Bill Text: MI HB5024 | 2009-2010 | 95th Legislature | Introduced
Bill Title: Taxation; hotel-motel tax; state convention facilities development act; modify. Amends secs. 3, 8, 9, 10 & 12 of 1985 PA 106 (MCL 207.623 et seq.).
Spectrum: Partisan Bill (Republican 12-0)
Status: (Introduced - Dead) 2009-06-02 - Printed Bill Filed 05/29/2009 [HB5024 Detail]
Download: Michigan-2009-HB5024-Introduced.html
HOUSE BILL No. 5024
May 28, 2009, Introduced by Reps. Haines, Crawford, Knollenberg, Rick Jones, Agema, Elsenheimer, Rogers, Kowall, Daley, Marleau, Opsommer and Green and referred to the Committee on Commerce.
A bill to amend 1985 PA 106, entitled
"State convention facility development act,"
by amending sections 3, 8, 9, 10, and 12 (MCL 207.623, 207.628,
207.629, 207.630, and 207.632), as amended by 2008 PA 553.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 3. As used in this act:
(a) "Accommodations" means the room or other space provided to
transient guests for dwelling, lodging, or sleeping, including
furnishings and other accessories, in a facility that is not a
campground, hospital, nursing home, emergency shelter, or community
mental health or community substance abuse treatment facility.
Accommodations do not include food or beverages.
(b) "Commissioner" means the state treasurer.
(c) "Convention facility" means 1 or more facilities owned or
leased by a local governmental unit that are any combination of a
convention hall, auditorium, meeting rooms, and exhibition areas
that are separate and distinct and contiguous to each other, and
related adjacent public areas generally available to members of the
public for lease on a short-term basis for holding conventions,
meetings, exhibits, and similar events and the necessary site or
sites, together with appurtenant properties necessary and
convenient for use in connection with the facility.
(d) "Convention hotel" means a facility used in the business
of providing accommodations that has more than 80 rooms for
providing accommodations to transient guests and that complies with
all of the following:
(i) Located within a county having a population according to
the most recent decennial census of 700,000 or more.
(ii) Located within a county that is 1 or more of the
following:
(A) A county that has a publicly owned or leased convention
facility
with 350,000 200,000 square feet or more of total exhibit
space.
(B)
A county that has 2,000 1,000
or more rooms to provide
accommodations for transient guests.
(e) "Local governmental unit" means a county, township, city,
village, building authority, or a metropolitan authority formed
under the regional convention facility authority act.
(f) "Person" means a natural person, partnership, fiduciary,
association, corporation, or other entity.
(g) "Room charge" means the charge imposed for the use or
occupancy of accommodations, excluding charges for food, beverages,
telephone services, the use tax imposed under the use tax act, 1937
PA 94, MCL 205.91 to 205.111, or like services paid in connection
with the charge. Room charge does not include reimbursement of the
assessment imposed by the community convention or tourism marketing
act, 1980 PA 395, MCL 141.871 to 141.880, the convention and
tourism marketing act, 1980 PA 383, MCL 141.881 to 141.889, or this
act.
(h) "Transient guest" means a natural person staying less than
30 consecutive days.
Sec. 8. (1) The collections from the tax imposed by section 4
shall be deposited in the state treasury, to the credit of the
convention facility development fund, which is hereby created
within the state treasury. Collections from the additional tax
imposed under section 1207 of the Michigan liquor control code of
1998, 1998 PA 58, MCL 436.2207, funds appropriated from the 21st
century jobs trust fund under subsection (4), and amounts
designated under section 5(b)(iii) of the health and safety fund act,
1987 PA 264, MCL 141.475, shall also be deposited to the credit of
the convention facility development fund.
(2) The convention facility development fund shall be
distributed for certain state purposes and to local governmental
units for use only for 1 or more of the following purposes:
(a) Acquiring, constructing, improving, enlarging, renewing,
replacing, or leasing a convention facility.
(b) In conjunction with an activity listed in subdivision (a),
repairing, furnishing, and equipping the convention facility.
(c) Refinancing an activity listed in subdivision (a) or (b).
(d) General fund expenditures.
(e) In the case of a local governmental unit that is a
metropolitan authority, for any purpose authorized under the
regional convention facility authority act, 2008 PA 554, MCL
141.1351 to 141.1379.
(3) A contract made by a local governmental unit for the
purposes included in subsection (2)(a) or (b) concerning a
convention facility funded by distributions pursuant to section 9
shall contain a fixed price or guaranteed maximum price for the
total cost of activities conducted for these purposes pursuant to
that contract.
