Bill Text: MI HB5086 | 2017-2018 | 99th Legislature | Chaptered

Michigan House Bill 5086 (Prior Session Legislation)

Bill Title: Property tax; personal property; distribution of local community stabilization act share revenues; modify. Amends secs. 5, 13, 14, 15, 16, 16a, 17, 18 & 21 of 2014 PA 86 (MCL 123.1345 et seq.).

Spectrum: Partisan Bill (Republican 1-0)

Status: (Passed) 2018-08-15 - Assigned Pa 247'18 With Immediate Effect [HB5086 Detail]

Download: Michigan-2017-HB5086-Chaptered.html

Act No. 247

Public Acts of 2018

Approved by the Governor

June 27, 2018

Filed with the Secretary of State

June 28, 2018

EFFECTIVE DATE: June 28, 2018

STATE OF MICHIGAN

99TH LEGISLATURE

REGULAR SESSION OF 2018

Introduced by Rep. Maturen

ENROLLED HOUSE BILL No. 5086

AN ACT to amend 2014 PA 86, entitled “An act to create a metropolitan authority; to prescribe the powers, duties, and jurisdictions of the metropolitan authority; to prescribe the powers and duties of certain state officials; to levy, collect, and distribute a tax; and to repeal acts and parts of acts,” by amending sections 5, 13, 14, 15, 16, 16a, 17, 18, and 21 (MCL 123.1345, 123.1353, 123.1354, 123.1355, 123.1356, 123.1356a, 123.1357, 123.1358, and 123.1361), sections 5 and 13 as amended by 2015 PA 122, sections 14, 15, 16, and 17 as amended by 2017 PA 102, and section 21 as amended by 2016 PA 124.

The People of the State of Michigan enact:

Sec. 5. As used in this act:

(a) “Acquisition cost” means that term as defined in section 3 of the state essential services assessment act, 2014 PA 92, MCL 211.1053, multiplied by the following percentages:

(i) For eligible personal property reported to the department and described in section 5(2)(a) of the state essential services assessment act, 2014 PA 92, MCL 211.1055, 100%.

(ii) For eligible personal property reported to the department and described in section 5(2)(b) of the state essential services assessment act, 2014 PA 92, MCL 211.1055, 52.1%.

(iii) For eligible personal property reported to the department and described in section 5(2)(c) of the state essential services assessment act, 2014 PA 92, MCL 211.1055, 37.5%.

(b) “Ambulance services” means patient transport services, nontransport prehospital life support services, and advanced life support, paramedic, and medical first-responder services.

(d) “Captured value” means 1 or more of the following:

(i) For a tax increment finance authority under the brownfield redevelopment financing act, 1996 PA 381, MCL 125.2651 to 125.2670, captured taxable value as determined in sections 2 and 7 of the brownfield redevelopment financing act, 1996 PA 381, MCL 125.2652 and 125.2657.

(ii) For a tax increment finance authority under 1975 PA 197, MCL 125.1651 to 125.1681, captured assessed value as defined in section 1 of 1975 PA 197, MCL 125.1651.

(iii) For a tax increment finance authority under the tax increment finance authority act, 1980 PA 450, MCL 125.1801 to 125.1830, captured assessed value as defined in section 1 of the tax increment finance authority act, 1980 PA 450, MCL 125.1801.

(iv) For a tax increment finance authority under the local development financing act, 1986 PA 281, MCL 125.2151 to 125.2174, captured assessed value as defined in section 2 of the local development financing act, 1986 PA 281, MCL 125.2152.

(v) For a tax increment finance authority under the historic neighborhood tax increment finance authority act, 2004 PA 530, MCL 125.2841 to 125.2866, captured assessed value as defined in section 2 of the historic neighborhood tax increment finance authority act, 2004 PA 530, MCL 125.2842.

(vi) For a tax increment finance authority under the corridor improvement authority act, 2005 PA 280, MCL 125.2871 to 125.2899, captured assessed value as defined in section 2 of the corridor improvement authority act, 2005 PA 280, MCL 125.2872.

(vii) For a tax increment finance authority under the neighborhood improvement authority act, 2007 PA 61, MCL 125.2911 to 125.2932, captured assessed value as defined in section 2 of the neighborhood improvement authority act, 2007 PA 61, MCL 125.2912.

(viii) For a tax increment finance authority under the water resource improvement tax increment finance authority act, 2008 PA 94, MCL 125.1771 to 125.1793, captured assessed value as defined in section 2 of the water resource improvement tax increment finance authority act, 2008 PA 94, MCL 125.1772.

(ix) For a tax increment finance authority under the private investment infrastructure funding act, 2010 PA 250, MCL 125.1871 to 125.1883, captured assessed value as defined in section 2 of the private investment infrastructure funding act, 2010 PA 250, MCL 125.1872.

(x) For a tax increment finance authority under the nonprofit street railway act, 1867 PA 35, MCL 472.1 to 472.27, captured assessed value as defined in section 23 of the nonprofit street railway act, 1867 PA 35, MCL 472.23.

(e) “Commercial personal property” means, except as otherwise provided in subparagraph (iii), all of the following:

(i) Personal property classified as commercial personal property under section 34c of the general property tax act, 1893 PA 206, MCL 211.34c.

(ii) Personal property subject to the industrial facilities tax under section 14(1) or (4) of 1974 PA 198, MCL 207.564, that is sited on land classified as commercial real property under section 34c of the general property tax act, 1893 PA 206, MCL 211.34c.

(iii) Commercial personal property does not include personal property that after 2012 was classified in the municipality where it is currently located as real property or utility personal property.

(f) “Council” means the council established for the authority under section 9.

(g) “Debt loss” means, for a municipality that is not a local school district, intermediate school district, or tax increment finance authority, the amount of ad valorem property taxes and any specific tax levied for the payment of principal and interest of obligations either approved by the voters before January 1, 2013 or incurred before January 1, 2013 pledging the unlimited or limited taxing power of the municipality that are lost as a result of the exemption of industrial personal property and commercial personal property under sections 9m, 9n, and 9o of the general property tax act, 1893 PA 206, MCL 211.9m, 211.9n, and 211.9o.

(h) “Department” means the department of treasury.

(i) “Eligible personal property” means personal property described in section 3(e)(i), (iii), and (iv) of the state essential services assessment act, 2014 PA 92, MCL 211.1053.

(j) “Essential services” means all of the following:

(i) Ambulance services.

(ii) Fire services.

(iii) Police services.

(iv) Jail operations.

(v) The funding of pensions for personnel providing services described in subparagraphs (i) to (iv).

(k) “Fire services” means services in the prevention and suppression of fire, homeland security response, hazardous materials response, rescue, fire marshal, and medical first-responder services.

(l) “Fiscal year” means either an annual period that begins on October 1 and ends on September 30 or the fiscal year for the authority established by the council.

