HB-4712, As Passed Senate, December 12, 2007

SENATE SUBSTITUTE FOR

HOUSE BILL NO. 4712

A bill to amend 1996 PA 381, entitled

"Brownfield redevelopment financing act,"

by amending section 13 (MCL 125.2663), as amended by 2006 PA 467.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 13. (1) Subject to section 15, the board may implement a

brownfield plan. The brownfield plan may apply to 1 or more parcels

of eligible property whether or not those parcels of eligible

property are contiguous and may be amended to apply to additional

parcels of eligible property. Except as otherwise authorized by

this act, if more than 1 ~~parcel of~~ eligible property is included

within the plan, the tax increment revenues under the plan shall be

determined individually for each ~~parcel of~~ eligible property. Each

plan or an amendment to a plan shall be approved by the governing

body of the municipality and shall contain all of the following:

(a) A description of the costs of the plan intended to be paid

for with the tax increment revenues or, for a plan for eligible

properties qualified on the basis that the property is owned or

under the control of a land bank fast track authority, a listing of

all eligible activities that may be conducted for 1 or more of the

eligible properties subject to the plan.

(b) A brief summary of the eligible activities that are

proposed for each eligible property or, for a plan for eligible

properties qualified on the basis that the property is owned or

under the control of a land bank fast track authority, a brief

summary of eligible activities conducted for 1 or more of the

eligible properties subject to the plan.

increment revenues for each year of the plan from ~~each parcel of~~

the eligible property. ~~, or from all eligible properties qualified~~

~~on the basis that the property is owned or under the control of a~~

~~land bank fast track authority, and in the aggregate.~~ The plan may

provide for the use of part or all of the captured taxable value,

including deposits in the local site remediation revolving fund,

but the portion intended to be used shall be clearly stated in the

plan. The plan shall not provide either for an exclusion from

captured taxable value of a portion of the captured taxable value

or for an exclusion of the tax levy of 1 or more taxing

jurisdictions unless the tax levy is excluded from tax increment

revenues in section 2(dd), or unless the tax levy is excluded from

capture under section 15.

House Bill No. 4712 as amended December 12, 2007

(d) The method by which the costs of the plan will be

financed, including a description of any advances made or

anticipated to be made for the costs of the plan from the

municipality.

(e) The maximum amount of note or bonded indebtedness to be

incurred, if any.

(f) The duration of the brownfield plan for eligible

activities on eligible property , which shall not exceed 35 years

following the date of the resolution approving the plan amendment

related to a particular eligible property. Each plan amendment

shall also contain the duration of capture of tax increment

revenues including the beginning date of the capture of tax

increment revenues, which beginning date shall be identified in the

brownfield plan and <<which beginning date>> shall not be later than 5

years following the

date of the resolution approving the plan amendment related to a

particular eligible property and which duration shall not exceed

the lesser of the period authorized under subsections (4) and (5)

or 30 years from the beginning date of the capture of tax increment

revenues. The date for the beginning of capture of tax increment

revenues may be amended by the authority but not to a date later

than 5 years after the date of the resolution adopting the plan. <<The

authority may not amend the date for the beginning of capture of tax increment revenues if the authority has begun to reimburse eligible activities from the capture of tax increment revenues. The authority may not amend the date for the beginning of capture if that amendment would lead to the duration of capture of tax increment revenues being longer than 30 years or the period authorized under subsections (4) and (5). If the date for the beginning of capture of tax increment revenues is amended by the authority and that plan includes the capture of tax increment revenues for school operating purposes, then the authority that amended that plan shall notify the department and the Michigan economic growth authority within 30 days of the approval of the amendment.>>

(g) An estimate of the impact of tax increment financing on

the revenues of all taxing jurisdictions in which the eligible

property is located.

(h) A legal description of ~~each parcel of~~ the eligible

property to which the plan applies, a map showing the location and

dimensions of each eligible property, a statement of the

characteristics that qualify the property as eligible property, and

a statement of whether personal property is included as part of the

eligible property. If the project is on property that is

functionally obsolete, the taxpayer shall include, with the

application, an affidavit signed by a level 3 or level 4 assessor,

that states that it is the assessor's expert opinion that the

property is functionally obsolete and the underlying basis for that

opinion.

(i) Estimates of the number of persons residing on each

eligible property to which the plan applies and the number of

families and individuals to be displaced. If occupied residences

are designated for acquisition and clearance by the authority, the

plan shall include a demographic survey of the persons to be

displaced, a statistical description of the housing supply in the

community, including the number of private and public units in

existence or under construction, the condition of those in

existence, the number of owner-occupied and renter-occupied units,

the annual rate of turnover of the various types of housing and the

range of rents and sale prices, an estimate of the total demand for

housing in the community, and the estimated capacity of private and

public housing available to displaced families and individuals.