(4) For the fiscal year ending September 30, 2009,
$9,000,000.00 is appropriated from the 21st century jobs trust fund
described in section 2 of the Michigan trust fund act, 2000 PA 489,
MCL 12.252, to an authority created under the regional convention
facility authority act, 2008 PA 554, MCL 141.1351 to 141.1379, for
the purpose of developing a qualified convention facility as
defined under that act. If the transfer of a qualified convention
facility to a regional convention authority is disapproved by the
legislative body of a qualified city under section 19(1) of the
regional convention facility authority act, 2008 PA 554, MCL
141.1369, then for the fiscal year ending September 30, 2009, that
$9,000,000.00 is appropriated from the 21st century jobs trust fund
described in section 2 of the Michigan trust fund act, 2000 PA 489,
MCL 12.252, to a building authority for a county having a
population of not less than 1,000,000 and not more than 1,500,000
on the effective date of the amendatory act that added this
sentence for the purpose of developing a convention facility as
defined in this act.
Sec. 9. (1) Except as provided in subsection (4) or (6), on or
before the thirtieth day of each month, the state treasurer shall
make a distribution from the convention facility development fund
to a qualified local governmental unit. The distribution shall be
an amount equal to the sum of the collections from the excise tax
levied for accommodations under this act for the previous month
from the convention hotels in the county in which the convention
facility is or is to be located and in any county in which
convention hotels are located that is contiguous to the county in
which the convention facility is located, or is to be located, the
additional tax imposed under section 1207 of the Michigan liquor
control code of 1998, 1998 PA 58, MCL 436.2207, for the previous
month received in the fund, and any distribution received under
section 5(b)(iii) of the health and safety fund act, 1987 PA 264, MCL
141.475, and from the 21st century jobs trust fund under section
8(4). However, distributions for any state fiscal year to any
qualified local governmental unit under this section shall not
exceed an amount equal to the amount pledged, assigned, or
dedicated by the qualified local governmental unit pursuant to
section 11 for the payment during that state fiscal year of bonds,
obligations, or other evidences of indebtedness incurred for the
purposes specified in this act or the regional convention facility
authority act, 2008 PA 554, MCL 141.1351 to 141.1379, plus
operating deficit cost expenditures under section 10, plus any
amount necessary to maintain a fully funded debt reserve or other
reserves intended to secure the principal and interest on the
bonds, obligations, or other evidences of indebtedness as contained
in the resolution or ordinance authorizing their issuance.
(2) Notwithstanding the distributions provided by subsection
(1), if a local governmental unit becomes a qualified local
governmental unit entitled to receive distributions from the tax
imposed under section 1207 of the Michigan liquor control code of
1998, 1998 PA 58, MCL 436.2207, or from the tax imposed by this act
in counties in which the convention facility is located or in a
county in which a convention hotel is located that is contiguous to
the county in which the convention facility is located, and from
any distribution under section 5(b)(iii) of the health and safety
fund act, 1987 PA 264, MCL 141.475, no other qualified local
governmental unit is entitled to distributions pursuant to this
section for which that qualified local governmental unit has
previously become entitled, until such time as that qualified local
governmental unit ownership or leasehold interest described in
subsection
(3) (4) is transferred to another local governmental
unit. If that transfer renders the transferee a qualified local
governmental unit, the transferee shall, immediately upon that
transfer, be entitled to the distributions to a qualified local
governmental unit provided in subsection (1) and the priority
provided to a qualified local governmental unit in this subsection,
notwithstanding that the amount of the distributions may increase
as a result of that transfer.
(3) Notwithstanding the provisions of subsection (2), if the
transfer of a qualified convention facility to a regional
convention authority is disapproved by the legislative body of a
qualified city under section 19(1) of the regional convention
facility authority act, 2008 PA 554, MCL 141.1369, then a
distribution from the convention facility development fund of
proceeds received under section 5(b)(iii) of the health and safety
fund act, 1987 PA 264, MCL 141.475, shall be made to a building
authority for a county having a population of not less than
1,000,000 and not more than 1,500,000 on the effective date of the
amendatory act that added this subsection for the purpose of
developing, leasing, or operating a convention facility as defined
in this act and no other qualified local governmental unit is
entitled to any distribution of proceeds received under section
5(b)(iii) of the health and safety fund act, 1987 PA 264, MCL
141.475.
