HB-5347, As Passed Senate, December 3, 2010

SUBSTITUTE FOR

HOUSE BILL NO. 5347

A bill to amend 1986 PA 281, entitled

"The local development financing act,"

by amending sections 2, 3, 4, 5, and 12 (MCL 125.2152, 125.2153,

125.2154, 125.2155, and 125.2162), section 2 as amended by 2007 PA

200, sections 3 and 12 as amended by 2000 PA 248, and section 4 as

amended by 2005 PA 15, and by adding sections 12c and 12d.

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 1 of the following:

(i) For valuations made before January 1, 1995, the state

equalized valuation as determined under the general property tax

act, 1893 PA 206, MCL 211.1 to ~~211.157~~ 211.155.

(ii) For valuations made after December 31, 1994, the taxable

value as determined under section 27a of the general property tax

act, 1893 PA 206, MCL 211.27a.

created pursuant to this act.

(d) "Authority district" means an area or areas within which

an authority exercises its powers.

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

(f) "Business development area" means an area designated as a

certified industrial park under this act prior to the effective

date of the amendatory act that added this subdivision, or an area

designated in the tax increment financing plan that meets all of

the following requirements:

(i) The area is zoned to allow its use for eligible property.

(ii) The area has a site plan or plat approved by the city,

village, or township in which the area is located.

(g) "Business incubator" means real and personal property that

meets all of the following requirements:

(i) Is located in a certified technology park.

(ii) Is subject to an agreement under section 12a.

(iii) Is developed for the primary purpose of attracting 1 or

more owners or tenants who will engage in activities that would

each separately qualify the property as eligible property under

subdivision (p)(iii).

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

by which the current assessed value of the eligible property

identified in the tax increment financing plan or, for a certified

technology park or a next Michigan development area, the real and

personal property included in the tax increment financing plan,

including the current assessed value of property for which specific

local taxes are paid in lieu of property taxes as determined

pursuant to subdivision ~~(cc)~~ (ee), exceeds the initial assessed

value. The state tax commission shall prescribe the method for

calculating captured assessed value. Except as otherwise provided

in this act, tax abated property in a renaissance zone as defined

under section 3 of the Michigan renaissance zone act, 1996 PA 376,

MCL 125.2683, shall be excluded from the calculation of captured

assessed value to the extent that the property is exempt from ad

valorem property taxes or specific local taxes.

(i) "Certified business park" means a business development

area that has been designated by the Michigan economic development

corporation as meeting criteria established by the Michigan

economic development corporation. The criteria shall establish

standards for business development areas including, but not limited

to, use, types of building materials, landscaping, setbacks,

parking, storage areas, and management.

(j) "Certified technology park" means that portion of the

authority district designated by a written agreement entered into

pursuant to section 12a between the authority, the municipality,

and the Michigan economic development corporation.

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

of a city, the president of a village, or, for other local units of

government or school districts, the person charged by law with the

supervision of the functions of the local unit of government or

school district.

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

requirements for a development set forth in section 15.

(m) "Development program" means the implementation of a

development plan.

(n) "Eligible advance" means an advance made before August 19,

1993.

(o) "Eligible obligation" means an obligation issued or

incurred by an authority or by a municipality on behalf of an

authority before August 19, 1993 and its subsequent refunding by a

qualified refunding obligation. Eligible obligation includes an

authority's written agreement entered into before August 19, 1993

to pay an obligation issued after August 18, 1993 and before

December 31, 1996 by another entity on behalf of the authority.

(p) "Eligible property" means land improvements, buildings,

structures, and other real property, and machinery, equipment,

furniture, and fixtures, or any part or accessory thereof whether

completed or in the process of construction comprising an

integrated whole, located within an authority district, of which

the primary purpose and use is or will be 1 of the following:

(i) The manufacture of goods or materials or the processing of

goods or materials by physical or chemical change.

(ii) Agricultural processing.

(iii) A high technology activity.

(iv) The production of energy by the processing of goods or

materials by physical or chemical change by a small power

production facility as defined by the federal energy regulatory

commission pursuant to the public utility regulatory policies act

of 1978, Public Law 95-617, which facility is fueled primarily by

biomass or wood waste. This act does not affect a person's rights

or liabilities under law with respect to groundwater contamination

described in this subparagraph. This subparagraph applies only if

all of the following requirements are met:

(A) Tax increment revenues captured from the eligible property

will be used to finance, or will be pledged for debt service on tax

increment bonds used to finance, a public facility in or near the

authority district designed to reduce, eliminate, or prevent the

spread of identified soil and groundwater contamination, pursuant

to law.

(B) The board of the authority exercising powers within the

authority district where the eligible property is located adopted

an initial tax increment financing plan between January 1, 1991 and

May 1, 1991.

special assessment district whereby not less than 50% of the

operating expenses of the public facility described in this

subparagraph will be paid for by special assessments. Not less than

50% of the amount specially assessed against all parcels in the

special assessment district shall be assessed against parcels owned

by parties potentially responsible for the identified groundwater

contamination pursuant to law.

(v) A business incubator.

(vi) An eligible next Michigan business, as that term is

defined in section 3 of the Michigan economic growth authority act,

1995 PA 24, MCL 207.803, and other businesses within a next

Michigan development area, but only to the extent designated as

eligible property within a development plan approved by a next

Michigan development corporation.

