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HB 5867

Economic development: tax increment financing; HOPE zone exemption; provide for. Amends secs. 201, 301, 402, 523, 602, 702 & 802 of 2018 PA 57 (MCL 125.4201 et seq.). TIE BAR WITH: HB 5852'26

2025-2026 Regular Session Introduced by Tyrone Carter and 9 co-sponsors

HB 5867 broadens TIF tools by expanding eligible areas and projects (HOPE zones, catalyst, tech and energy parks, Next Michigan), with clarified revenue rules and safeguards.

bill electronically reproduced 04/22/2026
#economicdevelopment:taxincrementfinancing
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Bill Summary · HB 5867

Summary of HB 5867 (Michigan, 2025-2026)

Purpose and intent

HB 5867 amends the 2018 Public Act 57, the recodified Tax Increment Financing (TIF) Act, to adjust and expand provisions governing tax increment financing districts, authorities, and related programs. The bill updates definitions, expands eligible activities and areas, and adds or clarifies rules for HOPE zones, catalyst development projects, certified technology parks, alternative energy parks, and Next Michigan development areas. The overall aim appears to broaden and refine the tools available for economic development through TIF mechanisms, while maintaining safeguards around valuation, revenue capture, and obligation payments.

Key provisions and changes

  • Definitions and terminology (Sec. 201, Sec. 402; parallel definitions in Sec. 301, Sec. 402):

    • Refines terms such as “advance,” “assessed value,” “captured assessed value,” “development plan,” “development program,” “public facility,” and “tax increment revenues.”
    • Clarifies when an advance or obligation is considered “on behalf of an authority.”
    • Specifies exclusions from captured value, notably HOPE zone property exempt from ad valorem or specific local taxes.

  • Catalyst development projects (Sec. 201):

    • Designation of a “catalyst development project” requires location in a municipality with a population > 600,000, a minimum capital investment of $300 million, and a cap of one such project per authority.

  • HOPE zones and specific local taxes (Sec. 201, Sec. 402):

    • Continues to exclude HOPE zone properties from captured value to the extent these properties are exempt from certain taxes.
    • Maintains special treatment of specific local taxes in the capture calculations.

  • Tax increment revenues (Sec. 201, Sec. 402):

    • Details what counts as tax increment revenues, including ad valorem and specific local taxes, and how revenues are used to repay advances and obligations.
    • Sets rules for apportionment of revenues among the state, school districts, and intermediate school districts, with calculations based on statutory distribution shares.

  • Certified technology parks and alternative energy parks (Sec. 402):

    • Defines avenues for establishing certified technology parks and certified alternative energy parks, including eligibility criteria and the role of the Michigan Economic Development Corporation (MEDC) and Michigan Strategic Fund.

  • Next Michigan development areas and corporations (Sec. 402):

    • Includes provisions for Next Michigan development areas and the corresponding development corporations, outlining eligible properties and development plans.

  • Obligations and refunds (Sec. 402):

    • Expands or clarifies what constitutes an “other protected obligation” and the conditions under which refunding obligations may be issued, including some long-term maturities and caps on revenue pledges.

  • Transit-oriented development (Sec. 402):

    • Clarifies scope of TOD-related infrastructure and facilities eligible within TIF districts.

Who is affected

  • Municipalities and authorities that create and operate TIF districts, Downtown Development Authorities, and related development entities.
  • Property owners within development areas (through changes in how captured assessed value is calculated and how taxes are allocated).
  • Public entities and school districts that share in tax increment revenues, given the clarified apportionment method.
  • Entities involved in catalyst projects, certified technology parks, and certified alternative energy parks, including MEDC and the MEDC-supported park design standards.
  • HOPE zone properties within TIF districts, due to continued exclusions from captured value where tax exemptions apply.

Procedural and timeline considerations

  • The bill references pre- and post-1993/1994 obligations and refunds, indicating alignment with historical financing structures while allowing new configurations.
  • It specifies that calculations of captured value and tax increment revenues must follow methods prescribed by the State Tax Commission.
  • The bill is linked to HB 5852 for a budget or policy bar that may accompany related economic development changes.

Note: The text provided is excerpted and includes drafting artifacts (e.g., repeated phrases, minor formatting issues). The summary reflects the substantive concepts and changes as presented.

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

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