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

persons displaced by implementation of the plan.

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

implementation of the plan, and financial assistance and

reimbursement of expenses, including litigation expenses and

expenses incident to the transfer of title, in accordance with the

standards and provisions of the uniform relocation assistance and

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

(l) A strategy for compliance with 1972 PA 227, MCL 213.321 to

213.332.

(m) A description of proposed use of the local site

remediation revolving fund.

(n) Other material that the authority or governing body

considers pertinent.

(2) The percentage of all taxes levied on a parcel of eligible

property for school operating expenses that is captured and used

under a brownfield plan and all tax increment finance plans under

1975 PA 197, MCL 125.1651 to 125.1681, the tax increment finance

authority act, 1980 PA 450, MCL 125.1801 to 125.1830, or the local

development financing act, 1986 PA 281, MCL 125.2151 to 125.2174,

shall not be greater than the combination of the plans' percentage

capture and use of all local taxes levied for purposes other than

for the payment of principal of and interest on either obligations

approved by the electors or obligations pledging the unlimited

taxing power of the local unit of government. This subsection shall

apply only when taxes levied for school operating purposes are

subject to capture under section 15.

(3) Except as provided in this subsection and subsections (5),

(15), and (16), tax increment revenues related to a brownfield plan

shall be used only for costs of eligible activities attributable to

the eligible property, the captured taxable value of which produces

the tax increment revenues, including the cost of principal of and

interest on any obligation issued by the authority to pay the costs

of eligible activities attributable to the eligible property, and

the reasonable costs of preparing a brownfield plan or a work plan

~~or remedial action plan~~ for the eligible property, including the

actual cost of the review of the work plan ~~or remedial action plan~~

under section 15. For property owned or under the control of a land

bank fast track authority, tax increment revenues related to a

brownfield plan may be used for eligible activities attributable to

any eligible property owned or under the control of the land bank

fast track authority, the cost of principal of and interest on any

obligation issued by the authority to pay the costs of eligible

activities, the reasonable costs of preparing a work plan, or

~~remedial action plan,~~ and the actual cost of the review of the work

plan ~~or remedial action plan~~ under section 15. ~~Tax~~ Except as

provided in subsection (18), tax increment revenues captured from

taxes levied by this state under the state education tax act, 1993

PA 331, MCL 211.901 to 211.906, or taxes levied by a local school

district shall not be used for eligible activities described in

section 2(m)(iv)(E).

(4) Except as provided in subsection (5), a brownfield plan

shall not authorize the capture of tax increment revenue from

eligible property after the year in which the total amount of tax

increment revenues captured is equal to the sum of the costs

permitted to be funded with tax increment revenues under this act.

(5) A brownfield plan may authorize the capture of additional

tax increment revenue from an eligible property in excess of the

amount authorized under subsection (4) during the time of capture

for the purpose of paying the costs permitted under subsection (3),

or for not more than 5 years after the time that capture is

required for the purpose of paying the costs permitted under

subsection (3), or both. Excess revenues captured under this

subsection shall be deposited in the local site remediation

revolving fund created under section 8 and used for the purposes

authorized in section 8. If tax increment revenues attributable to

taxes levied for school operating purposes from eligible property

are captured by the authority for purposes authorized under

subsection (3), the tax increment revenues captured for deposit in

the local site remediation revolving fund also may include tax

increment revenues attributable to taxes levied for school

operating purposes in an amount not greater than the tax increment

revenues levied for school operating purposes captured from the

eligible property by the authority for the purposes authorized

under subsection (3). Excess tax increment revenues from taxes

levied for school operating purposes for eligible activities

authorized under subsection (15) by the Michigan economic growth

authority shall not be captured for deposit in the local site

remediation revolving fund.

(6) An authority shall not expend tax increment revenues to

acquire or prepare eligible property, unless the acquisition or

preparation is an eligible activity.

(7) Costs of eligible activities attributable to eligible

property include all costs that are necessary or related to a

release from the eligible property, including eligible activities

on properties affected by a release from the eligible property. For

purposes of this subsection, "release" means that term as defined

in section 20101 of the natural resources and environmental

protection act, 1994 PA 451, MCL 324.20101.

(8) Costs of a response activity paid with tax increment

revenues that are captured pursuant to subsection (3) may be

recovered from a person who is liable for the costs of eligible

activities at an eligible property. This state or an authority may

undertake cost recovery for tax increment revenue captured. Before

an authority or this state may institute a cost recovery action, it

must provide the other with 120 days' notice. This state or an

authority that recovers costs under this subsection shall apply

those recovered costs to the following, in the following order of

priority:

(a) The reasonable attorney fees and costs incurred by this

state or an authority in obtaining the cost recovery.

