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The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us) STATE OF MICHIGAN FRANK J. KELLEY, ATTORNEY GENERAL Opinion No. 6012 November 23, 1981 CITIES: Authority of economic development corporation of a city ECONOMIC DEVELOPMENT CORPORATIONS: Financing of religious education facility of a church The expansion of a religious education facility of a church may not be financed by the economic development corporation of a city. Honorable D. J. Jacobetti State Representative The Capitol Lansing, Michigan You have asked whether the expansion of the present religious education facility of the Good News Assembly of God located in Ishpeming, Michigan may be financed by the Economic Development Corporation of Ishpeming. Under 1974 PA 338, as last amended by 1980 PA 501; MCLA 125.1601 et seq; MSA 5.3520(1) et seq, the Economic Development Corporations Act, municipalities may authorize the formation of an economic development corporation. Once formed, an economic development corporation may finance a variety of economic development projects by issuing revenue bonds. The proceeds of the revenue bonds are either loaned for the construction or acquisition of certain types of economic development projects, or the proceeds are used to directly construct or acquire for subsequent lease of the facilities for such projects. The loan payments or lease payments to the economic development corporation from the borrower or lessee for whom the project was financed or leased are used to pay the principal of and interest on the revenue bonds issued by the economic development corporation. Projects which may be financed by an economic development corporation are defined in 1974 PA 338, supra, Sec. 3(e), as follows: '(e) 'Project' means land or an interest in land, existing or planned improvements, machinery, furnishings, or equipment suitable for use by any of the following: (i) An industrial or commercial enterprise, including agricultural and forestry enterprises and enterprises designed to produce energy from renewable resources. Projects of such an enterprise may include any of the following: (A) Necessary buildings, improvements, or structures suitable for and intended for or incidental to use as an industrial or commercial enterprise. (B) Industrial park or industrial site improvements or port improvements. (C) A replacement housing project incidental to an industrial or commercial enterprise. (D) The machinery, furnishings, leasehold improvements, or equipment necessary, suitable, intended for or incidental to a commercial, industrial, or residential use in connection with the buildings, improvements, or structures. (E) Machinery, furnishings, leasehold improvements, or equipment, including pollution control facilities, to be installed or used primarily within a project area. (ii) An enterprise in relation to a housing and neighborhood improvement program which program involves either the clearing of land or the rehabilitation or construction of housing for the immediate sale of single family or multi-family units at fair market value, or both. Housing and neighborhood improvement programs identified by this subparagraph shall constitute a project for purposes of this subparagraph if the area in which these improvement programs are to be undertaken are located in, or are eligible to be included in, blighted or redevelopment areas identified pursuant to Act No. 344 of the Public Acts of 1945, as amended, being sections 125.71 to 125.84 of the Michigan Compiled Laws, Act No. 250 of the Public Acts of 1941, as amended, being sections 125.901 to 125.922 of the Michigan Compiled Laws, Act No. 197 of the Public Acts of 1975, as amended, being sections 125.1651 to 125.1680, of the Michigan Compiled Laws, or the tax increment finance authority act.' Thus, under 1974 PA 338, supra, an economic development corporation is authorized to provide financing for industrial and commercial enterprises, including agricultural and foresty enterprises, enterprises designed to produce energy from renewable resources, and certain enterprises related to housing and neighborhood programs. According to 1974 PA 338, supra, Sec. 2, the Legislature has found that there exists a continuing need for programs to alleviate and prevent conditions of unemployment and that it is necessary to assist and retain local industrial and commercial enterprises to strengthen and revitalize the state's economy, as well as to promote economic activity in forestry and agricultural sectors, to reduce energy consumption, to retain the family farm, to reduce the rate at which urban sprawl has been replacing productive farmlands, to provide farmers and foresters with a more favorable export market, and to encourage the development of facilities designed to produce energy from renewable resources. Based on a review of the foregoing statutory authority as to projects which may be financed by an economic development corporation, it is clear that religious education facilities are not included or contemplated in 1974 PA 338, supra. It is my opinion, therefore, that the expansion of a religious education facility of a church may not be financed by the economic development corporation of a Michigan municipality. Frank J. Kelley Attorney General
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