Bill Text: MI SB0970 | 2011-2012 | 96th Legislature | Engrossed
Bill Title: Income tax; city; rollback and maximum tax rate for residents and nonresidents within certain cities; eliminate rollback and reduce rate under certain circumstances. Amends sec. 3, ch. 1 of 1964 PA 284 (MCL 141.503). TIE BAR WITH: HB 5688'12, HB 5705'12
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Passed) 2012-12-27 - Assigned Pa 0394'12 With Immediate Effect [SB0970 Detail]
Download: Michigan-2011-SB0970-Engrossed.html
SB-0970, As Passed House, December 13, 2012
SUBSTITUTE FOR
SENATE BILL NO. 970
A bill to amend 1964 PA 284, entitled
"City income tax act,"
by amending section 3 of chapter 1 (MCL 141.503), as amended by
2011 PA 56.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
CHAPTER 1
Sec. 3. (1) The governing body of a city, by a lawfully
adopted ordinance that incorporates by reference the uniform city
income tax ordinance set forth in chapter 2, may levy, assess, and
collect an excise tax on income as provided in the ordinance. The
ordinance shall state the rate of the tax which shall be the rate
authorized by 1 of the following:
(a) The uniform city income tax ordinance under section 11 of
chapter 2.
(b) Subsection (2).
(c) Section 3a, 3b, or 3c of this chapter.
(2)
Except as otherwise provided in subsections (3), (4), and
(5),
in In a city with a population of more than 600,000, the
governing body may levy and collect a tax at a rate to be
determined from time to time, that rate to be not more than 2% on
corporations and the following maximum tax rates on resident
individuals and nonresident individuals for the following years:
(a) Before July 1, 1999, 3.00% on resident individuals and
1.50% on nonresident individuals.
(b) Beginning July 1, 1999 and each July 1 after 1999 through
July 1, 2012, except for 2008 and 2009, the maximum tax rate under
this subsection on resident individuals shall be reduced by 0.1
until the rate on resident individuals is 2.0%. The tax rate
imposed on nonresident individuals shall be 50% of the tax rate
imposed on resident individuals each year.
(c) Notwithstanding any other provision of this section, for
the 2008 and 2009 calendar years, the city shall impose the same
tax rate on resident individuals and nonresident individuals as the
city had imposed for the 2007 calendar year.
(d) Except as otherwise provided under subdivision (e),
beginning January 1, 2013 and each year after 2013, a rate of not
more than 2.40% on resident individuals and 1.20% on nonresident
individuals.
(e) Beginning January 1 of the year immediately succeeding the
year that all bonds, obligations, and other evidence of
indebtedness issued by a lighting authority have been fully paid
and each year thereafter, a rate of not more than 2.20% on resident
individuals and 1.10% on nonresident individuals.
(3)
If any 3 of the following conditions exist in a city with
a
population of 600,000 or more, the city may apply to the state
administrative
board for certification that those conditions exist
and
the maximum tax rate under subsection (2)(b) shall not be
further
reduced as provided in subsections (4) and (5):
(a)
Funds have been withdrawn from the city's budget
stabilization
fund for 2 or more consecutive city fiscal years or
there
is a balance of zero in the city's budget stabilization fund.
(b)
The city's income tax revenue growth rate is 0.95 or less.
(c)
The local tax base growth rate is 80% or less of the
statewide
tax base growth rate.
(d)
The city's unemployment rate is 10% or higher according to
the
most recent statistics available from the Michigan jobs
commission.
(4)
If the state administrative board certifies within 60 days
of
application that any 3 of the conditions set forth under
subsection
(3) are met, the maximum tax rate under subsection (2)
shall
not be further reduced from the date of the state
administrative
board's certification until the July 1 following the
expiration
of 1 year after the state administrative board's
certification
unless the city applies for certification that the
conditions
continue to exist. Before the expiration of the
certification,
the city may apply to the state administrative board
to
certify that the conditions continue to exist and if the state
administrative
board so certifies, the certification may continue
until
the July 1 following the expiration of 1 year after the state
administrative
board's certification that the conditions continue
to
exist. The city may continue to apply for certification until
the
conditions under subsection (3) no longer exist.
(5)
Notwithstanding any other provision of this section, if on
July
1 the maximum tax rate on resident individuals is reduced
under
subsection (2) after a year or years in which the maximum tax
rate
was not reduced because of subsections (3) and (4), the
maximum
tax rate on resident individuals shall be the maximum tax
rate
in effect on June 30 of that year reduced by 0.1 and the rate
on
nonresident individuals shall be 50% of the rate imposed on
resident
individuals. On each subsequent July 1, subsection (2)
applies
to the maximum tax rates, subject to subsections (3) and
(4).
