HB-4915, As Passed Senate, September 7, 2005

 

 

 

 

 

 

 

 

 

 

 

 

 

SENATE SUBSTITUTE FOR

 

HOUSE BILL NO. 4915

 

 

 

 

 

 

 

 

 

 

 

 

 

     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 section 2 (MCL 207.552), as amended by 2003 PA 5.

 

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.

 

     (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 logistical optimization center,

 

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 over

 

250,000 square feet in size. Industrial property also includes a

 

federal reserve bank operating under 12  U.S.C.  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 which 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,  of 1986  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.