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

(r) "Governing body" means, except as otherwise provided in

this subdivision, the elected body having legislative powers of a

municipality creating an authority under this act. For a next

Michigan development corporation, governing body means the

executive committee of the next Michigan development corporation,

unless otherwise provided in the interlocal agreement or articles

of incorporation creating the next Michigan development corporation

or the governing body of an eligible urban entity or its designee

as provided in the next Michigan development act.

(s) "High-technology activity" means that term as defined in

section 3 of the Michigan economic growth authority act, 1995 PA

24, MCL 207.803.

(t) "Initial assessed value" means the assessed value of the

eligible property identified in the tax increment financing plan

or, for a certified technology park or a next Michigan development

area, the assessed value of any real and personal property included

in the tax increment financing plan, at the time the resolution

establishing the tax increment financing plan is approved as shown

by the most recent assessment roll for which equalization has been

completed at the time the resolution is adopted or, for property

that becomes eligible property in other than a certified technology

park after the date the plan is approved, at the time the property

becomes eligible property. Property exempt from taxation at the

time of the determination of the initial assessed value shall be

included as zero. Property for which a specific local tax is paid

in lieu of property tax shall not be considered exempt from

taxation. The initial assessed value of property for which a

specific local tax was paid in lieu of property tax shall be

determined as provided in subdivision ~~(cc)~~ (ee).

(u) "Michigan economic development corporation" means the

public body corporate created under section 28 of article VII of

the state constitution of 1963 and the urban cooperation act of

1967, 1967 (Ex Sess) PA 7, MCL 124.501 to 124.512, by a contractual

interlocal agreement effective April 5, 1999 between local

participating economic development corporations formed under the

economic development corporations act, 1974 PA 338, MCL 125.1601 to

125.1636, and the Michigan strategic fund. If the Michigan economic

development corporation is unable for any reason to perform its

duties under this act, those duties may be exercised by the

Michigan strategic fund.

(v) "Michigan strategic fund" means the Michigan strategic

fund as described in the Michigan strategic fund act, 1984 PA 270,

MCL 125.2001 to 125.2094.

(w) "Municipality" means a city, village, or urban township.

(x) "Next Michigan development area" means a portion of an

authority district designated by a next Michigan development

corporation under section 12c to which a development plan is

applicable.

(y) "Next Michigan development corporation" means that term as

defined in section 3 of the next Michigan development act.

(z) ~~(x)~~ "Obligation" means a written promise to pay, whether

evidenced by a contract, agreement, lease, sublease, bond, or note,

or a requirement to pay imposed by law. An obligation does not

include a payment required solely because of default upon an

obligation, employee salaries, or consideration paid for the use of

municipal offices. An obligation does not include those bonds that

have been economically defeased by refunding bonds issued under

this act. Obligation includes, but is not limited to, the

following:

(i) A requirement to pay proceeds derived from ad valorem

property taxes or taxes levied in lieu of ad valorem property

taxes.

(ii) A management contract or a contract for professional

services.

(iii) A payment required on a contract, agreement, bond, or note

if the requirement to make or assume the payment arose before

August 19, 1993.

(iv) A requirement to pay or reimburse a person for the cost of

insurance for, or to maintain, property subject to a lease, land

contract, purchase agreement, or other agreement.

(v) A letter of credit, paying agent, transfer agent, bond

registrar, or trustee fee associated with a contract, agreement,

bond, or note.

(aa) ~~(y)~~ "On behalf of an authority", in relation to an

eligible advance made by a municipality or an eligible obligation

or other protected obligation issued or incurred by a municipality,

means in anticipation that an authority would transfer tax

increment revenues or reimburse the municipality from tax increment

revenues in an amount sufficient to fully make payment required by

the eligible advance made by a municipality, or eligible obligation

or other protected obligation issued or incurred by the

municipality, if the anticipation of the transfer or receipt of tax

increment revenues from the authority is pursuant to or evidenced

by 1 or more of the following:

(i) A reimbursement agreement between the municipality and an

authority it established.

(ii) A requirement imposed by law that the authority transfer

tax increment revenues to the municipality.

(iii) A resolution of the authority agreeing to make payments to

the incorporating unit.

(iv) Provisions in a tax increment financing plan describing

the project for which the obligation was incurred.

(bb) ~~(z)~~ "Other protected obligation" means:

(i) A qualified refunding obligation issued to refund an

obligation described in subparagraph (ii) or (iii), an obligation that

is not a qualified refunding obligation that is issued to refund an

eligible obligation, or a qualified refunding obligation issued to

refund an obligation described in this subparagraph.

(ii) An obligation issued or incurred by an authority or by a

municipality on behalf of an authority after August 19, 1993, but

before December 31, 1994, to finance a project described in a tax

increment finance plan approved by the municipality in accordance

with this act before August 19, 1993, for which a contract for

final design is entered into by the municipality or authority

before March 1, 1994.

(iii) An obligation incurred by an authority or municipality

after August 19, 1993, to reimburse a party to a development

agreement entered into by a municipality or authority before August

19, 1993, for a project described in a tax increment financing plan

approved in accordance with this act before August 19, 1993, and

undertaken and installed by that party in accordance with the

development agreement.

