1, 1994 and which 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.

(vi) An obligation issued or incurred by a municipality under

a contract executed on December 19, 1994 as subsequently amended

between the municipality and the authority to implement a project

described in a tax increment finance plan approved by the

municipality under this part before August 19, 1993 for which a

contract for final design was entered into by the municipality

before March 1, 1994 provided that final payment by the

municipality is made on or before December 31, 2001.

(vii) An obligation issued or incurred by an authority or by a

municipality on behalf of an authority that meets all of the

following qualifications:

(A) The obligation is issued or incurred to finance a project

described in a tax increment financing plan approved before August

19, 1993 by a municipality in accordance with this part.

(B) The obligation qualifies as an other protected obligation

under subparagraph (ii) and was issued or incurred by the authority

before December 31, 1994 for the purpose of financing the project.

authority before December 31, 1994 for the purpose of financing the

project was retired prior to December 31, 1996.

(D) The obligation does not exceed the dollar amount of the

portion of the obligation retired prior to December 31, 1996.

(viii) An obligation incurred by an authority that meets both

of the following qualifications:

(A) The obligation is a contract of lease originally executed

on December 20, 1994 between the municipality and the authority to

partially implement the authority's development plan and tax

increment financing plan.

(B) The obligation qualifies as an obligation under

subparagraph (ii). The obligation described in this subparagraph

may be amended to extend cash rental payments for a period not to

exceed 30 years through the year 2039. The duration of the

development plan and tax increment financing plan described in this

subparagraph is extended to 1 year after the final date that the

extended cash rental payments are due.

(u) "Public facility" means 1 or more of the following:

(i) A street, plaza, or pedestrian mall, and any improvements

to a street, plaza, boulevard, alley, or pedestrian mall, including

street furniture and beautification, park, parking facility,

recreation facility, playground, school, library, public

institution or administration building, right of way, structure,

waterway, bridge, lake, pond, canal, utility line or pipeline,

transit-oriented development, transit-oriented facility, and other

similar facilities and necessary easements of these facilities

designed and dedicated to use by the public generally or used by a

public agency. As used in this subparagraph, public institution or

administration building includes, but is not limited to, a police

station, fire station, court building, or other public safety

facility.

(ii) The acquisition and disposal of real and personal

property or interests in real and personal property, demolition of

structures, site preparation, relocation costs, building

rehabilitation, and all associated administrative costs, including,

but not limited to, architect's, engineer's, legal, and accounting

fees as contained in the resolution establishing the district's

development plan.

(iii) 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) "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 1 of the following

applies:

(i) The refunding obligation meets both of the following:

(A) 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.

(B) The net present value of the sum of the tax increment

revenues described in subdivision (aa)(ii) and the distributions

under section 12a 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 (aa)(ii) and the distributions

under section 312a to repay the obligation being refunded, as

calculated using a method approved by the department of treasury.

(ii) The refunding obligation is a tax increment refunding

bond issued to refund a refunding bond that is an other protected

obligation issued as a capital appreciation bond delivered to the

Michigan municipal bond authority on December 21, 1994, or bonds

issued to refund that bond, and the authority, by resolution of its

board, authorized issuance of the refunding obligation before

December 31, 2019 with a final maturity not later than 2039. The

municipality by majority vote of the members of its governing body

may pledge its full faith and credit for the payment of the

principal of and interest on the refunding obligation. A refunding

obligation issued under this subparagraph is not subject to the

requirements of section 305(2), (3), (5), or (6), 501, 503, or 611

of the revised municipal finance act, 2001 PA 34, MCL 141.2305,

141.2501, 141.2503, and 141.2611. The duration of the development

plan and the tax increment financing plan relating to the refunding

obligations described in this subparagraph is extended to 1 year

after the final date of maturity of the refunding obligation.

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

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

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

1984 PA 385, MCL 207.701 to 207.718, and 1953 PA 189, MCL 211.181

to 211.182. The initial assessed value or current assessed value of

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

the specific local tax paid divided by the ad valorem millage rate.

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.

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

October 1 of each year.

(y) "Tax increment district" or "district" means that area to

which the tax increment finance plan pertains.

(z) "Tax increment financing plan" means that information and

those requirements set forth in sections 313 to 315.

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