HOUSE BILL No. 5856

September 23, 2014, Introduced by Rep. Kowall and referred to the Committee on Commerce.

A bill to amend 1975 PA 197, entitled

"An act to provide for the establishment of a downtown development

authority; to prescribe its powers and duties; to correct and

prevent deterioration in business districts; to encourage historic

preservation; to authorize the acquisition and disposal of

interests in real and personal property; to authorize the creation

and implementation of development plans in the districts; to

promote the economic growth of the districts; to create a board; to

prescribe its powers and duties; to authorize the levy and

collection of taxes; to authorize the issuance of bonds and other

evidences of indebtedness; to authorize the use of tax increment

financing; to reimburse downtown development authorities for

certain losses of tax increment revenues; and to prescribe the

powers and duties of certain state officials,"

by amending sections 1, 1a, 5, 7, 8, 15, 17, 18, and 31 (MCL

125.1651, 125.1651a, 125.1655, 125.1657, 125.1658, 125.1665,

125.1667, 125.1668, and 125.1681), section 1 as amended by 2013 PA

66, sections 1a and 31 as added by 1988 PA 425, section 7 as

amended by 2008 PA 226, section 8 as added by 1987 PA 66, section

15 as amended by 1993 PA 323, section 17 as amended by 1993 PA 122,

and section 18 as amended by 2005 PA 13; and to repeal acts and

parts of acts.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 1. 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 211.155.

(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.

pursuant to this act.

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

(e) "Business district" means an area in the downtown 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 project area, including

the assessed value of property for which specific local taxes are

paid in lieu of property taxes as determined in subdivision (aa),

exceeds the initial assessed value. The state tax commission shall

prescribe the method for calculating captured assessed value.

(g) "Catalyst development project" means a project that is

located in a municipality with a population greater than 600,000,

is designated by the authority as a catalyst development project,

and is expected to result in at least $300,000,000.00 of capital

investment. There shall be no more than 1 catalyst development

project designated within each authority.

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

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

supervisor of a township or, if designated by the township board

for purposes of this act, the township superintendent or township

manager of a township.

(i) "Development area" means that area to which a development

plan is applicable.

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

requirements for a development plan set forth in section 17.

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

development plan.

(l) "Downtown district" means that part of an area in a

business district that is specifically designated by ordinance of

the governing body of the municipality pursuant to this act. A

downtown district may include 1 or more separate and distinct

geographic areas in a business district as determined by the

municipality if the municipality enters into an agreement with a

qualified township under section 3(7) or if the municipality is a

city that surrounds another city and that other city lies between

the 2 separate and distinct geographic areas. If the downtown

district contains more than 1 separate and distinct geographic area

in the downtown district, the separate and distinct geographic

areas shall be considered 1 downtown district.

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

1993.

(n) "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.

(o) "Fire alarm system" means a system designed to detect and

annunciate the presence of fire, or by-products of fire. Fire alarm

system includes smoke detectors.

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

(q) "Governing body of a municipality" means the elected body

of a municipality having legislative powers.

(r) "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 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 subdivision

~~(aa). In the case of a municipality having a population of less~~

~~than 35,000 that established an authority prior to 1985, created a~~

~~district or districts, and approved a development plan or tax~~

~~increment financing plan or amendments to a plan, and which plan or~~

~~tax increment financing plan or amendments to a plan, and which~~

~~plan expired by its terms December 31, 1991, the initial assessed~~

~~value for the purpose of any plan or plan amendment adopted as an~~

~~extension of the expired plan shall be determined as if the plan~~

~~had not expired December 31, 1991. For a development area~~

~~designated before 1997 in which a renaissance zone has subsequently~~

~~been designated pursuant to the Michigan renaissance zone act, 1996~~

~~PA 376, MCL 125.2681 to 125.2696, the initial assessed value of the~~

~~development area otherwise determined under this subdivision shall~~

~~be reduced by the amount by which the current assessed value of the~~

~~development area was reduced in 1997 due to the exemption of~~

~~property under section 7ff of the general property tax act, 1893 PA~~

~~206, MCL 211.7ff, but in no case shall the initial assessed value~~

~~be less than zero.~~(bb).

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

(t) "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.

(u) "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 the 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.

(v) "Operations" means office maintenance, including salaries

and expenses of employees, office supplies, consultation fees,

design costs, and other expenses incurred in the daily management

of the authority and planning of its activities.

