HB 4539, As Passed Senate

HB-4539, As Passed Senate, December 15, 2006

SENATE SUBSTITUTE FOR

HOUSE BILL NO. 4539

A bill to amend 1992 PA 147, entitled

"Neighborhood enterprise zone act,"

by amending sections 2, 4, and 12 (MCL 207.772, 207.774, and

207.782), sections 2 and 12 as amended by 2005 PA 339 and section 4

as amended by 2006 PA 349.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 2. As used in this act:

(a) "Commission" means the state tax commission created by

1927 PA 360, MCL 209.101 to 209.107.

(b) "Condominium unit" means that portion of a structure

intended for separate ownership, intended for residential use, and

established pursuant to the condominium act, 1978 PA 59, MCL

559.101 to 559.276. Condominium units within a qualified historic

building may be held under common ownership.

facility at the time of construction or of a rehabilitated facility

at the time of rehabilitation for which a neighborhood enterprise

zone certificate is applied for or issued.

(d) "Facility" means a homestead facility, a new facility, or

a rehabilitated facility.

(e) "Homestead facility" means an existing structure,

purchased by or transferred to an owner after December 31, ~~1997~~

1996, that has as its primary purpose residential housing

consisting of 1 or 2 units, 1 of which is occupied by an owner as

his or her principal residence and that is located within a

subdivision platted pursuant to state law before January 1, 1968.

(f) "Local governmental unit" means a qualified local

governmental unit as that term is defined under section 2 of the

obsolete property rehabilitation act, 2000 PA 146, MCL 125.2782, or

a county seat.

(g) "New facility" means a new structure or a portion of a new

structure that has as its primary purpose residential housing

consisting of 1 or 2 units, 1 of which is or will be occupied by an

owner as his or her principal residence. New facility includes a

model home or a model condominium unit. New facility includes a new

individual condominium unit, in a structure with 1 or more

condominium units, that has as its primary purpose residential

housing and that is or will be occupied by an owner as his or her

principal residence. New facility does not include apartments.

(h) "Neighborhood enterprise zone certificate" or

"certificate" means a certificate issued pursuant to sections 4, 5,

and 6.

(i) "Owner" means the record title holder of, or the vendee of

the original land contract pertaining to, a new facility, a

homestead facility, or a rehabilitated facility for which a

neighborhood enterprise zone certificate is applied for or issued.

(j) "Qualified historic building" means a property within a

neighborhood enterprise zone that has been designated a historic

resource as defined under section 266 of the income tax act of

1967, 1967 PA 281, MCL 206.266.

(k) "Rehabilitated facility" means an existing structure or a

portion of an existing structure with a current true cash value of

$80,000.00 or less per unit that has or will have as its primary

purpose residential housing, consisting of 1 to 8 units, the owner

of which proposes improvements that if done by a licensed

contractor would cost in excess of $5,000.00 per owner-occupied

unit or 50% of the true cash value, whichever is less, or $7,500.00

per nonowner-occupied unit or 50% of the true cash value, whichever

is less, or the owner proposes improvements that would be done by

the owner and not a licensed contractor and the cost of the

materials would be in excess of $3,000.00 per owner-occupied unit

or $4,500.00 per nonowner-occupied unit and will bring the

structure into conformance with minimum local building code

standards for occupancy or improve the livability of the units

while meeting minimum local building code standards. Rehabilitated

facility also includes an individual condominium unit, in a

structure with 1 or more condominium units that has as its primary

purpose residential housing, the owner of which proposes the above

described improvements. Rehabilitated facility also includes

existing or proposed condominium units in a qualified historic

building with 1 or more existing or proposed condominium units.

Rehabilitated facility does not include a facility rehabilitated

with the proceeds of an insurance policy for property or casualty

loss. A qualified historic building may contain multiple

rehabilitated facilities.

Sec. 4. (1) The owner of a homestead facility or owner or

developer or prospective owner or developer of a proposed new

facility or an owner or developer or prospective developer

proposing to rehabilitate property located in a neighborhood

enterprise zone may file an application for a neighborhood

enterprise zone certificate with the clerk of the local

governmental unit. The application shall be filed in the manner and

form prescribed by the commission. The clerk of the local

governmental unit shall provide a copy of each homestead facility

application to the assessor for the local governmental unit. Except

as provided in subsection (2) or as otherwise provided by the local

governmental unit by resolution if the application is filed not

later than 6 months following the date the building permit is

issued, the application shall be filed before a building permit is

issued for the new construction or rehabilitation of the facility.