(iv) An ongoing management or professional services contract

with the governing body of a county that was entered into before

March 1, 1994 and that was preceded by a series of limited term

management or professional services contracts with the governing

body of the county, the last of which was entered into before

August 19, 1993.

(cc) ~~(aa)~~ "Public facility" means 1 or more of the following:

(i) A street, road, bridge, storm water or sanitary sewer,

sewage treatment facility, facility designed to reduce, eliminate,

or prevent the spread of identified soil or groundwater

contamination, drainage system, retention basin, pretreatment

facility, waterway, waterline, water storage facility, rail line,

electric, gas, telephone or other communications, or any other type

of utility line or pipeline, or other similar or related structure

or improvement, together with necessary easements for the structure

or improvement. Except for rail lines, utility lines, or pipelines,

the structures or improvements described in this subparagraph shall

be either owned or used by a public agency, functionally connected

to similar or supporting facilities owned or used by a public

agency, or designed and dedicated to use by, for the benefit of, or

for the protection of the health, welfare, or safety of the public

generally, whether or not used by a single business entity. Any

road, street, or bridge shall be continuously open to public

access. A public facility shall be located on public property or in

a public, utility, or transportation easement or right-of-way.

(ii) The acquisition and disposal of land that is proposed or

intended to be used in the development of eligible property or an

interest in that land, demolition of structures, site preparation,

and relocation costs.

(iii) All administrative and real and personal property

acquisition and disposal costs related to a public facility

described in subparagraphs (i) and (iv), including, but not limited

to, architect's, engineer's, legal, and accounting fees as

permitted by the district's development plan.

(iv) An improvement to a facility used by the public or a

public facility as those terms are defined in section 1 of 1966 PA

1, MCL 125.1351, which improvement is made to comply with the

barrier free design requirements of the state construction code

promulgated under the Stille-DeRossett-Hale single state

construction code act, 1972 PA 230, MCL 125.1501 to 125.1531.

(v) All of the following costs approved by the Michigan

economic development corporation:

(A) Operational costs and the costs related to the

acquisition, improvement, preparation, demolition, disposal,

construction, reconstruction, remediation, rehabilitation,

restoration, preservation, maintenance, repair, furnishing, and

equipping of land and other assets that are or may become eligible

for depreciation under the internal revenue code of 1986 for a

business incubator located in a certified technology park.

(B) Costs related to the acquisition, improvement,

preparation, demolition, disposal, construction, reconstruction,

remediation, rehabilitation, restoration, preservation,

maintenance, repair, furnishing, and equipping of land and other

assets that, if privately owned, would be eligible for depreciation

under the internal revenue code of 1986 for laboratory facilities,

research and development facilities, conference facilities,

teleconference facilities, testing, training facilities, and

quality control facilities that are or that support eligible

property under subdivision (p)(iii), that are owned by a public

entity, and that are located within a certified technology park.

(vi) Operating and planning costs included in a plan pursuant

to section 12(1)(f), including costs of marketing property within

the district and attracting development of eligible property within

the district.

(dd) ~~(bb)~~ "Qualified refunding obligation" means an obligation

issued or incurred by an authority or by a municipality on behalf

of an authority to refund an obligation if the refunding obligation

meets both of the following:

(i) The net present value of the principal and interest to be

paid on the refunding obligation, including the cost of issuance,

will be less than the net present value of the principal and

interest to be paid on the obligation being refunded, as calculated

using a method approved by the department of treasury.

(ii) The net present value of the sum of the tax increment

revenues described in subdivision ~~(ee)(~~ii) (gg)(ii) and the

distributions under section 11a to repay the refunding obligation

will not be greater than the net present value of the sum of the

tax increment revenues described in subdivision ~~(ee)(~~ii) (gg)(ii) and

the distributions under section 11a to repay the obligation being

refunded, as calculated using a method approved by the department

of treasury.

(ee) ~~(cc)~~ "Specific local taxes" means a tax levied under 1974

PA 198, MCL 207.551 to 207.572, the obsolete property

rehabilitation act, 2000 PA 146, MCL 125.2781 to 125.2797, the

commercial redevelopment act, 1978 PA 255, MCL 207.651 to 207.668,

the enterprise zone act, 1985 PA 224, MCL 125.2101 to 125.2123,

1953 PA 189, MCL 211.181 to 211.182, and the technology park

development act, 1984 PA 385, MCL 207.701 to 207.718. The initial

assessed value or current assessed value of property subject to a

specific local tax is the quotient of the specific local tax paid

divided by the ad valorem millage rate. However, after 1993, the

state tax commission shall prescribe the method for calculating the

initial assessed value and current assessed value of property for

which a specific local tax was paid in lieu of a property tax.

(ff) ~~(dd)~~ "State fiscal year" means the annual period

commencing October 1 of each year.

(gg) ~~(ee)~~ "Tax increment revenues" means the amount of ad

valorem property taxes and specific local taxes attributable to the

application of the levy of all taxing jurisdictions upon the

captured assessed value of eligible property within the district

or, for purposes of a certified technology park or a next Michigan

development area, real or personal property that is located within

the certified technology park or a next Michigan development area

and included within the tax increment financing plan, subject to

the following requirements:

(i) Tax increment revenues include ad valorem property taxes

and specific local taxes attributable to the application of the

levy of all taxing jurisdictions, other than the state pursuant to

the state education tax act, 1993 PA 331, MCL 211.901 to 211.906,

and local or intermediate school districts, upon the captured

assessed value of real and personal property in the development

area for any purpose authorized by this act.

