Bill Text: MI HB5348 | 2009-2010 | 95th Legislature | Engrossed

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Bill Title: Economic development; plant rehabilitation; business eligibility for abatements; expand to include next Michigan development corporation. Amends secs. 2 & 4 of 1974 PA 198 (MCL 207.552 & 207.554).

Spectrum: Strong Partisan Bill (Democrat 11-1)

Status: (Introduced - Dead) 2010-01-13 - Referred To Committee On Commerce And Tourism [HB5348 Detail]

Download: Michigan-2009-HB5348-Engrossed.html

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HB-5348, As Passed House, December 19, 2009

 

 

 

 

 

 

 

 

 

 

 

SUBSTITUTE FOR

 

HOUSE BILL NO. 5348

 

 

 

 

 

 

 

 

 

 

 

     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 22 (MCL 207.552 and 207.572), section 2

 

as amended by 2008 PA 581 and section 22 as amended by 1994 PA 266.

 

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) "Next Michigan development corporation" means that term as

 

defined in section 3 of the next Michigan development act.

 

     (4) (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.

 

     (5) (4) "New facility" means new industrial property other

 

than a replacement facility to be built in a plant rehabilitation

 

district or industrial development district.

 

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

 

township, or next Michigan development corporation located in this

 

state. For purposes of this act, if a next Michigan development

 

corporation establishes a plant rehabilitation district or an

 

industrial development district, the next Michigan development

 

corporation shall act as the local governmental unit in

 

establishing and operating the plant rehabilitation district or the

 

industrial development district.

 

     (7) (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. For purposes of a local governmental unit

 

that is a next Michigan development corporation, industrial

 

property includes only property used in the operation of an

 

eligible next Michigan business, as that term is defined in section

 

3 of the Michigan economic growth authority act, 1995 PA 24, MCL

 

207.803. 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.

 

     (8) (7) "Obsolete industrial property" means industrial

 

property the condition of which is substantially less than an

 

economically efficient functional condition.

 

     (9) (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.

 

     (10) (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.

 

     (11) (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.

 

     (12) (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.

 

     (13) (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 optimizes transportation , and uses 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.

 

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

 

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

 

MCL 125.2782.

 

     (15) (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.

 

     (16) (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.

 

     (17) (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.

 

     Sec. 22. (1) A new industrial facilities exemption certificate

 

shall not be approved and issued under this act after April 1,

 

1994, unless a written agreement is entered into between the local

 

governmental unit and the person to whom the certificate is to be

 

issued, and filed with the department of treasury.

 

     (2) A next Michigan development corporation shall not approve

 

an application for an industrial facilities exemption certificate

 

for an eligible next Michigan business without a written agreement

 

entered into with the eligible next Michigan business containing a

 

remedy provision that includes, but is not limited to, all of the

 

following:

 

     (a) A requirement that the industrial facilities exemption

 

certificate is revoked if the eligible next Michigan business is

 

determined to be in violation of the provisions of the written

 

agreement.

 

     (b) A requirement that the eligible next Michigan business may

 

be required to repay all or part of the benefits received under

 

this act if the eligible next Michigan business is determined to be

 

in violation of the provisions of the written agreement.