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SB-0364, As Passed Senate, February 20, 2008

SUBSTITUTE FOR

SENATE BILL NO. 364

A bill to amend 2005 PA 280, entitled

"Corridor improvement authority act,"

by amending sections 2, 5, 6, 9, 18, 20, 22, 23, and 27 (MCL

125.2872, 125.2875, 125.2876, 125.2879, 125.2888, 125.2890,

125.2892, 125.2893, and 125.2897), sections 5 and 18 as amended by

2007 PA 44.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 2. As used in this act:

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

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

anticipation of repayment by the authority. Evidence of the intent

to repay an advance may include, but is not limited to, an executed

agreement to repay, provisions contained in a tax increment

financing plan approved prior to the advance, or a resolution of

the authority or the municipality.

(b) "Assessed value" means the taxable value as determined

under section 27a of the general property tax act, 1893 PA 206, MCL

211.27a.

under this act.

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

(e) "Business district" means an area of a municipality zoned

and used principally for business.

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

by which the current assessed value of the development area,

including the assessed value of property for which specific local

taxes are paid in lieu of property taxes as determined in section

~~3(e)~~ 3(d), exceeds the initial assessed value. The state tax

commission shall prescribe the method for calculating captured

assessed value.

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

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

township.

(h) "Development area" means that area described in section 5

to which a development plan is applicable.

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

requirements for a development area set forth in section 21.

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

development plan.

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

(l) "Governing body" or "governing body of a municipality"

means the elected body of a municipality having legislative powers.

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

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

development area at the time the ~~ordinance~~ resolution establishing

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

recent assessment roll of the municipality for which equalization

has been completed at the time the resolution is adopted. Property

exempt from taxation at the time of the determination of the

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

of determining initial assessed value, property for which a

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

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

assessed value of property for which a specific local tax was paid

in lieu of a property tax shall be determined as provided in

section ~~3(e)~~ 3(d).

(n) "Land use plan" means a plan prepared under ~~section 1 of~~

~~the city and village zoning act,~~ former 1921 PA 207, ~~MCL 125.581,~~

~~or the township zoning act,~~ former 1943 PA 184, ~~MCL 125.271 to~~

~~125.310~~ or a site plan under the Michigan zoning enabling act, 2006

PA 110, MCL 125.3101 to 125.3702.

(o) "Municipality" means 1 of the following:

(i) A city.

(ii) A village.

(iii) A township.

Sec. 5. A development area shall only be established in a

municipality and, except for a development area located in a

qualified development area, shall comply with all of the following

criteria:

(a) Be Is adjacent to or is within 500 feet of a road

classified as an arterial or collector according to the federal

highway administration manual "Highway Functional Classification -

Concepts, Criteria and Procedures".

(b) ~~Contain~~ Contains at least 10 contiguous parcels or at

least 5 contiguous acres.

in the development area is classified as commercial real property

under section 34c of the general property tax act, 1893 PA 206, MCL

211.34c.

(d) Residential use, commercial use, or industrial use has

been allowed and conducted under the zoning ordinance or conducted

in the entire development area, for the immediately preceding 30

years.

(e) Is presently served by municipal water ~~and~~ or sewer.

(f) ~~Zoned~~ Is zoned to allow for mixed use that includes high-

density residential use.

(g) The municipality agrees to all of the following:

(i) To expedite the local permitting and inspection process in

the development area.

(ii) To modify its master plan to provide for walkable

nonmotorized interconnections, including sidewalks and streetscapes

throughout the development area.

Sec. 6. (1) If the governing body of a municipality determines

that it is necessary for the best interests of the public to

redevelop its commercial corridors and to promote economic growth,

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

create and provide for the operation of an authority.

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

state that the proposed development area meets the criteria in

section 5, set a date for a public hearing on the adoption of a

proposed ~~ordinance~~ resolution creating the authority, and designate

the boundaries of the development area. Notice of the public

hearing shall be published twice in a newspaper of general

circulation in the municipality, not less than 20 or more than 40

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

the hearing, the governing body proposing to create the authority

shall also mail notice of the hearing to the property taxpayers of

record in the proposed development area, to the governing body of

each taxing jurisdiction levying taxes that would be subject to

capture if the authority is established and a tax increment

financing plan is approved, and to the state tax commission.

Failure of a property taxpayer to receive the notice does not

invalidate these proceedings. Notice of the hearing shall be posted

in at least 20 conspicuous and public places in the proposed

development area not less than 20 days before the hearing. The

notice shall state the date, time, and place of the hearing and

shall describe the boundaries of the proposed development area. A

citizen, taxpayer, or property owner of the municipality or an

official from a taxing jurisdiction with millage that would be

subject to capture has the right to be heard in regard to the

establishment of the authority and the boundaries of the proposed

development area. The governing body of the municipality shall not

incorporate land into the development area not included in the

description contained in the notice of public hearing, but it may

eliminate described lands from the development area in the final

determination of the boundaries.