(w) "Other protected obligation" means:

(i) A qualified refunding obligation issued to refund an

obligation described in subparagraph (ii), (iii), or (iv), 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 December 31, 1993, for which a contract for

final design is entered into by or on behalf of the municipality or

authority before March 1, 1994 or for which a written agreement

with a developer, titled preferred development agreement, was

entered into by or on behalf of the municipality or authority in

July 1993.

(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 obligation incurred by the authority evidenced by or to

finance a contract to purchase real property within a development

area or a contract to develop that property within the development

area, or both, if all of the following requirements are met:

(A) The authority purchased the real property in 1993.

(B) Before June 30, 1995, the authority enters a contract for

the development of the real property located within the development

area.

authority received approval for a grant from both of the following:

(I) The department of natural resources for site reclamation

of the real property.

(II) The department of consumer and industry services for

development of the real property.

(v) An ongoing management or professional services contract

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

March 1, 1994 and which 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.

(vi) A loan from a municipality to an authority if the loan was

approved by the legislative body of the municipality on April 18,

1994.

(vii) Funds expended to match a grant received by a

municipality on behalf of an authority for sidewalk improvements

from the Michigan department of transportation if the legislative

body of the municipality approved the grant application on April 5,

1993 and the grant was received by the municipality in June 1993.

(viii) For taxes captured in 1994, an obligation described in

this subparagraph issued or incurred to finance a project. An

obligation is considered issued or incurred to finance a project

described in this subparagraph only if all of the following are

met:

(A) The obligation requires raising capital for the project or

paying for the project, whether or not a borrowing is involved.

(B) The obligation was part of a development plan and the tax

increment financing plan was approved by a municipality on May 6,

1991.

understanding between a municipality and a public utility dated

October 27, 1994.

(D) The authority or municipality captured school taxes during

1994.

(ix) An obligation incurred after July 31, 2012 by an

authority, municipality, or other governmental unit to pay for

costs associated with a catalyst development project.

(x) "Public facility" means a road, street, plaza, pedestrian

mall, and any improvements to a street, plaza, or pedestrian mall

including street furniture and beautification, sidewalk, trail,

lighting, traffic flow modification, park, parking facility,

recreational facility, right-of-way, structure, waterway, bridge,

lake, pond, canal, utility line or pipe, building, and access

routes to any of the foregoing, designed and dedicated to use by

the public generally, or used by a public agency. Public facility

includes 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.~~

Public facility also includes environmental remediation of

property, and the acquisition, construction, improvement, and

operation of a building owned or leased by the authority to be used

as a retail business incubator.

(y) "Public service" means a service commonly provided by the

state, a county, or a municipality and includes, but is not limited

to, water, sanitary sewer, and storm water services; police, fire,

jail, and other emergency services; street repair and maintenance

services; operation and maintenance of parks and other public

places; operation of public gathering places; snowplowing; and the

operation and maintenance of other public facilities.

(z) ~~(y)~~ "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 1 or more of the

following apply:

(i) The obligation is issued to refund a qualified refunding

obligation issued in November 1997 and any subsequent refundings of

that obligation issued before January 1, 2010 or the obligation is

issued to refund a qualified refunding obligation issued on May 15,

1997 and any subsequent refundings of that obligation issued before

January 1, 2010 in an authority in which 1 parcel or group of

parcels under common ownership represents 50% or more of the

taxable value captured within the tax increment finance district

and that will ultimately provide for at least a 40% reduction in

the taxable value of the property as part of a negotiated

settlement as a result of an appeal filed with the state tax

tribunal. Qualified refunding obligations issued under this

subparagraph are not subject to the requirements of section 611 of

the revised municipal finance act, 2001 PA 34, MCL 141.2611, if

issued before January 1, 2010. The duration of the development

program described in the tax increment financing plan relating to

the qualified refunding obligations issued under this subparagraph

is hereby extended to 1 year after the final date of maturity of

the qualified refunding obligations.

(ii) The refunding obligation meets both of the following:

(A) 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.

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

revenues described in subdivision ~~(cc)(~~ii) (dd)(ii) and the

distributions under section 13b 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 ~~(cc)(~~ii) (dd)(ii) and

the distributions under section 13b to repay the obligation being

refunded, as calculated using a method approved by the department

of treasury.

