DDA Reporting Requirements Information and Reminder

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As the conversation around Downtown Development Authority/Tax Increment Financing reforms and lack of reporting continues this legislative session, the MML in conjunction with the MEDC and Michigan Downtown Association has create an informational piece reminding DDAs (the TIF tool that sees the most scrutiny) of the reporting requirements they should be complying with. Please ensure your DDA leadership is equipped with this information.  That statement is below:

ATTENTION: Downtown Development Authorities

DDAs are required to submit annually to the State Tax Commission (STC) a report on the status of the tax increment financing account, pursuant to Act 197 of 1975, as amended.

It is estimated that less than 25 percent of DDAs are meeting the reporting requirement. For ease, a TIF reporting template can be found HERE. Please note that the template is not mandatory, and it is not an official Treasury document.  The information on the form is required; the template is not.

Per Act 196 of 1975, the report shall be published in a newspaper of general circulation in the municipality and shall include the following:
(a) The amount and source of revenue in the account.
(b) The amount in any bond reserve account.
(c) The amount and purpose of expenditures from the account.
(d) The amount of principal and interest on any outstanding bonded indebtedness.
(e) The initial assessed value of the project area.
(f) The captured assessed value retained by the authority.
(g) The tax increment revenues received.
(h) The number of jobs created as a result of the implementation of the tax increment financing plan.
(i) Any additional information the governing body or the state tax commission considers necessary.

Helpful Hints:

  • Form 2604 is not the annual financial report; some have mistakenly sent it thinking it fulfills the requirement. Form 2604 is required only of authorities capturing school taxes. Those capturing school taxes must file both the 2604 and the annual financial report.
  • The DDA statute additionally requires annual  reporting to be provided to the “governing body” (i.e., the city council /village council/township board) as well.
  • “Captured Values” should be broken down by property class.
  • “Tax Increment Revenue” should be broken down by the jurisdictions from which it was captured.
  • The report is preferred to be received in an Excel format.

Annual reporting should be sent to the STC at mailto:Treas_LAFD@michigan.gov within ninety (90) days of the end of the fiscal year for the authority.  As there has been ongoing concern regarding the lack of transparency of DDA’s, please comply, publish, and submit your annual report in a timely manner.

If you have additional questions regarding the report, please direct them to Jim Mills with the Department of Treasury at MILLSJ@michigan.gov.

Additional Resources:

 

Nikki Brown is a legislative associate for the League handling economic development, land use, and municipal services issues.  She can be reached at nbrown@mml.org or 517-908-0305.