(m) “Increased captured value” means the anticipated increase in captured value for all industrial personal property and commercial personal property in a tax increment finance authority that would have occurred as a result of either the addition of personal property as part of a specific project or the expiration of an exemption under section 7k, 7ff, or 9f of the general property tax act, 1893 PA 206, MCL 211.7k, 211.7ff, and 211.9f, after 2013 if the exemptions under section 9m, 9n, or 9o of the general property tax act, 1893 PA 206, MCL 211.9m, 211.9n, and 211.9o, were not in effect. For calculations made under section 16a prior to calendar year 2018, in order for an anticipated increase in captured value to qualify as increased captured value, the tax increment financing plan must have demonstrated before 2013 that the tax increment finance authority was relying on this anticipated increase in captured value to pay 1 or more qualified obligations by specifically projecting the anticipated increase in captured value that would be used to pay the qualified obligations and the plan must meet all of the requirements in subdivisions (i) through (vii). For calculations made under section 16a in calendar year 2018 and after, in order for an anticipated increase in captured value related to the expiration of an exemption under section 7k, 7ff, or 9f of the general property tax act, 1893 PA 206, MCL 211.7k, 211.7ff, and 211.9f, after 2013 if the exemptions under section 9m, 9n, or 9o of the general property tax act, 1893 PA 206, MCL 211.9m, 211.9n, and 211.9o, were not in effect, to qualify as increased captured value, the tax increment finance authority or the municipality in which the authority is located must have documentation demonstrating that before or during 2013 the tax increment finance authority was relying on this increase in captured value to pay 1 or more qualified obligations. For calculations made under section 16a in calendar year 2018 and after, in order for an anticipated increase in captured value related to the addition of personal property as part of a specific project to qualify as increased captured value, the tax increment financing plan must have demonstrated before 2013 that the tax increment finance authority was relying on this increase in captured value to pay 1 or more qualified obligations by specifically projecting the anticipated increase in captured value that would be used to pay the qualified obligations and the plan must meet all of the following:

(i) The tax increment financing plan was fully approved by the governing body of the applicable local government not later than December 31, 2012. This does not prevent subsequent amendment to the tax increment financing plan, provided the amendment does not change the amount of any obligation under the plan, the scope of the project or projects described in the plan, or the time needed to repay any obligation.

(ii) If the tax increment financing plan is part of a brownfield plan under the brownfield redevelopment financing act, 1996 PA 381, MCL 125.2651 to 125.2670, any needed work plans were also approved by the appropriate state agencies not later than December 31, 2012. This does not prevent subsequent amendment to a work plan, provided the amendment does not change the amount of any obligation under the plan, the scope of the project or projects described in the plan, or the time needed to repay any obligation.

(iii) The tax increment financing plan identifies a particular site owner and site occupant that is engaged in industrial processing or direct integrated support, as defined in section 9m of the general property tax act, 1893 PA 206, MCL 211.9m. This does not preclude a change in the site owner or occupant, provided that change in the site owner or occupant did not result from a financial difficulty encountered during the construction and installation of the project and provided change in the site owner or occupant will not result in any change in the project.

(iv) The tax increment financing plan identifies a particular project on a specific parcel and that project includes the addition of particular personal property that is eligible manufacturing personal property, as defined in section 9m of the general property tax act, 1893 PA 206, MCL 211.9m, that is also identified in the tax increment financing plan.

(v) The personal property that is eligible manufacturing personal property, as defined in section 9m of the general property tax act, 1893 PA 206, MCL 211.9m, and is identified in the tax increment financing plan comprises not less than 20% of the true cash value of the improvements to be made as part of the specific project identified in the tax increment financing plan.

(vi) Before December 31, 2012, the specific project identified in the tax increment financing plan had obtained all necessary local zoning approvals, including any necessary rezoning, special land use, and site plan approvals for that project.

(vii) Before December 31, 2012, orders had been placed and significant investments made in the personal property that is eligible manufacturing personal property, as defined in section 9m of the general property tax act, 1893 PA 206, MCL 211.9m, to be located on the site.

(n) “Increased value from expired tax exemptions” means the increase in taxable value subject to tax of industrial personal property and commercial personal property placed in service before 2013 that would have occurred after 2013 if the exemptions under section 9m or 9n of the general property tax act, 1893 PA 206, MCL 211.9m and 211.9n, were not in effect as a result of the expiration of an exemption under section 7k, 7ff, or 9f of the general property tax act, 1893 PA 206, MCL 211.7k, 211.7ff, and 211.9f, that had been in effect in 2013, assuming an exemption under section 7k of the general property tax act, 1893 PA 206, MCL 211.7k, was not extended under section 11a of 1974 PA 198, MCL 207.561a, and an exemption under section 9f of the general property tax act, 1893 PA 206, MCL 211.9f, was not extended under section 9f(8) of the general property tax act, 1893 PA 206, MCL 211.9f.

(o) “Industrial personal property” means, except as otherwise provided in subparagraph (iii), all of the following:

(i) Personal property classified as industrial personal property under section 34c of the general property tax act, 1893 PA 206, MCL 211.34c.

(ii) Personal property subject to the industrial facilities tax under section 14(1) or (4) of 1974 PA 198, MCL 207.564, that is sited on land classified as industrial real property under section 34c of the general property tax act, 1893 PA 206, MCL 211.34c.

(iii) Industrial personal property does not include personal property that after 2012 was classified in the municipality where it is currently located as real property or utility personal property.

(p) “Jail operations” means all of the following:

(i) The operation of a jail, holding cell, holding center, or lockup as those terms are defined in section 62 of the corrections code of 1953, 1953 PA 232, MCL 791.262.

(ii) The operation of a juvenile detention facility by a county juvenile agency as authorized under section 7 of the county juvenile agency act, 1998 PA 518, MCL 45.627.

(q) “Local authority” means any authority, excluding an authority created under this act or a tax increment finance authority.

(r) “Local community stabilization share” means that portion of the use tax levied by the authority and authorized under the use tax act, 1937 PA 94, MCL 205.91 to 205.111.

(s) “Municipality” includes, but is not limited to, the following:

(i) Counties.

(ii) Cities.

(iii) Villages.

(iv) Townships.

(v) Local authorities.

(vi) Local school districts.

(vii) Intermediate school districts.

(viii) Community college districts.

(ix) Libraries.

(x) Tax increment finance authorities.

(xi) Other local and intergovernmental taxing units.

(t) “Personal property exemption loss” means 1 of the following:

(i) For a municipality that is not a local school district, intermediate school district, or tax increment finance authority, the 2013 taxable value of commercial personal property and industrial personal property minus the current year taxable value of commercial personal property and industrial personal property and minus the small taxpayer exemption loss if, for years after 2017, the small taxpayer exemption loss is greater than zero. For calendar years 2016 and 2017, the 2013 taxable values of commercial personal property and industrial personal property are the values reported under section 13(3) by the county equalization director in 2016 and 2017, respectively, except as provided in section 14. Beginning for calendar year 2018, the 2013 taxable values of commercial personal property and industrial personal property are the values reported under section 13(3) by the county equalization director in calendar year 2015. The calculation under this subparagraph must be modified for municipality boundary changes to the extent that the boundary changes affect the property taxes levied by the municipality. For millages from which renaissance zone property is exempt, the calculation under this subparagraph must be adjusted to exclude the taxable values of commercial personal property and industrial personal property exempt under the Michigan renaissance zone act, 1996 PA 376, MCL 125.2681 to 125.2696.

(ii) For a municipality that is a local school district, intermediate school district, or tax increment finance authority, the 2013 taxable value of commercial personal property and industrial personal property minus the current year taxable value of commercial personal property and industrial personal property. For calendar years 2016 and 2017, the 2013 taxable values of commercial personal property and industrial personal property are the values reported under section 13(3) by the county equalization director in 2016 and 2017, respectively, except as provided in sections 15, 16, and 16a. Beginning for calendar year 2018, the 2013 taxable values of commercial personal property and industrial personal property are the values reported under section 13(3) by the county equalization director in calendar year 2015. The calculation under this subparagraph must be modified for municipality boundary changes to the extent that the boundary changes affect the property taxes levied by the municipality. For millages from which renaissance zone property is exempt, the calculation under this subparagraph must be adjusted to exclude the taxable values of commercial personal property and industrial personal property exempt under the Michigan renaissance zone act, 1996 PA 376, MCL 125.2681 to 125.2696.

(u) “Police services” means law enforcement services for the prevention and detection of crime, the enforcement of laws and ordinances, homeland security response, and medical first-responder services.

(v) “Qualified loss” means the amounts calculated under section 14(1) that are not distributed to the municipality under section 17(4)(a). The qualified loss cannot be less than zero.