(b) One of the following:

(i) If an authority undertakes the cost recovery action, the

authority shall deposit the remaining recovered funds into the

local site remediation fund created pursuant to section 8, if such

a fund has been established by the authority. If a local site

remediation fund has not been established, the authority shall

disburse the remaining recovered funds to the local taxing

jurisdictions in the proportion that the local taxing

jurisdictions' taxes were captured.

(ii) If this state undertakes a cost recovery action, this

state shall deposit the remaining recovered funds into the

revitalization revolving loan fund established under section 20108a

of the natural resources and environmental protection act, 1994 PA

451, MCL 324.20108a.

(iii) If this state and an authority each undertake a cost

recovery action, undertake a cost recovery action jointly, or 1 on

behalf of the other, the amount of any remaining recovered funds

shall be deposited pursuant to subparagraphs (i) and (ii) in the

proportion that the tax increment revenues being recovered

represent local taxes and taxes levied for school operating

purposes, respectively.

(9) Approval of the brownfield plan or an amendment to a

brownfield plan shall be in accordance with the notice and approval

provisions of this section and section 14.

(10) Before approving a brownfield plan for an eligible

property, the governing body shall hold a public hearing on the

brownfield plan. By resolution, the governing body may delegate the

public hearing process to the authority or to a subcommittee of the

governing body subject to final approval by the governing body.

Notice of the time and place of the hearing shall be given by

publication twice in a newspaper of general circulation designated

by the municipality, ~~the first of which shall be~~ not less than 20

10 or more than 40 days before the date set for the hearing.

(11) Notice of the time and place of the hearing on a

brownfield plan shall contain all of the following:

(a) A description of the property to which the plan applies in

relation to existing or proposed highways, streets, streams, or

otherwise.

(b) A statement that maps, plats, and a description of the

brownfield plan are available for public inspection at a place

designated in the notice and that all aspects of the brownfield

plan are open for discussion at the public hearing required by this

section.

appropriate.

(12) At the time set for the hearing on the brownfield plan

required under subsection (10), the governing body shall ~~provide an~~

~~opportunity for~~ ensure that interested persons have an opportunity

to be heard and ~~shall receive and consider~~ that written

communications ~~in writing~~ with reference to the brownfield plan are

received and considered. The governing body shall ~~make and preserve~~

ensure that a record of the public hearing is made and preserved,

including all data presented at the hearing.

(13) Not less than 20 10 days before the hearing on the

brownfield plan, the governing body shall provide notice of the

hearing to the taxing jurisdictions that levy taxes subject to

capture under this act. The authority shall fully inform the taxing

jurisdictions about the fiscal and economic implications of the

proposed brownfield plan. At that hearing, an official from a

taxing jurisdiction with millage that would be subject to capture

under this act has the right to be heard in regard to the adoption

of the brownfield plan. Not less than 10 days before the hearing on

the brownfield plan, the governing body shall provide notice of the

hearing to the department if the brownfield plan involves the use

of taxes levied for school operating purposes to pay for eligible

activities that require the approval of a work plan by the

department under section 15(1)(a) and the Michigan economic growth

authority, or its designee, if the brownfield plan involves the use

of taxes levied for school operating purposes to pay for eligible

activities subject to subsection (15) or (18).

(14) The authority shall not enter into agreements with the

taxing jurisdictions and the governing body of the municipality to

share a portion of the captured taxable value of an eligible

property. Upon adoption of the plan, the collection and

transmission of the amount of tax increment revenues as specified

in this act shall be binding on all taxing units levying ad valorem

property taxes or specific taxes against property located in the

zone.

(15) Except as provided by subsection (18), if a brownfield

plan includes the capture of taxes levied for school operating

purposes ~~or the use of tax increment revenues related to a~~

~~brownfield plan for the cost of eligible activities attributable to~~

~~more than 1 eligible property that is adjacent and contiguous to~~

~~all other eligible properties covered by the development agreement,~~

~~whether or not the captured taxes are levied for school operating~~

~~purposes,~~ approval of a work plan by the Michigan economic growth

authority before January 1, ~~2008~~ 2013 to use taxes levied for

school operating ~~taxes~~ purposes and a development agreement or

reimbursement agreement between the municipality or authority and

an owner or developer of eligible property are required if the

~~revenues~~ taxes levied for school operating purposes will be used

for infrastructure improvements that directly benefit eligible

property, demolition of structures that is not response activity

under part 201 of the natural resources and environmental

protection act, 1994 PA 451, MCL 324.20101 to 324.20142, lead or

asbestos abatement, or site preparation that is not response

activity under section 20101 of the natural resources and

environmental protection act, 1994 PA 451, MCL 324.20101,

relocation of public buildings or operations for economic

development purposes, or acquisition of property by a land bank

fast track authority if acquisition of the property is for economic

development purposes. The eligible activities to be conducted

described in this subsection shall be consistent with the work plan

submitted by the authority to the Michigan economic growth

authority. The department's approval is not required for the

capture of taxes levied for school operating purposes for eligible

activities described in this subsection.

