SB-0680, As Passed Senate, February 28, 2008

SUBSTITUTE FOR

SENATE BILL NO. 680

     A bill to amend 1996 PA 376, entitled

"Michigan renaissance zone act,"

by amending sections 6, 8d, and 9 (MCL 125.2686, 125.2688d, and

125.2689), section 6 as amended by 2006 PA 304, section 8d as

amended by 2006 PA 93, and section 9 as amended by 2007 PA 186.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 6. (1) The board shall review all recommendations

submitted by the review board and determine which applications meet

the criteria contained in section 7.

     (2) The board shall do all of the following:

     (a) Designate renaissance zones.

     (b) Subject to subsection (3), approve or reject the duration

of renaissance zone status.

     (c) Subject to subsection (3), approve or reject the

geographic boundaries and the total area of the renaissance zone as

submitted in the application.

     (3) The board shall not alter the geographic boundaries of the

renaissance zone or the duration of renaissance zone status

described in the application unless the qualified local

governmental unit or units and the local governmental unit or units

in which the renaissance zone is to be located consent by

resolution to the alteration.

     (4) The board shall not designate a renaissance zone under

section 8 before November 1, 1996 or after December 31, 1996.

     (5) The designation of a renaissance zone under this act shall

take effect on January 1 in the year following designation.

However, for purposes of the taxes exempted under section 9(2), the

designation of a renaissance zone under this act shall take effect

on December 31 in the year of designation.

     (6) The board shall not designate a renaissance zone under

section 8a after December 31, 2002.

     (7) Through December 31, 2002, a qualified local governmental

unit in which a renaissance zone was designated under section 8 or

8a may modify the boundaries of that renaissance zone to include

contiguous parcels of property as determined by the qualified local

governmental unit and approval by the review board. The additional

contiguous parcels of property included in a renaissance zone under

this subsection do not constitute an additional distinct geographic

area under section 4(1)(d). If the boundaries of the renaissance

zone are modified as provided in this subsection, the additional

contiguous parcels of property shall become part of the original

renaissance zone on the same terms and conditions as the original

designation of that renaissance zone.

     (8) Notwithstanding any other provisions of this act, before

July 1, 2004, a qualified local governmental unit in which a

renaissance zone was designated under section 8a(1) as a

renaissance zone located in a rural area may modify the boundaries

of that renaissance zone to include a contiguous parcel of property

as determined by the qualified local governmental unit. The

contiguous parcel of property shall only include property that is

less than .5 acres in size and that the qualified local

governmental unit previously sought to have included in the zone by

submitting an application in February 2002 that was not acted upon

by the review board. The additional contiguous parcel of property

included in a renaissance zone under this subsection does not

constitute an additional distinct geographic area under section

4(1)(d). If the boundaries of the renaissance zone are modified as

provided in this subsection, the additional contiguous parcel of

property shall become part of the original renaissance zone on the

same terms and conditions as the rest of the property in that

renaissance zone.

     (9) A business that is located and conducts business activity

within a renaissance zone designated under this act, except as

designated under section 8a(2) or section 8d, shall not make a

payment in lieu of taxes to any taxing jurisdiction within the

qualified local governmental unit in which the renaissance zone is

located.

     (10) Notwithstanding any other provisions of this act, before

July 1, 2006, a qualified local governmental unit in which a

renaissance zone of less than 50 contiguous acres but more than 20

contiguous acres was designated under section 8 or 8a as a

renaissance zone in a city located in a county with a population of

more than 160,000 and less than 170,000 may modify the boundaries

of that renaissance zone to include a contiguous parcel of property

as determined by the qualified local governmental unit. The

contiguous parcel of property shall only include property that is

less than 12 acres in size. The additional contiguous parcel of

property included in a renaissance zone under this subsection does

not constitute an additional distinct geographic area under section

4(1)(d). If the boundaries of the renaissance zone are modified as

provided in this subsection, the additional contiguous parcel of

property shall become part of the original renaissance zone on the

same terms and conditions as the rest of the property in that

renaissance zone.

     (11) Notwithstanding any other provisions of this act, before

July 1, 2006, a qualified local governmental unit in which a

renaissance zone of more than 500 acres was designated under

section 8 or 8a as a renaissance zone in a county with a population

of more than 61,000 and less than 64,000 may modify the boundaries

of that renaissance zone to include a contiguous parcel of property

as determined by the qualified local governmental unit. The

contiguous parcel of property shall only include property that is

less than 12 acres in size. The additional contiguous parcel of

property included in a renaissance zone under this subsection does

not constitute an additional distinct geographic area under section

4(1)(d). If the boundaries of the renaissance zone are modified as

provided in this subsection, the additional contiguous parcel of

property shall become part of the original renaissance zone on the

same terms and conditions as the rest of the property in that

renaissance zone.

