1	Saginaw County Property Tax Abatement Programs Property Tax Exemption Programs Property Tax Authority Programs
2	Total of 9 Specific Programs Type 1 Abatement Programs(3) Abatement means reduction Industrial Facilities Tax (IFT) Obsolete Property Rehabilitation Act (OPRA) Neighborhood Enterprise Zones (NEZ) Cost to the General Fund $512,478
3	Specific Programs Continued Type 2 Exemption Programs (2) Act 328 New Personal Property Exemptions Renaissance Zones Cost to the General Fund $638,070
4	Specific Programs Continued Type 3 Authority Programs (4) Brownfield Redevelopment Financing Authority (Brownfield) Downtown Development Authority (DDA) Tax Increment Finance Authority (TIFA) Local Development Finance Authority (LDFA) Cost to the General Fund $763,230
5	Impact on General Fund Grand Total Cost for the 3 Types of Programs is $1,913,778 to the General Fund
6	Type 1. IFT Tax Abatements Industrial Facilities Tax (PA 198 of 1974) For Real & Personal Property The Land Taxable Value stays on ad valorem tax roll Two Types Rehabilitation Certificate New Facility Certificate Rehabilitation Certificate freezes the building taxable value for up to 12 years X current millage rate Owner remodels plant, no change in building value
7	Type1. IFT Abatements continued New Facility Certificate Taxable Value changes but taxed at 50% of all tax rates plus that part of State Education Tax that Michigan Economic Development Corporation decides they should pay (0, 3, or 6 mills) Abated for up to 12 years, State is still issuing we have many that expire in 2014 County Tax Dollars equal taxable value times half the millage rate including Debt
8	Type1. IFT Abatements continued Currently in Saginaw County 1 Rehabilitation Certificate (Frozen Taxable Value of $39,700) Wright K Technology Inc. 165 New Facility Certificates (Taxable Value of $216,797,374) County notified of local hearing date County no denial or approval authority IFT’s cost the General Fund $508,746
9	Type 1. OPRA Abatements Obsolete Property Rehabilitation Act of 2000 (PA 146 of 2000) Commercial Real Property only and only in designated communities, State Treasury decides the communities. Only City of Saginaw and Buena Vista Twp in Saginaw County qualify. County has no denial or approval authority but are notified of hearing For Taxes – Freeze initial value up to 12 years, this value is used multiplied times all the millage rates Plus Pay school operating (18 mills)and SET (6 mills) only on increase in taxable value for new construction Currently $323,909 increased Taxable Value Currently 2 properties, both expire 2014 Cost to the General Fund $1,575
10	Type1. Obsolete Property Rehab Example 2002 Taxable Value = $113,593 (Initial Frozen Value) 2003 New Construction Taxable Value = $323,909 For 2003, Frozen Value $113,593 X 51 mills (all current millages) =$5,793 Tax on the frozen value For 2003, New Const. Value $323,909 X 24 mills (6 SET + 18NH) = $7,774 Tax on the new construction Total Tax $5,793 + $7,774 = $13,567 with exemption Without exemption $437,502 Taxable Value (113,593 + 323,909) X 51 mills = $22,313 Tax savings $8,746 to Taxpayer ($22,313 –$13,567) Cost to General Fund $323,909 X 4.8622 Mills =$1575
11	Type 1. Neighborhood Enterprise Zone (NEZ) Neighborhood Enterprise Zone (Act 147 of 1992) Like an IFT for Residential Land Still Ad Valorem Rehab frozen value X Local Current Millage Rate New Facility at Half Rate of Statewide Average Tax Rate from Previous Year (Distribution to local units on same percentage as local millages) Abatement is for up to 12 years
12	Type 1. NEZ Continued Only in the City of Saginaw Only New Facility Certificates (1/2 Statewide Millage Rates) Zone established by hearing, once Zone established Taxpayer applies to Local Unit (City) and upon their approval they forward to State for final approval. County notified of hearing but has no approval or denial authority. 2003 Taxable Value $887,317 on 31 Certificates Cost to the General Fund is $2,157
13	Type 2. Act 328 New Personal Property Exemptions Public Act 328 of 1998 amended by PA 20 of 1999 Exempts New Personal Property in areas where local governments want increased investment Exemptions are allowed in a distressed community only Distressed community list is decided on by State Department of Treasury
14	Type 2. New Personal Property Exemption continued City of Saginaw, Buena Vista Twp, Carrollton Twp, Spaulding Twp and Zilwaukee Twp are the only communities in Saginaw County that qualify State Tax Commission approves the exemption based on application, approval by local government, and advice of Michigan Economic Development Corp. County has no denial or approval authority.