(ii) Tax increment revenues include ad valorem property taxes

and specific local taxes attributable to the application of the

levy of the state pursuant to the state education tax act, 1993 PA

331, MCL 211.901 to 211.906, and local or intermediate school

districts upon the captured assessed value of real and personal

property in the development area in an amount equal to the amount

necessary, without regard to subparagraph (i), for the following

purposes:

(A) To repay eligible advances, eligible obligations, and

other protected obligations.

(B) To fund or to repay an advance or obligation issued by or

on behalf of an authority to fund the cost of public facilities

related to or for the benefit of eligible property located within a

certified technology park to the extent the public facilities have

been included in an agreement under section 12a(3), not to exceed

50%, as determined by the state treasurer, of the amounts levied by

the state pursuant to the state education tax act, 1993 PA 331, MCL

211.901 to 211.906, and local and intermediate school districts for

a period not to exceed 15 years, as determined by the state

treasurer, if the state treasurer determines that the capture under

this subparagraph is necessary to reduce unemployment, promote

economic growth, and increase capital investment in the

municipality.

the benefit of eligible property located within a next Michigan

development area to the extent that the public facilities have been

included in a development plan, not to exceed 50%, as determined by

the state treasurer, of the amounts levied by the state pursuant to

the state education tax act, 1993 PA 331, MCL 211.901 to 211.906,

and local and intermediate school districts for a period not to

exceed 15 years, as determined by the state treasurer, if the state

treasurer determines that the capture under this sub-subparagraph

is necessary to reduce unemployment, promote economic growth, and

increase capital investment in the authority district.

(iii) Tax increment revenues do not include any of the

following:

(A) Ad valorem property taxes or specific local taxes that are

excluded from and not made part of the tax increment financing

plan.

(B) Ad valorem property taxes and specific local taxes

attributable to ad valorem property taxes excluded by the tax

increment financing plan of the authority from the determination of

the amount of tax increment revenues to be transmitted to the

authority.

section 4(3) or specific local taxes attributable to such ad

valorem property taxes.

(D) Ad valorem property taxes specifically levied for the

payment of principal and interest of obligations approved by the

electors or obligations pledging the unlimited taxing power of the

local governmental unit or specific local taxes attributable to

such ad valorem property taxes.

(E) The amount of ad valorem property taxes or specific taxes

captured by a downtown development authority under 1975 PA 197, MCL

125.1651 to 125.1681, tax increment financing authority under the

tax increment finance authority act, 1980 PA 450, MCL 125.1801 to

125.1830, or brownfield redevelopment authority under the

brownfield redevelopment financing act, 1996 PA 381, MCL 125.2651

to 125.2672, if those taxes were captured by these other

authorities on the date that the initial assessed value of a parcel

of property was established under this act.

(iv) The amount of tax increment revenues authorized to be

included under subparagraph (ii), and required to be transmitted to

the authority under section 13(1), from ad valorem property taxes

and specific local taxes attributable to the application of the

levy of the state education tax act, 1993 PA 331, MCL 211.901 to

211.906, or a local school district or an intermediate school

district upon the captured assessed value of real and personal

property in a development area shall be determined separately for

the levy by the state, each school district, and each intermediate

school district as the product of sub-subparagraphs (A) and (B):

(A) The percentage that the total ad valorem taxes and

specific local taxes available for distribution by law to the

state, local school district, or intermediate school district,

respectively, bears to the aggregate amount of ad valorem millage

taxes and specific taxes available for distribution by law to the

state, each local school district, and each intermediate school

district.

(B) The maximum amount of ad valorem property taxes and

specific local taxes considered tax increment revenues under

subparagraph (ii).

(hh) ~~(ff)~~ "Urban township" means a township that meets 1 or

more of the following:

(i) Meets all of the following requirements:

(A) Has a population of 20,000 or more, or has a population of

10,000 or more but is located in a county with a population of

400,000 or more.

(B) Adopted a master zoning plan before February 1, 1987.

a part of the township.

(ii) Meets all of the following requirements:

(A) Has a population of less than 20,000.

(B) Is located in a county with a population of 250,000 or

more but less than 400,000, and that county is located in a

metropolitan statistical area.

common ownership that is 800 acres or larger and is capable of

being served by a railroad, and located within 3 miles of a limited

access highway.

(D) Establishes an authority before December 31, 1998.

(iii) Meets all of the following requirements:

(A) Has a population of less than 20,000.

(B) Has a state equalized valuation for all real and personal

property located in the township of more than $200,000,000.00.

(D) Is a charter township under the charter township act, 1947

PA 359, MCL 42.1 to 42.34.

(E) Has within its boundaries a combination of parcels under

common ownership that is 800 acres or larger, is immediately

adjacent to a limited access highway, is capable of being served by

a railroad, and is immediately adjacent to an existing sewer line.

(F) Establishes an authority before March 1, 1999.

