Inside208

DDA Transparency Legislation Introduced Today, In Committee Tomorrow

Posted on September 23, 2014 by nbrown

Rep. Eileen Kowall has introduced legislation to require more transparency and limit some TIF fund operations of Downtown Development Authorities.  HB 5856 (Kowall DDA Act Legislation (4)) is significantly different than Draft 1 we posted about last week.  HB 5856 would do the following:

  1. Definition of Public Services and states a DDA can spend money on increased levels of public services that the municipality is not providing within the downtown district.
  2. Adds language stating the intent of the legislature in the DDA act of what a downtown is:
    A. DDAs 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.
    B. Downtowns 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.
  3. Adds abilities within a development district such as demolish, reconstruct, develop, redevelop, operate, repair, maintain, improve, etc.  Also adds in environmental remediation of property as an eligible activity.
  4. States all documents for the DDA (budget, audit, minutes, plans, etc) must be on either the DDAs website or the muni’s website.
  5. Requires an annual meeting of the DDA to which other taxing jurisdictions are invited to and allowed to speak on DDA specific issues.
  6. TIF reports that are currently submitted to state must also be submitted to the other taxing jurisdictions.
  7. Adds significant that must be a part of the TIF report including:
    Value of projects
    Number of businesses established and left area
    Other funds aside from TIF used for projects
    Job growth
    Growth in creation of businesses and existing businesses
    Vacancy rates
    Residential growth
    Increased activity from events sponsored by DDA
    Evidence of the reversal of blight or deterioration
  8. TIF revenues need to be used within 5 years of receipt or be turned back over to the other taxing jurisdictions.  However, that 5 years could be moved to longer than 5 but no more than 15 if the TIF plan states why the accumulation is needed, a timeframe for when it will be expended and for what it will be expended.  Additionally, TIF revenues may be accumulated as required pursuant to terms of bonds issued.
  9. Penalty for noncompliance: If State Tax Commission notifies the authority of failure to comply, the authority may not capture any TIF except what is needed for bonds or other obligations until they are back in compliance.

At this time, there are no additional opt outs or resetting of baselines.  However, it is extremely important that you all are contacting your representative regarding this legislation and letting them know how detrimental an opt out or resetting of baseline would be for economic development in your community.

This legislation will be taken up in House Commerce committee tomorrow morning at 10:30 am.  The intent is to then have one more committee hearing on this next week Wednesday where they pass it out and then potentially pass the full House next week Thursday (essentially the legislatures last day until after the election).

If you are interested in testifying on this issue, please let me know!

Please feel free to contact me with any questions!

 Nikki Brown is a legislative associate for the League handling economic development and land use issues.  She can be reached at [email protected] or 517-908-0305.

Locations
Headquarters
1675 Green Road,
Ann Arbor MI 48105
 
Capitol Office
208 N. Capitol Ave.,
1st Floor Lansing, MI 48933
©2022 Michigan Municipal League LLC. All rights reserved