September 10, 2009, Introduced by Reps. Kandrevas, Polidori, Constan, Geiss, Walsh, Leland, Byrnes, Johnson, Jackson, LeBlanc, Bledsoe and Angerer and referred to the Committee on Transportation.
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 4 (MCL 207.552 and 207.554), section 2
as amended by 2008 PA 581 and section 4 as amended by 2004 PA 437.
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) "Next Michigan development corporation" means that term as
defined in section 3 of the next Michigan development act.
(4) (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.
(5) (4)
"New facility" means new
industrial property other
than a replacement facility to be built in a plant rehabilitation
district or industrial development district.
(6) (5)
"Local governmental unit"
means a city, village, or
township, or next Michigan development corporation located in this
state. For purposes of this act, if a next Michigan development
corporation establishes a plant rehabilitation district or an
industrial development district, the next Michigan development
corporation shall act as the local governmental unit in
establishing and operating the plant rehabilitation district or the
industrial development district.
(7) (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. For purposes of a local governmental unit
that is a next Michigan development corporation, industrial
property includes only property used in the operation of an
eligible business, as that term is defined in section 3 of the
Michigan economic growth authority act, 1995 PA 24, MCL 207.803.
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.
(8) (7)
"Obsolete industrial
property" means industrial
property the condition of which is substantially less than an
economically efficient functional condition.
(9) (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.
(10) (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.
(11) (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.
(12) (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.
(13) (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.
(14) (13)
"Commercial property"
means that term as defined in
section 2 of the obsolete property rehabilitation act, 2000 PA 146,
MCL 125.2782.
(15) (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.
(16) (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.
(17) (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.
Sec. 4. (1) A local governmental unit, by resolution of its
legislative body, may establish plant rehabilitation districts and
industrial development districts that consist of 1 or more parcels
or tracts of land or a portion of a parcel or tract of land.
(2) The legislative body of a local governmental unit may
establish a plant rehabilitation district or an industrial
development district on its own initiative or upon a written
request filed by the owner or owners of 75% of the state equalized
value of the industrial property located within a proposed plant
rehabilitation district or industrial development district. This
request shall be filed with the clerk of the local governmental
unit.
(3) Except as provided in section 9(2)(h), after December 31,
1983, a request for the establishment of a proposed plant
rehabilitation district or industrial development district shall be
filed only in connection with a proposed replacement facility or
new facility, the construction, acquisition, alteration, or
installation of or for which has not commenced at the time of the
filing of the request. The legislative body of a local governmental
unit shall not establish a plant rehabilitation district or an
industrial development district pursuant to subsection (2) if it
finds that the request for the district was filed after the
commencement of construction, alteration, or installation of, or of
an acquisition related to, the proposed replacement facility or new
facility. This subsection shall not apply to a speculative
building.
(4) Before adopting a resolution establishing a plant
rehabilitation district or industrial development district, the
legislative body shall give written notice by certified mail to the
owners of all real property within the proposed plant
rehabilitation district or industrial development district and
shall hold a public hearing on the establishment of the plant
rehabilitation district or industrial development district at which
those owners and other residents or taxpayers of the local
governmental unit shall have a right to appear and be heard.
(5) The legislative body of the local governmental unit, in
its resolution establishing a plant rehabilitation district, shall
set forth a finding and determination that property comprising not
less than 50% of the state equalized valuation of the industrial
property within the district is obsolete.
(6) A plant rehabilitation district or industrial development
district established by a township shall be only within the
unincorporated territory of the township and shall not be within a
village.
(7) Industrial property that is part of an industrial
development district or a plant rehabilitation district may also be
part of a tax increment district established under the tax
increment finance authority act, 1980 PA 450, MCL 125.1801 to
125.1830.
(8) A local governmental unit, by resolution of its
legislative body, may terminate a plant rehabilitation district or
an industrial development district, if there are no industrial
facilities exemption certificates in effect in the plant
rehabilitation district or the industrial development district on
the date of the resolution to terminate.
(9) Before acting on a proposed resolution terminating a plant
rehabilitation district or an industrial development district, the
local governmental unit shall give at least 14 days' written notice
by certified mail to the owners of all real property within the
plant rehabilitation district or industrial development district as
determined by the tax records in the office of the assessor or the
treasurer of the local tax collecting unit in which the property is
located and shall hold a public hearing on the termination of the
plant rehabilitation district or industrial development district at
which those owners and other residents or taxpayers of the local
governmental unit, or others, shall have a right to appear and be
heard.
(10) A next Michigan development corporation may not establish
a plant rehabilitation district or an industrial development
district nor approve an application for an industrial facilities
exemption certificate for industrial property for an eligible
business without the prior written approval of the state treasurer
and the president of the Michigan strategic fund. In determining
whether to establish a plant rehabilitation district or industrial
development district or approve an industrial facilities exemption
certificate, the state treasurer and the president of the Michigan
strategic fund shall consider all of the following:
(a) Whether the facility has the ability to be located outside
of this state.
(b) The number of jobs and the amount of the wages for those
jobs at the facility.
(c) Whether the facility being located in this state will be a
net benefit for this state.
(d) Whether the operation of the facility will have a negative
effect on employment in other areas of this state.
(e) Whether the facility will likely locate in this state
without the incentive and whether the use of the incentive puts
other portions of this state at an unfair competitive disadvantage.