(iv) Meets all of the following requirements:

(A) Has a population of 13,000 or more.

(B) Is located in a county with a population of 150,000 or

more.

(v) Meets all of the following requirements:

(A) Is located in a county with a population of 1,000,000 or

more.

(B) Has a written agreement with an adjoining township to

develop 1 or more public facilities on contiguous property located

in both townships.

(vi) Meets all of the following requirements:

(A) Has a population of less than 10,000.

(B) Has a state equalized valuation for all real and personal

property located in the township of more than $280,000,000.00.

(D) Has within its boundaries a combination of parcels under

common ownership that is 199 acres or larger, is located within 1

mile of a limited access highway, and is located within 1 mile of

an existing sewer line.

(E) Has rail service.

(F) Establishes an authority before May 7, 2009.

Sec. 3. (1) Except as otherwise provided by subsection (2), a

municipality may establish not more than 1 authority under the

provisions of this act. An authority established under this

subsection shall exercise its powers in all authority districts.

(2) In addition to an authority established under subsection

(1), a municipality may join with 1 or more other municipality

located within the same county to establish an authority under this

act. An authority created under this subsection may only exercise

its powers in a certified technology park designated in an

agreement made under section 12a. A municipality shall not

establish more than 1 authority under this subsection.

(3) A next Michigan development corporation may establish not

more than 1 authority under the provisions of this act. An

authority established under this subsection shall exercise its

powers within its authority district and in all next Michigan

development areas. The authority district in which the authority

may exercise its powers shall include all or part of the territory

of a next Michigan development corporation, as determined by the

governing body of the next Michigan development corporation.

(4) ~~(3)~~ The authority shall be a public body corporate which

may sue and be sued in any court of this state. The authority

possesses all the powers necessary to carry out the purpose of its

incorporation. The enumeration of a power in this act shall not be

construed as a limitation upon the general powers of the authority.

The powers granted in this act to an authority may be exercised

notwithstanding that bonds are not issued by the authority.

Sec. 4. (1) The governing body of a municipality may declare

by resolution adopted by a majority of its members elected and

serving its intention to create and provide for the operation of an

authority.

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

to create the authority shall set a date for holding a public

hearing on the adoption of a proposed resolution creating the

authority and designating the boundaries of the authority district

or districts. Notice of the public hearing shall be published twice

in a newspaper of general circulation in the municipality, not less

than 20 nor more than 40 days before the date of the hearing. ~~Not~~

Except as otherwise provided in subsection (8), 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 a proposed authority district and, for a

public hearing to be held after February 15, 1994, 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. Beginning June 1, 2005, 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 authority is established and a tax increment

financing plan is approved. Failure of a property taxpayer to

receive the notice shall not invalidate these proceedings. The

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

shall describe the boundaries of the proposed authority district or

districts. At that hearing, a resident, taxpayer, or property owner

from a taxing jurisdiction in which the proposed district is

located 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 that

proposed authority district. The governing body of the municipality

in which a proposed district is to be located shall not incorporate

land into an authority district not included in the description

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

lands described in the notice of public hearing from an authority

district in the final determination of the boundaries.

(3) ~~Not~~ Except as otherwise provided in subsection (8), not

more than 60 days after a public hearing held after February 15,

1994, the governing body of a taxing jurisdiction with millage 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. However, a resolution by a governing body of a taxing

jurisdiction to exempt its taxes from capture is not effective for

the capture of taxes that are used for a certified technology park.

The resolution takes effect when filed with that clerk and remains

effective until a copy of a resolution rescinding that resolution

is filed with that clerk.

(4) ~~Not~~ Except as otherwise provided in subsection (8), not

less than 60 days after the public hearing, if the governing body

creating the authority intends to proceed with the establishment of

the authority, it shall adopt, by majority vote of its members

elected and serving, a resolution establishing the authority and

designating the boundaries of the authority district or districts

within which the authority shall exercise its powers. The adoption

of the resolution is subject to any applicable statutory or charter

provisions with respect to the approval or disapproval of

resolutions by the chief executive officer of the municipality and

the adoption of a resolution over his or her veto. This 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.

(5) The governing body may alter or amend the boundaries of an

authority district to include or exclude lands from that authority

district or create new authority districts pursuant to the same

requirements prescribed for adopting the resolution creating the

authority.

(6) The validity of the proceedings establishing an authority

shall be conclusive unless contested in a court of competent

jurisdiction within 60 days after the last of the following takes

place:

(a) Publication of the resolution creating the authority as

adopted.

(b) Filing of the resolution creating the authority with the

secretary of state.

(7) Except as otherwise provided by this subsection, if 2 or

more municipalities desire to establish an authority under section

3(2), each municipality in which the authority district will be

located shall comply with the procedures prescribed by this act.

The notice required by subsection (2) may be published jointly by

the municipalities establishing the authority. The resolutions

establishing the authority shall include, or shall approve an

agreement including, provisions governing the number of members on

the board, the method of appointment, the members to be represented

by governmental units or agencies, the terms of initial and

subsequent appointments to the board, the manner in which a member

of the board may be removed for cause before the expiration of his

or her term, the manner in which the authority may be dissolved,

and the disposition of assets upon dissolution. An authority

described in this subsection shall not be considered established

unless all of the following conditions are satisfied:

(a) A resolution is approved and filed with the secretary of

state by each municipality in which the authority district will be

located.

