Legislative Action


Details of Public Act 506 of 2016 – CORRECTION

Our original analysis of Public Act 506 included the following (highlighted) statement, as one of the conditions that would trigger the opt-out process for library millages in existence prior to January 1,2017: “Modifications to … additional activities.”  The new law does not reference modifications to DDA activities.

PA 506 establishes two conditions under which a library board or commission can act to exempt pre-2017 library millage revenues from tax capture:


Our apologies for this error. The following is the corrected analysis.

Details of Public Act 506 of 2016, Legislation Excluding Public Library Millages from Tax Capture, Effective Jan. 5, 2017 (as corrected, 1-13-17).

On January 5, 2017, the Governor signed a package of Senate bills (Senate Bills 620-624), passed by the House in the final days of the 2015-16 session, which exclude property taxes levied for public libraries from tax capture by a local authority such as the Downtown Development Authority unless the library board or commission expressly allows it.  The legislation also specifies that the rule would apply retroactively to millages under certain circumstances.  One bill in the package, SB 579, amending the Brownfield Redevelopment Financing Act, was dropped from the package and not passed by the House.

The bill specifically amending the Downtown Development Authority Act, SB 620, is now Public Act (PA) 506 of 2016, and was effective immediately upon the Governor’s signature. The new act:

  • Excludes from “tax increment revenues” ad valorem property taxes and specific local taxes attributable to those property taxes levied for a separate millage for public library purposes approved by the electors after December 31, 2016, except as provided below.
  • Specifies that a millage that was levied by a library board or commission for public library purposes before January 1, 2017, would be exempt from the capture of tax increment revenue if “all obligations and other protected obligations of the authority are paid,…”.
  • Allows a library board or commission to exempt all or a portion of its taxes from capture, if it levied a millage for public library purposes before January 1, 2017, and

* the authority alters or amends the boundaries of the downtown district; or
* the authority extends the duration of the existing finance plan.
This provision allows the library to opt out of the entire district, not just the added area, as currently allowed, and can do so regardless of whether the authority has outstanding debt obligations. A library board or commission would have 60 days to adopt a resolution opting-out after a public hearing on the proposal to amend or extend the TIFA plan. 

  • Specifies that a library board or commission could allow all or a portion of its taxes to be captured, with respect to a millage for public library purposes approved by the voters after December 31, 2016, under the terms of a written agreement with the TIFA and filed with the local clerk (there is a slightly different process for the Detroit City Library, that includes the authorization of the Mayor).

To review the new act as signed by the Governor, go to:

To review the new act in final bill form (showing changes made by the bill to what had been the current DDA Act), go to:

MDA members will want to review the new law with their legal counsel and elected officials to determine its impact on their community and their next steps.

Thank you,

Michigan Downtown Association


New draft versions of the Library Opt-out bills were presented on the Floor of the House yesterday (Tuesday). Votes are expected on Wednesday. Please have your Downtown constituents continue to contact their State Representatives ASAP to vote no and to explain that these bills will irrevocably harm Downtown redevelopment for years to come.

MDA Members Only: You can find all of the latest versions of the bills, including draft floor substitutes, under the File Archives on your member dashboard.

You can also find the latest bills online at: http://www.legislature.mi.gov/(S(mxbqmw5r0yln1s3eozk0sxz5))/mileg.aspx?page=home

MDA Legislative & Advocacy Committee – 2015 Year End Review

As legislators begin to head back to Lansing from their holiday break, I thought that this might be a good time to recap some of the activities of the Legislative & Advocacy Committee (LAC) in 2015.

In recap, 2015 saw the successful completion of a number of different activities of the LAC, including:  

  • Inaugural MDA Lansing Day – On February 25, 2015, MDA held its first ever Lansing Day event at the State Capital Building in Downtown Lansing, MI. The keynote speaker for the inaugural event was current State Representative Brad Jacobsen (R-46th District). During his keynote, Rep. Jacobsen made reference to a number of different legislators, whom had expressed interest in TIF reform, including: 1) Rep. Dave Maturen (R-63rd), 2) Rep. Michael Webber (R-45th), 3) Rep. Lee Chatfield (R-107th) and 4) Sen. Geoff Hansen (R-34th). (Shameless plug here, but it should be noted that we have secured one of the representatives listed above as one of our Keynote for this year’s MDA’s Lansing Day event schedule for February 24, 2016).
  • Elected a New Vice-Chair – The Legislative & Advocacy Committee elected Molly LaLone, Executive Director of the Ortonville DDA, as its new Vice-Chair. Once again, thank you Molly for your willingness to serve!
  • Membership Engagement Program – In the Fall of 2015, the LAC began its membership engagement program, with the distribution of its “Prosperity & Place” Survey. Once again, I would just like to thank those of you who filled out the survey! The LAC is extremely appreciative and will be using your responses to help develop a legislative agenda for MDA.

However, despite these accomplishments, the LAC was also presented with a number of legislative challenges in 2015, including:

  • Legislative Desire for TIF reform – In January 2015, the State House Republicans published the “2015-2016 State House Republican Action Plan.” If you recall, in this document the State House Republicans reiterated their desire to pursue legislative reforms to existing Tax Increment Financing (TIF) legislation. Further, they also indicated that TIF reform is their 2ndhighest legislative priority, next to tax relief.
  • Additional Legislative Hearings Regarding TIF – In October 2015, the State House Local Government Committee began holding hearings on the use of Tax Increment Finance (TIF) in Michigan. Stakeholders from around the State, including MDA, were invited to testify before the committee on this matter. Rumblings suggests that these hearings could lead to a bill being introduced that would limit the use of TIF by DDA’s; while requiring additional reporting and accountability reforms.
  • Passage of TIF Reform Bills Out of Committee – On December 1, 2015, the State Senate Finance Committee voted a number of bills (SB 579, 619, 620, 621, 622, 623 & 642) out of committee, by a 6-0-1 vote, that would provide libraries with additional resources to help stabilize their budget, by exempting the capture of “Special Library Millages” by TIF Authorities, unless a library board decides to opt-in to the capture.

As we transition to 2016, I anticipate that we will continue to hear overtures from both the Governor’s Office and the Legislature regarding TIF reform. Further, given the fact that the current legislative session ends at the end of this calendar year; it would not surprise me if we are faced with a similar situation as in 2014, where law makers will attempt to get something done during the lame duck session.  Because of this, I think that it is vitally important that we remain vigilant in our advocacy for sensible reforms that strengthen our downtowns and not weaken them.
Please continue to reach out and talk to your local State Senators and Representatives about the importance of TIF and the necessity of this instrument. Finally, if you haven’t already done so, I would just like to encourage you to register for this year’s MDA Lansing Day event; schedule for Wed February 24, 2016, at the State Capital Building. Tentatively, we have made arrangements to have two keynote speakers, from both sides of the legislative aisle, for this year’s event. So, if you are interested in hearing how the two sides view the importance of TIF, or have any questions you would like to ask of legislatures, then please come join us at this event. Looking forward to seeing you all in Lansing on February 24, 2016!

Eric Pratt

Legislative & Advocacy Committee Chair

Project Manager

Downtown Grand Rapids Inc.