SB-0974, As Passed House, June 27, 2008

SUBSTITUTE FOR

SENATE BILL NO. 974

A bill to amend 1978 PA 255, entitled

"Commercial redevelopment act,"

by amending sections 3, 4, 12, and 18 (MCL 207.653, 207.654,

207.662, and 207.668), section 3 as amended by 1980 PA 407, section

12 as amended by 1998 PA 243, and section 18 as amended by 1984 PA

342, and by adding section 12a.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 3. (1) "Commercial facilities tax" means the specific tax

levied under this act.

(2) "Commercial facilities exemption certificate" means a

certificate issued pursuant to section 8.

(3) "Commercial property" means land improvements classified

by law for general ad valorem tax purposes as real property

including real property assessable as personal property pursuant to

~~section 14(6) of Act No. 206 of the Public Acts of 1893, as~~

~~amended, being section 211.14 of the Michigan Compiled Laws~~

sections 8(d) and 14(6) of the general property tax act, 1893 PA

206, MCL 211.8 and 211.14, whether completed or in the process of

construction, the primary purpose and use of which is the operation

of a commercial business enterprise and shall include office,

engineering, research and development, warehousing parts

distribution, retail sales, hotel or motel development, and other

commercial facilities but shall not include any of the following:

(a) Land.

(b) Property of a public utility.

nonhousing commercial activity.

(d) Financial organization. As used in this subdivision,

"financial organization" means a bank, industrial bank, trust

company, building and loan or savings and loan association, bank

holding company as defined in 12 ~~U.S.C.~~ USC 1841, credit union,

safety and collateral deposit company, regulated investment company

as defined in the internal revenue code, and any other association,

joint stock company, or corporation at least 90% of whose assets

consist of intangible personal property and at least 90% of whose

gross receipts income consists of dividends or interest or other

charges resulting from the use of money or credit. The exclusion of

financial institutions shall not apply to the otherwise included

property of financial institutions which is located in the

designated area of a city that is either the largest city in

population within the county, as determined by the latest federal

census; or is a city that had more than the median percentage for

all cities in this state of its residents below the poverty line as

determined by the latest federal census. Each city qualified to not

be excluded under this subdivision shall designate only 1

commercial area for purposes of this provision, which area may be

conterminous with, or included within, a commercial redevelopment

district and in which area a majority of the land must be zoned

commercially.

Commercial property may be owned or leased. If, in the case of

leased property, the lessee is liable for payment of ad valorem

property taxes, and furnishes proof of that liability, the lessee

is eligible for the exemption. If the lessor is liable for payment

of ad valorem property taxes and furnishes proof of that liability,

the lessor is eligible for the exemption.

(4) "Commercial redevelopment district" means an area of a

local governmental unit established as provided in section 5.

(5) "Commission" means the state tax commission created by ~~Act~~

~~No. 360 of the Public Acts of 1927, as amended, being sections~~

~~209.101 to 209.107 of the~~ ~~Michigan~~ ~~Compiled Laws~~ 1927 PA 360, MCL

209.101 to 209.107.

(6) "Facility" means a restored facility, a replacement

facility, or a new facility.

Sec. 4. (1) "Local governmental unit" means, except as

otherwise provided in this subsection, a city, village, or

township. For local governmental units designating a commercial

redevelopment district after June 30, 2008, local governmental unit

means a city or village.

(2) "New facility" means 1 of the following:

(a) Through June 30, 2008, new commercial property other than

a replacement facility to be built in a redevelopment district.

(b) Beginning July 1, 2008, new commercial property other than

a replacement facility to be built in a redevelopment district that

meets all of the following:

(i) Is located on property that is zoned to allow for mixed use

that includes high-density residential use.

(ii) Is located in a qualified downtown revitalization district

as defined in section 2 of the neighborhood enterprise zone act,

1992 PA 147, MCL 207.772.

(iii) The local governmental unit in which the new facility is

to be located does all of the following:

(A) Establishes and implements an expedited local permitting

and inspection process in the commercial redevelopment district.

(B) By resolution provides for walkable nonmotorized

interconnections, including sidewalks and streetscapes throughout

the commercial redevelopment district.

(3) "Obsolete commercial property" means commercial property

the condition of which is impaired due to changes in design,

construction, technology, or improved production processes, or

damage due to fire, natural disaster, or general neglect.

(4) "Replacement" means the complete or partial demolition of

obsolete commercial property and the complete or partial

reconstruction or installation of new property of similar utility.