(w) “Qualified obligation” means a written promise to pay by a tax increment finance authority, whether evidenced by a contract, agreement, lease, sublease, bond, resolution promising repayment of an advance, or note, or a requirement to pay imposed by law. A qualified obligation does not include a payment required solely because of default upon an obligation, employee salary, or consideration paid for the use of municipal offices. A qualified obligation does not include bonds that have been economically defeased by refunding.

(x) “Qualified school debt millage rate” means the following:

(i) For calendar years before calendar year 2018, the millage rate specifically levied by the local school district or intermediate school district in the current year for the payment of principal and interest of obligations approved by the electors before January 1, 2013 or obligations pledging the unlimited taxing power of a local school district or intermediate school district incurred before January 1, 2013.

(ii) For calendar years 2018 and 2019, either the millage rate described in sub-subparagraph (A), if a local school district or intermediate school district, in the current year and any prior year after 2017, has elected to use the millage rate described in sub-subparagraph (A) and has reported the millage rate described in sub-subparagraph (A) to the department under section 13(4), or the total of all debt millage rates prescribed in sub-subparagraph (B), if the local school district or intermediate school district, in the current year or any prior year after 2017, has not elected to use the millage rate described in sub-subparagraph (A) or has not reported the millage rate described in sub-subparagraph (A) to the department under section 13(4):

(A) The millage rate specifically levied by the local school district or intermediate school district in the current year for the payment of principal and interest of obligations approved by the electors before January 1, 2015 or obligations pledging the unlimited taxing power of a local school district or intermediate school district incurred before January 1, 2015.

(B) The lesser of the following:

(I) The highest total of all debt millage rates levied by the local school district or intermediate school district in a single year for the period 2012 through 2014.

(II) The total of all debt millage rates levied by the local school district or intermediate school district in the year immediately preceding the current calendar year.

(iii) For calendar years after 2019, either the millage rate described in sub-subparagraph (A), if a local school district or intermediate school district has elected to use the millage rate described in subparagraph (ii)(A) in calendar years 2018 and 2019 and has elected to use the millage rate described in sub-subparagraph (A) in the current year and all prior years after 2019 and has reported under subparagraph (ii)(A) to the department under section 13(4) in calendar years 2018 and 2019 and has reported under sub-subparagraph (A) to the department under section 13(4) in the current year and all prior years after 2019, or the total of all debt millage rates described in sub-subparagraph (B), if the local school district or intermediate school district has not elected to use the millage rate described in subparagraph (ii)(A) in calendar years 2018 and 2019 or has not elected to use the millage rate described in sub-subparagraph (A) in the current year and all prior years after 2019 or has not reported under subparagraph (ii)(A) to the department under section 13(4) in calendar years 2018 and 2019 or has not reported under sub-subparagraph (A) to the department under section 13(4) in the current year and all prior years after 2019:

(A) The millage rate specifically levied by the local school district or intermediate school district in the current year for the payment of principal and interest of obligations approved by the electors before January 1, 2013 or obligations pledging the unlimited taxing power of a local school district or intermediate school district incurred before January 1, 2013.

(B) The lesser of the following:

(I) The highest total of all debt millage rates levied by the local school district or intermediate school district in a single year for the period 2012 through 2014.

(II) The total of all debt millage rates levied by the local school district or intermediate school district in the year immediately preceding the current calendar year.

(y) “School operating loss not reimbursed by the school aid fund” means the amount of revenue lost from ad valorem property taxes levied under section 1211 of the revised school code, 1976 PA 451, MCL 380.1211, as a result of the exemption of industrial personal property and commercial personal property under sections 9m, 9n, and 9o of the general property tax act, 1893 PA 206, MCL 211.9m, 211.9n, and 211.9o, for mills other than basic school operating mills, as that term is defined in section 2c of the use tax act, 1937 PA 94, MCL 205.92c.

(z) “Small taxpayer exemption loss” means 1 of the following:

(i) For a municipality, the 2013 taxable value of commercial personal property and industrial personal property minus the 2014 taxable value of commercial personal property and industrial personal property. For the 2014 calendar year, the 2013 and 2014 taxable values of commercial personal property and industrial personal property are the values reported under section 13(2) by the county equalization director in calendar year 2014. For the 2015, 2016, and 2018 calendar years and subsequent calendar years, the 2013 and 2014 taxable values of commercial personal property and industrial personal property are the values reported under section 13(3) by the county equalization director in calendar year 2015. For the 2017 calendar year, the 2013 and 2014 taxable values of commercial personal property and industrial personal property are the values reported under section 13(3) by the county equalization director in calendar year 2015, except as provided in section 14. The calculation under this subparagraph must be modified for municipality boundary changes to the extent that the boundary changes affect the property taxes levied by the municipality. For millages from which renaissance zone property is exempt, the calculation under this subparagraph must be adjusted to exclude the taxable value of commercial personal property and industrial personal property exempt under the Michigan renaissance zone act, 1996 PA 376, MCL 125.2681 to 125.2696.

(ii) For the 2015 calendar year and subsequent calendar years, for a municipality, the greater of the amount calculated under subparagraph (i) and the 2013 taxable value of commercial personal property and industrial personal property minus the 2015 taxable value of commercial personal property and industrial personal property. For the 2015, 2016, and 2018 calendar years and subsequent calendar years, the 2013 and 2015 taxable values of commercial personal property and industrial personal property are the values reported under section 13(3) by the county equalization director in calendar year 2015. For the 2017 calendar year, the 2013 and 2015 taxable values of commercial personal property and industrial personal property are the values reported under section 13(3) by the county equalization director in calendar year 2015, except as provided in section 14. The calculation under this subparagraph must be modified for municipality boundary changes to the extent that the boundary changes affect the property taxes levied by the municipality. For millages from which renaissance zone property is exempt, the calculation under this subparagraph must be adjusted to exclude the taxable value of commercial personal property and industrial personal property exempt under the Michigan renaissance zone act, 1996 PA 376, MCL 125.2681 to 125.2696.

(aa) “Specific tax” means a tax levied under 1974 PA 198, MCL 207.551 to 207.572.

(bb) “Tax increment finance authority” means an authority created under 1 or more of the following:

(i) 1975 PA 197, MCL 125.1651 to 125.1681.

(ii) The tax increment finance authority act, 1980 PA 450, MCL 125.1801 to 125.1830.

(iii) The local development financing act, 1986 PA 281, MCL 125.2151 to 125.2174.

(iv) The brownfield redevelopment financing act, 1996 PA 381, MCL 125.2651 to 125.2670.

(v) The historic neighborhood tax increment finance authority act, 2004 PA 530, MCL 125.2841 to 125.2866.

(vi) The corridor improvement authority act, 2005 PA 280, MCL 125.2871 to 125.2899.

(vii) The neighborhood improvement authority act, 2007 PA 61, MCL 125.2911 to 125.2932.

(viii) The water resource improvement tax increment finance authority act, 2008 PA 94, MCL 125.1771 to 125.1793.

(ix) The private investment infrastructure funding act, 2010 PA 250, MCL 125.1871 to 125.1883.

(x) The nonprofit street railway act, 1867 PA 35, MCL 472.1 to 472.27.

(cc) “Tax increment small taxpayer loss” means the amount of revenue lost by a municipality that is a tax increment finance authority due to the exemption provided by section 9o of the general property tax act, 1893 PA 206, MCL 211.9o.

(dd) “Taxable value” means all of the following:

(i) Except as otherwise provided in subparagraph (ii), that value determined under section 27a of the general property tax act, 1893 PA 206, MCL 211.27a.

(ii) For real or personal property subject to the industrial facilities tax under section 14(3) or (4) of 1974 PA 198, MCL 207.564, 50% of that value determined under section 27a of the general property tax act, 1893 PA 206, MCL 211.27a.

