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