SENATE BILL No. 570

September 14, 2017, Introduced by Senator HILDENBRAND and referred to the Committee on Finance.

A bill to amend 1893 PA 206, entitled

"The general property tax act,"

by amending sections 9f, 9m, 9n, 9o, 19, and 53b (MCL 211.9f,

211.9m, 211.9n, 211.9o, 211.19, and 211.53b), section 9f as amended

by 2016 PA 329, sections 9m and 9n as amended by 2017 PA 42,

section 9o as amended by 2013 PA 153, and sections 19 and 53b as

amended by 2016 PA 108.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 9f. (1) The governing body of an eligible local assessing

district or, subject to subsection (5), the board of a Next

Michigan development corporation in which an eligible local

assessing district is a constituent member may adopt a resolution

to exempt from the collection of taxes under this act all new

personal property owned or leased by an eligible business located

in 1 or more eligible districts or distressed parcels designated in

the resolution or an eligible Next Michigan business as provided in

this section. The clerk of the eligible local assessing district or

the recording officer of a Next Michigan development corporation

shall notify in writing the assessor of the township or city in

which the eligible district or distressed parcel is located and the

legislative body of each taxing unit that levies ad valorem

property taxes in the eligible local assessing district in which

the eligible district or distressed parcel is located. Before

acting on the resolution, the governing body of the eligible local

assessing district or a Next Michigan development corporation shall

afford the assessor and a representative of the affected taxing

units an opportunity for a hearing.

(2) The exemption under this section is effective on the

December 31 immediately succeeding the adoption of the resolution

by the governing body of the eligible local assessing district or a

Next Michigan development corporation and, except as otherwise

provided in subsection (9), shall continue in effect for a period

specified in the resolution. However, an exemption shall not be

granted under this section after December 31, 2012 for an eligible

business located in an eligible district identified in subsection

(11)(f)(ix) or in an eligible local assessing district identified

in subsection (11)(h)(ii). A copy of the resolution shall be filed

with the state tax commission, the state treasurer, and the

president of the Michigan strategic fund. A resolution is not

effective unless approved as provided in subsection (3).

(3) Not more than 60 days after receipt of a copy of the

resolution adopted by the governing body of an eligible local

assessing district under subsection (1), the state tax commission

shall determine if the new personal property subject to the

exemption is owned or leased by an eligible business and if the

eligible business is located in 1 or more eligible districts. If

the state tax commission determines that the new personal property

subject to the exemption is owned or leased by an eligible business

and that the eligible business is located in 1 or more eligible

districts, the state treasurer, with the written concurrence of the

president of the Michigan strategic fund, shall approve the

resolution adopted under subsection (1) if the state treasurer and

the president of the Michigan strategic fund determine that

exempting new personal property of the eligible business is

necessary to reduce unemployment, promote economic growth, and

increase capital investment in this state. In addition, for an

eligible business located in an eligible local assessing district

described in subsection (11)(h)(ii), the resolution adopted under

subsection (1) shall be approved if the state treasurer and the

president of the Michigan strategic fund determine that granting

the exemption is a net benefit to this state, that expansion,

retention, or location of an eligible business will not occur in

this state without this exemption, and that there is no significant

negative effect on employment in other parts of this state as a

result of the exemption.

(4) After December 31, 2016, a governing body of an eligible

local assessing district shall not adopt a resolution under

subsection (1) exempting new personal property from the collection

of taxes under this act without a written agreement entered into

with the eligible business subject to the exemption, which written

agreement contains a remedy provision that includes, but is not

limited to, the following:

(a) A requirement that the exemption under this section is

revoked if the eligible business is determined to be in violation

of the provisions of the written agreement.

(b) A requirement that the eligible business may be required

to repay all or part of the personal property taxes exempted under

this section if the eligible business is determined to be in

violation of the provisions of the written agreement.

revoked if the eligible business is determined to be in violation

of the provisions concerning the exemption set forth in the

resolution adopted under subsection (1).

(d) A requirement that the exemption under this section is

revoked if continuance of the exemption would be contrary to any of

the requirements of this section, including, but not limited to,

the requirement that the eligible business be an eligible business

or an acquiring eligible business under this section.

(5) A Next Michigan development corporation may only adopt a

resolution under subsection (1) exempting new personal property

from the collection of taxes under this act for new personal

property located in a Next Michigan development district. A Next

Michigan development corporation shall not adopt a resolution under

subsection (1) exempting new personal property from the collection

of taxes under this act without a written agreement entered into

with the eligible Next Michigan business subject to the exemption,

which written agreement contains a remedy provision that includes,

but is not limited to, all of the following:

(a) A requirement that the exemption under this section is

revoked if the eligible Next Michigan business is determined to be

in violation of the provisions of the written agreement.

(b) A requirement that the eligible Next Michigan business may

be required to repay all or part of the personal property taxes

exempted under this section if the eligible Next Michigan business

is determined to be in violation of the provisions of the written

agreement.

requirement that the exemption under this section is revoked if the

eligible Next Michigan business is determined to be in violation of

the provisions concerning the exemption set forth in the resolution

adopted under subsection (1).