     (12) Notwithstanding any other provisions of this act, before

July 1, 2006, a qualified local governmental unit in which a

renaissance zone of more than 137 acres was designated under

section 8 or 8a as a renaissance zone in a county with a population

of more than 61,000 and less than 63,000 may modify the boundaries

of that renaissance zone to include a parcel of property that is

separated from the existing renaissance zone by a roadway as

determined by the qualified local governmental unit. The parcel of

property shall only include property that is less than 67 acres in

size. The additional contiguous parcel of property included in a

renaissance zone under this subsection does not constitute an

additional distinct geographic area under section 4(1)(d). If the

boundaries of the renaissance zone are modified as provided in this

subsection, the additional contiguous parcel of property shall

become part of the original renaissance zone on the same terms and

conditions as the rest of the property in that renaissance zone.

     Sec. 8d. (1) The board of the Michigan strategic fund

described in section 4 of the Michigan strategic fund act, 1984 PA

270, MCL 125.2004, may designate not more than 25 35 tool and die

renaissance recovery zones within this state in 1 or more cities,

villages, or townships if that city, village, or township or

combination of cities, villages, or townships consents to the

creation of a recovery zone within their boundaries. A recovery

zone shall have a duration of renaissance zone status for a period

of not less than 5 years and not more than 15 years as determined

by the board of the Michigan strategic fund. If the Michigan

strategic fund determines that the duration of renaissance zone

status for a recovery zone is less than 15 years, then the Michigan

strategic fund, with the consent of the city, village, or township

or combination of cities, villages, or townships in which the

qualified tool and die business is located, may extend the duration

of renaissance zone status for the recovery zone for 1 or more

periods that when combined do not exceed 15 years. Not less than 1

of the recovery zones shall consist of 1 or more qualified tool and

die businesses that have a North American industrial classification

system (NAICS) of 332997.

     (2) The board of the Michigan strategic fund may designate a

recovery zone within this state if the recovery zone consists of

not less than 4 and not more than 20 qualified tool and die

businesses at the time of designation. If the board of the Michigan

strategic fund designated 1 or more recovery zones that contain

less than 20 qualified tool and die businesses before December 19,

2005, the board of the Michigan strategic fund may add additional

qualified tool and die businesses to that recovery zone subject to

the limitations contained in this subsection. A recovery zone shall

consist of only qualified tool and die business property. The board

of the Michigan strategic fund may combine existing recovery zones

that are comprised solely of tool and die businesses that are

parties to the same qualified collaborative agreement. Where 2 or

more recovery zones have been combined, the board of the Michigan

strategic fund may continue to designate additional recovery zones,

provided that no more than 25 35 tool and die recovery zones exist

at 1 time.

     (3) The board of the Michigan strategic fund may revoke the

designation of all or a portion of a recovery zone with respect to

1 or more qualified tool and die businesses if those qualified tool

and die businesses fail or cease to participate in or comply with a

qualified collaborative agreement. A qualified tool and die

business may enter into another qualified collaborative agreement

once it is designated part of a recovery zone.

     (4) One or more qualified tool and die businesses subject to a

qualified collaborative agreement may merge into another group of

qualified tool and die businesses subject to a different qualified

collaborative agreement upon application to and approval by the

Michigan strategic fund.

     (5) A qualified tool and die business in a recovery zone may

have a different period of renaissance zone status than other

qualified tool and die businesses in the same recovery zone.

     (6) The board of the Michigan strategic fund may modify an

existing recovery zone to add 1 or more qualified tool and die

businesses with the consent of all other qualified tool and die

businesses that are participating in the recovery zone.

     (7) Beginning on the effective date of the amendatory act that

added this subsection, a recovery zone may include a qualified tool

and die business that has 75 or more full-time employees if that

qualified tool and die business has entered into a written

agreement with the board of the Michigan strategic fund and the

city, village, or township, or a combination of cities, villages,

or townships, in which the qualified tool and die business is

located that may include a payment in lieu of taxes to compensate

the city, village, or township for public safety and fire

protection services provided to that qualified tool and die

business, not to exceed the actual costs of providing those

services, or a payment in lieu of taxes to this state in an amount

not to exceed the amount the facility would have paid under the

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

under section 1211 of the revised school code, 1976 PA 451, MCL

380.1211, if the facility were not eligible for the exemptions,

deductions, or credits under this act as determined by the board of

the Michigan strategic fund. If the qualified tool and die business

has entered into a written agreement to make a payment in lieu of

taxes under this subsection and the public safety or fire

protection services are provided by the county or another public

entity instead of the city, village, or township, those payments in

lieu of taxes shall be paid directly to the county or the other

public entity as provided by the board of the Michigan strategic

fund. Any amount paid to this state in lieu of taxes under this

subsection shall be credited to the state school aid fund

established under section 11 of article IX of the state

constitution of 1963.

