Bill
HB 6040
Exempts certain special millages from tax increment financing (TIF) capture, shielding revenue while clarifying PILOT treatment and setting a $300 million catalyst threshold.
Status / Procedural history
- Introduced: Rep. Phil Green, first read 11/07/2024; referred to Committee on Economic Development and Small Business.
- House actions: House passed with House Amendment SCH. A (05/19/2025). Referred to joint committees and the Office of Legislative Research / Office of Fiscal Analysis in March–April 2025. Senate calendared (No. 518) and favorably reported (05/21/2025).
- Bill amends the Recodified Tax Increment Financing Act (2018 PA 57). Amended statutory sections listed: 125.4201, 125.4203, 125.4301, 125.4303, 125.4402, 125.4404, 125.4523, 125.4603, 125.4618, 125.4703, 125.4715, 125.4803, and 125.4814.
Purpose / Intent
- To revise the state’s tax increment financing (TIF) law with clarified definitions and rules governing tax capture districts, to adjust how captured assessed value is calculated (including certain payments in lieu of taxes), to define and limit “catalyst development projects,” and (per the bill title) to exempt certain special millages from being captured by TIF districts.
Key changes and provisions (from bill text excerpt and bill title)
- Definitions (section 201): Several definitional clarifications and technical edits are made, including:
- “Advance”: clarifies what constitutes evidence of intent to repay an advance to an authority (e.g., executed repayment agreements, plan provisions, or resolutions).
- “Captured assessed value”: expressly includes assessed value of property for which specific local taxes are paid in lieu of property taxes (PILOT), and directs the State Tax Commission to prescribe the calculation method.
- “Catalyst development project”: creates/clarifies a designation for very large projects in municipalities with population >600,000 that are expected to result in at least $300,000,000 of capital investment; limits to one such designation per authority.
- “Downtown district” and “initial assessed value”: technical clarifications about how downtown districts may be composed and how initial assessed value is determined (including treatment of PILOT property and certain historical plan expirations).
- Other definition cleanups (authority, board, fiscal year, obligation, eligible advance/obligation, etc.).
- Inclusion of PILOT properties: The bill makes clear that property subject to a specific local tax paid in lieu of property tax is to be treated in captured value calculations (with a method to be prescribed).
- Exemption of certain special millages: The bill title states an intent to exempt certain special millages from tax capture under TIF. The bill text excerpt provided does not list which millages or the exact mechanics; the amendment list implies later sections (301, 303, 402, etc.) contain the implementing changes.
- Limits on catalyst projects: establishes a high capital-investment threshold ($300 million) and a one-per-authority cap for the catalyst designation, which may affect how large developments access TIF capture.
Who is affected
- Municipalities (cities, villages, townships) that create and administer downtown development authorities and TIF districts.
- Downtown development authorities and their governing boards.
- Local taxing units (school districts, counties, special districts, and providers of special millages) whose revenue flows can be subject to TIF capture—particularly if the bill exempts specified special millages from capture.
- Developers and investors in large-scale projects, especially those seeking TIF financing for major “catalyst” developments.
- Taxpayers may experience indirect effects through shifting tax revenue flows and development incentives.
Potential fiscal and policy impacts
- Revenue protection for certain taxing jurisdictions if special millages are excluded from capture (reducing the amount of tax increment diverted to TIF authorities).
- Changes to captured value calculations (including PILOT treatment) could raise or lower the amount of taxes available for capture depending on local PILOT structures.
- The $300 million catalyst threshold and one-per-authority limit will constrain access to enhanced TIF benefits/resourcing for very large projects in populous cities.
- Technical clarifications to advances/obligations may affect how municipalities and authorities structure interim financing and obligations.
Notes and limitations
- The excerpt provided includes detailed definitional changes but not the full text of all amended sections (301, 303, 402, etc.), so some implementation details—especially the precise list and mechanism for exempting “certain special millages”—are not available in the excerpt. Review of the full bill text is recommended to identify exact millages affected and the operational rules for exemptions and tax capture adjustments.
Compiled from official sources — confirm details with the bill’s official record.
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