(ee) “Total qualified loss” means the total amount of qualified losses of all municipalities, as determined by the department.

(ff) “Utility personal property” means that term as described in section 34c of the general property tax act, 1893 PA 206, MCL 211.34c.

Sec. 13. (1) Not later than June 5, 2014, the assessor for each city and township shall report to the county equalization director all of the following:

(a) The 2013 taxable value of commercial personal property and industrial personal property for each municipality in the city or township.

(b) The 2014 taxable value of commercial personal property and industrial personal property for each municipality in the city or township.

(2) Not later than June 20, 2014, the equalization director for each county shall report to the department the information described in subsection (1) for each municipality in the county. For each municipality levying a millage in more than 1 county, the county equalization director responsible for compiling the municipality’s taxable value under section 34d of the general property tax act, 1893 PA 206, MCL 211.34d, shall compile the municipality’s information described in subsection (1).

(3) Not later than June 5, 2015, June 5, 2016, June 5, 2017, and each May 15 thereafter, the assessor for each city and township shall report to the county equalization director the current year taxable value of commercial personal property and industrial personal property for each municipality in the city or township. Not later than June 20, 2015, the equalization director for each county shall report to the department the 2013, 2014, and 2015 taxable values of commercial personal property and industrial personal property for each municipality in the county. Not later than June 20, 2016, the equalization director for each county shall report to the department the 2013 and 2016 taxable values of commercial personal property and industrial personal property for each municipality in the county. Not later than June 20, 2017, the equalization director for each county shall report to the department the 2013 and 2017 taxable values of commercial personal property and industrial personal property for each municipality in the county. Each May 31 thereafter, the equalization director for each county shall report to the department the current year taxable value of commercial personal property and industrial personal property for each municipality in the county. For calendar years 2015 through 2017, the 2013, 2014, and current year taxable values of commercial personal property and industrial personal property shall be the current taxable values as of the reporting deadline for the county equalization director. For calendar year 2018 and thereafter, the current year taxable value of commercial personal property and industrial personal property shall be the current taxable value on May 10. Not later than June 20, 2015, for each municipality levying a millage in more than 1 county, the county equalization director responsible for compiling the municipality’s taxable value under section 34d of the general property tax act, 1893 PA 206, MCL 211.34d, shall compile and report to the department the municipality’s 2013, 2014, and 2015 taxable values of commercial personal property and industrial personal property. Not later than June 20, 2016, for each municipality levying a millage in more than 1 county, the county equalization director responsible for compiling the municipality’s taxable values under section 34d of the general property tax act, 1893 PA 206, MCL 211.34d, shall compile and report to the department the municipality’s 2013 and 2016 taxable values of commercial personal property and industrial personal property. Not later than June 20, 2017, for each municipality levying a millage in more than 1 county, the county equalization director responsible for compiling the municipality’s taxable values under section 34d of the general property tax act, 1893 PA 206, MCL 211.34d, shall compile and report to the department the municipality’s 2013 and 2017 taxable values of commercial personal property and industrial personal property. Each June 7 thereafter, for each municipality levying a millage in more than 1 county, the county equalization director responsible for compiling the municipality’s taxable value under section 34d of the general property tax act, 1893 PA 206, MCL 211.34d, shall compile and report to the department the municipality’s current year taxable value of commercial personal property and industrial personal property.

(4) Not later than August 15, 2014, August 15, 2015, August 15, 2016, and August 15, 2017, each municipality shall report to the department the millage rate levied or to be levied that year for a millage described in section 5(g) or (x) that is used to calculate an appropriation under section 17(1)(a) or a distribution under section 17(4)(a)(i). For 2014 and 2015, the rate of that millage shall be calculated using the sum of the municipality’s taxable value and the municipality’s small taxpayer exemption loss. For 2016 and 2017, the rate of that millage shall be calculated using the sum of the municipality’s taxable value and the municipality’s personal property exemption loss. For calendar year 2018 and subsequent years, a local school district and intermediate school district shall reduce its debt millage rate to reflect the payment to be received under section 17(4)(a)(i). By August 1, 2018 and by each August 1 thereafter, a local school district and intermediate school district may report its millage rate calculated under section 5(x)(ii)(A) or (iii)(A) and a local school district shall report the operating mills levied under section 1211 of the revised school code, 1976 PA 451, MCL 380.1211, on industrial personal property as that term is defined in section 1211 of the revised school code, 1976 PA 451, MCL 380.1211, levied or to be levied that year. For 2014 and 2015, the department shall calculate each municipality’s debt loss or school debt loss by multiplying the municipality’s millage rate reported under this subsection by the municipality’s small taxpayer exemption loss. For 2016 and 2017, the department shall calculate each municipality’s school debt loss by multiplying the municipality’s millage rate reported under this subsection by the municipality’s personal property exemption loss. For calendar year 2018 and subsequent years, the department shall calculate the municipality’s school debt loss by multiplying the municipality’s qualified school debt millage rate by the municipality’s personal property exemption loss.

(5) Not later than May 1 of each year, the department shall do the following:

(a) For the 2014, 2015, 2016, and 2017 calendar years’ calculations, calculate and make available to each municipality that municipality’s sum of the lowest rate of each individual millage levied in the period between 2012 and the year immediately preceding the current year. For a municipality, other than a municipality described in section 14, the calculation shall exclude debt millage and millage levied under section 1211 of the revised school code, 1976 PA 451, MCL 380.1211, on industrial personal property as that term is defined in section 1211 of the revised school code, 1976 PA 451, MCL 380.1211. For an individual millage rate not levied in 1 of the years, the lowest millage rate is zero. A millage used to make the calculations under this act must be levied against both real property and personal property.

(b) For the calendar year 2018 and subsequent years’ calculations, for a municipality that is not a local school district or tax increment finance authority:

(i) Calculate each municipality’s total millage levied in 2012, 2013, and 2014, respectively.

(ii) Calculate each municipality’s eligible millage cap as the highest total millage levied in 2012, 2013, or 2014.

(iii) Calculate each municipality’s total millage levied in the year immediately preceding the current year.

(iv) Calculate each individual millage rate for each municipality as follows:

(A) If the eligible millage cap, as calculated under subparagraph (ii), exceeds the total millage levied in the year immediately preceding the current year, as calculated under subparagraph (iii), then use each individual millage levied in the year immediately preceding the current year.

(B) If the total millage levied in the year immediately preceding the current year, as calculated under subparagraph (iii), exceeds the eligible millage cap, as calculated under subparagraph (ii), then prorate each individual millage levied in the year immediately preceding the current year downward to equal the eligible millage cap, as calculated under subparagraph (ii).

(v) For an intermediate school district, the calculations in this subdivision shall exclude debt millage. A millage used to make the calculations under this act must be levied against both real property and personal property.

(i) Calculate each individual millage rate levied by each local school district in 2012, 2013, and 2014.

(ii) Calculate each local school district’s eligible millage cap as the highest rate levied in 2012, 2013, or 2014 for each individual millage.

(iii) Calculate each individual millage rate for each local school district to be the lesser of the millage cap calculated under subparagraph (ii) and the millage rate levied in the year immediately preceding the current year for that individual millage.

(iv) the calculations in this subdivision shall exclude debt millage and operating mills levied under section 1211 of the revised school code, 1976 PA 451, MCL 380.1211, on industrial personal property as that term is defined in section 1211 of the revised school code, 1976 PA 451, MCL 380.1211. A millage used to make the calculations under this act must be levied against both real property and personal property.

(6) Not later than June 5, 2016, June 5, 2017, and each May 31 thereafter, the assessor for each city and township shall report to the department and the county equalization director the increased value from expired tax exemptions for each municipality that is subject to section 14(2) and that levies taxes in the city or township.

