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SB-553, As Passed Senate, April 21, 2026
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SUBSTITUTE FOR
SENATE BILL NO. 553
A bill to amend 2018 PA 57, entitled
"Recodified tax increment financing act,"
by amending sections 703, 705, and 710 (MCL 125.4703, 125.4705, and
125.4710).
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 703. As used in this part: 1
(a) "Operations" means office maintenance, including salaries 2
and expenses of employees, office supplies, consultation fees, 3
design costs, and other expenses incurred in the daily management 4
of the authority and planning of its activities. 5
(b) "Parcel" means an identifiable unit of land that is 6
treated as separate for valuation or zoning purposes. 7
(c) "Public facility" means a street, and any improvements to 8
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a street, including street furniture and beautification, park, 1
parking facility, recreational facility, right-of-way, structure, 2
waterway, bridge, lake, pond, canal, utility line or pipe, or 3
building, including access routes designed and dedicated to use by 4
the public generally, or used by a public agency, that is related 5
to access to inland lakes or inland river systems or a water 6
resource improvement, or means a water resource improvement. Public 7
facility includes an improvement to a facility used by the public 8
or a public facility as those terms are defined in section 1 of 9
1966 PA 1, MCL 125.1351, if the improvement complies with the 10
barrier free design requirements of the state construction code 11
promulgated under the Stille-DeRossett-Hale single state 12
construction code act, 1972 PA 230, MCL 125.1501 to 125.1531. 13
(d) "Specific local tax" means a tax levied under 1974 PA 198, 14
MCL 207.551 to 207.572, the commercial redevelopment act, 1978 PA 15
255, MCL 207.651 to 207.668, the technology park development act, 16
1984 PA 385, MCL 207.701 to 207.718, or 1953 PA 189, MCL 211.181 to 17
211.182. The initial assessed value or current assessed value of 18
property subject to a specific local tax shall be is the quotient 19
of the specific local tax paid divided by the ad valorem millage 20
rate. The state tax commission shall prescribe the method for 21
calculating the initial assessed value and current assessed value 22
of property for which a specific local tax was paid in lieu of a 23
property tax. 24
(e) "State fiscal year" means the annual period commencing 25
October 1 of each year. 26
(f) "Tax increment revenues" means the amount of ad valorem 27
property taxes and specific local taxes attributable to the 28
application of the levy of all taxing jurisdictions upon on the 29
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captured assessed value of real and personal property in the 1
development area. Tax increment revenues do not include any of the 2
following: 3
(i) Taxes under the state education tax act, 1993 PA 331, MCL 4
211.901 to 211.906. 5
(ii) Taxes levied by local or intermediate school districts. 6
(iii) Ad valorem property taxes attributable either to a portion 7
of the captured assessed value shared with taxing jurisdictions 8
within the jurisdictional area of the authority or to a portion of 9
value of property that may be excluded from captured assessed value 10
or specific local taxes attributable to the ad valorem property 11
taxes. 12
(iv) Ad valorem property taxes excluded by the tax increment 13
financing plan of the authority from the determination of the 14
amount of tax increment revenues to be transmitted to the authority 15
or specific local taxes attributable to the ad valorem property 16
taxes. 17
(v) Ad valorem property taxes exempted from capture under 18
section 815(5) 715(5) or specific local taxes attributable to the 19
ad valorem property taxes. 20
(vi) Ad valorem property taxes specifically levied for the 21
payment of principal and interest of obligations approved by the 22
electors or obligations pledging the unlimited taxing power of the 23
local governmental unit or specific taxes attributable to those ad 24
valorem property taxes. 25
(vii) Ad valorem property taxes levied under 1 or more of the 26
following or specific local taxes attributable to those ad valorem 27
property taxes: 28
(A) The zoological authorities act, 2008 PA 49, MCL 123.1161 29
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to 123.1183. 1
(B) The art institute authorities act, 2010 PA 296, MCL 2
123.1201 to 123.1229. 3
(viii) (C) Except as otherwise provided in section 715(5), ad 4
valorem property taxes or specific local taxes attributable to 5
those ad valorem property taxes levied for a separate millage for 6
public library purposes approved by the electors after December 31, 7
2016. 8
(g) "Water resource improvement" means enhancement of water 9
quality and water dependent natural resources, including, but not 10
limited to, the following: 11
(i) The elimination of the causes and the proliferation of 12
aquatic nuisance species, as defined in section 3101 of the natural 13
resources and environmental protection act, 1994 PA 451, MCL 14
324.3101. 15
(ii) Sewer systems that service existing structures that have 16
