Bill Text: MI SB0426 | 2009-2010 | 95th Legislature | Engrossed

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Bill Title: Economic development; plant rehabilitation; abatement eligibility; expand to include certain modular housing manufacturer. Amends secs. 2 & 14 of 1974 PA 198 (MCL 207.552 & 207.564).

Spectrum: Partisan Bill (Republican 1-0)

Status: (Engrossed - Dead) 2009-06-03 - Referred To Committee On Commerce [SB0426 Detail]

Download: Michigan-2009-SB0426-Engrossed.html

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SB-0426, As Passed Senate, June 3, 2009

 

 

 

 

 

 

 

 

 

 

 

SUBSTITUTE FOR

 

SENATE BILL NO. 426

 

 

 

 

 

 

 

 

 

 

     A bill to amend 1974 PA 198, entitled

 

"An act to provide for the establishment of plant rehabilitation

districts and industrial development districts in local

governmental units; to provide for the exemption from certain

taxes; to levy and collect a specific tax upon the owners of

certain facilities; to impose and provide for the disposition of an

administrative fee; to provide for the disposition of the tax; to

provide for the obtaining and transferring of an exemption

certificate and to prescribe the contents of those certificates; to

prescribe the powers and duties of the state tax commission and

certain officers of local governmental units; and to provide

penalties,"

 

by amending sections 2 and 14 (MCL 207.552 and 207.564), section 2

 

as amended by 2008 PA 581 and section 14 as amended by 2008 PA 457.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 2. (1) "Commission" means the state tax commission

 

created by 1927 PA 360, MCL 209.101 to 209.107.

 

     (2) "Facility" means either a replacement facility, a new

 

facility, or, if applicable by its usage, a speculative building.

 

     (3) "Replacement facility" means 1 of the following:

 

     (a) In the case of a replacement or restoration that occurs on

 

the same or contiguous land as that which is replaced or restored,

 

industrial property that is or is to be acquired, constructed,

 

altered, or installed for the purpose of replacement or restoration

 

of obsolete industrial property together with any part of the old

 

altered property that remains for use as industrial property after

 

the replacement, restoration, or alteration.

 

     (b) In the case of construction on vacant noncontiguous land,

 

property that is or will be used as industrial property that is or

 

is to be acquired, constructed, transferred, or installed for the

 

purpose of being substituted for obsolete industrial property if

 

the obsolete industrial property is situated in a plant

 

rehabilitation district in the same city, village, or township as

 

the land on which the facility is or is to be constructed and

 

includes the obsolete industrial property itself until the time as

 

the substituted facility is completed.

 

     (4) "New facility" means new industrial property other than a

 

replacement facility to be built in a plant rehabilitation district

 

or industrial development district.

 

     (5) "Local governmental unit" means a city, village, or

 

township located in this state.

 

     (6) "Industrial property" means land improvements, buildings,

 

structures, and other real property, and machinery, equipment,

 

furniture, and fixtures or any part or accessory whether completed

 

or in the process of construction comprising an integrated whole,

 

the primary purpose and use of which is the engaging in a high-

 

technology activity, operation of a strategic response center,

 

operation of a motorsports entertainment complex, operation of a

 

logistical optimization center, operation of qualified commercial

 

activity, operation of a major distribution and logistics facility,

 

the manufacture of goods or materials, creation or synthesis of

 

biodiesel fuel, or the processing of goods and materials by

 

physical or chemical change; property acquired, constructed,

 

altered, or installed due to the passage of proposal A in 1976; the

 

operation of a hydro-electric dam by a private company other than a

 

public utility; or agricultural processing facilities. Industrial

 

property includes facilities related to a manufacturing operation

 

under the same ownership, including, but not limited to, office,

 

engineering, research and development, warehousing, or parts

 

distribution facilities. Industrial property also includes research

 

and development laboratories of companies other than those

 

companies that manufacture the products developed from their

 

research activities and research development laboratories of a

 

manufacturing company that are unrelated to the products of the

 

company. For applications approved by the legislative body of a

 

local governmental unit between June 30, 1999 and December 31,

 

2007, industrial property also includes an electric generating

 

plant that is not owned by a local unit of government, including,

 

but not limited to, an electric generating plant fueled by biomass.

 

Industrial property also includes convention and trade centers in

 

which construction begins not later than December 31, 2010 and is

 

over 250,000 square feet in size or, if located in a county with a

 

population of more than 750,000 and less than 1,100,000, is over

 

100,000 square feet in size or, if located in a county with a

 

population of more than 26,000 and less than 28,000, is over 30,000

 

square feet in size. Industrial property also includes a federal

 

reserve bank operating under 12 USC 341, located in a city with a

 

population of 750,000 or more. Industrial property may be owned or

 

leased. However, in the case of leased property, the lessee is

 

liable for payment of ad valorem property taxes and shall furnish

 

proof of that liability. Industrial property does not include any

 

of the following:

 

     (a) Land.

 

     (b) Property of a public utility other than an electric

 

generating plant that is not owned by a local unit of government

 

and for which an application was approved by the legislative body

 

of a local governmental unit between June 30, 1999 and December 31,

 

2007.

