SB-0530, As Passed House, December 14, 2005
SUBSTITUTE FOR
SENATE BILL NO. 530
A bill to amend 1992 PA 147, entitled
"Neighborhood enterprise zone act,"
by amending sections 2, 3, 4, 8, 10, 11, 12, and 13 (MCL 207.772,
207.773, 207.774, 207.778, 207.780, 207.781, 207.782, and 207.783),
sections 2, 3, and 12 as amended by 2004 PA 396, section 4 as
amended by 2004 PA 566, and sections 10 and 11 as amended by 2001
PA 217.
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.
(c) "Developer" means a person who is the owner of a new
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,
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) (d)
"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) (e)
"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) (f)
"Neighborhood enterprise zone
certificate" or
"certificate" means a certificate issued pursuant to sections 4, 5,
and 6.
(i) (g)
"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) (h)
"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) (i)
"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
Senate Bill No. 530 as amended December 8, 2005
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. 3. (1) The governing body of a local governmental unit by
resolution may designate 1 or more neighborhood enterprise zones
within that local governmental unit. A neighborhood enterprise zone
shall contain not less than 10 platted parcels of land. All the
land within a neighborhood enterprise zone shall also be compact
and contiguous. Contiguity is not broken by a road, right-of-way,
or property purchased or taken under condemnation if the purchased
or condemned property was a single parcel prior to the sale or
condemnation.
(2) The total acreage of the neighborhood enterprise zones
containing only new facilities or rehabilitated facilities or any
combination of new facilities or rehabilitated facilities
designated under this act shall not exceed 15% of the total acreage
contained within the boundaries of the local governmental unit. The
total acreage of the neighborhood enterprise zones containing only
homestead facilities designated under this act shall not exceed <<10% of
the total acreage contained within the boundaries of the local governmental unit or, with the approval of the board of commissioners of the county in which the neighborhood enterprise zone is located if the county does not have an elected or appointed county executive or with the approval of the board of commissioners and the county executive of the county in which the neighborhood enterprise zone is located if the county has an elected or appointed county executive,>> 15%
of the total acreage contained within the boundaries of the local
governmental unit.
(3) Not less than 60 days before the passage of a resolution
designating a neighborhood enterprise zone or the repeal or
amendment of a resolution under subsection (5), the clerk of the
local governmental unit shall give written notice to the assessor
and to the governing body of each taxing unit that levies ad
valorem property taxes in the proposed neighborhood enterprise
zone. Before acting upon the resolution, the governing body of the
local governmental unit shall make a finding that a proposed
neighborhood enterprise zone is consistent with the master plan of
the local governmental unit and the neighborhood preservation and
economic development goals of the local governmental unit. The
governing body before acting upon the resolution shall also adopt a
statement of the local governmental unit's goals, objectives, and
policies relative to the maintenance, preservation, improvement,
and development of housing for all persons regardless of income
level living within the proposed neighborhood enterprise zone.
Additionally, before acting upon the resolution, the governing body
of a local governmental unit with a population greater than 20,000
shall pass a housing inspection ordinance. A local governmental
unit with a population of 20,000 or less may pass a housing
inspection ordinance. Before the sale of a unit in a new or
rehabilitated facility for which a neighborhood enterprise zone
certificate is in effect, an inspection shall be made of the unit
to determine compliance with any local construction or safety codes
and that a sale may not be finalized until there is compliance with
those local construction or safety codes. The governing body shall
hold a public hearing not later than 45 days after the date the
notice is sent but before acting upon the resolution.
(4) Upon receipt of a notice under subsection (3), the
assessor shall determine and furnish to the governing body of the
local governmental unit the amount of the true cash value of the
property located within the proposed neighborhood enterprise zone
and any other information considered necessary by the governing
body.
(5) A resolution designating a neighborhood enterprise zone,
other than a zone designated under subsection (2), may be repealed
or amended not sooner than 3 years after the date of adoption or of
the most recent amendment of the resolution by the governing body
of the local governmental unit. The repeal or amendment of the
resolution shall take effect 6 months after adoption. However, an
action taken under this subsection does not invalidate a
certificate that is issued or in effect and a facility for which a
certificate is issued or in effect shall continue to be included in
the total acreage limitations under this section until the
certificate is expired or revoked.
(6) Upon passage, amendment, or repeal of a resolution under
this section, the clerk of the local governmental unit shall notify
the commission of the action taken.
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), 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.
(c) 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 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.
(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.
(c) The general nature and extent of the construction to be
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) (e)
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), 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.
Sec. 8. A neighborhood enterprise zone certificate shall be in
the form prescribed and provided by the commission and shall
include the following:
(a) A legal description of the real property on which the new
facility is to be located or the legal description of the homestead
facility or the rehabilitated property.
(b) A statement that unless revoked under this act, the
certificate shall remain in effect for the period stated in the
certificate.
Sec. 10. (1) Except as provided in subsections (2) and (3),
the effective date of the neighborhood enterprise zone certificate
is December 31 in the year in which the new facility or
rehabilitated facility is substantially completed and, for a new
facility, occupied by an owner as a principal residence, as
evidenced by the owner filing with the assessor of the local
assessing unit all of the following:
(a) For a new facility, a certificate of occupancy.