(16) The limitations of section 15(1) upon use of tax

increment revenues by an authority shall not apply to the following

costs and expenses:

(a) In each fiscal year of the authority, ~~$75,000.00~~ the

amount described in subsection (19) for the following purposes for

tax increment revenues attributable to local taxes:

(i) Reasonable and actual administrative and operating expenses

of the authority.

(ii) Baseline environmental assessments, due care activities,

and additional response activities conducted by or on behalf of the

authority related directly to work conducted on prospective

eligible properties prior to approval of the brownfield plan.

(b) Reasonable costs of preparing a work plan ~~or remedial~~

~~action plan~~ or the cost of the review of a work plan for which tax

House Bill No. 4712 as amended December 12, 2007

increment revenues may be used under section 13(3).

reasonable costs of site investigations described in section

15(1)(a)(i), baseline environmental assessments, and due care

activities incurred by a person other than the authority related

directly to work conducted on eligible property or prospective

eligible properties prior to approval of the brownfield plan, if

those costs and the eligible property are included in a brownfield

plan approved by the authority.

(17) A brownfield authority may reimburse advances, with or

without interest, made by a municipality under section 7(3), a land

bank fast track authority, or any other person or entity for costs

of eligible activities with any source of revenue available for use

of the brownfield authority under this act. <<~~and~~ If an authority

reimburses a person or entity under this section for an advance for the

payment or reimbursement of the cost of eliGible activities and interest

thereon, the authority may capture local taxes for the payment of that

interest. if an authority reimburses a person or entity under this

section for an advance for the payment or reimbursement of the cost of

baseline environmental assessments, due care, and additional response

activities and interest thereon included in a work plan approved by the

department, the authority may capture taxes levied for school operating

purposes and local taxes for the payment of that interest. if an

authority reimburses a person or entity under this section for an advance

for the payment or reimbursement of the cost of eligible activities that

are not baseline environmental assessments, due care, and additional

response activities and interest thereon included in a work plan approved

House Bill No. 4712 as amended December 12, 2007

by the michigan economic growth authority, the authority may capture

taxes levied for school operating purposes and local taxes for the

payment of that interest provided that the michigan economic growth

authority grants an approval for the capture of taxes levied for school

operating purposes to pay such interest.>> An authority may enter into

agreements related to ~~those~~

these reimbursements and payments. A reimbursement agreement for

these purposes and the obligations under that reimbursement

agreement shall not be subject to section 12 or the revised

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

(18) If a brownfield plan includes the capture of taxes levied

for school operating purposes, approval of a work plan by the

Michigan economic growth authority in the manner required under

section 15(14) to (16) is required in order to use tax increment

revenues attributable to taxes levied for school operating purposes

for purposes of eligible activities described in section 2(m)(iv)(E)

for 1 or more parcels of eligible property. The work plan to be

submitted to the Michigan economic growth authority under this

subsection shall be in a form prescribed by the Michigan economic

growth authority. The eligible activities to be conducted and

described in this subsection shall be consistent with the work plan

submitted by the authority to the Michigan economic growth

authority. The department's approval is not required for the

capture of taxes levied for school operating purposes for eligible

activities described in this section.

(19) In each fiscal year of the authority, the amount of tax

increment revenues attributable to local taxes that an authority

can use for the purposes described in subsection (16)(a) shall be

determined as follows:

(a) For authorities that have 5 or fewer active projects,

$100,000.00.

(b) For authorities that have 6 or more but fewer than 11

active projects, $125,000.00.

active projects, $150,000.00.

(d) For authorities that have 16 or more but fewer than 21

active projects, $175,000.00.

(e) For authorities that have 21 or more but fewer than 26

active projects, $200,000.00.

(f) For authorities that have 26 or more active projects,

$300,000.00.

(20) As used in subsection (19), "active project" means a

project in which the authority is currently capturing taxes under

this act.

Enacting section 1. This amendatory act does not take effect

unless all of the following bills of the 94th Legislature are

enacted into law:

(a) Senate Bill No. 534.

(b) Senate Bill No. 539.