SB-0787, As Passed Senate, December 19, 2014

HOUSE SUBSTITUTE FOR

SENATE BILL NO. 787

     A bill to provide for the exemption of certain property from

certain taxes; to levy and collect a specific tax upon the owners

of certain property; to provide for the disposition of the tax; to

prescribe the powers and duties of certain local government

officials; and to provide penalties.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 1. This act shall be known and may be cited as the

"eligible hydroponics and eligible aquaculture production

facilities specific tax act".

     Sec. 2. As used in this act:

     (a) "Aquaculture" means the commercial husbandry of

aquaculture species, including, but not limited to, culturing,

producing, growing, propagating, and harvesting aquaculture

products under any applicable permits or registration.

     (b) "Aquaculture production facility" means real property used

for an indoor aquaculture production operation using aquaculture

techniques or practices for growing aquaculture species. An

aquaculture production facility includes all of the following, to

the extent that it constitutes real property:

     (i) Pumps, tanks, controls, application systems, indoor

recirculating systems, and related infrastructure required to grow

aquaculture species using aquaculture techniques or practices.

     (ii) Any warehouse or shipping area integrated into the

aquaculture production operation.

     (iii) Offices integrated into the aquaculture production

operation if the taxable value of the offices is less than 50% of

the combined taxable value of the aquaculture production facility

and the offices.

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

1927 PA 360, MCL 209.101 to 209.107.

     (d) "Eligible aquaculture production facility" means an

aquaculture production facility that has a production area of not

less than 10,000 square feet.

     (e) "Eligible hydroponics production facility" means a

hydroponics production facility that has a production area of not

less than 1 acre.

     (f) "Hydroponics" means a system in which water-soluble

nutrients are placed in intimate contact with a plant's root

system, being grown in an inert supportive medium, which inert

supportive medium itself does all of the following:

     (i) Supplies physical support for the roots.

     (ii) Does not add or subtract plant nutrients.

     (g) "Hydroponics production facility" means real property used

for an indoor agriculture production operation using hydroponics

techniques or practices for growing plants produced by agriculture

that are useful to human beings, including, but not limited to,

forages, field crops, sod, berries, herbs, fruits, vegetables,

flowers, seeds, and nursery stock. Hydroponics production facility

does not include an indoor agriculture production operation for

growing plants that are illegal under federal law. A hydroponics

production facility includes, but is not limited to, all of the

following, to the extent that it constitutes real property:

     (i) Pumps, tanks, controls, application systems, and related

infrastructure required to grow agricultural crops using

hydroponics techniques or practices.

     (ii) Any warehouse or shipping area integrated into the

hydroponics production facility operation.

     (iii) Offices integrated into the indoor agriculture production

operation if the taxable value of the offices is less than 50% of

the combined taxable value of the hydroponics production facility

and the offices.

     (h) "Taxable value" means the taxable value as determined

under section 27a of the general property tax act, 1893 PA 206, MCL

211.27a.

     Sec. 3. For taxes levied after December 31, 2014, an eligible

hydroponics production facility or an eligible aquaculture

production facility is exempt from ad valorem property taxes

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

211.1 to 211.155, as provided under section 7uu of the general

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

     Sec. 4. The assessor of each local tax collecting unit in

which there is an eligible hydroponics production facility or an

eligible aquaculture production facility shall determine annually

as of December 31 the value and taxable value of each eligible

hydroponics production facility or eligible aquaculture production

facility located in that local tax collecting unit.

     Sec. 5. (1) There is levied upon the owner of every eligible

hydroponics production facility or eligible aquaculture production

facility a specific tax to be known as the eligible hydroponics and

eligible aquaculture production facilities specific tax.

     (2) The amount of the eligible hydroponics and eligible

aquaculture production facilities specific tax in each year shall

be determined as follows:

     (a) Multiply the number of mills that would be assessed in the

local tax collecting unit if the property were subject to the

collection of taxes under the general property tax act, 1893 PA

206, MCL 211.1 to 211.155, and if the property was exempt as

provided under section 7cc of the general property tax act, 1893 PA

206, MCL 211.7cc, by the eligible hydroponics production facility's

or eligible aquaculture production facility's taxable value.

     (b) Multiply the result of the calculation in subdivision (a)

by .25.

     (c) If a new millage is approved in the local tax collecting

unit in which an eligible hydroponics production facility or an

eligible aquaculture production facility is located after the

effective date of this act, multiply the number of mills that were

approved that would be assessed if the eligible hydroponics

production facility or eligible aquaculture production facility

were subject to the collection of taxes under the general property

tax act, 1893 PA 206, MCL 211.1 to 211.155, by the eligible

hydroponics production facility's or eligible aquaculture

production facility's taxable value. Repeat this calculation for

each individual new millage approved in the local tax collecting

unit after the effective date of this act. As used in this

subdivision, "new millage" does not include the renewal of some or

all of a millage in existence on the effective date of this act.

     (d) Add the result of the calculation under subdivision (b)

and the result of all calculations under subdivision (c).

     (3) The eligible hydroponics and eligible aquaculture

production facilities property specific tax is an annual tax,

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

same collecting officer or officers as taxes collected under the

general property tax act, 1893 PA 206, MCL 211.1 to 211.155.

     (4) The collecting officer or officers shall disburse the

eligible hydroponics and eligible aquaculture production facilities

property specific tax to and among this state and cities,

townships, villages, school districts, counties, or other taxing

units, 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 211.155.

     (5) The collecting officer or officers shall send a copy of

the amount of disbursement made to each taxing unit under this

section to the commission on a form provided by the commission.

     Sec. 6. Unpaid eligible hydroponics and eligible aquaculture

production facilities specific taxes are subject to forfeiture,

foreclosure, and sale in the same manner and at the same time as

taxes returned as delinquent under the general property tax act,

1893 PA 206, MCL 211.1 to 211.155.

     Enacting section 1. This act does not take effect unless

Senate Bill No. 786 of the 97th Legislature is enacted into law.