(8) (7) As used in this section:

     (a) "Qualified collaborative agreement" means an agreement

that demonstrates synergistic opportunities, including, but not

limited to, all of the following:

     (i) Sales and marketing efforts.

     (ii) Development of standardized processes.

     (iii) Development of tooling standards.

     (iv) Standardized project management methods.

     (v) Improved ability for specialized or small niche shops to

develop expertise and compete successfully on larger programs.

     (b) "Qualified tool and die business" means a business entity

that meets all of the following:

     (i) Has a North American industrial classification system

(NAICS) of 332997, 333511, 333512, 333513, 333514, or 333515; or

has a North American industrial classification system (NAICS) of

337215 and operates a facility within an existing renaissance zone,

which facility is adjacent to real property not located in a

renaissance zone and is located within 1/4 mile of a Michigan

technical education center.

     (ii) Has entered into a qualified collaboration agreement as

approved by the Michigan strategic fund consisting of not fewer

than 4 or more than 20 other business entities at the time of

designation that have a North American industrial classification

system (NAICS) of 332997, 333511, 333512, 333513, 333514, or

333515.

     (iii) Has Except as otherwise provided by the board of the

Michigan strategic fund, has fewer than 75 full-time employees.

     (c) "Qualified tool and die business property" means 1 or more

of the following:

     (i) Property owned by 1 or more qualified tool and die

businesses and used by those qualified tool and die businesses

primarily for tool and die business operations. Qualified tool and

die business property is used primarily for tool and die business

operations if the qualified tool and die businesses that own the

qualified tool and die business property generate 75% or more of

the qualified tool and die businesses' gross revenue from tool and

die operations that take place on the qualified tool and die

business property at the time of designation.

     (ii) Property leased by 1 or more qualified tool and die

business for which the qualified tool and die business is liable

for ad valorem property taxes and which is used by those qualified

tool and die businesses primarily for tool and die business

operations. Qualified tool and die business property is used

primarily for tool and die business operations if the qualified

tool and die businesses that lease the qualified tool and die

business property generate 75% or more of the qualified tool and

die businesses' gross revenue from tool and die operations that

take place on the qualified tool and die business property at the

time of designation. The qualified tool and die business shall

furnish proof of its ad valorem property tax liability to the

department of treasury.

     Sec. 9. (1) Except as otherwise provided in section 10, an

individual who is a resident of a renaissance zone or a business

that is located and conducts business activity within a renaissance

zone shall receive the exemption, deduction, or credit as provided

in the following for the period provided under section 6(2)(b):

     (a) Section 39b of the single business tax act, former 1975 PA

228 , MCL 208.39b, or section 433 of the Michigan business tax act,

2007 PA 36, MCL 208.1433.

     (b) Section 31 of the income tax act of 1967, 1967 PA 281, MCL

206.31.

     (c) Section 35 of chapter 2 of the city income tax act, 1964

PA 284, MCL 141.635.

     (d) Section 5 of the city utility users tax act, 1990 PA 100,

MCL 141.1155.

     (2) Except as otherwise provided in section 10, property

located in a renaissance zone is exempt from the collection of

taxes under all of the following:

     (a) Section 7ff of the general property tax act, 1893 PA 206,

MCL 211.7ff.

     (b) Section 11 of 1974 PA 198, MCL 207.561.

     (c) Section 12 of the commercial redevelopment act, 1978 PA

255, MCL 207.662.

     (d) Section 21c of the enterprise zone act, 1985 PA 224, MCL

125.2121c.

     (e) Section 1 of 1953 PA 189, MCL 211.181.

     (f) Section 12 of the technology park development act, 1984 PA

385, MCL 207.712.

     (g) Section 51105 of the natural resources and environmental

protection act, 1994 PA 451, MCL 324.51105.

     (h) Section 9 of the neighborhood enterprise zone act, 1992 PA

147, MCL 207.779.

     (3) During Except for tool and die renaissance recovery zones

that have a duration of less than 15 years, during the last 3 years

that the taxpayer is eligible for an exemption, deduction, or

credit described in subsections (1) and (2), the exemption,

deduction, or credit shall be reduced by the following percentages:

     (a) For the tax year that is 2 years before the final year of

designation as a renaissance zone, the percentage shall be 25%.

     (b) For the tax year immediately preceding the final year of

designation as a renaissance zone, the percentage shall be 50%.

     (c) For the tax year that is the final year of designation as

a renaissance zone, the percentage shall be 75%.