The Michigan Attorney general has issued an opinion on one of the biggest controversies in economic development regarding Downtown Development Authorities (DDAs). And the opinion is good for DDAs, good for jobs, and good for economic development.
The question: When a local unit of government decides to change the borders of a DDA, do other taxing jurisdictions get 60 days to opt-out of TIF for the entire DDA or just the new parts of the DDA? The law allows opt-outs when the district is changed, but is vague on what can be opted out.
The answer: According to an opinion from Attorney General Mike Cox, other taxing jurisdictions can only opt-out of having taxes captured on any property added to the district. They cannot opt-out of the entire district. Opinion No. 7246 was issued Monday and released Tuesday.
The opinion said: While section 3 does not expressly address this issue, nothing in the text of the statute suggests that the Legislature intended the later process of altering or amending districts to provide a taxing jurisdiction with a second opportunity to "opt out" with respect to lands encompassed within an original district. It is with regard to including new land in an existing downtown district that subsections (3) and (5) extend an "opt-out" opportunity, just as an "opt-out" opportunity was allowed for land originally included in the district. Thus, in the case of an expansion, a taxing jurisdiction would only have the opportunity to "opt out" with respect to lands being added to the district. In the case of an exclusion or contraction of the district, the "opt-out" provision becomes irrelevant since the land being excluded from the district would no longer be subject to tax capture.
This is good news in ensuring regionalization and maximizing all new dollars created by continual development in DDAs.
Andy Schor is the Assistant Director of State Affairs for the Michigan Municipal League. Contact him at (517) 908-0300 or by email.
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