HB-5335, As Passed House, April 27, 2004

SUBSTITUTE FOR

HOUSE BILL NO. 5335

                                                                             A bill to amend 1992 PA 147, entitled                                             

"Neighborhood enterprise zone act,"                                         

by amending section 9 (MCL 207.779), as amended by 2003 PA 127.             

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1       Sec. 9.  (1) Except as provided in  subsection subsections

2   (10) and (11), there is levied on the owner of a new facility or            

3   a rehabilitated facility to which a neighborhood enterprise zone            

4   certificate is issued a specific tax known as the neighborhood              

5   enterprise zone tax.                                                        

6       (2) A new facility or a rehabilitated facility for which a                  

7   neighborhood enterprise zone certificate is in effect, but not              

8   the land on which the facility is located, is exempt from ad                

9   valorem real property taxes collected under the general property            

10  tax act, 1893 PA 206, MCL 211.1 to 211.157.                                 

11      (3) The amount of the neighborhood enterprise zone tax on a                 

1   new facility is determined each year by multiplying the taxable             

2   value of the facility, not including the land, by 1 of the                  

3   following:                                                                  

4       (a) For property that would otherwise meet the definition of                

5   a principal residence under section 7dd of the general property             

6   tax act, 1893 PA 206, MCL 211.7dd, if that property was not                 

7   exempt from ad valorem property taxes under this act, 1/2 of the            

8   average rate of taxation levied in this state in the immediately            

9   preceding calendar year on a principal residence and qualified              

10  agricultural property as defined in section 7dd of the general              

11  property tax act, 1893 PA 206, MCL 211.7dd.  However, in 1994               

12  only, the average rate of taxation shall be the average rate of             

13  taxation levied in 1993 upon all property in this state upon                

14  which ad valorem taxes are assessed.                                        

15      (b) For property that is not a principal residence under                    

16  section 7dd of the general property tax act, 1893 PA 206,                   

17  MCL 211.7dd, 1/2 of the average rate of taxation levied upon                

18  commercial, industrial, and utility property upon which ad                  

19  valorem taxes are assessed as determined for the immediately                

20  preceding calendar year by the state board of assessors under               

21  section 13 of 1905 PA 282, MCL 207.13.  However, in 1994 only,              

22  the average rate of taxation shall be the average rate of                   

23  taxation levied in 1993 upon all property in this state upon                

24  which ad valorem taxes are assessed.                                        

25      (4) The amount of the neighborhood enterprise zone tax on a                 

26  rehabilitated facility is determined each year by multiplying the           

27  taxable value of the rehabilitated facility, not including the              

1   land, for the tax year immediately preceding the effective date             

2   of the neighborhood enterprise zone certificate by the total                

3   mills collected under the general property tax act, 1893 PA 206,            

4   MCL 211.1 to 211.157, for the current year by all taxing units              

5   within which the rehabilitated facility is located.                         

6       (5) The neighborhood enterprise zone tax is an annual tax,                  

7   payable at the same times, in the same installments, and to the             

8   same officer or officers as taxes collected under the general               

9   property tax act, 1893 PA 206, MCL 211.1 to 211.157, are                    

10  payable.  Except as otherwise provided in this section, the                 

11  officer or officers shall disburse the neighborhood enterprise              

12  zone tax received by the officer or officers each year to the               

13  state, cities, townships, villages, school districts, counties,             

14  and authorities at the same times and in the same proportions as            

15  required for the disbursement of taxes collected under the                  

16  general property tax act, 1893 PA 206, MCL 211.1 to 211.157.  To            

17  determine the proportion for the disbursement of taxes under this           

18  subsection and for attribution of taxes under subsection (7) for            

19  taxes collected after June 30, 1994, the number of mills levied             

20  for local school district operating purposes to be used in the              

21  calculation shall equal the number of mills for local school                

22  district operating purposes levied in 1993 minus the number of              

23  mills levied under the state education tax act, 1993 PA 331,                

24  MCL 211.901 to 211.906, for the year for which the disbursement             

25  is calculated.                                                              