(b) For a rehabilitated facility, a certificate that the
improvements meet minimum local building code standards issued by
the local building inspector or other authorized officer or a
certificate of occupancy if required by local building permits or
building codes.
(c) For a rehabilitated facility, documentation proving the
cost
requirements of section 2(h) 2(k) are met.
(d) For a homestead facility or a new facility, an affidavit
executed by an owner affirming that the homestead facility or new
facility is occupied by an owner as a principal residence.
(2) If a new facility is substantially completed in a year but
is not occupied by an owner as a principal residence until the
following year, upon the request of the owner, the effective date
of the neighborhood enterprise zone certificate shall be December
31 in the year immediately preceding the date of occupancy by the
owner as a principal residence.
(3) Upon the request of the owner, the effective date of the
neighborhood enterprise zone certificate for a rehabilitated
facility shall be December 31 in the year immediately preceding the
date on which the rehabilitated facility is substantially
completed.
Sec. 11. (1) Upon receipt of a request by certified mail to
the commission by the holder of a neighborhood enterprise zone
certificate requesting revocation of the certificate, the
commission by order shall revoke the certificate.
(2) The certificate shall expire if the owner fails to
complete the filing requirements under section 10 within 2 years of
the date the certificate was issued. The holder of the certificate
may request in writing to the commission a 1-year automatic
extension of the certificate if the owner has proceeded in good
faith with the construction or rehabilitation of the facility in a
manner consistent with the purposes of this act and the delay in
completion or occupancy by an owner is due to circumstances beyond
the control of the holder of the certificate. Upon request of the
local governmental unit, the commission shall extend the
certificate if the new facility has not been occupied.
(3) The certificate for a homestead facility or new facility
is automatically revoked if the homestead facility or new facility
is no longer a homestead as that term is defined in section 7a of
the general property tax act, 1893 PA 206, MCL 211.7a. However, if
the owner or any subsequent owner submits a certificate before the
revocation is effective, the commission, upon application of the
owner, shall rescind the order of revocation. If the certificate is
submitted after revocation of the certificate, the commission, upon
application of the owner, shall reinstate the certificate for the
remaining period of time for which the original certificate would
have been in effect.
(4) If the owner of the facility fails to make the annual
payment of the neighborhood enterprise zone tax and the ad valorem
property tax on the land under the general property tax act, 1893
PA 206, MCL 211.1 to 211.157, the commission by order shall revoke
the certificate. However, if payment of these taxes is made before
the revocation is effective, the commission, upon application of
the owner, shall rescind the order of revocation. If payment of
these taxes and any subsequent ad valorem property tax due on the
facility is made after revocation of the certificate, the
commission, upon application of the owner, shall reinstate the
certificate for the remaining period of time for which the original
certificate would have been in effect.
(5) If a homestead facility, a new facility, or a
rehabilitated facility ceases to have as its primary purpose
residential housing, the commission by order shall revoke the
certificate for that facility. A new or rehabilitated facility does
not cease to be used for its primary purpose if it is temporarily
damaged or destroyed in whole or in part.
(6) If the governing body of a local governmental unit
determines that a homestead facility, a new facility, or a
rehabilitated facility is not in compliance with any local
construction, building, or safety codes and notifies the commission
by certified mail of the noncompliance, the commission by order
shall revoke the certificate.
(7) The revocation shall be effective beginning the December
31 following the date of the order or, if the certificate is
automatically revoked under subsection (3), the December 31
following the automatic revocation. The commission shall send by
certified mail copies of the order of revocation to the holder of
the certificate, to the local governmental unit in which the
facility is located, to the assessor of that local governmental
unit, and to the legislative body of each taxing unit that levies
taxes upon property in the local governmental unit in which the new
facility or rehabilitated facility is located.
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. 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.
Sec. 13. (1) The assessor of each local governmental unit in
which is located a homestead facility, a new facility, or a
rehabilitated facility for which a neighborhood enterprise zone
certificate is in effect shall determine annually, with respect to
each homestead facility, new facility, or rehabilitated facility,
the assessed valuation of the property comprising the facility
having the benefit of a neighborhood enterprise zone certificate
and the amount of ad valorem property tax that would have been paid
with respect to each homestead facility, new facility, and
rehabilitated
facility under the general property tax act, Act No.
206
of the Public Acts of 1893, being sections 211.1 to 211.157 of
the
Michigan Compiled Laws 1893 PA 206, MCL 211.1
to 211.157, if
the certificate had not been in force, and the assessed valuation
on which the neighborhood enterprise zone tax is based for a
homestead facility or a rehabilitated facility. A holder of a
certificate shall furnish to the assessor the information necessary
for the determination.
(2) After making the determinations under subsection (1), the
assessor shall send annually notification of those determinations
to the Michigan enterprise zone authority and the governing body of
each taxing unit that levies taxes upon property in the local
governmental unit in which the new facility or rehabilitated
facility is located and the holder of the certificate for which the
determination is made. The notice shall be sent by certified mail
not later than October 15 and shall be based upon the valuation as
of the immediately preceding December 31.