15	Type 2. New Personal Property Exemption continued No set length Currently we have certificates that vary in expiration dates from 6 years (Floyd Kloc)to 20 years (General Motors and Delphi) For 2003 the Exempt Taxable Value of Personal Property in Saginaw County is $101,062,800 Cost to the General Fund is $491,388
16	Type 2. Renaissance Zones Michigan Renaissance Zone Act (Act 376 of 1996) Renaissance Zone (limited tax area) Resident pays Fed Income tax, no City or State Income Tax, and only Debt on Property Tax. Business no Single Business Tax, and only Debt on Property Tax 15 year limit on zone. Can have more than one zone area but not to exceed 10 Only in the City of Saginaw, they have 10 zones City’s zones expire varying 2014 - 2017
17	Type 2 Renaissance Zones Continued 2003 Taxable Value of $43,862,843 in Zones of which $30,167,775 currently qualifies for exemption (amount qualifying can change) Qualify by filing with City who then forwards application to State for approval. County no denial or approval authority County had no denial or approval authority for initial setup of Zones. City of Saginaw was a designated location, and upon City approval and review by State, Zones were established Up to 12-31-2002 could Change Boundary Area of present Zones without consent of County Board Current Cost to the General Fund is $146,682
18	Type 3. Authorities Brownfield (Brownfield Redevelopment Financing Authority) DDA (Downtown Development Authority) LDFA (Local Development Financing Authority) TIFA (Tax Increment Financing Authority) All Four capture (keep) the increase in taxes above a base value (Tax Increment Revenue) The Base value is the value in existence at the time of establishment of the Financing Plan for the district
19	Type 3. Brownfield Redevelopment Brownfield Redevelopment Financing Act (Act 381 of 1996) Brownfield Redevelopment Zone (area where increase in taxable value is captured to be used for environmental cleanup). Up to 30 years. Can get a credit on Single Business Tax. Ten Percent of the amount of total investment can be used for payroll taxes. Whole County is a zone, a Brownfield site can be developed if it is found that there is environmental contamination
20	Type 3. Brownfield Redevelopment continued Currently 3 Authority Boards: City of Saginaw, Saginaw Twp. and Saginaw County (County Authority oversees the rest of the county units) County Board final approval on county sites. No authority on Saginaw City or Saginaw Twp., but they can’t capture county millage. 2003 Captured Taxable Value is $1,048,992 on properties that capture county millage Cost to the General Fund is $5,100
21	Type 3 DDA, TIFA, and LDFA These all basically work the same They capture Tax Dollars above a base Taxable Value within a designated area Those Tax Dollars that are captured are called Tax Increment Revenue The Designated Area boundary is determined by a hearing then approval by County Board Past County Board approved. Current Board can do nothing about current plans in effect County Board has a say in any Plan amendments
22	Type 3. DDA, TIFA, LDFA continued If there is a boundary change, County can decide whether or not to have their millage captured on those new properties If there is a plan amendment County again has a say on their own millage If there is a new plan initiated, County can participate in or opt out of having their millage captured or can do partial captures
23	Type 3 DDA Value Current DDA Captured Value is $127,390,850 Ad valorem and $1,172,713 IFT Taxable Value DDA cost to the General Fund is $622,251
24	Type 3 TIFA Value Current TIFA Captured Value is $11,324,035 Ad valorem and $4,084,302 IFT TIFA cost to the General Fund is $64,989
25	Type 3 LDFA Value Current LDFA Captured Value is $13,442,400 Ad valorem and $2,274,700 IFT LDFA cost to the General Fund is $70,890
26	Type 3. DDA ,TIFA,and LDFA continued DDA Authority can levy up to 2 Mills on District Properties City of Frankenmuth currently does Kochville Twp. Plans on doing it for 2003 These Millages do not affect other Jurisdictions Revenue TIFA and LDFA Authorities cannot levy a millage
27	DDA, TIFA, LDFA Tax Increment Example Bridgeport District Established 1989 Taxable Value in 1989 = $26,140,466 Year 2003 Taxable value = $39,665,597 Captured value $13,525,131 Taxes still $39,665,597 X millage But $13,525,131 X the millage is kept by the Authority Jurisdictions like the County do not receive the increase in taxes from growth County receives $26,140,466 X 4.8622 General Fund Millage Rate = $127,100 Authority receives $13,525,131 X 4.8622 General Fund Millage Rate = $65,761 Tax Increment Revenue
28	Sample of Perceived Benefits of All These Programs Construction Investment, leading to newer Buildings and Infrastructure, and a general beautification of the area Increased Value of surrounding properties which may not be in Exemption Area These Companies will promote and invest in the Community Upon termination of exemption, the Property Taxes will be on an improved site and area Creation of Jobs in these new enterprises Workers have to live somewhere, they’ll pay property taxes
29	Legislative Update Public Act 93 of 2003 Amends the Renaissance Zone Act to allow 10 additional Ag Processing Renaissance Zones (total of 20 Ag Ren Zones) this allows State to still allow zones for Ag after 12-31-2002. Senate Bill 275 Extends boundary modification of Renaissance Zones to 12-31-2004 (in Committee) Senate Bill 580 Extends boundary modification of Renaissance Zones to 12-31-2003 (in Committee) Senate Bill 483 Creates Corridor Improvement Authority, for Cities only, areas greater than 5 acres or 10 contiguous parcels, zoned commercial past 40 years. Would work similar to a DDA,TIFA, or LDFA, tax increment revenue above a base value. County could meet and come to an agreement on millage capture. (in Committee)
30	Questions and Comments