(4) (3)
As used in this act,
"qualified local governmental
unit" means, except as otherwise provided in this subsection, a
city, village, township, county, or authority that is located in,
or includes within its territory or jurisdiction, a county in which
convention hotels are located and that either is the owner or
lessee of a convention facility with 350,000 square feet or more of
total exhibit space on July 30, 1985 or, if such a convention
facility does not exist, will be the owner or lessee of a
convention facility with 350,000 square feet or more of total
exhibit space through the application of distributions under this
section to the purchase or lease of a convention facility. If the
transfer of a qualified convention facility to a regional
convention authority is disapproved by the legislative body of a
qualified city under section 19(1) of the regional convention
facility authority act, 2008 PA 554, MCL 141.1369, then for
purposes of any distribution from the convention facility
development of proceeds under section 5(b)(iii) of the health and
safety fund act, 1987 PA 264, MCL 141.475, qualified local
governmental unit means a building authority for a county having a
population of not less than 1,000,000 and not more than 1,500,000
on the effective date of the amendatory act that added this
sentence.
(5) (4)
Before the 2015-2016 fiscal year,
collections from the
excise tax levied for accommodations under this act and collections
from the tax imposed under section 1207 of the Michigan liquor
control code of 1998, 1998 PA 58, MCL 436.2207, shall not be paid
to a qualified local governmental unit for the repayment of bonds,
obligations, or other evidences of indebtedness incurred after
2007.
(6) If a building authority becomes a qualified local
governmental unit under subsection (4), collections from
distributions under section 5(b)(iii) of the health and safety fund
act, 1987 PA 264, MCL 141.475, shall be paid by the state treasurer
on or before the thirtieth day of each month to that qualified
local governmental unit.
Sec. 10. (1) Any money remaining in the convention facility
development fund that is not used for the bonds, obligations, or
other evidences of indebtedness described in section 9 shall be
distributed pursuant to subsection (2).
(2) Money in the convention facility development fund shall be
distributed as provided in subsection (4) in the following order of
priority in the following amounts:
(a) For each of the following fiscal years, the following
amounts shall be distributed to a metropolitan authority created
under the regional convention facility authority act, 2008 PA 554,
MCL 141.1351 to 141.1379, for the operational deficit costs of a
qualified convention facility operated by the authority under that
act:
(i) $9,400,000.00 for the fiscal year ending September 30,
2009.
(ii) $11,000,000.00 each fiscal year for the fiscal years
ending September 30, 2010 and September 30, 2011.
(iii) $9,000,000.00 each fiscal year for the fiscal years ending
September 30, 2012 and September 30, 2013.
(iv) $8,000,000.00 each fiscal year for the fiscal years ending
September 30, 2014 and September 30, 2015.
(v) $7,000,000.00 for the fiscal year ending September 30,
2016.
(vi) $6,000,000.00 for the fiscal year ending September 30,
2017.
(vii) $5,000,000.00 each fiscal year for the fiscal years
ending September 30, 2018 and September 30, 2019.
(viii) $5,000,000.00 for the fiscal year ending September 30,
2020.
(ix) $5,000,000.00 for the fiscal year ending September 30,
2021.
(x) $5,000,000.00 for the fiscal year ending September 30,
2022.
(xi) $5,000,000.00 for the fiscal year ending September 30,
2023.
(b) For fiscal years ending before October 1, 2009, an amount
equal to the difference, if any, between the tax imposed under this
act in the preceding state fiscal year that is designated under
section 9 to a qualified local governmental unit and the tax
imposed under this act that is designated under section 9 in the
state fiscal year immediately preceding the preceding state fiscal
year for the same local governmental unit shall be distributed to
that local governmental unit. This subdivision does not apply
unless a tax has been imposed under this act in the entire 2 state
fiscal years immediately preceding the state fiscal year in which a
distribution under this subdivision is made. Any amount distributed
under this subdivision shall be used by the local governmental unit
only for the retirement of outstanding bonds, obligations, or other
evidences of indebtedness incurred for which distributions under
section 9 are pledged. A distribution under this subdivision shall
not be made to the extent that the obligations, bonds, or other
evidences of indebtedness cannot be retired or are not outstanding.