26      (6) An intermediate school district receiving state aid under               

27  sections 56, 62, and 81 of the state school aid act of 1979, 1979           

1   PA 94, MCL 388.1656, 388.1662, and 388.1681, of the amount that             

2   would otherwise be disbursed to or retained by the intermediate             

3   school district, all or a portion, to be determined on the basis            

4   of the tax rates being utilized to compute the amount of state              

5   aid, shall be paid to the state treasury to the credit of the               

6   state school aid fund established by section 11 of article IX of            

7   the state constitution of 1963.  If and for the period that the             

8   state school aid act of 1979, 1979 PA 94, MCL 388.1601 to                   

9   388.1772, is amended or its successor act is enacted or amended             

10  to include a provision that provides for adjustments in state               

11  school aid to account for the receipt of revenues provided under            

12  this act in place of exempted ad valorem property tax, revenues             

13  required to be remitted or returned to the state treasury to the            

14  credit of the state school aid fund shall be distributed instead            

15  to the intermediate school districts.  If the sum of any                    

16  industrial facility tax levied under 1974 PA 198, MCL 207.551 to            

17  207.572, the commercial facilities tax levied under the                     

18  commercial redevelopment act, 1978 PA 255, MCL 207.651 to                   

19  207.668, and the neighborhood enterprise zone tax paid to the               

20  state treasury to the credit of the state school aid fund that              

21  would otherwise be disbursed to the intermediate school district            

22  exceeds the amount received by the intermediate school district             

23  under sections 56, 62, and 81 of the state school aid act of                

24  1979, 1979 PA 94, MCL 388.1656, 388.1662, and 388.1681, the                 

25  department of treasury shall allocate to each eligible                      

26  intermediate school district an amount equal to the difference              

27  between the sum of the industrial facility tax, the commercial              

1   facilities tax, and the neighborhood enterprise zone tax paid to            

2   the state treasury to the credit of the state school aid fund and           

3   the amount the intermediate school district received under                  

4   sections 56, 62, and 81 of the state school aid act of 1979, 1979           

5   PA 94, MCL 388.1656, 388.1662, and 388.1681.                                

6       (7) For neighborhood enterprise zone taxes levied after 1993                

7   for school operating purposes, the amount that would otherwise be           

8   disbursed to a local school district shall be paid instead to the           

9   state treasury and credited to the state school aid fund                    

10  established by section 11 of article IX of the state constitution           

11  of 1963.                                                                    

12      (8) The officer or officers shall send a copy of the amount                 

13  of disbursement made to each unit under this section to the                 

14  commission on a form provided by the commission.  The                       

15  neighborhood enterprise zone tax is a lien on the real property             

16  upon which the new facility or rehabilitated facility subject to            

17  the certificate is located until paid.  The continuance of a                

18  certificate is conditional upon the annual payment of the                   

19  neighborhood enterprise zone tax and the ad valorem tax on the              

20  land collected under the general property tax act, 1893 PA 206,             

21  MCL 211.1 to 211.157.                                                       

22      (9) If payment of the tax under this act is not made by the                 

23  March 1 following the levy of the tax, the tax shall be turned              

24  over to the county treasurer and collected in the same manner as            

25  a delinquent tax under the general property tax act, 1893 PA 206,           

26  MCL 211.1 to 211.157.                                                       

27      (10) A new facility or a rehabilitated facility located in a                

1   renaissance zone under the Michigan renaissance zone act, 1996              

2   PA 376, MCL 125.2681 to 125.2696, is exempt from the neighborhood           

3   enterprise zone tax levied under this act to the extent and for             

4   the duration provided pursuant to the Michigan renaissance zone             

5   act, 1996 PA 376, MCL 125.2681 to 125.2696, except for that                 

6   portion of the neighborhood enterprise zone tax attributable to a           

7   special assessment or a tax described in section 7ff(2) of the              

8   general property tax act, 1893 PA 206, MCL 211.7ff.  The                    

9   neighborhood enterprise zone tax calculated under this subsection           

10  shall be disbursed proportionately to the local taxing unit or              

11  units that levied the special assessment or the tax described in            

12  section 7ff(2) of the general property tax act, 1893 PA 206,                

13  MCL 211.7ff.                                                                

14  (11) Upon application for an exemption under this subsection                

15  by a qualified start-up business, the governing body of a local             

16  tax collecting unit may adopt a resolution to exempt a new                  

17  facility or a rehabilitated facility of a qualified start-up                

18  business from the collection of the neighborhood enterprise zone            

19  tax levied under this act.  The clerk of the local tax collecting           

20  unit shall notify in writing the assessor of the local tax                  

21  collecting unit and the legislative body of each taxing unit that           

22  levies ad valorem property taxes in the local tax collecting                

23  unit.  Before acting on the resolution, the governing body of the           

24  local tax collecting unit shall afford the assessor and a                   

25  representative of the affected taxing units an opportunity for a            

26  hearing.  The application for exemption under this subsection               

27  shall be in a form prescribed by the state tax commission.  If a            

House Bill No. 5335 (H-2) as amended April 27, 2004

1   resolution authorizing the exemption is adopted as provided in              

2   this subsection, the new facility or a rehabilitated facility               

3   owned or operated by a qualified start-up business is exempt from           

4   the neighborhood enterprise zone tax levied under this act,                 

5   except for that portion of the neighborhood enterprise zone tax             

6   attributable to a special assessment or a tax described in                  

7   section 7ff(2) of the general property tax act, 1893 PA 206,                

8   MCL 211.7ff, for 5 consecutive years beginning on the December 31           

9   in the year in which the qualified start-up business first                  

10  claimed the credit under section 31a of the single business tax             

11  act, 1975 PA 228, MCL 208.31a, or section 51f of the income tax             

12  act of 1967, 1967 PA 281, MCL 206.51f.  A qualified start-up                

13  business exempt under this subsection shall file an exemption               

14  affidavit with the assessor of the local tax collecting unit.               

15  The exemption affidavit shall be filed within 60 days of the                

16  qualified start-up business becoming exempt under this                      

17  subsection.  The affidavit shall be in a form prescribed by the             

18  state tax commission.  The neighborhood enterprise zone tax                 

19  calculated under this subsection shall be disbursed                         

20  proportionately to the taxing unit or units that levied the                 

21  special assessment or the tax described in section 7ff(2) of the            

22  general property tax act, 1893 PA 206, MCL 211.7ff.  As used in             

23  this subsection, "qualified start-up business" means that term as           

24  defined in section 31a of the single business tax act, 1975 PA              

25   228, MCL 208.31a.

[Enacting section 1. This amendatory act does not take effect unless House Bill No. 5331 of the 92nd Legislature is enacted into law.]