(2) An application may be filed after a building permit is

issued only if 1 or more of the following apply:

(a) For the rehabilitation of a facility if the area in which

the facility is located is designated as a neighborhood enterprise

zone by the governing body of the local governmental unit in the

calendar year 1992 and if the building permit is issued for the

rehabilitation before December 31, 1994 and after the date on which

the area in which the facility is located was designated as a

neighborhood enterprise zone by the governing body of the local

governmental unit.

(b) For the construction of a new facility if the area in

which the new facility is located is designated as a neighborhood

enterprise zone by the governing body of the local governmental

unit in calendar year 1992 or 1993 and if the building permit is

issued for that new facility before December 31, 1995 and after

January 1, 1993.

which the new facility is located is designated as a neighborhood

enterprise zone by the governing body of the local governmental

unit in July 1997 and if the building permit is issued for that new

facility on February 3, 1998.

(d) For a new facility or a rehabilitated facility if the area

in which the new facility or rehabilitated facility is located was

designated as a neighborhood enterprise zone by the governing body

of the local governmental unit in July 1996 and if the building

permit was issued for that facility on or before July 3, 2001.

(e) For a new facility or a rehabilitated facility if the area

in which the new facility or rehabilitated facility is located was

designated as a neighborhood enterprise zone by the governing body

of the local governmental unit in October 1994 and if the building

permit was issued for that facility on or before April 25, 1997.

(f) For the construction of a new facility if the area in

which the new facility is located is designated as a neighborhood

enterprise zone by the governing body of the local governmental

unit in September 2001 and if the building permit is issued for

that new facility on March 3, 2003.

(g) For a rehabilitated facility if all or a portion of the

rehabilitated facility is a qualified historic building.

(h) For the construction of a new facility if the area in

which the new facility is located is designated as a neighborhood

enterprise zone by the governing body of the local governmental

unit in July 1993 and the new facility was a model home.

(i) For the construction of a new facility if the area in

which the new facility is located is designated as a neighborhood

enterprise zone by the governing body of the local governmental

unit in August 2004 and if building permits were issued for that

facility beginning November 5, 2002 through December 23, 2003.

(j) For a homestead facility.

(k) For the construction of a facility if the area in which

the facility is located was designated as a neighborhood enterprise

zone by the governing body of the local governmental unit in July

2003, and if the building permit was issued for that facility in

June 2004.

(l) For a new facility or a rehabilitated facility if the area

in which the new facility or rehabilitated facility is located was

designated as a neighborhood zone by the governing body of the

local governmental unit in February 2004 and if the building permit

for that facility was issued in August 2003 or January 2005.

(3) The application shall contain or be accompanied by all of

the following:

(a) A general description of the homestead facility, new

facility, or proposed rehabilitated facility.

(b) The dimensions of the parcel on which the homestead

facility, new facility, or proposed rehabilitated facility is or is

to be located.

undertaken.

(d) A time schedule for undertaking and completing the

rehabilitation of property or the construction of the new facility.

(e) A statement by the owner of a homestead facility that the

owner is committed to investing a minimum of $500.00 in the first 3

years that the certificate for a homestead facility is in effect

and committed to documenting the minimum investment if required to

do so by the assessor of the local governmental unit.

(f) Any other information required by the local governmental

unit.

(4) Notwithstanding any other provisions of this act, for any

certificate issued as a result of the enactment of the amendatory

act that added subsection (2)(c), the effective date of the

certificate shall be the first day of the tax year following the

year the certificate is approved by the commission.

(5) Notwithstanding any other provisions of this act, for any

certificate issued as a result of the enactment of the amendatory

act that added subsection (2)(d) or the amendatory act that added

subsection (2)(e), the effective date of the certificate shall be

January 1, 2001.