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

(a) Through June 30, 2008, commercial property on the same or

contiguous land within the district which land is or is to be

acquired, constructed, altered, or installed for the purpose of

being substituted for obsolete commercial property together with

any part of the old altered property ~~which~~ that remains for use as

commercial property after the replacement.

(b) Beginning July 1, 2008, commercial property on the same or

contiguous land within the district which land is or is to be

acquired, constructed, altered, or installed for the purpose of

being substituted for obsolete commercial property and any part of

the old altered property that remains for use as commercial

property after the replacement, that meets all of the following:

(i) Is located on property that is zoned to allow for mixed use

that includes high-density residential use.

(ii) Is located in a qualified downtown revitalization district

as defined in section 2 of the neighborhood enterprise zone act,

1992 PA 147, MCL 207.772.

(iii) The local governmental unit in which the replacement

facility is to be located does all of the following:

(A) Establishes and implements an expedited local permitting

and inspection process in the commercial redevelopment district.

(B) By resolution provides for walkable nonmotorized

interconnections, including sidewalks and streetscapes throughout

the commercial redevelopment district.

(6) "Restoration" means changes to obsolete commercial

property other than replacement as may be required to restore the

property, together with all appurtenances thereto, to an

economically efficient condition. Restoration ~~shall include~~

includes major renovation including but not ~~necessarily~~ limited to

the improvement of floor loads, correction of deficient or

excessive height, new or improved fixed building equipment,

including heating, ventilation, and lighting, reducing multistory

facilities to 1 or 2 stories, improved structural support including

foundations, improved roof structure and cover, floor replacement,

improved wall placement, improved exterior and interior appearance

of buildings, and other physical changes required to restore the

commercial property to an economically efficient condition.

Restoration ~~shall~~ does not include improvements aggregating less

than 10% of the true cash value of the property at commencement of

the restoration of the commercial property.

(7) "Restored facility" means a facility that has undergone

restoration.

(8) "State equalized valuation" means the valuation determined

under ~~Act No. 44 of the Public Acts of 1911, as amended, being~~

~~sections 209.1 to 209.8 of the Michigan Compiled Laws~~ 1911 PA 44,

MCL 209.1 to 209.8.

Sec. 12. (1) Except as provided in subsection (9), there is

levied upon every owner of a new, replacement, or restored facility

to which a commercial facilities exemption certificate is issued a

specific tax to be known as the commercial facilities tax.

(2) The amount of the commercial facilities tax, in each year,

~~in the case of~~ for a restored facility shall be determined by

multiplying the total mills levied as ad valorem taxes for that

year by all taxing units within which the facility is ~~located~~

situated by the ~~state equalized valuation~~ taxable value of the real

property of the obsolete commercial property for the tax year

immediately preceding the effective date of the commercial

facilities exemption certificate after deducting the ~~state~~

~~equalized valuation~~ taxable value of the land and of personal

property other than personal property assessed pursuant to section

14(6) of the general property tax act, 1893 PA 206, MCL 211.14.

(3) The amount of the commercial facilities tax, in each year,

~~in the case of~~ for a new or replacement facility shall be

determined by multiplying the ~~state equalized valuation~~ taxable

value of the facility excluding the land and personal property

other than personal property assessed pursuant to section 14(6) of

the general property tax act, 1893 PA 206, MCL 211.14, by the sum

of 1/2 of the total mills levied as ad valorem taxes for that year

by all taxing units within which the facility is located other than

mills levied ~~for school operating purposes by a local or~~

~~intermediate school district within which the facility is located~~

~~or mills levied~~ under the state education tax act, 1993 PA 331, MCL

211.901 to 211.906, plus, ~~1/2 of the number of mills levied for~~

~~school operating purposes in 1993~~ subject to section 12a, the

number of mills levied under the state education tax act, 1993 PA

331, MCL 211.901 to 211.906.

(4) The commercial facilities tax shall be collected,

disbursed, and assessed in accordance with this act.

