SB 581 — Economic development: downtown development authorities; definition of downtown district; modify. Amends sec. 201 of 2018 PA 57 (MCL 125.4201). TIE BAR WITH: HB 5455'26

SB-581, As Passed House,Senate, March 19,11, 2026 HOUSE SUBSTITUTE FOR SENATE BILL NO.

581 ASeptember bill22, to2025, amendIntroduced 2018by PASenator 57,HERTEL entitledand "Recodifiedreferred taxto incrementCommittee financingon act,"Local byGovernment. amending section 201 (MCL 125.4201).

A bill to amend 2018 PA 57, entitled "Recodified tax increment financing act," by amending section 201 (MCL 125.4201).

Evidence of the intent to repay an advance may include, includes, but is not limited to, ERE S03447'25_SB581_APS_1 kmhgx3 1 an executed agreement to repay, provisions contained in a tax increment financing plan approved prior to before the advance, or a resolution of the authority or the municipality.

ERE S03447'25 (H-1)_SB581_APH_1 0a2qxs 1 (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.

(h) "Chief executive officer" means the mayor or city manager of a city, the president or village manager of a village, or the ERE S03447'25_SB581_APS_1 kmhgx3 1 supervisor of a township or, if designated by the township board for purposes of this part, the township superintendent or township manager of a township.

(i) "Development area" means that area to which a development ERE S03447'25 (H-1)_SB581_APH_1 0a2qxs 1 plan is applicable.

(m) "Eligible advance" means an advance made before August 19, ERE S03447'25_SB581_APS_1 kmhgx3 1 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 ERE S03447'25 (H-1)_SB581_APH_1 0a2qxs 1 qualified refunding obligation.

In the case of If a municipality having a population of less than 35,000 that ERE S03447'25_SB581_APS_1 kmhgx3 1 established an authority prior to before 1985, created a district or districts, and approved a development plan or tax increment financing plan or amendments amendment to a plan , and which plan or tax increment financing plan or amendments to a plan, and which ERE S03447'25 (H-1)_SB581_APH_1 0a2qxs 1 plan that 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 must be determined as if the plan had not expired December 31, 1991.

(i) A requirement to pay proceeds derived from ad valorem property taxes or taxes levied in lieu of ad valorem property ERE S03447'25_SB581_APS_1 kmhgx3 1 taxes.

(iii) A payment required on a contract, agreement, bond, or note ERE S03447'25 (H-1)_SB581_APH_1 0a2qxs 1 if the requirement to make or assume the payment arose before August 19, 1993.

ERE S03447'25_SB581_APS_1 kmhgx3 1 (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, ERE S03447'25 (H-1)_SB581_APH_1 0a2qxs 1 design costs, and other expenses incurred in the daily management of the authority and planning of its activities.

(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 part before August 19, 1993, and undertaken and installed by that party in accordance with the ERE S03447'25_SB581_APS_1 kmhgx3 1 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 ERE S03447'25 (H-1)_SB581_APH_1 0a2qxs 1 area, or both, if all of the following requirements are met:

ERE S03447'25_SB581_APS_1 kmhgx3 1 (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 ERE S03447'25 (H-1)_SB581_APH_1 0a2qxs 1 met:

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 ERE S03447'25_SB581_APS_1 kmhgx3 1 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 the acquisition, construction, improvement, and operation of a building owned or ERE S03447'25 (H-1)_SB581_APH_1 0a2qxs 1 leased by the authority to be used as a retail business incubator.

ERE S03447'25_SB581_APS_1 kmhgx3 1 (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 ERE S03447'25 (H-1)_SB581_APH_1 0a2qxs 1 using a method approved by the department of treasury.

An obligation issued under ERE S03447'25_SB581_APS_1 kmhgx3 1 this subparagraph is a qualified refunding obligation only to the extent that revenues described in subdivision (cc)(ii) and distributions under section 213b to repay the qualified refunding obligation do not exceed $750,000.00.

ERE S03447'25 (H-1)_SB581_APH_1 0a2qxs 1 (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.

(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 ERE S03447'25_SB581_APS_1 kmhgx3 1 125.131 to 125.143.

(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 ERE S03447'25 (H-1)_SB581_APH_1 0a2qxs 1 act, 1984 PA 385, MCL 207.701 to 207.718, and 1953 PA 189, MCL 211.181 to 211.182.

(ii) Tax increment revenues include ad valorem property taxes and specific local taxes attributable to the application of the levy of the this state pursuant to under the state education tax ERE S03447'25_SB581_APS_1 kmhgx3 1 act, 1993 PA 331, MCL 211.901 to 211.906, and local or intermediate school districts upon on 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 ERE S03447'25 (H-1)_SB581_APH_1 0a2qxs 1 eligible advances, eligible obligations, and other protected obligations.

ERE S03447'25_SB581_APS_1 kmhgx3 1 (III) Except as otherwise provided in section 203(3), ad valorem property taxes or specific local taxes attributable to those ad valorem property taxes levied for a separate millage for public library purposes approved by the electors after December 31, ERE S03447'25 (H-1)_SB581_APH_1 0a2qxs 1 2016.

(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 ERE S03447'25_SB581_APS_1 kmhgx3 1 state under the state education tax act, 1993 PA 331, MCL 211.901 to 211.906, and by local or intermediate school districts, upon on the captured assessed value of real and personal property in the development area of an authority established in a city with a ERE S03447'25 (H-1)_SB581_APH_1 0a2qxs 1 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.

EnactingFinal sectionPage 1.ERE S03447'25_SB581_APS_1 kmhgx3

This amendatory act does not take effect unless House Bill No.

5455 of the 103rd Legislature is enacted into law.

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