Bill Text: MI SB1222 | 2017-2018 | 99th Legislature | Engrossed
Bill Title: Economic development; brownfield redevelopment authority; reimbursement formula for tax increment revenues lost as a result of certain personal property tax exemptions; modify. Amends sec. 15a of 1996 PA 381 (MCL 125.2665a).
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2018-12-28 - Assigned Pa 0480'18 With Immediate Effect [SB1222 Detail]
Download: Michigan-2017-SB1222-Engrossed.html
SB-1222, As Passed House, December 20, 2018
SB-1222, As Passed Senate, December 6, 2018
SENATE BILL No. 1222
November 28, 2018, Introduced by Senator NOFS and referred to the Committee on Economic Development and International Investment.
A bill to amend 1996 PA 381, entitled
"Brownfield redevelopment financing act,"
by amending section 15a (MCL 125.2665a), as amended by 2016 PA 471.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 15a. (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 act,
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 within the
municipality 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 advance made before June 5, 2008.
(b) To repay an obligation issued or incurred before June 5,
2008.
(c) To pay or reimburse a developer or owner of eligible
property or a municipality that created the authority for eligible
activities pursuant to a development and reimbursement agreement
entered into not before June 5, 2008.
(d) To pay for eligible activities identified in a brownfield
plan, or an amendment to that plan approved by board of the
authority before September 3, 2008 if the plan contains all of the
following and the work plan for the capture of school taxes has
been approved before June 5, 2009:
(i) A detailed description of the project.
(ii) A statement of the estimated cost of the project.
(iii) The specific location of the project.
(iv) The name of any developer of the project.
(2) Not later than June 15 of each year, or for 2013 only,
before March 28, 2014, 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.
(c) The tax increment revenues the authority estimates it
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 advances, obligations, development and
reimbursement agreements, and projects included in brownfield plans
described in subsection (1), and shall separately identify the
payments due on each of those advances, obligations, development
agreements, and eligible activities 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, or would be used for, the repayment of an
advance, the payment of an obligation, the payment of eligible
activities pursuant to a development and reimbursement agreement,
or the payment of eligible activities identified in a brownfield
plan described in subsection (1). 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 act
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 of each 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 of treasury. 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.
(c) An excess amount required to be reported under subsection
(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
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 11b of the local
development
financing act, 1986 PA 281, MCL 125.2161b, section 12b
of
the tax increment finance authority act, 1980 PA 450, MCL
125.1812b,
and section 13c of 1975 PA 197, MCL 125.1663c, sections
213c, 312b, and 411b of the recodified tax increment financing act,
2018 PA 57, MCL 125.4213c, 125.4312b, and 125.4411b, 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.
(12) As used in this section:
(a)
"Advance" means that term as defined in section 1 of 1975
PA
197, MCL 125.1651.201 of the
recodified tax increment financing
act, 2018 PA 57, MCL 125.4201.
(b)
"Obligation" means that term as defined in section 1 of
1975
PA 197, MCL 125.1651.201 of
the recodified tax increment
financing act, 2018 PA 57, MCL 125.4201.
