Bill Text: MI HB6559 | 2017-2018 | 99th Legislature | Introduced

Michigan House Bill 6559 (Prior Session Legislation)

Introduced

Bill Title: Economic development; tax increment financing; reimbursement formula for tax increment revenues lost as a result of certain personal property tax exemptions; modify. Amends secs. 213c, 312b & 411b of 2018 PA 57 (MCL 125.4213c et seq.).

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2018-12-04 - Referred To Second Reading [HB6559 Detail]

Download: Michigan-2017-HB6559-Introduced.html

HOUSE BILL No. 6559

November 29, 2018, Introduced by Rep. Maturen and referred to the Committee on Tax Policy.

A bill to amend 2018 PA 57, entitled

"Recodified tax increment financing act,"

by amending sections 213c, 312b, and 411b (MCL 125.4213c,

125.4312b, and 125.4411b).

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

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)~~ 1211(1) and (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. For fiscal years beginning January 1, 2019 and

thereafter, the amount under this subdivision shall be calculated

using the greater of the following:

(i) The captured assessed value of industrial personal

property, commercial personal property, and the personal property

component of exemption certificates granted under 1974 PA 198, MCL

207.551 to 207.572, that are sited on property classified as either

industrial or commercial, for the authority's fiscal year ending in

the current year.

(ii) The 2013 captured assessed value of industrial personal

property, commercial personal property, and the personal property

component of exemption certificates granted under 1974 PA 198, MCL

207.551 to 207.572, that are sited on property classified as either

industrial or commercial.

(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. 312b. (1) If the amount of tax increment revenues lost as