(iii) The obligation is issued to refund an other protected

obligation issued as a capital appreciation bond delivered to the

Michigan municipal bond authority on December 21, 1994 and any

subsequent refundings of that obligation issued before January 1,

2012. Qualified refunding obligations issued under this

subparagraph are not subject to the requirements of section 305(2),

(3), (5), and (6), section 501, section 503, or section 611 of the

revised municipal finance act, 2001 PA 34, MCL 141.2305, 141.2501,

141.2503, and 141.2611, if issued before January 1, 2012. The

duration of the development program described in the tax increment

financing plan relating to the qualified refunding obligations

issued under this subparagraph is extended to 1 year after the

final date of maturity of the qualified refunding obligations. The

obligation may be payable through the year 2025 at an interest rate

not exceeding the maximum rate permitted by law, notwithstanding

the bond maturity dates contained in the notice of intent to issue

bonds published by the municipality. An obligation issued under

this subparagraph is a qualified refunding obligation only to the

extent that revenues described in subdivision ~~(cc)(~~ii) (dd)(ii) and

distributions under section 13b to repay the qualified refunding

obligation do not exceed $750,000.00.

(iv) The obligation is issued to refund a qualified refunding

obligation issued on February 13, 2008, and any subsequent

refundings of that obligation, issued before December 31, 2018.

Qualified refunding obligations issued under this subparagraph are

not subject to the requirements of section 305(2), (3), (5), and

(6), 501, 503, or 611 of the revised municipal finance act, 2001 PA

34, MCL 141.2305, 141.2501, 141.2503, and 141.2611. The duration of

the development program described in the tax increment financing

plan relating to the qualified refunding obligations issued under

this subparagraph is extended to 1 year after the final date of

maturity of the qualified refunding obligations. Revenues described

in subdivision (cc)(ii) and distributions made under section 13b in

excess of the amount needed for current year debt service on an

obligation issued under this subparagraph may be paid to the

authority to the extent necessary to pay future years' debt service

on the obligation as determined by the board.

(aa) ~~(z)~~ "Qualified township" means a township that meets all

of the following requirements:

(i) Was not eligible to create an authority prior to January 3,

2005.

(ii) Adjoins a municipality that previously created an

authority.

(iii) Along with the adjoining municipality that previously

created an authority, is a member of the same joint planning

commission under the joint municipal planning act, 2003 PA 226, MCL

125.131 to 125.143.

(bb) ~~(aa)~~ "Specific local tax" means a tax levied under 1974

PA 198, MCL 207.551 to 207.572, the commercial redevelopment act,

1978 PA 255, MCL 207.651 to 207.668, the technology park

development act, 1984 PA 385, MCL 207.701 to 207.718, section 5 of

the state essential services assessment act, 2014 PA 92, MCL

211.1055, section 5 of the alternative state essential services

assessment act, 2014 PA 93, MCL 211.1075, and 1953 PA 189, MCL

211.181 to 211.182. The initial assessed value or current assessed

value of property subject to a specific local tax shall be 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.

(cc) ~~(bb)~~ "State fiscal year" means the annual period

commencing October 1 of each year.

(dd) ~~(cc)~~ "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 real and personal property in the

development area, 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), to repay eligible

advances, eligible obligations, and other protected obligations.

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

following:

(A) Ad valorem property taxes attributable either to a portion

of the captured assessed value shared with taxing jurisdictions

within the jurisdictional area of the authority or to a portion of

value of property that may be excluded from captured assessed value

or specific local taxes attributable to such ad valorem property

taxes.

(B) 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

or specific local taxes attributable to such ad valorem property

taxes.

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

valorem property taxes.

(D) Ad valorem property taxes levied under 1 or more of the

following or specific local taxes attributable to those ad valorem

property taxes:

(I) The zoological authorities act, 2008 PA 49, MCL 123.1161

to 123.1183.

(II) The art institute authorities act, 2010 PA 296, MCL

123.1201 to 123.1229.

(III) 1939 PA 147, MCL 119.51 to 119.62.

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

included under subparagraph (ii) or (v), and required to be

transmitted to the authority under section 14(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, 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) or (v).

