Bill Text: MI SB0829 | 2013-2014 | 97th Legislature | Introduced
Bill Title: Taxation; excise taxes; tax on certain owners of exempt eligible personal property; create. Creates new act & repeals 2012 PA 406 (MCL 123.1241 - 123.1247). TIE BAR WITH: SB 0822'14
Spectrum: Bipartisan Bill
Status: (Passed) 2014-04-22 - Assigned Pa 0092'14 With Immediate Effect [SB0829 Detail]
Download: Michigan-2013-SB0829-Introduced.html
SENATE BILL No. 829
February 25, 2014, Introduced by Senators WARREN and NOFS and referred to the Committee on Finance.
A bill to levy a tax on certain personal property; to provide
for the administration, collection, and distribution of the tax; to
provide for an exemption from that tax; to impose certain duties on
persons and certain state departments; to impose penalties; and to
repeal acts and parts of acts.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act shall be known and may be cited as the "state
essential services assessment act".
Sec. 3. As used in this act:
(a) "Acquisition cost" means the fair market value of eligible
personal property at the time of acquisition by the current owner,
including the cost of freight, sales tax, and installation, and
other capitalized costs, except capitalized interest. There is a
rebuttable presumption that the acquisition price paid by the
current owner for eligible personal property, and any costs of
freight, sales tax, and installation, and other capitalized costs,
except capitalized interest, reflect the fair market value of the
eligible personal property. For property described in subdivision
(e)(i) that would otherwise be exempt under section 7k of the
general property tax act, 1893 PA 206, MCL 211.7k, and for property
described in subdivision (e)(iii), acquisition cost means 1/2 of the
fair market value of that eligible personal property at the time of
acquisition by the current owner. The acquisition cost for eligible
personal property exempt under the renaissance zone act, 1996 PA
376, MCL 125.2681 to 125.2696, is $0.00 except for the 3 years
immediately preceding the expiration of the exemption of that
eligible personal property under the renaissance zone act, 1996 PA
376, MCL 125.2681 to 125.2696, during which period of time the
acquisition cost for that eligible personal property means the fair
market value of that eligible personal property at the time of
acquisition by the current owner multiplied by the percentage
reduction in the exemption as provided in section 9(3) of the
renaissance zone act, 1996 PA 376, MCL 125.2689. The department of
treasury may provide guidelines for circumstances in which the
actual acquisition price is not determinative of fair market value
and the basis of determining fair market value in those
circumstances, including when that property is idle, obsolete, or
surplus.
(b) "Assessment" means the state essential services assessment
levied under section 5.
(c) "Assessment year" means the year in which the state
essential services assessment levied under section 5 is due.
(d) "Eligible claimant" means a person that claims an
exemption for eligible personal property.
(e) "Eligible personal property" means all of the following:
(i) Personal property exempt under section 9m or 9n of the
general property tax act, 1893 PA 206, MCL 211.9m and 211.9n.
(ii) Personal property exempt under section 9f of the general
property tax act, 1893 PA 206, MCL 211.9f, which exemption was
approved under section 9f of the general property tax act, 1893 PA
206, MCL 211.9f, after 2013.
(iii) Personal property subject to an extended industrial
facilities exemption certificate under section 11a of 1974 PA 198,
MCL 207.561a.
(iv) Personal property subject to an extended exemption under
section 9f(8) of the general property tax act, 1893 PA 206, MCL
211.9f.
(f) "Fund board" means the board of directors of the Michigan
strategic fund created under the Michigan strategic fund act, 1984
PA 270, MCL 125.2001 to 125.2094.
(g) "Michigan economic development corporation" means the
Michigan economic development corporation, the public body
corporate created under section 28 of article VII of the state
constitution of 1963 and the urban cooperation act of 1967, 1967
(Ex Sess) PA 7, MCL 124.501 to 124.512, by a contractual interlocal
agreement effective April 5, 1999, and subsequently amended,
between local participating economic development corporations
formed under the economic development corporations act, 1974 PA
338, MCL 125.1601 to 125.1636, and the Michigan strategic fund.
(h) "Michigan strategic fund" means the Michigan strategic
fund created under the Michigan strategic fund act, 1984 PA 270,
MCL 125.2001 to 125.2094.
(i) "Next Michigan development corporation" means that term as
defined under the next Michigan development act, 2010 PA 275, MCL
125.2951 to 125.2959.
Sec. 5. (1) Beginning January 1, 2016, the state essential
services assessment is levied on all eligible personal property as
provided in this section.
(2) The assessment under this section is a state tax on the
eligible personal property owned by, leased to, or in the
possession of an eligible claimant on December 31 of the year
immediately preceding the assessment year and shall be calculated
as follows:
(a) For eligible personal property purchased by the eligible
claimant in a year 1 to 5 years before the assessment year,
multiply the acquisition cost of the eligible personal property by
2.4 mills.
(b) For eligible personal property purchased by the eligible
claimant in a year 6 to 10 years before the assessment year,
multiply the acquisition cost of the eligible personal property by
1.25 mills.
(c) For eligible personal property purchased by the eligible
claimant in a year more than 10 years before the assessment year,
multiply the acquisition cost of the eligible personal property by
0.9 mills.
Sec. 7. (1) The department of treasury shall collect and
administer the assessment as provided in this section.
