Bill Text: MI SB1113 | 2009-2010 | 95th Legislature | Introduced
Bill Title: Economic development; commercial redevelopment; tax incentives for buildings that are LEED-certified; provide for. Amends secs. 3, 4, 6 & 8 of 1978 PA 255 (MCL 207.653 et seq.).
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2010-09-23 - Referred To Committee Of The Whole With Substitute S-1 [SB1113 Detail]
Download: Michigan-2009-SB1113-Introduced.html
SENATE BILL No. 1113
February 4, 2010, Introduced by Senators BIRKHOLZ, BARCIA, CROPSEY, ALLEN, PAPPAGEORGE, BASHAM, CLARKE, HUNTER and KUIPERS and referred to the Committee on Commerce and Tourism.
A bill to amend 1978 PA 255, entitled
"Commercial redevelopment act,"
by amending sections 3, 4, 6, and 8 (MCL 207.653, 207.654, 207.656,
and 207.658), sections 3 and 4 as amended by 2008 PA 227 and
section 6 as amended by 1980 PA 407.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 3. (1) "Commercial facilities tax" means the specific tax
levied under this act.
(2) "Commercial facilities exemption certificate" means a
certificate issued pursuant to section 8.
(3) "Commercial property" means land improvements classified
by law for general ad valorem tax purposes as real property
including real property assessable as personal property pursuant to
sections 8(d) and 14(6) of the general property tax act, 1893 PA
206, MCL 211.8 and 211.14, whether completed or in the process of
construction, the primary purpose and use of which is the operation
of a commercial business enterprise and shall include office,
engineering, research and development, warehousing parts
distribution, retail sales, hotel or motel development, and other
commercial facilities but shall not include any of the following:
(a) Land.
(b) Property of a public utility.
(c) Housing, except that portion of a building containing
nonhousing commercial activity.
(d) Financial organization. As used in this subdivision,
"financial organization" means a bank, industrial bank, trust
company, building and loan or savings and loan association, bank
holding company as defined in 12 USC 1841, credit union, safety and
collateral deposit company, regulated investment company as defined
in the internal revenue code, and any other association, joint
stock company, or corporation at least 90% of whose assets consist
of intangible personal property and at least 90% of whose gross
receipts income consists of dividends or interest or other charges
resulting from the use of money or credit. The exclusion of
financial institutions shall not apply to the otherwise included
property of financial institutions which is located in the
designated area of a city that is either the largest city in
population within the county, as determined by the latest federal
census; or is a city that had more than the median percentage for
all cities in this state of its residents below the poverty line as
determined by the latest federal census. Each city qualified to not
be excluded under this subdivision shall designate only 1
commercial area for purposes of this provision, which area may be
conterminous with, or included within, a commercial redevelopment
district and in which area a majority of the land must be zoned
commercially.
Commercial property may be owned or leased. If, in the case of
leased property, the lessee is liable for payment of ad valorem
property taxes, and furnishes proof of that liability, the lessee
is eligible for the exemption. If the lessor is liable for payment
of ad valorem property taxes and furnishes proof of that liability,
the lessor is eligible for the exemption.
(4) "Commercial redevelopment district" means an area of a
local governmental unit established as provided in section 5.
(5) "Commission" means the state tax commission created by
1927 PA 360, MCL 209.101 to 209.107.
(6) "Facility" means a restored facility, a replacement
facility,
or a new facility, or a
LEED certified facility.
Sec. 4. (1) "LEED construction activities" means 1 or more of
the following:
(a) Construction of a LEED certified facility.
(b) Renovating or upgrading a LEED certified facility for the
purpose of achieving LEED certification or maintaining or
increasing the level of an existing LEED certification.
(2) "LEED certification" means a certification issued under
the leadership in energy and environmental design green building
rating system developed by the U.S. green building council.
(3) "LEED certified facility" means land improvements
classified by law for general ad valorem tax purposes as real
property including real property assessable as personal property
pursuant to sections 8(d) and 14(6) of the general property tax
act, 1893 PA 206, MCL 211.8 and 211.14, and which have either
received LEED certification or for which LEED certification will be
sought, but shall not include land. A LEED certified facility is
not required to be dedicated to any primary purpose or use and may
include, but is not limited to, commercial, industrial, or
residential uses or multiple uses.