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

governing body of the municipality intends to proceed with the

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

its members, ~~an ordinance~~ a resolution establishing the authority

and designating the boundaries of the development area within which

the authority shall exercise its powers. The adoption of the

~~ordinance~~ resolution is subject to any applicable statutory or

charter provisions in respect to the approval or disapproval by the

chief executive or other officer of the municipality and the

adoption of ~~an ordinance~~ a resolution over his or her veto. This

~~ordinance~~ resolution shall be filed with the secretary of state

promptly after its adoption and shall be published at least once in

a newspaper of general circulation in the municipality.

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

the boundaries of the development area to include or exclude lands

from the development area in the same manner as adopting the

~~ordinance~~ resolution creating the authority.

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

into an agreement with an adjoining municipality that has created

an authority to jointly operate and administer those authorities

under an interlocal agreement under the urban cooperation act of

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

agreement shall include, but is not limited to, a plan to

coordinate and expedite local inspections and permit approvals, a

plan to address contradictory zoning requirements, and a date

certain to implement all provisions of these plans. If a

municipality enters into an interlocal agreement under this

subsection, the municipality shall provide a copy of that

interlocal agreement to the state tax commission within 60 days of

entering into the interlocal agreement.

Sec. 9. (1) The board may employ and fix the compensation of a

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

municipality. The director shall serve at the pleasure of the

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

of director. Before beginning his or her duties, the director shall

take and subscribe to the constitutional oath, and furnish bond, by

posting a bond in the sum determined in the ~~ordinance~~ resolution

establishing the authority payable to the authority for use and

benefit of the authority, approved by the board, and filed with the

municipal clerk. The premium on the bond shall be considered an

operating expense of the authority, payable from funds available to

the authority for expenses of operation. The director shall be the

chief executive officer of the authority. Subject to the approval

of the board, the director shall supervise and be responsible for

the preparation of plans and the performance of the functions of

the authority in the manner authorized by this act. The director

shall attend the meetings of the board and shall provide to the

board and to the governing body of the municipality a regular

report covering the activities and financial condition of the

authority. If the director is absent or disabled, the board may

designate a qualified person as acting director to perform the

duties of the office. Before beginning his or her duties, the

acting director shall take and subscribe to the oath, and furnish

bond, as required of the director. The director shall furnish the

board with information or reports governing the operation of the

authority as the board requires.

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

treasurer, who shall keep the financial records of the authority

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

the expenditure of funds of the authority. The treasurer shall

perform all duties delegated to him or her by the board and shall

furnish bond in an amount prescribed by the board.

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

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

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

maintained by the treasurer. The secretary shall attend meetings of

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

other duties delegated by the board.

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

the proper performance of its duties. The legal counsel shall

represent the authority in actions brought by or against the

authority.

(5) The board may employ other personnel considered necessary

by the board.

Sec. 18. (1) If the authority determines that it is necessary

for the achievement of the purposes of this act, the authority

shall prepare and submit a tax increment financing plan to the

governing body of the municipality. The plan shall include a

development plan as provided in section 21, a detailed explanation

of the tax increment procedure, the maximum amount of bonded

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

shall be in compliance with section 19. The plan shall contain a

statement of the estimated impact of tax increment financing on the

assessed values of all taxing jurisdictions in which the

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

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

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

tax increment financing plan. The authority or municipality may

exclude from captured assessed value growth in property value

resulting solely from inflation. The plan shall set forth the

method for excluding growth in property value resulting solely from

inflation.

(2) Approval of the tax increment financing plan shall comply

with the notice, hearing, and disclosure provisions of section 22.

If the development plan is part of the tax increment financing

plan, only 1 hearing and approval procedure is required for the 2

plans together.

(3) Before the public hearing on the tax increment financing

plan, the governing body shall provide a reasonable opportunity to

the taxing jurisdictions levying taxes subject to capture to meet

with the governing body. The authority shall fully inform the

taxing jurisdictions of the fiscal and economic implications of the

proposed development area. The taxing jurisdictions may present

their recommendations at the public hearing on the tax increment

financing plan. The authority may enter into agreements with the

taxing jurisdictions and the governing body of the municipality in

which the development area is located to share a portion of the

captured assessed value of the development area.

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

modification is approved by the governing body upon notice and

after public hearings and agreements as are required for approval

of the original plan.

(5) Except for a development area located in a qualified

development area, not more than 60 days after the public hearing on

the tax increment financing plan, the governing body in a taxing

jurisdiction levying ad valorem property taxes that would otherwise

be subject to capture may exempt its taxes from capture by adopting

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

municipality proposing to create the authority. The resolution

shall take effect when filed with the clerk and remains effective

until a copy of a resolution rescinding that resolution is filed

with that clerk.