 

     (c) Inventory.

 

     (7) "Obsolete industrial property" means industrial property

 

the condition of which is substantially less than an economically

 

efficient functional condition.

 

     (8) "Economically efficient functional condition" means a

 

state or condition of property the desirability and usefulness of

 

which is not impaired due to changes in design, construction,

 

technology, or improved production processes, or from external

 

influencing factors that make the property less desirable and

 

valuable for continued use.

 

     (9) "Research and development laboratories" means building and

 

structures, including the machinery, equipment, furniture, and

 

fixtures located in the building or structure, used or to be used

 

for research or experimental purposes that would be considered

 

qualified research as that term is used in section 41 of the

 

internal revenue code, 26 USC 41, except that qualified research

 

also includes qualified research funded by grant, contract, or

 

otherwise by another person or governmental entity.

 

     (10) "Manufacture of goods or materials" or "processing of

 

goods or materials" means any type of operation that would be

 

conducted by an entity included in the classifications provided by

 

sector 31-33 — manufacturing, of the North American industry

 

classification system, United States, 1997, published by the office

 

of management and budget, regardless of whether the entity

 

conducting that operation is included in that manual.

 

     (11) "High-technology activity" means that term as defined in

 

section 3 of the Michigan economic growth authority act, 1995 PA

 

24, MCL 207.803.

 

     (12) "Logistical optimization center" means a sorting and

 

distribution center that supports a private passenger motor vehicle

 

assembly center and its manufacturing process for the purpose of

 

optimizing transportation, just-in-time inventory management, and

 

material handling, and to which all of the following apply:

 

     (a) The sorting and distribution center is within 2 miles of a

 

private passenger motor vehicle assembly center that, together with

 

supporting facilities, contains at least 800,000 square feet.

 

     (b) The sorting and distribution center contains at least

 

950,000 square feet.

 

     (c) The sorting and distribution center has applied for an

 

industrial facilities exemption certificate after June 30, 2005 and

 

before January 1, 2006.

 

     (d) The private passenger motor vehicle assembly center is

 

located on land conditionally transferred by a township with a

 

population of more than 25,000 under 1984 PA 425, MCL 124.21 to

 

124.30, to a city with a population of more than 100,000 that

 

levies an income tax under the city income tax act, 1964 PA 284,

 

MCL 141.501 to 141.787.

 

     (13) "Commercial property" means that term as defined in

 

section 2 of the obsolete property rehabilitation act, 2000 PA 146,

 

MCL 125.2782.

 

     (14) "Qualified commercial activity" means commercial property

 

that meets all of the following:

 

     (a) At least 90% of the property, excluding the surrounding

 

green space, is used for warehousing, distribution, or logistic

 

purposes and is located in a county that borders another state or

 

Canada or for a communications center.

 

     (b) Occupies a building or structure that is greater than

 

100,000 square feet in size.

 

     (15) "Motorsports entertainment complex" means a closed-course

 

motorsports facility, and its ancillary grounds and facilities,

 

that satisfies all of the following:

 

     (a) Has at least 70,000 fixed seats for race patrons.

 

     (b) Has at least 6 scheduled days of motorsports events each

 

calendar year, at least 2 of which shall be comparable to nascar

 

nextel cup events held in 2007 or their successor events.

 

     (c) Serves food and beverages at the facility during

 

sanctioned events each calendar year through concession outlets, a

 

majority of which are staffed by individuals who represent or are

 

members of 1 or more nonprofit civic or charitable organizations

 

that directly financially benefit from the concession outlets'

 

sales.

 

     (d) Engages in tourism promotion.

 

     (e) Has permanent exhibitions of motorsports history, events,

 

or vehicles.

 

     (16) "Major distribution and logistics facility" means a

 

proposed distribution center that meets all of the following:

 

     (a) Contains at least 250,000 square feet.

 

     (b) Has or will have an assessed value of $5,000,000.00 or

 

more for the real property.

 

     (c) Is located within 35 miles of the border of this state.

 

     (d) Has as its purpose the distribution of inventory and

 

materials to facilities owned by the taxpayer whose primary

 

business is the retail sale of sporting goods and related

 

inventory.

 

     (17) "Qualified modular housing manufacturer" means a

 

manufacturer of premanufactured modular building units or

 

manufactured homes that has a manufacturing facility located in

 

this state and has been granted an industrial facilities exemption

 

certificate that expires on December 30, 2011.

 

     (18) "Premanufactured modular building unit" means a building

 

designed and constructed pursuant to the Stille-DeRossett-Hale

 

single state construction code act, 1972 PA 230, MCL 125.1501 to

 

125.1531, that is manufactured in 1 or more sections in a factory

 

for installation on a permanent foundation at its final location.

 

Premanufactured modular building unit does not include a mobile

 

home or a manufactured home that is constructed on a permanent

 

chassis in compliance with the national manufactured housing

 

construction and safety standards act of 1974, 42 USC 5401 to 5426.

