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Public Act 57: New reporting requirements for tax increment authorities

November 28, 2018 Article 3 min read
David Helisek Britni McDole
Changes to Public Act 57 call for additional transparency and reporting requirements. Here’s what your organization needs to consider.

Person looking at computerPublic Act 57 of 2018, otherwise known as The Recodified Tax Increment Financing Act (the Act), will consolidate tax increment authorities under one statute and establish new reporting requirements. This Act will go into effect Jan. 1, 2019.

Consolidation of tax increment authorities

The Act will consolidate the ability to create and operate tax increment authorities (other than brownfield redevelopment authorities) into a single statute.

All previously created authorities will remain; however, the following acts will be repealed and the corresponding authorities will now operate under the new act:

  • Downtown Development Authority Act (PA 197 of 1975)
  • Tax Increment Finance Authority Act (PA 450 of 1980)
  • Local Development Finance Authority Act (PA 281 of 1986)
  • Nonprofit Street Railway Act (PA 35 of 1867)
  • Corridor Improvement Authority Act (PA 280 of 2005)
  • Water Resource Improvement Tax Increment Finance Authority Act (PA 94 of 2008)
  • Neighborhood Improvement Authority Act (PA 61 of 2007)

Note that the above acts were repealed and recodified into the new act. The acts listed below were repealed, but not recodified:

  • Historical Neighborhood Tax Increment Finance Authority Act (PA 530 of 2004)
  • Private Investment Infrastructure Funding Act (PA 250 of 2010)

Any obligation, or refunding of an obligation, that was issued by an authority or by the municipality that created the authority, under a statute that was repealed by Public Act 57 will continue in effect under its original terms under the corresponding part of this Act.

Transparency and reporting requirements

  1. By April 1, 2019, each authority must submit its currently adopted development plan or tax increment financing plan to the Department of Treasury.
  2. Annually, after Jan. 1, 2019, each authority must submit a comprehensive annual report to Treasury, the governing bodies of its related municipality, and each taxing unit levying taxes that are captured by the authority. This report must contain detailed information on the capture and use of tax increment revenues and is due concurrent with the authority’s audit report due date (typically six months after the fiscal year end).
  3. Within 180 days after the authority’s fiscal year end, subsequent to Jan. 1, 2019, the municipality which created the authority must give public access (either on its website or at a physical location within the municipality) to the following documents:
    • Minutes of all authority board meetings
    • Current authority staff contact information
    • Authority’s approved budgets and annual audits
    • Currently adopted development or tax increment financing plans
    • Annual synopsis of the authority’s activity, which includes the following:
      • For any tax increment revenues not expended within five years of receipt, include the reasoning for accumulating the funds, their expected uses, and a time frame of when they’ll be expended.
      • For any tax increment revenues not expended within 10 years of receipt, include the amount of those funds, along with a written explanation for the reason the funds haven’t been expended.
    • For the immediately preceding fiscal year, a list of the authority’s accomplishments, projects, investments, events, and promotional campaigns
  4. The authority must hold, at a minimum, two informational meetings each year, and give a 14-day advance notice to the public and to the governing body of each taxing unit. These meetings may be held in conjunction with other public meetings of the authority or municipality.          

Any authority not in compliance with the above reporting requirements will receive a notice from the Department of Treasury. If the authority is still in noncompliance status after 60 days from receipt of the notice, the authority will be prohibited from capturing tax increment revenues in excess of the amounts needed to pay bonded indebtedness and other obligations of the authority during this period of noncompliance.

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