(7) For a millage that is not general operating millage and that is dedicated in part, but not solely, for the cost of essential services, a county, township, village, city, or local authority shall annually report the portion of the rate calculated for that millage under subsection (5) that is dedicated for the cost of essential services. This report shall be submitted to the department, in a form and manner prescribed by the department, by August 1, 2018, and by each August 1 thereafter. If the county, township, village, city, or local authority fails to report to the department by August 1, the department shall determine that the millage is dedicated solely for the cost of essential services.

Sec. 14. (1) Not later than November 7, 2017, and each October 7 thereafter, for each municipality that is not a local school district, intermediate school district, or tax increment finance authority, the department shall do all of the following:

(a) Calculate the municipality’s personal property exemption loss.

(b) Multiply the municipality’s personal property exemption loss by the millage rates calculated under section 13(5).

(c) For calendar year 2017 calculations only, adjust the amount calculated under subdivision (b) by the amount required to reflect changes in prior year taxable values that affect any prior year calculation under this subsection and that can be calculated from taxable values reported under section 151(1) of the state school aid act of 1979, 1979 PA 94, MCL 388.1751.

(2) Not later than November 7, 2017, and each October 7 thereafter, for each municipality that is a county, township, village, city, or local authority that provides essential services, the department shall do all of the following:

(a) Add to the amount calculated under subsection (1)(a) any increased value from expired tax exemptions for the current year.

(b) Multiply the millage rate calculated under section 13(5) for general operating millage by the percentage of the municipality’s general operating millage used to fund the cost of essential services in the municipality’s fiscal year ending in 2012. The department shall calculate each municipality’s percentage of general operating millage used to fund the cost of essential services in the municipality’s fiscal year ending in 2012, unless the municipality includes the calculation in its comprehensive annual financial report for the municipality’s fiscal year ending in either 2014 or 2015 or otherwise reports the calculation to the department in a form and in a manner prescribed by the department.

(d) Multiply the amount calculated under section 16a(2) for captured taxes from the general operating millage levied by the municipality not including taxes attributable to increased captured value by the percentage of the municipality’s general operating millage used to fund the cost of essential services in the municipality’s fiscal year ending in 2012 and subtract the resulting amount from the amount calculated under subdivision (c).

(e) Add to the result of the calculation in subdivision (d) an amount calculated by multiplying the millage rate calculated under section 13(5) for each millage that is not general operating millage and that is dedicated in whole or in part for the cost of essential services by 1 or by the portion reported for that millage under section 13(7), as applicable, multiplying the resulting product for each millage by the amount calculated under subdivision (a), and adding the results. A millage levied to fund a pension under the fire fighters and police officers retirement act, 1937 PA 345, MCL 38.551 to 38.562, is dedicated for the cost of essential services.

(f) Subtract from the result of the calculation in subdivision (e) the amount calculated under section 16a(2) for captured taxes from the portion of millage dedicated for the cost of essential services levied by the municipality not including taxes attributable to increased captured value.

(3) Not later than May 24, 2016, for each municipality that is a city, the department shall do all of the following:

(a) Calculate the municipality’s 2014 and 2015 small taxpayer exemption loss.

(b) Multiply the 2014 small taxpayer exemption loss if greater than zero by the millage rates calculated under section 13(5) for 2014, excluding debt millage.

(c) Multiply the 2015 small taxpayer exemption loss if greater than zero by the millage rates calculated under section 13(5) for 2015, excluding debt millage.

(d) Add the amounts calculated under subdivisions (b) and (c).

(e) Calculate the sum of the municipality’s debt loss for 2014 and 2015 reimbursed under section 17(1)(a) for millages used to calculate the amounts under subdivisions (b) and (c).

(f) Calculate the amount of any tax increment small taxpayer loss for captured taxes levied by the municipality in 2014 and 2015 for millages used to calculate the amounts under subdivisions (b) and (c).

(4) Not later than November 7, 2017, and each October 7 thereafter, for each municipality that is not a local school district, intermediate school district, or tax increment finance authority, the department shall do all of the following:

(a) Calculate the municipality’s 2015 small taxpayer exemption loss.

(b) Multiply the municipality’s 2015 small taxpayer exemption loss by the millage rates calculated under section 13(5).

(d) Subtract from the amount calculated under subdivision (b), as adjusted by subdivision (c), the amount calculated under section 16a(2) for captured taxes levied by the municipality not including taxes attributable to increased captured value. The subtraction under this subdivision shall only be made to the extent that the subtraction made under subsection (1)(d) did not fully account for all captured taxes levied by the municipality not including taxes attributable to increased captured value.

Sec. 15. Not later than November 7, 2017, and each October 7 thereafter, for each municipality that is a local school district, the department shall do all of the following:

(a) Calculate the municipality’s personal property exemption loss.

(b) Multiply the result of the calculation in subdivision (a) by the individual millage levied under section 1212 of the revised school code, 1976 PA 451, MCL 380.1212, and section 2 of 1917 PA 156, MCL 123.52, as calculated under section 13(5).

(c) For calendar year 2017 calculations only, adjust the amount calculated under subdivision (b) by the amount required to reflect changes in prior year taxable values that affect any prior year calculation under this section and that can be calculated from taxable values reported under section 151(1) of the state school aid act of 1979, 1979 PA 94, MCL 388.1751.

(d) Subtract from the result of the calculation in subdivision (b), as adjusted by subdivision (c), the amount calculated under section 16a(2) for captured taxes levied by the municipality under section 1212 of the revised school code, 1976 PA 451, MCL 380.1212, and section 2 of 1917 PA 156, MCL 123.52, not including taxes attributable to increased captured value.

Sec. 16. Not later than November 7, 2017, and each October 7 thereafter, for each municipality that is an intermediate school district, the department shall do all of the following:

(a) Calculate the municipality’s personal property exemption loss.

(b) Multiply the result of the calculation in subdivision (a) by the millage rates calculated under section 13(5).

(c) For calendar year 2017 calculations only, adjust the amount calculated under subdivision (b) by the amount required to reflect changes in prior year taxable values that affect any prior year calculation under this section and that can be calculated from taxable values reported under section 151(1) of the state school aid act of 1979, 1979 PA 94, MCL 388.1751.

(d) Subtract from the result of the calculation in subdivision (b), as adjusted by subdivision (c), the amount calculated under section 16a(2) for captured taxes levied by that municipality not including taxes attributable to increased captured value.

Sec. 16a. (1) Not later than June 15, 2014 and June 15, 2015, each municipality that is a tax increment finance authority shall calculate and report to the department the municipality’s tax increment small taxpayer loss for the current calendar year.

(2) Not later than June 15, 2016, and each June 15 thereafter, each municipality that is a tax increment finance authority shall do all of the following for each of its tax increment financing plans:

(a) Calculate separately for each category of property the captured value of all industrial personal property and commercial personal property in the municipality that is a tax increment finance authority in 2013 and add any increased captured value for the current year.

(b) From each amount calculated in subdivision (a), subtract the captured value of all industrial personal property and commercial personal property in the municipality that is a tax increment finance authority in the current year for that category of property and multiply the resulting amount by each individual millage rate calculated under section 13(5), to the extent the millage is subject to capture by that tax increment finance authority for that category of property.

(c) Add all of the amounts calculated under subdivision (b). If the estimated amount of tax increment revenue for the current year for all property in the municipality that is a tax increment finance authority is negative, the sum of the subdivision (b) amounts calculated under this subdivision shall be reduced by that negative amount.

(d) For calendar year 2017 calculations only, adjust the amount calculated under subdivision (c) by the amount required to reflect changes in prior year taxable values that affect any prior year calculation under this section and that can be calculated from taxable values reported under section 151(1) of the state school aid act of 1979, 1979 PA 94, MCL 388.1751.