(b) The same boundaries have been approved for the authority

district by the governing body of each municipality in which the

authority district will be located.

the authority district will be located has approved by resolution

the creation of the authority.

(8) For an authority created under section 3(3), except as

otherwise provided by this subsection, the next Michigan

development corporation shall comply with the procedures prescribed

for a municipality by subsections (1) and (2) and this subsection.

The provisions of subsections (3) and (4) shall not apply to an

authority exercising its powers under section 3(3). The notice

required by subsection (2) may be published by the next Michigan

development corporation in a newspaper or newspapers of general

circulation within the municipalities which are constituent members

of the next Michigan development corporation, and notice shall not

be required to be mailed to the property taxpayers of record in the

proposed authority district. The governing body of the next

Michigan development corporation shall be the governing body of the

authority. A taxing jurisdiction levying ad valorem taxes within

the authority district that would otherwise be subject to capture

which is not a party to the intergovernmental agreement may exempt

its taxes from capture by adopting a resolution to that effect and

filing a copy not more than 60 days after the public hearing with

the recording officer of the next Michigan development corporation.

The next Michigan development corporation shall mail notice of the

public hearing to the governing body of each taxing jurisdiction

which is not a party to the intergovernmental agreement not less

than 20 days before the hearing. Following the public hearing, the

governing body of the next Michigan development corporation shall

adopt a resolution designating the boundaries of the authority

district within which the authority shall exercise its powers,

which may include any certified technology park within the proposed

authority district in accordance with this subsection and may

include property adjacent to or within 1,500 feet of a road

classified as an arterial or collector according to the federal

highway administration manual "Highway Functional Classification -

Concepts, Criteria and Procedures" or of another road in the

discretion of the next Michigan development corporation, and

property adjacent to that property within the territory of the next

Michigan development corporation, as provided in the resolution.

The resolution shall be effective when adopted, shall be filed with

the secretary of state and the president of the Michigan strategic

fund promptly after its adoption, and shall be published at least

once in a newspaper of general circulation in the territory of the

next Michigan development corporation. If an authority district

designated under this subsection or subsequently amended includes a

certified technology park which is within the authority district of

another authority and which is subject to an existing development

plan or tax increment financing plan, then that certified

technology park may be considered to be under the jurisdiction of

the authority established under section 3(3) if so provided in a

resolution of the authority established under section 3(3) and if

approved by resolution of the governing body of the municipality

which created the other authority, and by the president of the

Michigan strategic fund. If so provided and approved, then the

development plan and tax increment financing plan applicable to the

certified technology park, including all assets and obligations

under the plans, shall be considered assigned and transferred from

the other authority to the authority created under section 3(3),

and the initial assessed value of the certified technology park

prior to the transfer shall remain the initial assessed value of

the certified technology park following the transfer. The transfer

shall be effective as of the later of the effective date of the

resolution of the authority established under section 3(3), the

resolution approved by the governing body of the municipality which

created the other authority, and the approval of the president of

the Michigan strategic fund.

Sec. 5. (1) The authority shall be under the supervision and

control of a board of 7 members appointed by the chief executive

officer of the city, village, or urban township creating the

authority subject to the approval of the governing body creating

the authority. The board shall include 1 member appointed by the

county board of commissioners of the county in which the authority

is located. The board shall include 1 member representing a

community or junior college in whose district the authority is

located appointed by the chief executive officer of that community

or junior college. The board shall also include 2 members appointed

by the chief executive officer of each local governmental unit,

other than the city, village, or urban township creating the

authority, which levied 20% or more of the ad valorem property

taxes levied against all property located in an authority district

in the year before the year in which the authority district is

established. However, those additional members shall only vote on

matters relating to authority districts located within their

respective local unit of government. Of the members first

appointed, an equal number, as near as possible, shall have terms

designated by the governing body creating the authority of 1 year,

2 years, 3 years, and 4 years. However, a member shall hold office

until the member's successor is appointed. After the first

appointment, each member shall serve for a term of 4 years. An

appointment to fill a vacancy shall be made in the same manner as

the original appointment. An appointment to fill an unexpired term

shall be for the unexpired portion of the term only. Members of the

board shall serve without compensation, but shall be reimbursed for

actual and necessary expenses.

(2) The chairperson of the board shall be elected by the

board.

(3) Before assuming the duties of office, a member shall

qualify by taking and subscribing to the constitutional oath of

office.

(4) The board shall adopt rules governing its procedure and

the holding of regular meetings, subject to the approval of the

governing body. Special meetings may be held when called in the

manner provided in the rules of the board. Meetings of the board

shall be open to the public, in accordance with the open meetings

act, ~~Act No. 267 of the Public Acts of 1976, being sections 15.261~~

~~to 15.275 of the~~ ~~Michigan~~ ~~Compiled Laws~~ 1976 PA 267, MCL 15.261 to

15.275.

(5) Subject to notice and an opportunity to be heard, a member

of the board may be removed before the expiration of his or her

term for cause by the governing body. Removal of a member is

subject to review by the circuit court.

