2024 Senate Bill 784

AI Analysis – Experimental

The legislative text aims to amend the "Recodified Tax Increment Financing Act" by revising several sections of the Michigan Compiled Laws (MCL) related to tax increment financing (TIF). The primary provisions include redefining terms such as "advance," "assessed value," "authority," and "captured assessed value," among others, to clarify the scope and application of TIF. Notably, the bill specifies that evidence of intent to repay an advance includes executed agreements, provisions in approved TIF plans, or resolutions by the authority or municipality. It also updates the definition of "catalyst development project" to require a minimum capital investment of $300 million and limits the designation to one project per authority.

The bill introduces changes to the calculation of "initial assessed value" and "captured assessed value," ensuring that properties exempt from taxation at the time of determination are included as zero. It also modifies the definition of "tax increment revenues" to exclude ad valorem property taxes levied for separate millages for fire department purposes. Additionally, the bill outlines the conditions under which tax increment revenues can be used to repay eligible advances, obligations, and other protected obligations, including specific local taxes and ad valorem property taxes.

Funding allocations are detailed, with specific figures provided for eligible obligations and advances made before certain dates. For instance, the bill sets limits on the amount of tax increment revenues that can be received by an authority for eligible obligations, with a phased reduction in the maximum amounts over several fiscal years, ultimately reaching zero for taxes levied after June 30, 2015. The legislation also extends the duration of development programs and tax increment financing plans to one year after the final maturity date of qualified refunding obligations. It includes provisions for the issuance of refunding obligations to manage existing debts, specifying conditions under which these obligations can be issued and the methods for calculating net present value to ensure cost-effectiveness.

Significant timelines and deadlines are embedded within the text, such as the requirement for certain obligations to be issued or incurred before specific dates to qualify as protected obligations. The bill also mandates that the state tax commission prescribe methods for calculating assessed values for properties subject to specific local taxes. Additional context provided by the legislation includes the definition of "transit-oriented facility" as a facility that houses a transit station in a manner that promotes transit ridership or passenger rail use. The bill also elaborates on the establishment of transit operations finance zones for street railway systems, detailing the procedures for creating such zones, including public hearings, agreements between municipalities and street railways, and the use of tax increment financing plans to support transit operations. The bill specifies that tax increment revenues in these zones must be used exclusively for operating expenses of the street railway system and sets limits on the amount of revenue that can be distributed annually.

The legislation further defines "alternative energy technology" and "alternative energy technology business," emphasizing the inclusion of businesses engaged in the research, development, or manufacturing of alternative energy systems. It also clarifies the roles of various entities such as the Michigan Economic Development Corporation and the Michigan Strategic Fund in supporting these initiatives. The bill also addresses the establishment of neighborhood improvement authorities and water resource improvement districts, specifying the types of public facilities and infrastructural improvements that qualify for TIF funding. It includes provisions for the enhancement of water quality and the elimination of aquatic nuisance species, as well as the development of sewer and storm water systems to service existing infrastructure.

The bill amends the "Recodified Tax Increment Financing Act" to update definitions, clarify repayment evidence for advances, set funding limits for eligible obligations, exclude certain taxes from tax increment revenues, extend the duration of development programs and financing plans, and establish transit operations finance zones to support street railway systems.