(e) For an obligation refinanced after 2012, estimate for the term of the obligation:

(i) The cumulative school district operating tax and state education tax that would have been captured to repay the obligation had the obligation not been refinanced.

(ii) The cumulative amount calculated under subdivision (c), as adjusted by subdivision (d), for school district operating tax and state education tax for the obligation had it not been refinanced.

(f) Once the amount included in subdivision (c), as adjusted by subdivision (d), for the current and prior years for school operating tax and state education tax for the refinanced obligation equals the amount estimated in subdivision (e)(ii), subtract from the amount calculated under subdivision (c), as adjusted by subdivision (d), the amount calculated under subdivision (c), as adjusted by subdivision (d), for school district operating tax and state education tax for the refinanced obligation.

(g) Once the amount of school district operating tax and state education tax captured for the current and prior years to pay the refinanced obligation equals the amount estimated under subdivision (e)(i), subtract from the amount calculated in subdivision (c), as adjusted by subdivision (d), the amount of school operating tax and state education tax captured to repay the refinanced obligation.

(3) Not later than June 15, 2016, and each June 15 thereafter, each municipality that is a tax increment finance authority shall report to the department the results of the calculations under subsection (2) for each tax increment financing plan.

Sec. 17. (1) The legislature shall appropriate funds for all of the following purposes:

(a) For fiscal year 2014-2015 and fiscal year 2015-2016, to the authority, an amount equal to all debt loss for municipalities that are not a local school district, intermediate school district, or tax increment finance authority, an amount equal to all school debt loss for municipalities that are a local school district or intermediate school district, and an amount equal to all tax increment small taxpayer loss for municipalities that are a tax increment finance authority. Funds appropriated under this subdivision for fiscal year 2015-2016 may be used to pay a corrected tax increment small taxpayer exemption loss for 2014 if a tax increment finance authority submits before June 1, 2016 a correction to a report that was filed under section 16a before October 1, 2014.

(b) For fiscal year 2014-2015 through fiscal year 2018-2019 an amount equal to the necessary expenses incurred by the department in implementing this act.

(c) Beginning in fiscal year 2019-2020 and each fiscal year thereafter, an amount equal to the necessary expenses incurred by the authority and the department in implementing this act.

(2) In fiscal year 2014-2015 and fiscal year 2015-2016, the authority shall distribute to municipalities those funds appropriated under subsection (1)(a). However, in fiscal year 2014-2015, if the authority is not able to make the distribution under this subsection, the department shall make the distribution under this subsection on behalf of the authority.

(3) For calendar years 2014 and 2015, the authority shall distribute local community stabilization share revenue to each city in an amount determined by multiplying the sum of the local community stabilization share revenue for the calendar years and the amounts calculated under section 14(3)(e) and (f) by a fraction, the numerator of which is that city’s amount calculated under section 14(3)(d) and the denominator of which is the total amount calculated under section 14(3)(d), and subtracting from the result each city’s amounts calculated under section 14(3)(e) and (f).

(4) Beginning for calendar year 2016, the authority shall distribute local community stabilization share revenue as follows in the following order of priority:

(a) The authority shall distribute to each municipality an amount equal to all of the following:

(i) 100% of that municipality’s school debt loss in the current year as calculated under section 13(4) and 100% of its amount calculated under section 15.

(ii) 100% of that municipality’s amount calculated under section 16.

(iii) 100% of that municipality’s school operating loss not reimbursed by the school aid fund in the current year, calculated by multiplying the operating millage rate reported under section 13(4) or the operating millage rate calculated under section 13(5) by the local school district’s personal property exemption loss for the personal property subject to the respective millage reimbursed under this subparagraph.

(iv) 100% of the amount calculated in section 14(2). For calendar years 2016 and 2017 only, however, the amount distributed to a municipality under this subparagraph shall not exceed the amount calculated in section 14(1)(d). For all calendar years, all distributions under this subparagraph shall be used to fund essential services.

(v) For a municipality that is a tax increment finance authority, 100% of its amount calculated under section 16a(2), as confirmed or adjusted by the department. For calculations made under section 16a(2), as modified by section 16b(2), in calendar years 2016 and 2017 only, amounts claimed for increased captured value shall be included as claimed.

(vi) 100% of that municipality’s amount calculated under section 14(4).

(b) Beginning for calendar year 2021, after the distributions under subdivision (a), and subject to subparagraph (viii), the authority shall distribute an amount equal to 15% of the total qualified loss for the current calendar year to each municipality that is not a local school district, intermediate school district, or tax increment finance authority in an amount determined as follows:

(i) Calculate the total acquisition cost of all eligible personal property in the municipality.

(ii) Multiply the result of the calculation in subparagraph (i) by each individual millage levied by the municipality as calculated under section 13(5) that is not used to calculate a distribution under subdivision (a)(i) to (iv).

(iii) Divide the sum of the amounts calculated under subparagraph (ii) for all municipalities subject to the calculation by total qualified loss.

(iv) Multiply the result of the calculation in subparagraph (iii) by the difference between the amount calculated under section 16a(2) for captured taxes for each individual millage levied by the municipality not including taxes attributable to increased captured value and the subtraction amounts calculated under section 14(2)(d), (2)(f), and (4)(d) for that millage.

(v) Subtract from the amount calculated under subparagraph (ii) the amount calculated under subparagraph (iv) for the individual millage levied.

(vi) Divide the result of the calculation in subparagraph (v) by the sum of the calculation under subparagraph (v) for all millages for all municipalities.

(vii) Multiply the result of the calculation in subparagraph (vi) by the amount to be distributed under this subdivision.

(viii) For calendar year 2022, and each calendar year thereafter, the percentage amount described in this subdivision shall be increased an additional 5% each year, not to exceed 100%.

(c) For calendar years 2016 and 2017, after the distributions in subdivision (a), the authority shall distribute the remaining balance of the local community stabilization share fund for a calendar year to each municipality in an amount determined by multiplying the remaining balance by a fraction, the numerator of which is that municipality’s qualified loss and the denominator of which is the total qualified loss. Beginning for calendar year 2018, after the distributions in subdivisions (a) and (b), the authority shall distribute local community stabilization share revenue under this subdivision to each municipality in an amount determined by multiplying total qualified loss minus the total amount distributed in subdivision (b) for a calendar year by a fraction, the numerator of which is that municipality’s qualified loss and the denominator of which is the total qualified loss.

(d) After the distributions under subdivisions (a) to (c), beginning for calendar year 2018, the department shall adjust the amounts calculated under subdivisions (b) and (c) for a municipality by the amount of any overpayment to that municipality under those subdivisions for that calendar year and the authority shall distribute to a municipality the amount of any underpayment calculated under subsection (5) for calendar years after 2016.