(v) Tax increment revenues include ad valorem property taxes

and specific local taxes, in an annual amount and for each year

approved by the state treasurer, attributable to the levy by this

state under the state education tax act, 1993 PA 331, MCL 211.901

to 211.906, and by local or intermediate school districts, upon the

captured assessed value of real and personal property in the

development area of an authority established in a city with a

population of 600,000 or more to pay for, or reimburse an advance

for, not more than $8,000,000.00 for the demolition of buildings or

structures on public or privately owned property within a

development area that commences in 2005, or to pay the annual

principal of or interest on an obligation, the terms of which are

approved by the state treasurer, issued by an authority, or by a

city on behalf of an authority, to pay not more than $8,000,000.00

of the costs to demolish buildings or structures on public or

privately owned property within a development area that commences

in 2005.

(vi) Tax increment revenues include ad valorem property taxes

and specific local taxes attributable to the levy by this state

under the state education tax act, 1993 PA 331, MCL 211.201 to

211.906, and by local or intermediate school districts which were

levied on or after July 1, 2010, upon the captured assessed value

of real and personal property in the development area of an

authority established in a city with a population of 600,000 or

more to pay for, or reimburse an advance for, costs associated with

the land acquisition, preliminary site work, and construction of a

catalyst development project.

Sec. 1a. The legislature finds all of the following:

(a) That there exists in this state conditions of property

value deterioration detrimental to the state economy and the

economic growth of the state and its local units of government.

(b) That government programs are desirable and necessary to

~~eliminate~~ address the causes of property value deterioration and to

enhance local economic development thereby benefiting the economic

growth of the state.

programs by means available to the state and local units of

government in the state, including tax increment financing.

(d) That tax increment financing is a government financing

program that contributes to economic growth and development by

dedicating a portion of the increase in the tax base resulting from

economic growth and development to facilities, structures, or

improvements, programs, and other efforts within a development area

thereby facilitating economic growth and development.

(e) That it is necessary for the legislature to exercise its

power to legislate tax increment financing as authorized in this

act and in the exercise of this power to mandate the transfer of

tax increment revenues by city, village, township, school district,

~~and~~ county treasurers, and other taxing units to authorities

created under this act in order to effectuate the ~~legislative~~

~~government programs~~ efforts to eliminate property value

deterioration and to promote economic growth.

(f) That halting property value deterioration and promoting

economic growth in the state are essential governmental functions

and constitute essential public purposes.

(g) That economic development strengthens the tax base upon

which local units of government rely and that government programs

to eliminate property value deterioration benefit local units of

government and are for the use of the local units of government.

(h) That the provisions of this act are enacted to provide a

means for local units of government to eliminate property value

deterioration and to promote economic growth in the communities

served by those local units of government.

(i) That the establishment of authorities under this act is

intended to revitalize and develop downtown areas with intensive

private and public capital investment that are densely settled

commercial cores that serve as social, economic, and cultural

centers.

(j) That downtowns in this state are multifunctional

geographically contiguous spaces where residents can shop, dine,

live, worship, access government, and be entertained, and that are

compact and walkable and serve as a defining characteristic for the

community's overall sense of place.

Sec. 5. (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 entering upon the duties of his or her office,

the director shall take and subscribe to the constitutional oath,

and furnish bond, by posting a bond in the penal sum determined in

the ordinance 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

deemed 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

render 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 entering upon the duties of his or her

office, 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 such other duties as may be delegated to him or her by the

board and shall furnish bond in an amount as 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

such 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 deemed necessary by

the board.

(6) As an alternative to employing any officer or other

personnel, the board may contract with the municipality or with

other entities or individuals to provide services required by the

authority. All contracts for those services shall require the

board's approval and shall be listed in the annual budget of the

authority. Any board member may also be selected as the secretary

or treasurer but may not be compensated.

Sec. 7. (1) The board may:

(a) Prepare an analysis of economic changes taking place in

the downtown district.

(b) Study and analyze the impact of metropolitan growth upon

the downtown district.

remodeling, rehabilitation, restoration, preservation, or

reconstruction of a public facility, an existing building, or a

multiple-family dwelling unit which may be necessary or appropriate

to the execution of a plan which, in the opinion of the board, aids

in the economic growth of the downtown district.

(d) Plan, propose, and implement an improvement to a public

facility within the development area 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.

(e) Develop long-range plans, in cooperation with the agency

which is chiefly responsible for planning in the municipality,

designed to halt the deterioration of property values in the

downtown district and to promote the economic growth of the

downtown district, and take such steps as may be necessary to

persuade property owners to implement the plans to the fullest

extent possible.

