Economic development: other; economic development corporations act; amend to reflect elimination of the Michigan strategic fund. Amends sec. 23 of 1974 PA 338 (MCL 125.1623). TIE BAR WITH: SB 0631'25
SB 660 amends section 23 of the Economic Development Corporations Act, which governs how municipal economic development corporations may finance projects and issue revenue bonds or notes. The bill authorizes corporations to borrow money and issue revenue bonds or revenue notes to cover project costs and to refund or advance refund existing obligations, including obligations issued under the Industrial Development Revenue Bond Act of 1963. It also clarifies that refunding bonds may be issued whether the original bonds have matured, are redeemable, or are subject to early redemption, and may be used to pay principal, interest, redemption premiums, or any combination of those amounts.
The bill preserves and restates the tax treatment of these bonds and notes, providing that they are exempt from all taxation except inheritance and transfer taxes, and that interest on the bonds or notes is exempt from Michigan taxation even if subject to federal income tax. It also states that municipalities are not liable for the corporation’s bonds or notes and that the debt is not a municipal debt, requiring a statement to that effect on the face of the instruments. The bill continues existing authority for public officers, state agencies, political subdivisions, financial institutions, insurers, and fiduciaries to invest in or deposit these securities.
SB 660 also strengthens reporting and transparency requirements for economic development corporations. Each corporation must report at least annually to the municipality’s governing body and to the Michigan Economic Development Corporation bureau of fair competition and free enterprise, describing its activities and all revenues and expenditures since the prior report. In addition, the corporation’s financial records, audit reports, and other public-money records are declared public records open to inspection, and the corporation must publish an annual revenue-and-expenditure statement in a newspaper and provide copies on request.
The bill’s stated context indicates it is part of a broader effort to update the act to reflect the elimination of the Michigan Strategic Fund, and it is tie-barred to SB 631, meaning it would not take effect unless that companion bill becomes law. Overall, the bill appears to be a technical and administrative update rather than a major policy shift, focused on preserving financing tools for local development corporations while ensuring clearer public reporting and record access.
SB 660 would amend Michigan’s Economic Development Corporations Act by updating the rules for municipal economic development corporations’ bond and note issuance, refunding authority, tax exemptions, and disclosure obligations. It affects municipalities that create these corporations, the corporations themselves, investors in their securities, and the state and local entities that may hold or receive those securities. The bill also ties reporting to the Michigan Economic Development Corporation bureau referenced in the act and makes the corporation’s financial records and annual revenue/expenditure statements publicly accessible.
The available context suggests generally neutral to favorable sentiment, with the bill presented as a technical cleanup measure to align the statute with the elimination of the Michigan Strategic Fund and to preserve existing financing mechanisms for economic development corporations. No committee transcript or vote record is provided, so there is no evidence of recorded opposition or debate in the materials supplied. The bill’s transparency provisions may also be viewed positively by those concerned with public accountability.
The main potential point of contention is the continued use of tax-exempt revenue bonds and notes for economic development purposes, which can raise broader policy questions about public subsidy, municipal exposure, and the use of tax advantages to support private or quasi-public projects. Another possible issue is the bill’s tie-bar to SB 631, meaning its effectiveness depends on enactment of companion legislation, which can complicate passage. However, the provided materials do not show any specific objections, amendments, or divided votes.