(6) Notwithstanding any other provisions of this act, for any

certificate issued as a result of the enactment of the amendatory

act that added subsection (2)(j) or the amendatory act that added

subsection (2)(k), the effective date of the certificate shall be

the first day of the tax year following the year the certificate is

approved by the commission.

(7) For a certificate issued as a result of the amendatory act

that added subsection (2)(e), both of the following shall apply

notwithstanding any other provision of this act:

(a) The effective date of the certificate shall be January 1,

2001 and the taxable value for rehabilitated facilities shall be

set as provided in section 10(3).

(b) For certificates issued or reissued after December 31,

2005, the amount of the neighborhood enterprise zone tax on a

rehabilitated facility is determined each year by multiplying the

taxable value of the rehabilitated facility, not including the

land, as of December 31 of the year prior to the start of the

improvement as described in subsection (3) by the total mills

collected under the general property tax act, 1893 PA 206, MCL

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

which the rehabilitated facility is located.

(8) For any certificate issued as result of the amendatory act

that added subsection (2)(l), notwithstanding any other provision of

this act the amount of the neighborhood enterprise zone tax on a

rehabilitated facility is determined each year by multiplying the

taxable value of the rehabilitated facility, not including the

land, as of December 31 of the year prior to the start of the

improvement as described in subsection (3) by the total mills

collected under the general property tax act, 1893 PA 206, MCL

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

within which the rehabilitated facility is located.

(9) If a new facility is completed in a neighborhood

enterprise zone approved in October 1996 and a building permit was

issued in March 1998 but a neighborhood enterprise zone certificate

was not applied for by the original owner occupying the facility as

a principal residence, a subsequent owner occupying the new

facility as a principal residence can request and, notwithstanding

any other provision of this act, effective December 31 of the year

preceding the application, be granted a neighborhood enterprise

zone certificate for the remainder of the term, not to exceed 12

years, that a neighborhood enterprise zone certificate would have

been in effect for the original owner of the new facility.

Sec. 12. (1) Except as otherwise provided in this section,

unless earlier revoked as provided in section 11, a neighborhood

enterprise zone certificate issued before January 1, 2006 shall

remain in effect for 6 to 12 years and a neighborhood enterprise

zone certificate issued after December 31, 2005 shall remain in

effect for 6 to 15 years from the effective date of the certificate

as determined by the governing body of the local governmental unit.

The governing body of a local governmental unit that issued a

neighborhood enterprise zone certificate for a new facility or a

rehabilitated facility before January 1, 2006 may extend the

certificate for an additional 3 years if the extension is approved

by resolution before the original neighborhood enterprise zone

certificate expires or after the original certificate expires if

the certificate expired on or after January 1, 2004 and on or

before January 3, 2006. If the homestead facility, new facility, or

rehabilitated facility is sold or transferred to another owner who

otherwise complies with this act and, for a homestead facility or a

new facility, uses the homestead facility or the new facility as a

principal residence, the certificate shall remain in effect.

(2) If a rehabilitated facility was sold before December 29,

1994 and a certificate was in effect for that facility at the time

of the sale, and the new owner of the rehabilitated facility

otherwise complies with this act, the certificate shall be

reinstated and remain in effect for the remainder of the original

period described in subsection (1), unless earlier revoked under

section 11.

(3) Except as provided in subsection (4), a change in

ownership of a rehabilitated facility constituting all or a portion

of a qualified historic building, occurring after the effective

date of a neighborhood enterprise zone certificate for that

rehabilitated facility, shall not affect the validity of that

neighborhood enterprise zone certificate, and the certificate shall

remain in effect for the period specified in this section as long

as the rehabilitated facility has as its primary purpose

residential housing.

(4) Unless revoked earlier as provided in section 11, a

neighborhood enterprise zone certificate in effect for a

rehabilitated facility constituting all or a portion of a qualified

historic building shall remain in effect for 11 to 17 years from

the effective date of the certificate as determined by the

governing body of the local governmental unit. However, if a

rehabilitated facility constituting all or a portion of a qualified

historic building is not transferred or sold to a person who will

own and occupy the rehabilitated facility as his or her principal

residence within 6 years of the effective date of the neighborhood

enterprise zone certificate, the neighborhood enterprise zone

certificate is revoked.