(f) Implement any plan of development in the downtown district

necessary to achieve the purposes of this act, in accordance with

the powers of the authority as granted by this act.

(g) Make and enter into contracts necessary or incidental to

the exercise of its powers and the performance of its duties.

(h) Acquire by purchase or otherwise, on terms and conditions

and in a manner the authority considers proper or own, convey, or

otherwise dispose of, or lease as lessor or lessee, land and other

property, real or personal, or rights or interests in property,

which the authority determines is reasonably necessary to achieve

the purposes of this act, and to grant or acquire licenses,

easements, and options with respect to that property.

(i) Improve land and construct, reconstruct, rehabilitate,

restore and preserve, equip, improve, maintain, repair, and operate

any building, including multiple-family dwellings, and any

necessary or desirable appurtenances to that property, within the

downtown district for the use, in whole or in part, of any public

or private person or corporation, or a combination of them.

(j) Fix, charge, and collect fees, rents, and charges for the

use of any building or property under its control or any part

thereof, or facility therein, and pledge the fees, rents, and

charges for the payment of revenue bonds issued by the authority.

(k) Lease any building or property under its control, or any

part of a building or property.

(l) Accept grants and donations of property, labor, or other

things of value from a public or private source.

(m) Acquire, ~~and~~ construct, demolish, reconstruct, develop,

redevelop, use, operate, repair, maintain, improve, enlarge, or

modify public facilities located within a development area.

(n) Create, operate, and fund marketing initiatives that

benefit only retail and general marketing of the downtown district.

(o) Contract for broadband service and wireless technology

service in the downtown district.

(p) Operate and perform all duties and exercise all

responsibilities described in this section in a qualified township

if the qualified township has entered into an agreement with the

municipality under section 3(7).

(q) Create, operate, and fund a loan program to fund

improvements for existing buildings located in a downtown district

to make them marketable for sale or lease. The board may make loans

with interest at a market rate or may make loans with interest at a

below market rate, as determined by the board.

(r) Create, operate, and fund retail business incubators in

the downtown district.

(2) If it is the express determination of the board to create,

operate, or fund a retail business incubator in the downtown

district, the board shall give preference to tenants who will

provide goods or services that are not available or that are

underserved in the downtown area. If the board creates, operates,

or funds retail business incubators in the downtown district, the

board and each tenant who leases space in a retail business

incubator shall enter into a written contract that includes, but is

not limited to, all of the following:

(a) The lease or rental rate that may be below the fair market

rate as determined by the board.

(b) The requirement that a tenant may lease space in the

retail business incubator for a period not to exceed 18 months.

businesses located in the downtown district.

(d) A copy of the business plan of the tenant that contains

measurable goals and objectives.

(e) The requirement that the tenant participate in basic

management classes, business seminars, or other business education

programs offered by the authority, the local chamber of commerce,

local community colleges, or institutions of higher education, as

determined by the board.

(3) An authority may provide or cause to be provided public

services within a downtown district that exceed the levels of

public services generally provided to the extent that those

incremental increases in public services are determined by the

authority to be necessary within the downtown district. An

authority may not provide funding for additional public services

outside the downtown district.

Sec. 8. (1) ~~If a board created under this act serves as the~~

~~planning commission under section 2 of Act No. 285 of the Public~~

~~Acts of 1931, being section 125.32 of the Michigan Compiled Laws,~~

~~the board shall include planning commission business in its agenda.~~

The authority or the municipality creating the authority shall

create, operate, and regularly maintain a website with all

authority records and documents including all of the following:

(a) Minutes of all board meetings.

(b) Annual budget.

(d) Currently adopted development plan.

(e) Currently adopted tax increment finance plan.

(f) List of all authority sponsored and managed events.

(g) Authority staff contact information.

(h) All promotional and marketing materials.

(i) Amount of tax increment revenues captured for each taxing

jurisdiction that levies ad valorem property taxes or specific

local taxes within the boundaries of the authority.

(j) Other documents related to management of the authority.

(2) Each year, the board shall hold an annual meeting. The

purpose of the annual meeting will be to highlight all of the

successes and statistics over the past year and projects

accomplished, events held, promotional and marketing programs

undertaken, property tax valuation from the previous year, the

outcomes related to authority activity, and to hear any questions,

concerns, statements, or other information presented verbally or in

writing at the meeting or in writing before the meeting. Notice of

the annual meeting shall be posted on the municipality's website

not less than 20 days before the date of the meeting. Not less than

20 days before the annual meeting, the board shall mail notice of

the annual meeting to the governing body of each taxing

jurisdiction levying taxes that are subject to capture by the

authority.