(6) All expense items of the authority shall be publicized

annually and the financial records shall be open to the public

pursuant to the freedom of information act, ~~Act No. 442 of the~~

~~Public Acts of 1976, being sections 15.231 to 15.246 of the~~

~~Michigan~~ ~~Compiled Laws~~ 1976 PA 442, MCL 15.231 to 15.246.

(7) The provisions of subsections (1) and (5) of this section

shall not apply to an authority exercising its powers under section

3(3).

Sec. 12. (1) If the board determines that it is necessary for

the achievement of the purposes of this act, the board shall

prepare and submit a tax increment financing plan to the governing

body. The plan shall be in compliance with section 13 and shall

include a development plan as provided in section 15. The plan

shall also contain the following:

(a) A statement of the reasons that the plan will result in

the development of captured assessed value that could not otherwise

be expected. The reasons may include, but are not limited to,

activities of the municipality, authority, or others undertaken

before formulation or adoption of the plan in reasonable

anticipation that the objectives of the plan would be achieved by

some means.

(b) An estimate of the captured assessed value for each year

of the plan. The plan may provide for the use of part or all of the

captured assessed value or, subject to subsection (3), of the tax

increment revenues attributable to the levy of any taxing

jurisdiction, but the portion intended to be used shall be clearly

stated in the plan. The board or the municipality creating the

authority may exclude from captured assessed value a percentage of

captured assessed value as specified in the plan or growth in

property value resulting solely from inflation. If excluded, the

plan shall set forth the method for excluding growth in property

value resulting solely from inflation.

plan.

(d) A detailed explanation of the tax increment procedure.

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

incurred, if any.

(f) The amount of operating and planning expenditures of the

authority and municipality, the amount of advances extended by or

indebtedness incurred by the municipality, and the amount of

advances by others to be repaid from tax increment revenues.

(g) The costs of the plan anticipated to be paid from tax

increment revenues as received.

(h) The duration of the development plan and the tax increment

plan.

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

the revenues of all taxing jurisdictions in which the eligible

property is or is anticipated to be located.

(j) A legal description of the eligible property to which the

tax increment financing plan applies or shall apply upon

qualification as eligible property.

(k) An estimate of the number of jobs to be created as a

result of implementation of the tax increment financing plan.

(l) The proposed boundaries of a certified technology park to

be created under an agreement proposed to be entered into pursuant

to section 12a or of a next Michigan development area designated

under section 12c, an identification of the real property within

the certified technology park or the next Michigan development area

to be included in the tax increment financing plan for purposes of

determining tax increment revenues, and whether personal property

located in the certified technology park or the next Michigan

development area is exempt from determining tax increment revenues.

(2) Except as provided in subsection (7), a tax increment

financing plan shall provide for the use of tax increment revenues

for public facilities for eligible property whose captured assessed

value produces the tax increment revenues or, to the extent the

eligible property is located within a business development area or

a next Michigan development area, for other eligible property

located in the business development area or the next Michigan

development area. Public facilities for eligible property include

the development or improvement of access to and around, or within

the eligible property, of road facilities reasonably required by

traffic flow to be generated by the eligible property, and the

development or improvement of public facilities that are necessary

to service the eligible property, whether or not located on that

eligible property. If the eligible property identified in the tax

increment financing plan is property to which section 2(p)(iv)

applies, the tax increment financing plan shall not provide for the

use of tax increment revenues for public facilities other than

those described in the development plan as of April 1, 1991.

Whether or not provided in the tax increment financing plan, if the

eligible property identified in the tax increment financing plan is

property to which section 2(p)(iv) applies, then to the extent that

captured tax increment revenues are utilized for the costs of

cleanup of identified soil and groundwater contamination, the

captured tax increment revenues shall be first credited against the

shares of responsibility for the total costs of cleanup of

uncollectible parties who are responsible for the identified soil

and groundwater contamination pursuant to law, and then shall be

credited on a pro rata basis against the shares of responsibility

for the total costs of cleanup of other parties who are responsible

for the identified soil and groundwater contamination pursuant to

law.

(3) The percentage of taxes levied for school operating

purposes that is captured and used by the tax increment financing

plan and the tax increment financing 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, and the brownfield redevelopment

financing act, 1996 PA 381, MCL 125.2651 to 125.2672, shall not be

greater than the percentage capture and use of taxes levied by a

municipality or county for operating purposes under the tax

increment financing plan and tax increment financing 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, and the

brownfield redevelopment financing act, 1996 PA 381, MCL 125.2651

to 125.2672. For purposes of the previous sentence, taxes levied by

a county for operating purposes include only millage allocated for

county or charter county purposes under the property tax limitation

act, 1933 PA 62, MCL 211.201 to 211.217a.

(4) Except as otherwise provided by this subsection, approval

of the tax increment financing plan shall be in accordance with the

notice, hearing, disclosure, and approval provisions of sections 16

and 17. 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. For a plan submitted by an authority

established by 2 or more municipalities under sections 3(2) and

4(7) or by an authority established by a next Michigan development

corporation under sections 3(3) and 4(8), the notice required by

section 16 may be published jointly by the municipalities in which

the authority district is located or by the next Michigan

development corporation. ~~The~~ For a plan submitted by an authority

exercising its powers under sections 3(2) and 4(7), the plan shall

not be considered approved unless each governing body in which the

authority district is located makes the determinations required by

section 17 and approves the same plan, including the same

modifications, if any, made to the plan by any other governing

body. A plan submitted by an authority exercising its powers under

sections 3(3) and 4(8) shall be approved if the governing body of

the next Michigan development corporation makes the determinations

required by section 17.