(e) Except as otherwise provided in this subdivision, after the distributions under subdivisions (a) to (d), the authority shall distribute the remaining balance of the local community stabilization share fund for the calendar year to each municipality that is not a local school district, intermediate school district, or tax increment finance authority in an amount determined by multiplying the remaining balance by a fraction, the numerator of which is the sum of that municipality’s amount received under subdivisions (b), (c), and (d), only to the extent that the distribution under subdivision (d) is for an underpayment of the current calendar year’s subdivision (b) or (c) amount, and the adjustment under subdivision (d), and the denominator of which is the sum of the total amount distributed under subdivisions (b), (c), and (d), only to the extent that the distribution under subdivision (d) is for an underpayment of the current calendar year’s subdivision (b) or (c) amount, and the total adjustments under subdivision (d). For a municipality that, in total, was overpaid under subdivisions (a), (b), and (c), the distribution under this subdivision shall be reduced by any positive amount determined by subtracting the corrected amounts under subdivisions (a) to (c) for that municipality from the distributed amounts under subdivisions (a) to (c) for that municipality and subtracting $10,000.00. If the resulting distribution amount is negative, the municipality has been overpaid for the year by the amount of the negative balance. The municipality shall pay to the authority the amount of the overpayment in 3 equal annual payments, due by September 20 1 year following notice of the overpayment and by September 20 of the subsequent 2 years. A municipality may pay the amount of the overpayment at any time during the 3-year period. If a municipality fails to repay the amount of the overpayment as provided in this subdivision, the authority shall add interest to the entire amount of the original overpayment from the date of notice of the overpayment and may reduce subsequent distributions to the municipality under this section to recover the outstanding balance of the overpayment and interest. Interest added under this subdivision shall be at the rate determined under section 23 of 1941 PA 122, MCL 205.23. Any overpayment amounts repaid to the authority under this subdivision by September 30 of each year shall be added to the local community stabilization share revenue available for distribution for the calendar year. If reductions to distributions calculated under this section result in the authority having a year-end balance of local community stabilization share revenue, that revenue shall be added to the local community stabilization share revenue available for distribution for the subsequent calendar year.

(5) The department and authority shall administer overpayments and underpayments as follows:

(a) For calendar years before 2016, if a municipality received an overpayment under this section due to an error in reporting or calculation, the authority may reduce a subsequent payment to the municipality or bill the municipality to recover the overpayment.

(b) Before November 7, 2017, the department shall recalculate 2016 payments to correct any errors in reporting under section 13(3) or (4) and any calculation errors made by the department, and adjust the 2017 payment to each municipality for any change in its 2016 payment.

(c) For calendar year 2018, for any errors in reporting under section 13(3) or (4) in calendar year 2017 or 2018, any calculation errors made by the department in calendar year 2017 or 2018, or any prior year error adjustment used in the calculation of the calendar year 2017 distributions, that resulted in an underpayment or overpayment under this section to a municipality for the prior calendar year or current calendar year, the department shall calculate the amount of underpayment or overpayment. For each municipality, the department shall add together the calendar year 2016 and calendar year 2017 underpayment and overpayment amounts. If a municipality has a net underpayment for calendar years 2016 and 2017, the amount of the net underpayment shall be added to the calendar year 2018 underpayment or overpayment amount for that municipality. If a municipality has a net overpayment for calendar years 2016 and 2017, the amount of the net overpayment shall be excused by the authority and shall not be added to the calendar year 2018 underpayment or overpayment amount for that municipality. The following apply to determining underpayment or overpayment amounts:

(i) For calendar year 2016, the underpayment or overpayment of a municipality’s qualified loss shall be calculated by multiplying the municipality’s qualified loss by 261.3820%.

(ii) For calendar year 2017, the underpayment or overpayment of a municipality’s qualified loss shall be calculated by multiplying the municipality’s qualified loss by 292.4677%.

(d) Beginning for calendar year 2019, for any errors in reporting under section 13(3) or (4), and for any calculation errors made by the department, that resulted in an underpayment or overpayment under this section to a municipality for the current calendar year, the department shall calculate the amount of underpayment or overpayment. A calculation made under this subdivision shall not recalculate a prior year payment.

(e) Except as provided in subsection (6), any underpayment shall be paid to the municipality as provided in subsection (4)(d). Any underpayment amount determined by the department to be the fault of that municipality, by either the municipality reporting inaccurate information or filing information after the reporting due dates, shall not be included in any payment made under subsection (4)(d) or (6).

(f) For any overpayment for which the state treasurer determines that the municipality was at fault and acted in bad faith, the department may calculate the amount of the overpayment for all years to which the bad faith applied without any adjustment and the municipality shall immediately repay the amount of the overpayment and interest to the authority within 30 days following notice of the overpayment. If a municipality fails to repay the amount of the overpayment and interest to the authority, the authority shall reduce subsequent payments to the municipality under this section to recover the outstanding balance of the overpayment and interest. Interest added under this subsection shall be at the rate determined under section 23 of 1941 PA 122, MCL 205.23. Any overpayment amounts repaid to the authority under this subsection by September 30 of each year shall be added to the local community stabilization share revenue available for distribution for the calendar year. Any reduction of subsequent payments due to municipalities failing to repay the amount of the overpayment and interest shall be added to the local community stabilization share revenue available for distribution for the subsequent calendar year.

(6) If a municipality received an underpayment under this section of $500,000.00 or more for calendar year 2017 due to an error in reporting under section 13(3) or (4), or a calculation error made by the department, including a prior year error adjustment used in the calculation of the calendar year 2017 distributions, the municipality may notify the department of any errors identified by providing substantiating documentation to support an adjustment to the payment amount by August 1, 2018. Upon the department’s review of the substantiating documentation and verification of the errors, the department shall calculate an underpayment amount in accordance with subsection (5)(c). The underpayment amount shall be calculated using the appropriate proration factor provided for under subsection (5)(c). The department shall determine if the substantiating documentation is sufficient. The department shall notify the authority to make an advance 2018 payment to the municipality for the amount of the 2017 underpayment. The advance payment shall be deducted from the municipality’s payment for calendar year 2018 that includes the distribution under subsection (4)(d).

(7) For payments received beginning October 20, 2018, a municipality shall do all of the following:

(a) Allocate payments received, up to 100% reimbursement, under this section based on the portion of the municipality’s payment attributable to each millage levied by the municipality. The portion of the payment allocated to each millage other than the general operating millage shall be considered restricted and recorded by the municipality in the same manner as the millage levied. As used in this subsection, “100% reimbursement” means the amounts received under subsection (4)(a), (b), (c), and (d), only to the extent that the distribution under subsection (4)(d) is for an underpayment of the current calendar year’s subsection (4)(a), (b), or (c) amount.

(b) For millage levied by a county under section 20b of 1909 PA 283, MCL 224.20b, the governing bodies of the cities and villages in the county and the board of county road commissioners shall agree to a formula that allocates a portion of the payments under this section to each city and village based on the city and village share of the losses and acquisition cost used to calculate the payment to the county described in this subdivision and each city’s and village’s portion of that share. The formula once established will be in effect until the effective date of any subsequent agreement. If the governing bodies of the cities and villages and the board of county road commissioners described in this subdivision do not agree on a formula by March 31 following the receipt of the subsection (8)(b) payment, the department may prescribe a formula for allocating the payments under this section.

(c) Payments under this section to a municipality that is participating in an intergovernmental conditional transfer by contract under 1984 PA 425, MCL 124.21 to 124.30, or any other interlocal agreement that provides for a millage-based sharing of revenue, shall be allocated between the parties based on the proportionate share of the payment as it is attributable to the area subject to the agreement.

(8) The authority shall make the payments required by subsection (3) not later than June 20, 2016, payments required by subsection (6) not later than October 20, 2018, and payments required by subsection (4) not later than on the following dates:

(a) Except as provided in subdivision (d), for county allocated millage, November 20, 2017, and thereafter October 20 of the year the millage is levied.

(b) Except as provided in subdivision (d), for county extra-voted millage, township millage, and other millages levied 100% in December of a year, February 20 of the following year.

(c) Except as provided in subdivision (d), for other millages, November 20, 2017, and thereafter October 20 of the year the millage is levied.

(d) Payment under subsection (4)(d) and (e) shall be made on May 20 of the year following the calendar year for which the payments are calculated.

(9) If the authority has insufficient funds to make the payments on the dates required in subsection (8), the department shall advance to the authority the amount necessary for the authority to make the required payments. The authority shall repay the advance to the department from the local community stabilization share.

(10) For each fiscal year from fiscal year 2015-2016 through fiscal year 2018-2019, the authority may use up to $300,000.00 of the local community stabilization share revenue for purposes consistent with implementing and administering this act.

