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HB 5031

Economic development: local development financing authority; smart zone state capture use; modify. Amends secs. 402, 412a & 412b of 2018 PA 57 (MCL 125.4402 et seq.).

2025-2026 Regular Session Introduced by Joe Aragona and 20 co-sponsors

HB 5031 modifies Michigan's local development financing authority rules for smart zones, adjusting revenue capture and financing mechanisms in designated economic development areas.

referred to second reading
#economicdevelopment:localdevelopmentfinancingauthority
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WeVote Research Nonpartisan
Bill Summary · HB 5031

Legislative bill overview

HB 5031 modifies Michigan's local development financing authority provisions under the 2018 Public Act 57, specifically amending sections related to smart zones and state capture use. The bill adjusts how local development authorities can utilize financing mechanisms within designated smart zone economic development areas. The exact modifications to sections 402, 412a, and 412b are not detailed in the available legislative information.

Why is this important

Local development financing authorities are key tools Michigan municipalities use to fund infrastructure and economic development projects in targeted areas. Smart zones represent state-designated regions intended to attract technology and innovation investment. Changes to how these authorities operate directly affect a community's ability to finance projects, attract businesses, and potentially influence property tax allocation mechanisms used for development financing.

Potential points of contention

  • Revenue allocation concerns: Modifications to "state capture use" may shift how tax increment or other revenue streams are allocated between local and state governments, potentially affecting education and county services that depend on these revenues
  • Smart zone definition and scope: Changes could expand or restrict which areas qualify as smart zones, creating winners and losers among different municipalities competing for development resources
  • Development incentive effectiveness: Altering financing authority mechanisms could impact the actual economic development benefits these tools are intended to generate versus their fiscal costs to taxpayers

Compiled from official sources — confirm details with the bill’s official record.

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