Sec. 15. (1) The municipal and county treasurers shall

transmit to the authority tax increment revenues.

(2) The authority shall expend the tax increment revenues

received for the development program only pursuant to the tax

increment financing plan. Surplus funds, including any funds

accumulated in excess of the limitations set forth in subsections

(4) and (5), shall revert proportionately to the respective taxing

bodies. These revenues shall not be used to circumvent existing

property tax limitations. The governing body of the municipality

may abolish the tax increment financing plan when it finds that the

purposes for which it was established are accomplished. However,

the tax increment financing plan shall not be abolished, allowed to

expire, or otherwise terminate, until the principal of, and

interest on, bonds issued pursuant to section 16 have been paid or

funds sufficient to make the payment have been segregated.

(3) Annually the authority shall submit to the governing body

of the municipality, the governing body of a taxing unit levying

taxes subject to capture by an authority, and the state tax

commission a report on the status of the tax increment financing

account. The report shall be published in a newspaper of general

circulation in the municipality or on a website of the authority or

the municipality and shall include the following:

(a) The amount and source of revenue in the account.

(b) The amount in any bond reserve account.

(d) The amount of principal and interest on any outstanding

bonded indebtedness.

(e) The initial assessed value of the ~~project~~ development

area.

(f) The captured assessed value retained by the authority.

(g) The tax increment revenues received.

~~(h) The number of jobs created as a result of the~~

~~implementation of the tax increment financing plan.~~

(h) The total new public investment in each of the development

areas.

(i) The total value of all projects for which a building

permit was issued for new private investment within each of the

development areas.

(j) The total numbers of businesses that were established in

or left each of the development areas.

(k) The total number of new buildings or additions to

buildings within each development area.

(l) The totals received by the authority or other entities or

persons with which is it cooperating in sponsorships, cash, and in-

kind services for events, programs, and projects within each

development area.

(m) The amounts of any funds other than tax increments

revenues used by the authority for any projects or activities in

the development areas.

(n) Information on outcomes resulting from the expenditures of

tax increment revenues measuring all of the following with respect

to each development area:

(i) Job growth.

(ii) Growth in the creation of new businesses.

(iii) Growth in existing businesses.

(iv) Commercial or industrial building vacancy rates.

(v) Residential growth.

(vi) Increased activity from events, conventions, conference,

concerts, tourism, or similar activities or efforts.

(vii) Increased economic activity in the region in which the

authority is located.

(viii) Evidence of the reversal of blight or deterioration in

development areas or surrounding neighborhoods.

(ix) Results of repurposing development areas to improve

economic viability or vitality.

(o) ~~(i)~~ Any additional information the governing body or the

state tax commission considers necessary.

(4) Except as otherwise provided in subsection (5), tax

increment revenues shall be expended within 5 years of their

receipt. However, tax increment revenues may be accumulated for a

period longer than 5 years but not more than 15 years provided the

tax increment financing plan specifically provides for all of the

following:

(a) The reasons for accumulating those funds.

(b) A time frame when the fund will be expended.

(5) Tax increment revenues may also be accumulated as required

pursuant to the terms of bonds issued under this act.

Sec. 17. (1) When a board decides to finance a project in the

downtown district by the use of revenue bonds as authorized in

section 13 or tax increment financing as authorized in sections 14,

15, and 16, it shall prepare a development plan.

(2) The development plan shall contain all of the following:

(a) The designation of boundaries of the development area in

relation to highways, streets, streams, or otherwise.

(b) The location and extent of existing streets and other

public facilities within the development area, shall designate the

location, character, and extent of the categories of public and

private land uses then existing and proposed for the development

area, including residential, recreational, commercial, industrial,

educational, and other uses, and shall include a legal description

of the development area.

area to be demolished, repaired, or altered, a description of any

repairs and alterations, and an estimate of the time required for

completion.

(d) The location, extent, character, and estimated cost of the

improvements including rehabilitation contemplated for the

development area and an estimate of the time required for

completion.

(e) A statement of the construction or stages of construction

planned, and the estimated time of completion of each stage.