(2) Not later than March 1 in each assessment year, the
department of treasury shall send to each eligible claimant a
statement for calculation of the assessment as provided in section
5. The statement shall be in a form prescribed by the department of
treasury.
(3) Not later than September 15 in each assessment year, each
eligible claimant shall submit to the department of treasury the
completed statement and full payment of the assessment levied under
section 5 for that assessment year as calculated in section 5(2). A
statement submitted by an eligible claimant shall include all of
the eligible claimant's eligible personal property located in this
state subject to the assessment levied under section 5.
(4) If an eligible claimant does not submit the statement and
full payment of the assessment levied under section 5 for that
assessment year as calculated under section 5(2), all of the
following shall apply:
(a) The department of treasury shall rescind for the
assessment year any exemption described in section 9m or 9n of the
general property tax act, 1893 PA 206, MCL 211.9m and 211.9n,
granted for the eligible personal property.
(b) The state tax commission shall rescind for the assessment
year any exemption under section 9f of the general property tax
act, 1893 PA 206, MCL 211.9f, which exemption was approved under
section 9f of the general property tax act, 1893 PA 206, MCL
211.9f, after 2013.
(c) The state tax commission shall rescind for the assessment
year any exemption for eligible personal property subject to an
extended industrial facilities exemption certificate under section
11a of 1974 PA 198, MCL 207.561a.
(d) The state tax commission shall rescind for the assessment
year any extended exemption for eligible personal property under
section 9f(8)(a) of the general property tax act, 1893 PA 206, MCL
211.9f.
(e) All taxes due as a result of a rescission by the
department of treasury or by the state tax commission under
subdivisions (a) to (d) that were not billed under the general
property tax act, 1893 PA 206, MCL 211.1 to 211.155, or under 1974
PA 198, MCL 207.551 to 207.572, on the summer bill shall be billed
under the general property tax act, 1893 PA 206, MCL 211.1 to
211.155, or under 1974 PA 198, MCL 207.551 to 207.572, on the
winter tax bill.
(5) The department of treasury or any eligible claimant may
appeal any statement submitted under subsection (3) to the state
tax commission. The state tax commission shall arbitrate any appeal
under this subsection. The department of treasury or any eligible
claimant may appeal the decision of the state tax commission to the
Michigan tax tribunal.
Sec. 9. (1) The fund board may adopt a resolution to exempt
from the assessment under this act all eligible personal property
owned by, leased to, or in the possession of an eligible claimant
designated in the resolution as provided in this section. The
resolution shall not be approved if the state treasurer, or his or
her designee to the fund board, votes against the resolution.
(2) An exemption under this section is effective in the
assessment year immediately succeeding the year in which the fund
board adopts the resolution under subsection (1) and shall continue
in effect for a period specified in the resolution. A copy of the
resolution shall be filed with the state tax commission.
(3) The fund board shall provide for a detailed application,
approval, and compliance process published and available on the
fund's website. The detailed application, approval, and compliance
process shall, at a minimum, contain the following:
(a) An eligible claimant, or a next Michigan development
corporation on behalf of an eligible claimant, may apply for an
exemption to the assessment in a form and manner determined by the
fund board.
(b) After receipt of an application, the fund may enter into
an agreement with an eligible claimant if the eligible claimant
agrees to make certain investments of eligible personal property in
this state.
(c) An eligible claimant shall present a business plan or
demonstrate that a minimum of $25,000,000.00 will be invested in
additional eligible personal property in this state during the
duration of the written agreement.
(d) The written agreement shall provide in a clear and concise
manner all of the conditions imposed, including specific time
frames, on the eligible claimant, to receive the exemption to the
assessment under this section.
(e) The written agreement shall provide that the exemption
under this section is revoked if the eligible claimant fails to
comply with the provisions of the written agreement.
(f) The written agreement shall provide for a repayment
provision on the exemption to the assessment if the eligible
claimant fails to comply with the provisions of the written
agreement.
(g) The written agreement shall provide for an audit provision
that requires the fund to verify that the specific time frames for
the investment have been met.
(4) The fund board shall consider the following criteria to
the extent reasonably applicable to the type of investment proposed
when approving an exemption to the assessment:
(a) Out-of-state competition.
(b) Net-positive return to this state.
(c) Level of investment made by the eligible claimant.
(d) Business diversification.
(e) Reuse of existing facilities.
(f) Near-term job creation or significant job retention as a
result of the investment made in eligible personal property.
(g) Strong links to Michigan suppliers.
(h) Whether the project is in a local unit of government that
contains an eligible distressed area as that term is defined in
section 11 of the state housing development authority act of 1966,
1966 PA 346, MCL 125.1411.
(5) The fund board, or the Michigan economic development
corporation, may charge actual and reasonable fees for costs
associated with administering the activities authorized under this
section.
Sec. 11. Proceeds of the assessment collected under section 7
shall be credited to the general fund.
Enacting section 1. The local unit of government essential
services special assessment act, 2012 PA 406, MCL 123.1241 to
123.1247, is repealed.
Enacting section 2. This act does not take effect unless
Senate Bill No.822 of
the 97th Legislature is approved by a majority of the qualified
electors of this state voting on the question at an election to be
held on the August regular election date in 2014.