(11) The authority shall distribute local community stabilization share revenue under this section as follows:

(a) From fiscal year 2015-2016 local community stabilization share revenue, $19,200,000.00 for calendar years 2014 and 2015 and $76,900,000.00 for calendar year 2016.

(b) From fiscal year 2016-2017 local community stabilization share revenue, $297,400,000.00 for calendar year 2016 and $83,200,000.00 for calendar year 2017.

(c) From fiscal year 2017-2018 local community stabilization share revenue, $321,500,000.00 for calendar year 2017 and $89,000,000.00 for calendar year 2018.

(d) From fiscal year 2018-2019 local community stabilization share revenue, $341,800,000.00 for calendar year 2018 and $95,900,000.00 for calendar year 2019.

(e) From fiscal year 2019-2020 local community stabilization share revenue, $364,500,000.00 for calendar year 2019 and $101,400,000.00 for calendar year 2020.

(f) From fiscal year 2020-2021 local community stabilization share revenue, $383,500,000.00 for calendar year 2020 and $108,000,000.00 for calendar year 2021.

(g) From fiscal year 2021-2022 local community stabilization share revenue, $405,700,000.00 for calendar year 2021 and $115,600,000.00 for calendar year 2022.

(h) From fiscal year 2022-2023 local community stabilization share revenue, $428,300,000.00 for calendar year 2022 and $119,700,000.00 for calendar year 2023.

(i) From fiscal year 2023-2024 local community stabilization share revenue, $438,900,000.00 for calendar year 2023 and $122,800,000.00 for calendar year 2024.

(j) From fiscal year 2024-2025 local community stabilization share revenue, $445,800,000.00 for calendar year 2024 and $124,000,000.00 for calendar year 2025.

(k) From fiscal year 2025-2026 local community stabilization share revenue, $447,100,000.00 for calendar year 2025 and $124,300,000.00 for calendar year 2026.

(l) From fiscal year 2026-2027 local community stabilization share revenue, $447,700,000.00 for calendar year 2026 and $124,500,000.00 for calendar year 2027.

(m) From fiscal year 2027-2028 local community stabilization share revenue, $448,000,000.00 for calendar year 2027 and $124,600,000.00 for calendar year 2028.

(n) From the local community stabilization share revenue for fiscal year 2028-2029 and each fiscal year thereafter, the authority shall increase the prior fiscal year’s 2 distribution amounts under this subsection by the personal property growth factor, the first amount for the calendar year in which the fiscal year begins and the second amount for the calendar year in which the fiscal year ends. As used in this subdivision, “personal property growth factor” means that term as defined in section 2c of the use tax act, 1937 PA 94, MCL 205.92c.

Sec. 18. (1) Beginning in fiscal year 2015-2016, and each fiscal year thereafter, the department shall determine the amount of the distributions under this act.

(2) Each municipality shall submit to the department sufficient information for the department to make its calculations under this act, as determined by the department.

(3) The department shall annually make the distribution calculations and the commercial personal property and industrial personal property taxable values available on the internet.

(4) For calendar year 2018, each municipality may review the prior year distribution calculations that the department posted on the internet to determine if there are any errors in reporting under section 13(4) or any calculation errors made by the department. For calendar year 2018 and subsequent calendar years, each municipality may review the current year distribution calculations that the department posted on the internet to determine if there are any errors in reporting under section 13(4) or any calculation errors made by the department. A municipality may notify the department of any errors identified by providing substantiating documentation to support an adjustment to the payment amount by March 31 of the year following the calendar year for which the payments are calculated, except that for errors identified in calculations under section 13(5) for the current calendar year, a municipality shall notify the department by August 1 of the calendar year for which the payments are calculated. Upon the department’s review of the substantiating documentation and verification of the errors, the department shall calculate an underpayment or overpayment amount in accordance with section 17(5). The department shall determine if the substantiating documentation is sufficient.

(5) Each municipality may review the annual commercial personal property and industrial personal property taxable values posted by the department on the internet to determine if there are any errors in reporting under section 13(3) or any calculation errors made by the department. A municipality may notify the department of any errors identified by providing substantiating documentation to support an adjustment to the payment amount, as described in subdivisions (a) to (e). Upon the department’s review of the substantiating documentation and verification of the errors, the department shall calculate an underpayment or overpayment amount in accordance with section 17(5). The department shall determine if the substantiating documentation is sufficient. Error notifications under this subsection are subject to the following, as applicable:

(a) For the 2013, 2014, and 2015 commercial personal property and industrial personal property taxable values, as reported by the county equalization director in calendar year 2015 under section 13(3), municipalities must report any inaccurate commercial personal property and industrial personal property taxable values to the county equalization director by August 1, 2018, except as provided in section 17(6). County equalization directors shall notify the department by August 13, 2018, of any corrected 2013, 2014, and 2015 commercial personal property and industrial personal property taxable values, by providing substantiating documentation to support the corrected values.

(b) For the 2013 and 2016 commercial personal property and industrial personal property taxable values, as reported by the county equalization director in calendar year 2016 under section 13(3), municipalities must report any inaccurate commercial personal property and industrial personal property taxable values to the county equalization director by February 28, 2019, except as provided in section 17(6). County equalization directors shall notify the department by March 29, 2019, of any corrected 2013 and 2016 commercial personal property and industrial personal property taxable values by providing substantiating documentation to support the corrected values.

(c) For the 2013, 2014, 2015, and 2016 commercial personal property and industrial personal property taxable values, as reported on July 10, 2017, under section 151(1) of the state school aid act of 1979, 1979 PA 94, MCL 388.1751, municipalities must report any inaccurate commercial personal property and industrial personal property taxable values to the county treasurer by February 28, 2019, except as provided in section 17(6). County treasurers shall notify the department by March 29, 2019, of any corrected 2013, 2014, 2015, and 2016 commercial personal property and industrial personal property taxable values by providing substantiating documentation to support the corrected values. For purposes of this subdivision, the corrected 2013, 2014, 2015, and 2016 commercial personal property and industrial personal property taxable values shall be the current taxable values on July 10, 2017.

(d) For the 2013 and 2017 commercial personal property and industrial personal property taxable values, as reported by the county equalization director in calendar year 2017 under section 13(3), municipalities must report any inaccurate commercial personal property and industrial personal property taxable values to the county equalization director by February 28, 2019, except as provided in section 17(6). County equalization directors shall notify the department by March 29, 2019, of any corrected 2013 and 2017 commercial personal property and industrial personal property taxable values by providing substantiating documentation to support the corrected values.

(e) For 2018 and subsequent years’ commercial personal property and industrial personal property taxable values, as reported by the county equalization director by May 31 of each year under section 13(3), municipalities must report any inaccurate commercial personal property and industrial personal property taxable values for the current year to the county equalization director by February 28 of the following year. County equalization directors shall notify the department by March 31 of each year of any corrected prior year commercial personal property and industrial personal property taxable values, by providing substantiating documentation to support the corrected values.

Sec. 21. (1) If a municipality does not adjust its debt millage rate to reflect reimbursement for the small taxpayer exemption loss under section 17(1)(a), the reimbursement under section 17(1)(a) shall be reduced by the excess debt taxes levied.

(2) A municipality shall use the amount received under section 17(4) for debt millage to pay debt. If a payment under section 17(4) for debt millage is not used to pay debt, the amount not used to pay debt shall be deducted from a subsequent payment under section 17(4), unless all debts have been repaid, in which case the amount received under section 17(4) for debt millage may be used by the municipality in any manner and shall not be deducted from a subsequent payment under section 17(4).

This act is ordered to take immediate effect.

Clerk of the House of Representatives

Secretary of the Senate

Approved

Governor