(c) For fiscal years ending before October 1, 2015, an amount
equal to that portion of the liquor tax collected under section
1207 of the Michigan liquor control code of 1998, 1998 PA 58, MCL
436.2207, from licensees in counties in which convention hotels are
not located shall be distributed to those counties in which
convention hotels are not located in the same proportion that the
amount of tax collected under section 1207 of the Michigan liquor
control code of 1998, 1998 PA 58, MCL 436.2207, in the preceding
state fiscal year from the licensees in a county bears to the total
tax collections under section 1207 of the Michigan liquor control
code of 1998, 1998 PA 58, MCL 436.2207, in the preceding state
fiscal year from all counties in which convention hotels are not
located.
(d) For fiscal years ending before October 1, 2015, the
remaining money available after distributions under subdivisions
(a), (b), and (c) shall be distributed to each county in the
following amounts:
(i) The amount of money available to be distributed under this
subdivision multiplied by the percentage of collections in the
preceding state fiscal year under section 1207 of the Michigan
liquor control code of 1998, 1998 PA 58, MCL 436.2207, from
licensees in counties in which convention hotels are not located
shall be distributed to each county in which convention hotels are
not located in the same proportion that the amount of tax collected
pursuant to section 1207 of the Michigan liquor control code of
1998, 1998 PA 58, MCL 436.2207, in the preceding state fiscal year
from licensees in that county bears to the total tax collections
from section 1207 of the Michigan liquor control code of 1998, 1998
PA 58, MCL 436.2207, in the preceding state fiscal year from all
counties in which convention hotels are not located.
(ii) The amount of money available to be distributed under this
subdivision multiplied by the percentage of collections in the
preceding state fiscal year under section 1207 of the Michigan
liquor control code of 1998, 1998 PA 58, MCL 436.2207, from
licensees in counties in which convention hotels are located shall
be distributed to each county in which convention hotels are
located in the same proportion that the amount of tax collected
pursuant to section 1207 of the Michigan liquor control code of
1998, 1998 PA 58, MCL 436.2207, in the preceding state fiscal year
from licensees in that county bears to the total tax collections
from section 1207 of the Michigan liquor control code of 1998, 1998
PA 58, MCL 436.2207, in the preceding state fiscal year from all
counties in which convention hotels are located. However, in the
calculation of the proportion represented by a county's share of
distributions under this subparagraph, the amount of the tax
collected from licensees in the qualified local governmental unit
that received distributions under section 9 in fiscal year 2007-
2008 shall not be included.
(e) For the fiscal year ending September 30, 2016, an amount
equal to the product of the total amount of tax collected under
section 1207 of the Michigan liquor control code of 1998, 1998 PA
58, MCL 436.2207, and distributed to all counties in the 2014-2015
fiscal year multiplied by 1.01 shall be distributed to all counties
as provided in this subdivision. For fiscal years beginning after
September 30, 2016, an amount equal to the product of the amount of
liquor tax distributions in the immediately preceding fiscal year
multiplied by 1.01, not to exceed the total amount of tax collected
under section 1207 of the Michigan liquor control code of 1998,
1998 PA 58, MCL 436.2207, shall be distributed to counties.
Distributions to each county under this subdivision shall be
calculated as follows:
(i) The amount of money available to be distributed under this
subdivision multiplied by the percentage of collections in the
immediately preceding state fiscal year under section 1207 of the
Michigan liquor control code of 1998, 1998 PA 58, MCL 436.2207,
from licensees in counties in which convention hotels are not
located shall be distributed to each county in which convention
hotels are not located in the same proportion that the amount of
tax collected pursuant to section 1207 of the Michigan liquor
control code of 1998, 1998 PA 58, MCL 436.2207, in the immediately
preceding state fiscal year from licensees in that county bears to
the total tax collections from section 1207 of the Michigan liquor
control code of 1998, 1998 PA 58, MCL 436.2207, in the immediately
preceding state fiscal year from all counties in which convention
hotels are not located.
(ii) The amount of money available to be distributed under this
subdivision multiplied by the percentage of collections in the
immediately preceding state fiscal year under section 1207 of the
Michigan liquor control code of 1998, 1998 PA 58, MCL 436.2207,
from licensees in counties in which convention hotels are located
shall be distributed to each county in which convention hotels are
located in the same proportion that the amount of tax collected
pursuant to section 1207 of the Michigan liquor control code of
1998, 1998 PA 58, MCL 436.2207, in the immediately preceding state
fiscal year from licensees in that county bears to the total tax
collections from section 1207 of the Michigan liquor control code
of 1998, 1998 PA 58, MCL 436.2207, in the immediately preceding
state fiscal year from all counties in which convention hotels are
located. However, in the calculation of the proportion represented
by a county's share of distributions under this subparagraph, the
amount of the tax collected from licensees in the qualified local
governmental unit that received distributions under section 9 in
the 2007-2008 state fiscal year shall not be included.