failing on-site disposal systems. 17
(iii) Storm water systems that service existing infrastructure. 18
(iv) Dredging, removal of spoils, or other improvements or 19
maintenance activities that enhance navigability of a waterway or 20
the drainage of a storm water management system. 21
(v) Green storm water infrastructure. 22
(vi) Natural shoreline protection. 23
(vii) Ecological assessments. 24
(viii) Seawall replacement with nature-based shoreline erosion 25
control methods. 26
(ix) Lake management planning. 27
(x) Water quality monitoring. 28
(xi) Boat wash stations at public launches. 29
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(xii) Stewardship and education events. 1
(xiii) Fish stocking and other wildlife enhancements. 2
(xiv) Access to and maintenance of boat launch infrastructure. 3
(xv) Watershed management projects for water quality 4
enhancement. 5
(xvi) Storm water system improvements, including both of the 6
following: 7
(A) Maintenance or development of green storm water 8
infrastructure. 9
(B) Maintenance or development of drains, ditches, pump 10
stations, flood protection infrastructure, or other drainage 11
infrastructure. 12
(xvii) Watershed and storm water management plans, studies, 13
inspections, ordinances, or public education. 14
(xviii) Acquisition, ownership, construction, or conservation of 15
property rights for use of right-of-way access and natural area 16
conservation and preservation. 17
(h) "Water resource improvement district" or "district" means 18
1 or more of the following: 19
(i) An inland body of water and land that is up to 1 mile from 20
the shoreline of an inland lake that contains 1 or more public 21
access points. 22
(ii) An inland body of water and parcels of land that are 23
contiguous to the shoreline of an inland lake that does not contain 24
a public access point. 25
(iii) The shoreline of a harbor on a Great Lake and 1 or more of 26
the following: 27
(A) Land up to 1 mile from the shoreline of the harbor. 28
(B) A tributary to that Great Lake harbor up to 5 miles 29
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upstream from the shoreline of the Great Lake harbor. 1
(C) Land up to 1 mile from each bank of the tributary 2
described in sub-subparagraph (B). 3
(iv) An inland river system and land that is up to 1 mile from 4
the shoreline of an inland river system. 5
Sec. 705. (1) If the governing body of a municipality 6
determines that it is necessary for the best interests of the 7
public to promote water resource improvement or access to inland 8
lakes, or both, 1 or more of the following in a water resource 9
improvement district, the governing body may, by resolution, 10
declare its intention to create and provide for the operation of an 11
authority within the boundaries of a water resource improvement 12
district: 13
(a) Water resource improvement. 14
(b) Access to inland lakes. 15
(c) Access to inland river systems. 16
(2) In the resolution of intent, the governing body shall set 17
a date for a public hearing on the adoption of a proposed ordinance 18
creating the authority and designating the boundaries of the 19
development area. Notice of the public hearing shall must be 20
published twice in a newspaper of general circulation in the 21
municipality, not less than 20 or more than 40 days before the date 22
of the hearing. Not less than 20 days before the hearing, the 23
governing body proposing to create the authority shall also mail 24
notice of the hearing to the property taxpayers of record in the 25
proposed development area and to the governing body of each taxing 26
jurisdiction levying taxes that would be subject to capture if the 27
authority is established and a tax increment financing plan is 28
approved. Failure of a property taxpayer to receive the notice does 29
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not invalidate these proceedings. Notice of the hearing shall must 1
be posted in at least not fewer than 20 conspicuous and public 2
places in the proposed development area not less than 20 days 3
before the hearing. The notice shall must state the date, time, and 4
place of the hearing and shall must describe the boundaries of the 5
proposed development area. A citizen, taxpayer, or property owner 6
of the municipality or an official from a taxing jurisdiction with 7
millage that would be subject to capture has the right to be heard 8
in regard to regarding the establishment of the authority and the 9
boundaries of the proposed development area. The governing body of 10
the municipality shall not incorporate land into the development 11
area not included in the description contained in the notice of 12
public hearing, but it may eliminate described lands from the 13
development area in the final determination of the boundaries. 14
(3) Not less than 60 days after the public hearing, if the 15
governing body of the municipality intends to proceed with the 16
establishment of the authority it shall adopt, by majority vote of 17
its members, an ordinance establishing the authority and 18
designating the boundaries of the development area within which the 19
authority shall may exercise its powers. The adoption of the 20