Sec. 20. (1) The municipality may by resolution of its

governing body ~~and subject to voter approval~~ authorize, issue, and

sell limited general obligation bonds subject to the limitations

set forth in this subsection to finance the development program of

the tax increment financing plan and shall pledge its full faith

and credit for the payment of the bonds. The municipality may

pledge as additional security for the bonds any money received by

the authority or the municipality under section 14. The bonds are

subject to the revised municipal finance act, 2001 PA 34, MCL

141.2101 to 141.2821. Before the municipality may authorize the

borrowing, the authority shall submit an estimate of the

anticipated tax increment revenues and other revenue available

under section 14 to be available for payment of principal and

interest on the bonds, to the governing body of the municipality.

This estimate shall be approved by the governing body of the

municipality by resolution adopted by majority vote of the members

of the governing body in the resolution authorizing the bonds. If

the governing body of the municipality adopts the resolution

authorizing the bonds, the estimate of the anticipated tax

increment revenues and other revenue available under section 14 to

be available for payment of principal and interest on the bonds

shall be conclusive for purposes of this section. The bonds issued

under this subsection shall be considered a single series for the

purposes of the revised municipal finance act, 2001 PA 34, MCL

141.2101 to 141.2821.

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

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

limitations set forth in this subsection to finance the development

program of the tax increment financing plan. The tax increment

bonds issued by the authority under this subsection shall pledge

solely the tax increment revenues of a development area in which

the project is located or a development area from which tax

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

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

under this subsection may be secured by any other revenues

identified in section 14 as sources of financing for activities of

the authority that the authority shall specifically pledge in the

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

shall not be pledged to secure bonds issued under this subsection.

The bond issue may include a sum sufficient to pay interest on the

tax increment bonds until full development of tax increment

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

reserve for payment of principal and interest on the bonds. The

resolution authorizing the bonds shall create a lien on the tax

increment revenues and other revenues pledged by the resolution

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

only to liens previously created. The resolution may provide the

terms upon which additional bonds may be issued of equal standing

and parity of lien as to the tax increment revenues and other

revenues pledged under the resolution. Bonds issued under this

subsection that pledge revenue received under section 15 for

repayment of the bonds are subject to the revised municipal finance

act, 2001 PA 34, MCL 141.2101 to 141.2821.

Sec. 22. (1) The governing body, before adoption of an

~~ordinance~~ a resolution approving a development plan or tax

increment financing plan, shall hold a public hearing on the

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

be given by publication twice in a newspaper of general circulation

designated by the municipality, the first of which shall be not

less than 20 days before the date set for the hearing. Notice of

the hearing shall be posted in at least 20 conspicuous and public

places in the development area not less than 20 days before the

hearing. Notice shall also be mailed to all property taxpayers of

record in the development area and to the governing body of each

taxing jurisdiction levying taxes that would be subject to capture

if the tax increment financing plan is approved not less than 20

days before the hearing. The notice of hearing within the time

frame described in this subsection shall be mailed by certified

mail to the governing body of each taxing jurisdiction levying

taxes that would be subject to capture if the tax increment

financing plan is approved.

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

plan shall contain all of the following:

(a) A description of the proposed development area in relation

to highways, streets, streams, or otherwise.

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

development plan, including the method of relocating families and

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

public inspection at a place designated in the notice.

be open for discussion at the public hearing.

(d) Other information that the governing body considers

appropriate.

(3) At the time set for the hearing, the governing body shall

provide an opportunity for interested persons to speak and shall

receive and consider communications in writing. The hearing shall

provide the fullest opportunity for expression of opinion, for

argument on the merits, and for consideration of documentary

evidence pertinent to the development plan. The governing body

shall make and preserve a record of the public hearing, including

all data presented at the hearing.

Sec. 23. The governing body after a public hearing on the

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

notice given under section 22, shall determine whether the

development plan or tax increment financing plan constitutes a

public purpose. If it determines that the development plan or tax

increment financing plan constitutes a public purpose, it shall by

~~ordinance~~ resolution approve or reject the plan, or approve it with

modification, based on the following considerations:

~~(a) The findings and recommendations of a development area~~

~~citizens council, if a development area citizens council was~~

~~formed.~~

(a) ~~(b)~~ The plan meets the requirements under section 20(2).

(b) ~~(c)~~ The proposed method of financing the development is

feasible and the authority has the ability to arrange the

financing.

out the purposes of this act.

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

acquired is reasonably necessary to carry out the purposes of the

plan and of this act in an efficient and economically satisfactory

manner.

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

land use plan of the municipality.

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

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

(g) ~~(h)~~ Changes in zoning, streets, street levels,

intersections, and utilities are reasonably necessary for the

project and for the municipality.

Sec. 27. An authority that has completed the purposes for

which it was organized shall be dissolved by ~~ordinance~~ resolution

of the governing body. The property and assets of the authority

remaining after the satisfaction of the obligations of the

authority belong to the municipality.