(f) Beginning with the fiscal year ending on September 30,
2016, and each fiscal year thereafter, if the revenue in the
convention facility development fund exceeds the amounts
distributed under section 9 and the distributions under subdivision
(e), the excess shall be distributed to a qualified local
governmental unit that is a metropolitan authority to be used by
that qualified local governmental unit only for the retirement of
outstanding bonds, obligations, or other evidences of indebtedness
incurred for which distributions under section 9 are pledged and
for a qualified governmental unit that is a metropolitan authority
or next for the payment of any unfunded operational deficit costs
incurred during the prior fiscal year by a metropolitan authority
created under the regional convention facility authority act for
the operation of a qualified convention facility under that act.
(3) A distribution to a county pursuant to this section shall
be included for purposes of the calculations required to be made by
section 24e of the general property tax act, 1893 PA 206, MCL
211.24e. If the governing body of a taxing unit approves the
additional millage rate under section 24e of the general property
tax act, 1893 PA 206, MCL 211.24e, which is due to distributions
pursuant to this section, then an amount equal to 50% of the
distribution under this section shall be used for substance abuse
treatment within the taxing unit.
(4) Beginning October 1, 2007 and each year thereafter, from
the revenue collected during the previous quarter, after
distributing the monthly payments under section 9(1), the state
treasurer shall make quarterly distributions under subsection
(2)(b) and (c) or under subsection (2)(e). From the revenue
collected in the last quarter of the state fiscal year, the state
treasurer shall make the distribution under subsection (2)(a) prior
to any distributions under subsection (2)(b) and (c) or (e).
Sec. 12. (1) Subject to approval pursuant to section 11, a
local governmental unit may assign or pledge all or a portion of
the distribution of taxes that the local governmental unit is
eligible to receive under this act for payment of bonds,
obligations, or other evidences of indebtedness for the purposes
specified in section 8(2). If a local governmental unit assigns,
pledges, or, pursuant to section 11(3), dedicates all or a portion
of the distribution of taxes that the local governmental unit is
eligible to receive under this act for payment of bonds,
obligations, or other evidences of indebtedness incurred for the
purposes specified in this act, the state treasurer may transmit to
the duly appointed trustee or trustees for the bonds, obligations,
or other evidences of indebtedness, if any, the payment of the
distribution assigned, pledged, or dedicated by the local
governmental unit.
(2) A local governmental unit that becomes a qualified local
governmental unit before May 1, 2008 shall not issue bonds,
obligations, or other evidences of indebtedness to which
distributions under section 9 are pledged in a principal amount
greater than $180,000,000.00. This limit does not apply to
refunding bonds, obligations, or other evidences of indebtedness
issued pursuant to section 11(2) or to bonds, obligations, or other
evidences of indebtedness to which distributions of taxes from the
convention facility development fund are dedicated under section
11(3).
A local governmental unit regional
authority that becomes a
qualified local governmental unit after December 1, 2008 shall not
issue bonds, obligations, or other evidences of indebtedness to
which distributions under section 9 are pledged in order to finance
a total cost for all projects undertaken by the qualified local
governmental unit that exceeds $299,000,000.00. A building
authority that becomes a qualified local governmental unit after
May 1, 2009 shall not issue bonds, obligations, or other evidences
of indebtedness to which distributions under section 9 are pledged
in order to finance a total cost for all projects undertaken by the
qualified local governmental unit that exceeds $135,000,000.00. The
cost of a project in addition to construction and acquisition costs
may include an allowance for legal, engineering, architectural, and
consulting services. The following shall not be considered costs of
a project and may be financed with the proceeds of bonds,
obligations, or other evidences of indebtedness for which section 9
distributions are pledged:
(a) Interest on revenue obligations issued to finance the
project becoming due before the collection of the first revenues
available for the payment of those revenue obligations.
(b) A reserve for the payment of principal, interest, and
redemption premiums on the revenue obligations of the qualified
local governmental unit, and other necessary incidental expenses
including, but not limited to, placement fees, fees or charges for
insurance, letters of credit, lines of credit, remarketing
agreements, or commitments to purchase obligations issued pursuant
to this act.
(c) Fees or charges associated with an agreement to manage
payment, revenue, or interest rate exposure.
(d) Any other fees or charges for any other security provided
to assure timely payment of the obligations.
(e) Refunding bonds.