(4)
(1) "Local governmental unit" means, except as
otherwise
provided in this subsection, a city, village, or township. For
local governmental units designating a commercial redevelopment
district after June 30, 2008, local governmental unit means a city
or village. For purposes of LEED certified facilities, local
governmental unit includes a city or village and also includes a
township that has a population of 20,000 or more.
(5) (2)
"New facility" means 1 of
the following:
(a) Through June 30, 2008, new commercial property other than
a replacement facility to be built in a redevelopment district.
(b) Beginning July 1, 2008, new commercial property other than
a replacement facility to be built in a redevelopment district that
meets all of the following:
(i) Is located on property that is zoned to allow for mixed use
that includes high-density residential use.
(ii) Is located in a qualified downtown revitalization district
as defined in section 2 of the neighborhood enterprise zone act,
1992 PA 147, MCL 207.772.
(iii) The local governmental unit in which the new facility is
to be located does all of the following:
(A) Establishes and implements an expedited local permitting
and inspection process in the commercial redevelopment district.
(B) By resolution provides for walkable nonmotorized
interconnections, including sidewalks and streetscapes throughout
the commercial redevelopment district.
(6) (3)
"Obsolete commercial
property" means commercial
property the condition of which is impaired due to changes in
design, construction, technology, or improved production processes,
or damage due to fire, natural disaster, or general neglect.
(7) (4)
"Replacement" means the
complete or partial demolition
of obsolete commercial property and the complete or partial
reconstruction or installation of new property of similar utility.
(8) (5)
"Replacement facility"
means 1 of the following:
(a) Through June 30, 2008, commercial property on the same or
contiguous land within the district which land is or is to be
acquired, constructed, altered, or installed for the purpose of
being substituted for obsolete commercial property together with
any part of the old altered property that remains for use as
commercial property after the replacement.
(b) Beginning July 1, 2008, commercial property on the same or
contiguous land within the district which land is or is to be
acquired, constructed, altered, or installed for the purpose of
being substituted for obsolete commercial property and any part of
the old altered property that remains for use as commercial
property after the replacement, that meets all of the following:
(i) Is located on property that is zoned to allow for mixed use
that includes high-density residential use.
(ii) Is located in a qualified downtown revitalization district
as defined in section 2 of the neighborhood enterprise zone act,
1992 PA 147, MCL 207.772.
(iii) The local governmental unit in which the replacement
facility is to be located does all of the following:
(A) Establishes and implements an expedited local permitting
and inspection process in the commercial redevelopment district.
(B) By resolution provides for walkable nonmotorized
interconnections, including sidewalks and streetscapes throughout
the commercial redevelopment district.
(9) (6)
"Restoration" means
changes to obsolete commercial
property other than replacement as may be required to restore the
property, together with all appurtenances thereto, to an
economically efficient condition. Restoration includes major
renovation including but not limited to the improvement of floor
loads, correction of deficient or excessive height, new or improved
fixed building equipment, including heating, ventilation, and
lighting, reducing multistory facilities to 1 or 2 stories,
improved structural support including foundations, improved roof
structure and cover, floor replacement, improved wall placement,
improved exterior and interior appearance of buildings, and other
physical changes required to restore the commercial property to an
economically efficient condition. Restoration does not include
improvements aggregating less than 10% of the true cash value of
the property at commencement of the restoration of the commercial
property.
(10) (7)
"Restored facility" means
a facility that has
undergone restoration.
(11) (8)
"State equalized
valuation" means the valuation
determined under 1911 PA 44, MCL 209.1 to 209.8.