(5) The commercial facilities tax is an annual tax, payable at

the same times, in the same installments, and to the same officer

or officers as taxes imposed under the general property tax act,

1893 PA 206, MCL 211.1 to ~~211.157~~ 211.155, are payable. Except as

otherwise provided in this section, the officer or officers shall

disburse the commercial facilities tax payments received ~~by the~~

~~officer or officers~~ each year to and among the state, cities,

townships, villages, school districts, counties, and authorities,

at the same times and in the same proportions as required by law

for the disbursement of taxes collected under the general property

tax act, 1893 PA 206, MCL 211.1 to ~~211.157~~ 211.155. ~~To determine~~

~~the proportion for the disbursement of taxes under this subsection~~

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

~~collected pursuant to commercial facilities exemption certificates~~

~~issued before~~ ~~January 1, 1994, the number of mills levied for local~~

~~school district operating purposes to be used in the calculation~~

~~shall equal the number of mills for local school district operating~~

~~purposes levied in 1993 minus the number of mills levied under the~~

~~state education tax act, 1993 PA 331, MCL 211.901 to 211.906, for~~

~~the year for which the disbursement is calculated.~~

(6) Except as provided in subsection (7), for intermediate

school districts receiving state aid under sections 56, 62, and 81

of the state school aid act of 1979, 1979 PA 94, MCL 388.1656,

388.1662, and 388.1681, of the amount that would otherwise be

disbursed to an or retained by the intermediate school district,

all or a portion, to be determined on the basis of the tax rates

being utilized to compute the amount of state school aid, shall be

paid instead to the state treasury to the credit of the state

school aid fund established by section 11 of article IX of the

state constitution of 1963. If the sum of any industrial facility

taxes prescribed by 1974 PA 198, 207.551 to 207.572, and the

commercial facilities taxes paid to the state treasury to the

credit of the state school aid fund that would otherwise be

disbursed to the local or intermediate school district, ~~pursuant to~~

under section 11 of 1974 PA 198, MCL 207.561, and this section,

exceeds the amount received by the local or intermediate school

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

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

department of treasury shall allocate to each eligible local or

intermediate school district an amount equal to the difference

between the sum of the industrial facility taxes and the commercial

facilities taxes paid to the state treasury to the credit of the

state school aid fund and the amount the local or intermediate

school district received under sections 56, 62, and 81 of the state

school aid act of 1979, 1979 PA 94, MCL 388.1656, 388.1662, and

388.1681. ~~This subsection applies to taxes levied before 1994.~~ This

subsection does not apply to taxes levied for either of the

following:

(a) Mills allocated to an intermediate school district for

operating purposes as provided for under the property tax

limitation act, 1933 PA 62, MCL 211.201 to 211.217a.

(b) An intermediate school district that is not receiving

state aid under section 56 or 62 of the state school aid act of

1979, 1979 PA 94, MCL 388.1656 and 388.1662.

(7) For commercial facilities taxes levied after 1993 for

school operating purposes, the amount that would otherwise be

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

state treasury and credited to the state school aid fund

established by section 11 of article IX of the state constitution

of 1963.

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

disbursement made to each unit under this section to the commission

on a form provided by the commission.

(9) A new, replacement, or restored facility located in a

renaissance zone under the Michigan renaissance zone act, 1996 PA

376, MCL 125.2681 to 125.2696, is exempt from the commercial

facilities tax levied under this act to the extent and for the

duration provided pursuant to the Michigan renaissance zone act,

1996 PA 376, MCL 125.2681 to 125.2696, except for that portion of

the commercial facilities tax attributable to a special assessment

or a tax described in section 7ff(2) of the general property tax

act, 1893 PA 206, MCL 211.7ff. The commercial facilities tax

calculated under this subsection shall be disbursed proportionately

to the local taxing unit or units that levied the special

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

property tax act, 1893 PA 206, MCL 211.7ff.

(10) As used in this act, facility does not include a casino.

As used in this subsection, "casino" means a casino or a parking

lot, hotel, motel, or retail store owned or operated by a casino,

an affiliate, or an affiliated company, regulated by this state

pursuant to the Michigan gaming control and revenue act, ~~the~~

~~Initiated Law of 1996~~ 1996 IL 1, MCL 432.201 to ~~432.216~~ 432.226.

Sec. 12a. (1) Within 60 days after the granting of a new

commercial facilities exemption certificate under section 8 for a

new or a replacement facility, the state treasurer may, for a

period not to exceed 6 years, exclude up to 1/2 of the number of

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

211.901 to 211.906, from the specific tax calculation on the

facility under section 12(3) if the state treasurer determines that

reducing the number of mills used to calculate the specific tax

under section 12(3) is necessary to reduce unemployment, promote

economic growth, and increase capital investment in qualified local

governmental units.

(2) The state treasurer shall not grant more than 25

exclusions under this section each year.

Sec. 18. A new exemption shall not be granted under this act

after December 31, ~~1985~~ 2020, but an exemption then in effect shall

continue until the expiration of the exemption certificate.

Enacting section 1. This amendatory act does not take effect

unless Senate Bill No. 976 of the 94th Legislature is enacted into

law.