 

     (19) "Manufactured home" means that term as defined in section

 

9102(1)(aaa) of the uniform commercial code, 1962 PA 174, MCL

 

440.9102.

 

     Sec. 14. (1) The amount of the industrial facility tax, in

 

each year for a replacement facility, shall be determined by

 

multiplying the total mills levied as ad valorem taxes for that

 

year by all taxing units within which the facility is situated by

 

the taxable value of the real and personal property of the obsolete

 

industrial property for the tax year immediately preceding the

 

effective date of the industrial facilities exemption certificate

 

after deducting the taxable value of the land and of the inventory

 

as specified in section 19.

 

     (2) The amount of the industrial facility tax, in each year

 

for a new facility or a speculative building for which an

 

industrial facilities exemption certificate became effective before

 

January 1, 1994, shall be determined by multiplying the taxable

 

value of the facility excluding the land and the inventory personal

 

property by the sum of 1/2 of the total mills levied as ad valorem

 

taxes for that year by all taxing units within which the facility

 

is located other than mills levied for school operating purposes by

 

a local school district within which the facility is located or

 

mills levied under the state education tax act, 1993 PA 331, MCL

 

211.901 to 211.906, plus 1/2 of the number of mills levied for

 

local school district operating purposes in 1993.

 

     (3) Except as provided in subsection subsections (4) and (6),

 

the amount of the industrial facility tax in each year for a new

 

facility or a speculative building for which an industrial

 

facilities exemption certificate becomes effective after December

 

31, 1993, shall be determined by multiplying the taxable value of

 

the facility excluding the land and the inventory personal property

 

by the sum of 1/2 of the total mills levied as ad valorem taxes for

 

that year by all taxing units within which the facility is located

 

other than mills levied under the state education tax act, 1993 PA

 

331, MCL 211.901 to 211.906, plus, subject to section 14a, the

 

number of mills levied under the state education tax act, 1993 PA

 

331, MCL 211.901 to 211.906.

 

     (4) For taxes levied after December 31, 2007, for the personal

 

property tax component of an industrial facilities exemption

 

certificate for a new facility or a speculative building that is

 

sited on real property classified as industrial real property under

 

section 34c of the general property tax act, 1893 PA 206, MCL

 

211.34c, the amount of the industrial facility tax in each year for

 

a new facility or a speculative building shall be determined by

 

multiplying the taxable value of the facility excluding the land

 

and the inventory personal property by the sum of 1/2 of the total

 

mills levied as ad valorem taxes for that year by all taxing units

 

within which the facility is located other than mills levied under

 

the state education tax act, 1993 PA 331, MCL 211.901 to 211.906,

 

and the number of mills from which the property is exempt under

 

section 1211(1) of the revised school code, 1976 PA 451, MCL

 

380.1211. For taxes levied after December 31, 2007, for the

 

personal property tax component of an industrial facilities

 

exemption certificate for a new facility or a speculative building

 

that is sited on real property classified as commercial real

 

property under section 34c of the general property tax act, 1893 PA

 

206, MCL 211.34c, the amount of the industrial facility tax in each

 

year for a new facility or a speculative building shall be

 

determined by multiplying the taxable value of the facility

 

excluding the land and the inventory personal property by the sum

 

of 1/2 of the total mills levied as ad valorem taxes for that year

 

by all taxing units within which the facility is located other than

 

the number of mills from which the property is exempt under section

 

1211(1) of the revised school code, 1976 PA 451, MCL 380.1211.

 

     (5) For a termination or revocation of only the real property

 

component, or only the personal property component, of an

 

industrial facilities exemption certificate as provided in this

 

act, the valuation and the tax determined using that valuation

 

shall be reduced proportionately to reflect the exclusion of the

 

component with respect to which the termination or revocation has

 

occurred.

 

     (6) Beginning for the 2009 tax year and through the 2011 tax

 

year, the amount of the industrial facility tax in each year for a

 

new facility or a speculative building that is owned or operated by

 

a qualified modular housing manufacturer shall be determined by

 

multiplying the taxable value of the facility excluding the land

 

and the inventory personal property by the sum of 1/10 of the total

 

mills levied as ad valorem taxes for that year by all taxing units

 

within which the facility is located other than mills levied under

 

the state education tax act, 1993 PA 331, MCL 211.901 to 211.906,

 

plus, subject to section 14a, the number of mills levied under the

 

state education tax act, 1993 PA 331, MCL 211.901 to 211.906. This

 

subsection does not apply unless the local governmental unit in

 

which the new facility or speculative building is located approves,

 

by resolution, the amount of the industrial facility tax described

 

in this subsection for the qualified modular housing manufacturer.

 

     (7) Notwithstanding any other provision of this act, if a

 

local governmental unit passed a resolution approving an industrial

 

facilities exemption certificate for a facility before January 1,

 

2009 that is owned or operated by a qualified modular housing

 

manufacturer, then the certificate for that facility is extended

 

for 12 additional years beginning when the initial certificate

 

would have expired if the local governmental unit in which the

 

facility is located approves the extension by resolution.