Sec. 6. (1) The owner or lessee of a facility may file an
application for a commercial facilities exemption certificate with
the clerk of the local governmental unit that established the
commercial redevelopment district. The application shall be filed
in the manner and form prescribed by the commission. The
application shall contain or be accompanied by a general
description of the facility and a general description of the
proposed use of the facility, the general nature and extent of the
restoration, replacement, or construction to be undertaken, a
descriptive list of the fixed building equipment which will be a
part of the facility, a time schedule for undertaking and
completing the restoration, replacement, or construction of the
facility, a statement of the economic advantages expected from the
exemption, including the number of jobs retained or created because
of the exemption, including expected construction employment, and
information relating to the requirements in section 10.
(2) Upon receipt of an application for a commercial facilities
exemption certificate, the clerk of the local governmental unit
shall notify in writing the assessor of the assessing unit in which
the facility is located or to be located, and to the legislative
body of each taxing unit which levies ad valorem property taxes in
the local governmental unit in which the facility is located or to
be located. Before acting upon the application, the legislative
body of the local governmental unit shall hold a public hearing on
the application and give public notice to the applicant, the
assessor, a representative of the affected taxing jurisdictions,
and the general public. The hearing on the application shall be
held separately from the hearing on the establishment of the
commercial redevelopment district.
(3) Upon receipt of an application for a commercial facility
exemption certificate for a facility located on property which was
owned by a local governmental unit on June 21, 1978, and
subsequently conveyed to a private owner and zoned commercial, the
clerk of the local governmental unit, in addition to the other
requirements of this section, shall request the assessor of the
assessing unit in which the facility is located or is to be located
to determine the state equalized valuation of the property. This
determination shall be made prior to the hearing on the application
for a commercial facilities exemption certificate held pursuant to
subsection (2).
(4) Notwithstanding any other provision of this act, an owner
or lessee of a LEED certified facility, or another person with the
written approval of an owner or lessee, may file an application for
a commercial facilities exemption certificate with the clerk of the
local governmental unit within which the LEED certified facility is
located. If an exclusion of the state education tax is requested
under section 12a(2), a copy of the application shall be submitted
to the commission. The application may be for all or a portion, or
multiple portions, of a LEED certified facility. The application
shall be filed in the manner and form prescribed by the commission.
Until the commission prescribes the manner and form of application,
the owner or lessee of a LEED certified facility may apply under
this subsection by submitting information specified in this
subsection. The application shall contain or be accompanied by a
general description of the facility and a general description of
the use of the facility, the general nature and extent of the LEED
construction activities, including the activities that were or will
be conducted for the purpose of achieving LEED certification, and,
if the application is filed after LEED certification is obtained,
evidence of LEED certification. The local governmental unit shall
hold a public hearing on the application as provided in subsection
(2).
Sec. 8. (1) Following approval of the application by the
legislative body of the local governmental unit, the clerk of the
local governmental unit shall issue to the applicant a commercial
facilities exemption certificate in the form the commission
determines which shall contain all of the following:
(a) A legal description of the real property on which the
facility is or is to be located.
(b) A statement that unless revoked as provided in this act
the certificate shall remain in force for the period stated in the
certificate.
(c) In the case of a restored facility a statement of the
state equalized valuation of the obsolete commercial property,
separately stated for real and personal property, for the tax year
immediately preceding the effective date of the certificate after
deducting the state equalized valuation of the land and personal
property other than personal property assessed pursuant to section
14(6)
of Act No. 206 of the Public Acts of 1893, as amended the
general property tax act, 1893 PA 206, MCL 211.14.
(d) In the case of a LEED certified facility, the percentage
of property tax applicable to the facility pursuant to section 12.
(2) A certificate shall not be issued under subsection (1) for
a LEED certified facility until the applicant has submitted
evidence of LEED certification to the local governmental unit,
along with information sufficient to determine the starting date of
LEED construction activities for purposes of calculating the
commercial facilities tax under section 12(4). The information
required under this subsection shall be submitted to the local
governmental unit no later than 5 years after the date the
certificate application is approved by the local governmental unit
or a greater time as authorized by the legislative body of the
local governmental unit.
(3) (2)
The effective date of the
certificate shall be the
December 31 next following the date of issuance of the certificate.
(4) (3)
The clerk of the local governmental
unit shall file
with the commission a copy of the commercial facilities exemption
certificate and the commission shall maintain a record of all
certificates filed.