(3) Notwithstanding any other provision of law or any
ordinance of the city to the contrary, a city that forms a lighting
authority shall deposit an amount equal to the sum of the revenue
collected from 0.2% of the rate levied on resident individuals
pursuant to subsection (2)(d) and 0.1% of the rate levied on
nonresident individuals pursuant to subsection (2)(d) directly into
the budget of the city's police department and use it exclusively
to retain or hire police officers. The transfer and use of the
revenue as provided under this subsection shall continue until all
bonds, obligations, or other evidence of indebtedness issued by a
lighting authority have been fully paid and revenue is no longer
being pledged from taxes levied under the city utility users tax
act, 1990 PA 100, MCL 141.1151 to 141.1177, to the lighting
authority. As used in this subsection, "lighting authority" means a
lighting authority incorporated under the municipal lighting
authority act.
(4) (6)
The governing body of a city may
adopt the uniform
city income tax ordinance with the alternative sections as set
forth in chapter 3 instead of the similarly numbered sections as
set forth in chapter 2. The uniform city income tax ordinance may
be lawfully adopted or rescinded by the governing body at any time.
The adoption of an ordinance is effective on and after January 1 or
July 1 following adoption of the ordinance, as specified in the
ordinance, but an ordinance shall not become effective earlier than
45 days after adoption or until approved by the electors if a
referendum petition is filed as authorized in this act or a
referendum is otherwise required. The rescission of an ordinance
shall become effective on the following December 31. The ordinance
may be rescinded at any time by the governing body in the same
manner in which it was adopted and with appropriate enforcement,
collection, and refund provisions with respect to liabilities
incurred prior to the effective date of the rescission of the
ordinance. The ordinance shall not be amended except as provided by
the legislature. A city may amend the ordinance to change the tax
rate to a rate authorized by this act.
(5) (7)
Petitions for a referendum election
on the question of
adopting an ordinance adopted by the governing body may be filed
with the city clerk not later than the sixth Monday following the
adoption of the ordinance. The petitions shall be signed by a
number of registered electors of the city equal to at least 10%,
but not more than 20%, of the registered electors of the city
voting in the last general municipal election prior to the adoption
of the ordinance by the governing body. If proper petitions are
filed, the question of adopting the ordinance shall be submitted by
the governing body to the city electors at the next primary or
general election or at a special election called for the purpose,
in any case held not less than 45 days nor more than 90 days after
the clerk has reported the filing of the referendum petition to the
city's governing body. The checking of names on the petitions, the
counting, canvassing, and return of the votes on the question, and
other procedures for the election shall be as provided by law or
charter. Upon a favorable vote of the city electors, the ordinance
shall be effective as specified in the ordinance which may be
amended by the governing body of the city following the election to
specify July 1 or January 1 as the effective date of the ordinance,
if the effective date originally specified in the ordinance is
considered impractical or inconvenient for any reason. The
provisions in this section for a referendum election, and for
delaying the effective date of the ordinance if petitions for a
referendum are filed, are not applicable to a city that on January
1, 1964 had in effect a valid ordinance levying and imposing an
excise tax levied on or measured by income. Notwithstanding any
other provision of this act, if an ordinance becomes effective on
any date other than January 1, each tax year shall end on December
31, and the provisions of the ordinance based on a full tax year
are modified accordingly to be applicable to the partial tax year.
(8)
The city shall annualize the rates under this section as
necessary.
(9)
As used in this section:
(a)
"Consumer price index" means the Detroit consumer price
index
for all urban consumers as defined and reported by the United
States
department of labor, bureau of labor statistics, and as
certified
by the state treasurer.
(b)
"Income tax revenue growth rate" means a number the
numerator
of which is the income tax collections of the city for
the
city fiscal year immediately preceding the city's application
under
subsection (3) and the denominator of which is the product of
the
income tax collections of the city for the city fiscal year
immediately
preceding the city fiscal year used to determine the
numerator
multiplied by 1 plus the corresponding percentage change
in
the average consumer price index for the calendar year ending in
the
city fiscal year used to determine the numerator.
(c)
"Local tax base growth rate" means the total taxable value
of
real property and personal property in the city for the most
recent
year for which data is available divided by the total
taxable
value of real property and personal property in the city
for
the second year immediately preceding the most recent year for
which
the data is available.
(d)
"Statewide tax base growth rate" means the total taxable
value
of real property and personal property in the state for the
most
recent year for which the data is available divided by the
total
taxable value of real property and personal property in the
state
for the second year immediately preceding the most recent
year
for which the data is available.
Enacting section 1. This amendatory act does not take effect
unless all of the following bills of the 96th Legislature are
enacted into law:
(a) House Bill No. 5688.
(b) House Bill No. 5705.