(f) A description of any parts of the development area to be

left as open space and the use contemplated for the space.

(g) A description of any portions of the development area that

the authority desires to sell, donate, exchange, or lease to or

from the municipality and the proposed terms.

(h) A description of desired zoning changes and changes in

streets, street levels, intersections, or utilities.

(i) An estimate of the cost of the development, a statement of

the proposed method of financing the development, and the ability

of the authority to arrange the financing.

(j) Designation of the person or persons, natural or

corporate, to whom all or a portion of the development is to be

leased, sold, or conveyed in any manner and for whose benefit the

project is being undertaken if that information is available to the

authority.

(k) The procedures for bidding for the leasing, purchasing, or

conveying in any manner of all or a portion of the development upon

its completion, if there is no express or implied agreement between

the authority and persons, natural or corporate, that all or a

portion of the development will be leased, sold, or conveyed in any

manner to those persons.

(l) Estimates of the number of persons residing in the

development area and the number of families and individuals to be

displaced. If occupied residences are designated for acquisition

and clearance by the authority, a development plan shall include a

survey of the families and individuals to be displaced, including

their income and racial composition, 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 units 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.

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

persons displaced by the development in any new housing in the

development area.

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

the development 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 federal uniform relocation assistance and real

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

42 ~~U.S.C.~~ USC sections 4601, et seq.

(o) A plan for compliance with ~~Act No. 227 of the Public Acts~~

~~of 1972, being sections 213.321 to 213.332 of the Michigan Compiled~~

~~Laws.~~1972 PA 227, MCL 213.321 to 213.332.

(p) If the project or activity is a noncapital expense, detail

the nature of the activity or project, the benefits to the

development area, and the economic development goals that are

anticipated to result.

(q) ~~(p)~~ Other material that the authority, local public

agency, or governing body considers pertinent.

~~(3) A development plan may provide for improvements related to~~

~~a qualified facility, as defined in the federal facility~~

~~development act, Act No. 275 of the Public Acts of 1992, being~~

~~sections 3.931 to 3.940 of the Michigan Compiled Laws, that is~~

~~located outside of the boundaries of the development area but~~

~~within the district, including the cost of construction,~~

~~renovation, rehabilitation, or acquisition of that qualified~~

~~facility or of public facilities and improvements related to that~~

~~qualified facility.~~

Sec. 18. (1) The governing body, before adoption of an

ordinance approving or amending a development plan or approving or

amending a 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 and on the

website of the authority or 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 downtown district not less than 20 days~~

~~before the hearing.~~ Notice shall also be mailed to all property

taxpayers of record in the downtown district not less than 20 days

before the hearing. ~~Beginning June 1, 2005, the~~ 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

development plan or the tax increment financing plan is approved or

amended.

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

plan shall contain: a description of the proposed development area

in relation to highways, streets, streams, or otherwise; 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, and that all

aspects of the development plan will be open for discussion at the

public hearing; and other information that the governing body

considers appropriate. At the time set for hearing, the governing

body shall provide an opportunity for interested persons to be

heard and shall receive and consider communications in writing with

reference to the development plan. The hearing shall provide the

fullest opportunity for expression of opinion, for argument on the

merits, and for introduction 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 thereat.

Sec. 31. (1) The state tax commission may institute

proceedings to compel enforcement of this act and may send written

notification to an authority failing to comply with this act and

the governing body of the municipality that established the

authority of a violation of any provision of this act.

(2) The state tax commission may promulgate rules necessary

for the administration of this act pursuant to the administrative

procedures act of 1969, ~~Act No. 306 of the Public Acts of 1969,~~

~~being sections 24.201 to 24.328 of the Michigan Compiled Laws.~~1969

PA 306, MCL 24.201 to 24.328.

(3) If the state tax commission notifies an authority in

writing that the authority failed to comply with any provision of

this act, that authority shall not capture any tax increment

revenues that are in excess of amounts necessary to pay bonded

indebtedness or other obligations for the period of noncompliance

as determined by the state tax commission. Any excess funds

captured shall be returned to the taxing jurisdiction from which

they were captured as provided in section 15(2).

Enacting section 1. The following acts are repealed:

(a) The historic neighborhood tax increment finance authority

act, 2004 PA 530, MCL 125.2841 to 125.2866.

(b) The neighborhood improvement authority act, 2007 PA 61,

MCL 125.2911 to 125.2932.