ordinance is subject to any applicable statutory or charter 21
provisions in respect to the approval or disapproval by the chief 22
executive or other officer of the municipality and the adoption of 23
an ordinance over his or her that officer's veto. This ordinance 24
shall must be filed with the secretary of state promptly after its 25
adoption and shall must be published at least once in a newspaper 26
of general circulation in the municipality. 27
(4) The governing body of the municipality may alter or amend 28
the boundaries of the development area to include or exclude lands 29
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from the development area in the same manner as adopting the 1
ordinance creating the authority. 2
(5) A municipality that has created an authority may enter 3
into an agreement with an adjoining municipality that has created 4
an authority to jointly operate and administer those authorities 5
under an interlocal agreement under the urban cooperation act of 6
1967, 1967 (Ex Sess) PA 7, MCL 124.501 to 124.512. 7
Sec. 710. (1) The board may do any of the following: 8
(a) Prepare an analysis of water resource improvement and 9
access to inland lakes issues taking place in the development area 10
related to water resource improvement and access to inland lakes 11
and inland river systems. 12
(b) Study and analyze the need for water resource improvements 13
and access to inland lakes upon and inland river systems in the 14
development area. 15
(c) Plan and propose the construction, renovation, repair, 16
remodeling, rehabilitation, restoration, preservation, or 17
reconstruction of a public facility that may be necessary or 18
appropriate to the execution of a plan that, in the opinion of the 19
board, aids in water resource improvement or access to inland lakes 20
or inland river systems in the development area. The board is 21
encouraged to develop a plan that conserves the natural features, 22
reduces impervious surfaces, and uses landscaping and natural 23
features to reflect the predevelopment site. 24
(d) Plan, propose, and implement an improvement to a public 25
facility within the development area to comply with the barrier 26
free design requirements of the state construction code promulgated 27
under the Stille-DeRossett-Hale single state construction code act, 28
1972 PA 230, MCL 125.1501 to 125.1531. 29
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(e) Develop long-range plans for water resource improvement 1
and access to inland lakes and inland river systems within the 2
district. 3
(f) Implement any plan of development for water resource 4
improvement and access to inland lakes and inland river systems in 5
the development area necessary to achieve the purposes of this part 6
in accordance with the powers of the authority granted by this 7
part. 8
(g) Make and enter into contracts necessary or incidental to 9
the exercise of its powers and the performance of its duties. 10
(h) Acquire by purchase or otherwise, on terms and conditions 11
and in a manner the authority considers proper, or own, convey, or 12
otherwise dispose of, or lease as lessor or lessee, land and other 13
property, real or personal, or rights or interests in the property, 14
that the authority determines is reasonably necessary to achieve 15
the purposes of this part, and to grant or acquire licenses, 16
easements, and options. 17
(i) Improve land and construct, reconstruct, rehabilitate, 18
restore and preserve, equip, clear, improve, maintain, and repair 19
any public facility, building, and any necessary or desirable 20
appurtenances to those buildings and operate a water resource 21
improvement, as determined by the authority to be reasonably 22
necessary to achieve the purposes of this part, within the 23
development area for the use, in whole or in part, of any public or 24
private person or corporation, or a combination thereof. 25
(j) Fix, charge, and collect fees, rents, and charges for the 26
use of any facility, building, or property under its control or any 27
part of the facility, building, or property, and pledge the fees, 28
rents, and charges for the payment of revenue bonds issued by the 29
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authority. 1
(k) Lease, in whole or in part, any facility, building, or 2
property under its control. 3
(l) Accept grants and donations of property, labor, or other 4
things of value from a public or private source. 5
(m) Acquire and construct public facilities. 6
(n) Plan and implement water resource improvements in harbors 7
of the Great Lakes and their tributaries, including, but not 8
limited to, dredging, removal of spoils, and other improvements or 9
maintenance activities that enhance navigability of a waterway. 10
(2) The board shall prepare a water resource management plan 11
in consultation with the department of environmental quality, 12
environment, Great Lakes, and energy, the department of natural 13
resources, or any other entity with expertise in water quality 14
management and invasive species management. 15
(3) The board may apply for the necessary state and federal 16
permits required for a public facility or a water resource 17
improvement under this part. 18