Economic development; plant rehabilitation; tax incentives for

certain water bottling facilities; prohibit.

ECONOMIC DEVELOPMENT: Plant rehabilitation; NATURAL RESOURCES:

Great Lakes

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 govern-

mental units; to provide for the exemption from certain taxes; to

levy and collect a specific tax upon the owners of certain facil-

ities; to impose and provide for the disposition of an adminis-

trative fee; to provide for the disposition of the tax; to pro-

vide for the obtaining and transferring of an exemption certifi-

cate and to prescribe the contents of those certificates; to pre-

scribe the powers and duties of the state tax commission and cer-

tain officers of local governmental units; and to provide

penalties,"

by amending section 2 (MCL 207.552), as amended by 2002 PA 280.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1 Sec. 2. (1) "Commission" means the state tax commission

2 created by 1927 PA 360, MCL 209.101 to 209.107.

3 (2) "Facility" means either a replacement facility, a new

4 facility, or, if applicable by its usage, a speculative

5 building.

06654'02 JLB

2

1 (3) "Replacement facility" means 1 of the following:

2 (a) In the case of a replacement or restoration that occurs

3 on the same or contiguous land as that which is replaced or

4 restored, industrial property that is or is to be acquired, con-

5 structed, altered, or installed for the purpose of replacement or

6 restoration of obsolete industrial property together with any

7 part of the old altered property that remains for use as indus-

8 trial property after the replacement, restoration, or

9 alteration.

10 (b) In the case of construction on vacant noncontiguous

11 land, property that is or will be used as industrial property

12 that is or is to be acquired, constructed, transferred, or

13 installed for the purpose of being substituted for obsolete

14 industrial property if the obsolete industrial property is situa-

15 ted in a plant rehabilitation district in the same city, village,

16 or township as the land on which the facility is or is to be con-

17 structed and includes the obsolete industrial property itself

18 until the time as the substituted facility is completed.

19 (4) "New facility" means new industrial property other than

20 a replacement facility to be built in a plant rehabilitation dis-

21 trict or industrial development district.

22 (5) "Local governmental unit" means a city, village, or

23 township.

24 (6) "Industrial property" means land improvements, build-

25 ings, structures, and other real property, and machinery, equip-

26 ment, furniture, and fixtures or any part or accessory whether

27 completed or in the process of construction comprising an

06654'02

3

1 integrated whole, the primary purpose and use of which is the

2 engaging in a high-technology activity, the manufacture of goods

3 or materials, or the processing of goods and materials by physi-

4 cal or chemical change; property acquired, constructed, altered,

5 or installed due to the passage of proposal A in 1976; the opera-

6 tion of a hydro-electric dam by a private company other than a

7 public utility; or agricultural processing facilities.

8 Industrial property includes facilities related to a manufactur-

9 ing operation under the same ownership, including, but not

10 limited to, office, engineering, research and development, ware-

11 housing, or parts distribution facilities. Industrial property

12 also includes research and development laboratories of companies

13 other than those companies that manufacture the products devel-

14 oped from their research activities and research development lab-

15 oratories of a manufacturing company that are unrelated to the

16 products of the company. For applications approved by the legis-

17 lative body of a local governmental unit between June 30, 1999

18 and December 31, 2007, industrial property also includes an elec-

19 tric generating plant that is not owned by a local unit of

20 government. Industrial property also includes convention and

21 trade centers over 250,000 square feet in size. Industrial prop-

22 erty also includes a federal reserve bank operating under 12

23 U.S.C. 341, located in a city with a population of 750,000 or

24 more. Industrial property may be owned or leased. However, in

25 the case of leased property, the lessee is liable for payment of

26 ad valorem property taxes and shall furnish proof of that

06654'02

4

1 liability. Industrial property does not include any of the

2 following:

3 (a) Land.

4 (b) Property of a public utility other than an electric gen-

5 erating plant that is not owned by a local unit of government and

6 for which an application was approved by the legislative body of

7 a local governmental unit between June 30, 1999 and December 31,

8 2007.

9 (c) Inventory.

10 (D) A PLANT OR OTHER PROPERTY THAT HAS AS ITS PRIMARY PUR-

11 POSE THE PACKAGING, PRODUCTION, OR BOTTLING OF WATER INTENDED FOR

12 HUMAN CONSUMPTION IN SEALED CONTAINERS LESS THAN 1 GALLON IN SIZE

13 AND THAT HAS NO ADDITIONAL ADDED INGREDIENTS.

14 (7) "Obsolete industrial property" means industrial property

15 the condition of which is substantially less than an economically

16 efficient functional condition.

17 (8) "Economically efficient functional condition" means a

18 state or condition of property the desirability and usefulness of

19 which is not impaired due to changes in design, construction,

20 technology, or improved production processes, or from external

21 influencing factors which make the property less desirable and

22 valuable for continued use.

23 (9) "Research and development laboratories" means building

24 and structures, including the machinery, equipment, furniture,

25 and fixtures located in the building or structure, used or to be

26 used for research or experimental purposes that would be

27 considered qualified research as that term is used in section 30

06654'02

5

1 of the internal revenue code OF 1986, except that qualified

2 research also includes qualified research funded by grant, con-

3 tract, or otherwise by another person or governmental entity.

4 (10) "Manufacture of goods or materials" or "processing of

5 goods or materials" means any type of operation that would be

6 conducted by an entity included in the classifications provided

7 by sector 31-33 -- manufacturing, of the North American industry

8 classification system -- United States, 1997, published by the

9 office of management and budget, regardless of whether the entity

10 conducting that operation is included in that manual.

11 (11) "High-technology activity" means that term as defined

12 in section 3 of the Michigan economic growth authority act, 1995

13 PA 24, MCL 207.803.

06654'02 Final page. JLB