(5) 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

express their views and recommendations regarding the tax increment

financing plan. The authority shall fully inform the taxing

jurisdictions about the fiscal and economic implications of the

proposed tax increment financing plan. 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 authority district is located to share a

portion of the captured assessed value of the district or to

distribute tax increment revenues among taxing jurisdictions. 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 local taxes against property located in the authority

district.

(6) Property qualified as a public facility under section

~~2(aa)(~~ii) 2(cc)(ii) that is acquired by an authority may be sold,

conveyed, or otherwise disposed to any person, public or private,

for fair market value or reasonable monetary consideration

established by the authority with the concurrence of the Michigan

economic development corporation and the municipality in which the

eligible property is located based on a fair market value appraisal

from a fee appraiser only if the property is sold for fair market

value. Unless the property acquired by an authority was located

within a certified business park, or a certified technology park,

or a next Michigan development area at the time of disposition, an

authority shall remit all monetary proceeds received from the sale

or disposition of property that qualified as a public facility

under section ~~2(aa)(~~ii) 2(cc)(ii) and was purchased with tax

increment revenues to the taxing jurisdictions. Proceeds

distributed to taxing jurisdictions shall be remitted in proportion

to the amount of tax increment revenues attributable to each taxing

jurisdiction in the year the property was acquired. If the property

was acquired in part with funds other than tax increment revenues,

only that portion of the monetary proceeds received upon

disposition that represent the proportion of the cost of

acquisition paid with tax increment revenues is required to be

remitted to taxing jurisdictions. If the property is located within

a certified business park, or a certified technology park, or a

next Michigan development area at the time of disposition, the

monetary proceeds received from the sale or disposition of that

property may be retained by the authority for any purpose necessary

to further the development program for the certified business park,

or certified technology park, or next Michigan development area in

accordance with the tax increment financing plan.

(7) The tax increment financing plan may provide for the use

of tax increment revenues from a certified technology park for

public facilities for any eligible property located in the

certified technology park. The tax increment financing plan may

provide for the use of tax increment revenues within or without the

development area from which the tax increment revenues are derived,

provided that the tax increment revenues shall be used for public

facilities within a next Michigan development area within the

municipality whose levy has contributed to the tax increment

revenues except as otherwise provided in the interlocal agreement

creating the next Michigan development corporation that established

the authority.

(8) If title to property qualified as a public facility under

section ~~2(aa)(~~ii) 2(cc)(ii) and acquired by an authority with tax

increment revenues is sold, conveyed, or otherwise disposed of

pursuant to subsection (6) for less than fair market value, the

authority shall enter into an agreement relating to the use of the

property with the person to whom the property is sold, conveyed, or

disposed of, which agreement shall include a penalty provision

addressing repayment to the authority if any interest in the

property is sold, conveyed, or otherwise disposed of by the person

within 12 years after the person received title to the property

from the authority. This subsection shall not require enforcement

of a penalty provision for a conveyance incident to a merger,

acquisition, reorganization, sale-lease back transaction, employee

stock ownership plan, or other change in corporate or business form

or structure.

(9) The penalty provision described in subsection (8) shall

not be less than an amount equal to the difference between the fair

market value of the property when originally sold, conveyed, or

otherwise disposed of and the actual consideration paid by the

person to whom the property was originally sold, conveyed, or

otherwise disposed of.

Sec. 12c. (1) A next Michigan development corporation

establishing an authority under section 3(3) shall notify the

Michigan economic development corporation of the designation of a

next Michigan development area.

(2) The Michigan economic development corporation shall market

the authority district including next Michigan development areas.

(3) For an authority exercising its powers under section 3(3),

each municipality and county which is a party to the interlocal

agreement establishing the next Michigan development corporation,

or any 1 of them, by a majority vote of the members of its

governing body, may make a limited tax pledge to support the

authority's tax increment bonds issued under section 14 or, if

authorized by the voters of the municipality or county, may pledge

its full faith and credit for the payment of the principal of and

interest on the bonds. The municipalities or counties that have

made a pledge to support the authority's tax increment bonds may

approve by resolution an agreement among themselves establishing

obligations each may have to the other party or parties to the

agreement for reimbursement of all or any portion of a payment made

by a municipality or county related to its pledge to support the

authority's tax increment bonds.

Sec. 12d. (1) If an authority determines that a sale price or

rental value at below market rate will assist in increasing

employment or private investment in a development area, the

authority may determine a sale price or rental value for public

facilities owned or developed by the authority at below market

rate.

(2) If public facilities are conveyed or leased at less than

fair market value or at below market rates, the terms of the

conveyance or lease shall include legal and equitable remedies and

rights to assure that the public facilities are used as eligible

property. Legal and equitable remedies and rights may include

penalties and actual or liquidated damages. If public facilities

for public benefit are provided to private owners or users of

eligible property, the terms of the conveyance or lease shall

include a benefit to the private owner or user.