June 9, 2005, Introduced by Rep. Farrah and referred to the Committee on Tax Policy.
A bill to amend 1905 PA 282, entitled
"An act to provide for the assessment of the property, by
whomsoever owned, operated or conducted, of railroad companies,
union station and depot companies, telegraph companies, telephone
companies, sleeping car companies, express companies, car loaning
companies, stock car companies, refrigerator car companies, and
fast freight companies, and all other companies owning, leasing,
running or operating any freight, stock, refrigerator, or any other
cars, not being exclusively the property of any railroad company
paying taxes upon its rolling stock under the provisions of this
act, over or upon the line or lines of any railroad or railroads in
this state, and for the levy of taxes thereon by a state board of
assessors, and for the collection of such taxes, and to repeal all
acts or parts of acts contravening any of the provisions of this
act,"
by amending sections 13 and 13a (MCL 207.13 and 207.13a), section
13 as amended by 2001 PA 35 and section 13a as added by 2000 PA
341.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 13. (1) The state board of assessors, from the
information contained in the reports provided for in section 12,
shall determine for the year in which the reports are required to
be made the average rate of taxation levied on other commercial,
industrial, and utility property on which ad valorem taxes are
assessed for state, county, township, school, and municipal
purposes, and enter the determination in its records, together with
the method by which the average rate of taxation was determined. In
determining the average rate of taxation for taxes levied under
this act before January 1, 1996, the state board of assessors shall
divide the state equalized value as set by the state board of
equalization for the previous year into the total ad valorem taxes
as reported by each director of a county tax or equalization
department as provided in section 12. In determining the average
rate of taxation for taxes levied under this act after December 31,
1995, the state board of assessors shall divide the state taxable
value for the previous year into the total ad valorem taxes as
reported by each director of a county tax or equalization
department as provided in section 12. In determining the average
rate of taxation for 1994, ad valorem taxes levied for the year in
which the reports are required by a local school district for
school operating purposes as defined in section 1211 of the revised
school code, 1976 PA 451, MCL 380.1211, shall be excluded from the
calculation required by this section and the state board of
assessors shall add to the tax rate calculated under this section
after the exclusion required by this sentence, the number of mills
levied under the state education tax act, 1993 PA 331, MCL 211.901
to 211.906, plus the statewide average number of mills levied in
1994 by local school districts for school operating purposes under
the revised school code, 1976 PA 451, MCL 380.1 to 380.1852. If the
state board of assessors is unable to determine the average rate of
taxation for 1994 before June 1, 1994, the state board of assessors
shall determine a preliminary average rate of taxation that shall
be used to complete the 1994 tax roll under section 14. However,
before June 1, 1995, the state board of assessors shall determine
and certify the average rate of taxation for 1994 and prepare a
supplemental 1994 tax roll using the 1994 assessed valuations for
the purpose of levying a supplemental tax or making a refund. The
supplemental tax is due and payable and the refund, if any, is due
July 1, 1995 without interest. If the supplemental tax is paid
after August 1, 1995, the tax is payable with interest due at the
rate of 1% per month or portion of a month calculated from January
15, 1995 to the date of payment.
(2) A
Before the 2006 tax year, a railroad company is
allowed a credit against the tax imposed by this act for the tax
year in an amount equal to 25% of the amount expended for the
maintenance or improvement of rights of way, including those items,
except depreciation, in the official maintenance-of-way and capital
track accounts of the railroad company in this state during the
calendar year immediately preceding the tax year but not to exceed
the total liability for the tax under this act. The manner of
applying for the credit and the proof of expenditures required
shall be prescribed by the state board of assessors. After the 2005
tax year, the credit under this subsection shall not be allowed.
(3)
A railroad company that claims a credit under this
section
subsection (2) is required to file an annual report with
the state board of assessors that shall include detailed data of
right of way work conducted in this state during the past calendar
year. The state board of assessors shall transmit a copy of the
report to the chairperson of the senate finance committee and the
house taxation
tax policy committee. This report submitted to the
state board of assessors shall include the number of notices of
violation from railway inspectors by railroad section, and shall
include a detailed account of the location and the nature of the
work. The location of the work shall be defined by the railroad
section or mile posts surrounding the work area plus the county,
city, or township in which the work was performed. This report
shall include a separation of costs by labor and materials on each
project. The report also shall include an itemized account of what
work was done. This account shall be itemized by the following
categories:
(a) Miles of track laid.
(b) Tons of new ballast installed.
(c) Number of ties installed.
(d) Miles of tracks surfaced.
(e) Signals installed.
(f) Under drainage work done.
(4) The railroad companies, in order to qualify for the full
25%
credit under this act subsection (2), must
demonstrate to the
state board of assessors that the highest priority of expenditures
for the maintenance or improvement of rights of way has been given
to rail lines that handle hazardous materials, especially those
that are located in urban or residential areas. A railroad company
that
claims a credit under this section subsection (2) is
required to file an annual report with the state board of assessors
that shall include detailed data on the tonnages of hazardous
materials handled in relation to tonnages of other traffic handled
over the rail line for which a tax credit is being applied.
(5)
A railroad company utilizing the property tax that
claims
a credit provisions of this act under subsection (2) shall
grant to another railroad company, upon application by the latter,
trackage rights over its line for trains, providing that the train
operations do not interfere with the movement of Michigan freight
using the same trackage, if operations can be accomplished safely
in the opinion of the grantor and if trackage arrangements and
train operations are approved by the interstate commerce
commission. The grantee shall pay the grantor reasonable charges
agreed to between the 2 parties if the charges and terms of the
agreement between the 2 parties are not in violation of the
antitrust provisions of federal laws.
Sec.
13a. (1) Subject Before the 2006 tax year and subject
to subsection (2), an eligible company is allowed a credit against
the tax imposed under this act for the tax year equal to the amount
of eligible expenses incurred during the calendar year immediately
preceding the tax year for which the credit under this subsection
is claimed. After the 2005 tax year, a credit under this subsection
shall not be allowed.
(2) The sum of the credits under subsection (1) and section
13(2) shall not exceed an eligible company's liability for the tax
levied under this act in the tax year in which the credit is
claimed.
(3) An eligible company may apply for the credit under
subsection (1) by submitting to the state board of assessors an
application in the form prescribed by the state board of assessors.
(4) If the board determines that for any eligible company the
sum of the credits provided in this section and in section 13(2)
equals the eligible company's liability for the tax levied under
this act before application of the credits, the board may waive the
application requirement in subsection (3) and the reports and
statements required under sections 6, 7, 8, and 13. A waiver under
this subsection does not affect the board's powers under section 3.
(5) As used in this section:
(a) "Eligible company" means railroad companies, union station
and depot companies, sleeping car companies, express companies, car
loaning companies, stock car companies, refrigerator car companies,
fast freight line companies, and all other companies owning,
leasing, running, or operating any freight, stock, refrigerator, or
any other cars not the exclusive property of a railroad company
paying taxes upon its rolling stock under this act, over or upon
the line or lines of any railroad in this state.
(b) "Eligible expenses" means 1 or more of the following:
(i) Expenses incurred in this state to maintain or improve an
eligible company's qualified rolling stock.
(ii) Seventy-five percent of the expenses incurred in this
state for maintenance or improvement of rights-of-way, including
those items, except depreciation, in the official maintenance-of-
way and capital track accounts of the eligible company.
(c) "Qualified rolling stock" means any freight, stock,
refrigerator, or other railcars subject to the tax levied under
this act.