(d) For an agreement entered into after December 31, 2016, a

requirement that the exemption under this section is revoked if

continuance of the exemption would be contrary to any of the

requirements of this section, including, but not limited to, the

requirement that the eligible Next Michigan business be an eligible

business or an acquiring eligible business under this section.

(6) Subject to subsections (7) and (9), if an existing

eligible business sells or leases new personal property exempt

under this section to an acquiring eligible business, the exemption

granted to the existing eligible business shall continue in effect

for the period specified in the resolution adopted under subsection

(1) for the new personal property purchased or leased from the

existing eligible business by the acquiring eligible business and

for any new personal property purchased or leased by the acquiring

eligible business.

(7) After December 31, 2007, an exemption for an existing

eligible business shall continue in effect for an acquiring

eligible business under subsection (6) only if the continuation of

the exemption is approved in a resolution adopted by the governing

body of an eligible local assessing district or the board of a Next

Michigan development corporation in which the eligible local

assessing district is a constituent member.

(8) Notwithstanding 2000 PA 415, all of the following shall

apply to an exemption under this section that was approved by the

state tax commission on or before April 30, 1999, regardless of the

effective date of the exemption:

(a) The exemption shall be continued for the term authorized

by the resolution adopted by the governing body of the eligible

local assessing district and approved by the state tax commission

with respect to buildings and improvements constructed on leased

real property during the term of the exemption if the value of the

real property is not assessed to the owner of the buildings and

improvements.

(b) The exemption shall not be impaired or restricted with

respect to buildings and improvements constructed on leased real

property during the term of the exemption if the value of the real

property is not assessed to the owner of the buildings and

improvements.

(9) Notwithstanding any other provision of this section to the

contrary, if new personal property exempt under this section on or

after December 31, 2012 is eligible manufacturing personal

property, that eligible manufacturing personal property shall

remain exempt under this section until the later of the following:

(a) The date that eligible manufacturing personal property

would otherwise be exempt from the collection of taxes under this

act under section 9m, 9n, or 9o.

(b) The date that eligible manufacturing personal property is

no longer exempt under the resolution adopted under subsection (1).

(10) An eligible business that owns or leases new personal

property that is exempt under this section and that is eligible

personal property shall deliver the combined document as in the

time, form, and manner prescribed in sections 9m and 9n to the

assessor of the township or city in which the eligible personal

property is located ~~by February 20 of~~ each year that the new

personal property is eligible personal property. The form shall

indicate that the new personal property is eligible personal

property.

(11) As used in this section:

(a) "Acquiring eligible business" means an eligible business

that purchases or leases assets of an existing eligible business,

including the purchase or lease of new personal property exempt

under this section, and that will conduct business operations

similar to those of the existing eligible business at the location

of the existing eligible business within the eligible district.

(b) "Authorized business" means that term as defined in

section 3 of the Michigan economic growth authority act, 1995 PA

24, MCL 207.803.

as defined in section 9m.

(d) "Distressed parcel" means a parcel of real property

located in a city or village that meets all of the following

conditions:

(i) Is located in a qualified downtown revitalization

district. As used in this subparagraph, "qualified downtown

revitalization district" means an area located within 1 or more of

the following:

(A) The boundaries of a downtown district as defined in

section 1 of 1975 PA 197, MCL 125.1651.

(B) The boundaries of a principal shopping district or a

business improvement district as defined in section 1 of 1961 PA

120, MCL 125.981.

that is zoned and primarily used for business as determined by the

local governmental unit.

(ii) Meets 1 of the following conditions:

(A) Has a blighted or functionally obsolete building located

on the parcel. As used in this sub-subparagraph, "blighted" and

"functionally obsolete" mean those terms as defined in section 2 of

the brownfield redevelopment financing act, 1996 PA 381, MCL

125.2652.

(B) Is a vacant parcel that had been previously occupied.

(iii) Is zoned to allow for mixed use.

(e) "Eligible business" means, effective August 7, 1998, a

business engaged primarily in manufacturing, mining, research and

development, wholesale trade, office operations, or the operation

of a facility for which the business that owns or operates the

facility is an eligible taxpayer. For purposes of a Next Michigan

development corporation, eligible business means only an eligible

Next Michigan business. Eligible business does not include a

casino, retail establishment, professional sports stadium, or that

portion of an eligible business used exclusively for retail sales.

Professional sports stadium does not include a sports stadium in

existence on June 6, 2000 that is not used by a professional sports

team on the date of the resolution adopted pursuant to subsection

(1). As used in this subdivision, "casino" means a casino regulated

by this state under the Michigan gaming control and revenue act,

1996 IL 1, MCL 432.201 to 432.226, and all property associated or

affiliated with the operation of a casino, including, but not

limited to, a parking lot, hotel, motel, or retail store.

(f) "Eligible district" means 1 or more of the following:

(i) An industrial development district as that term is defined

in 1974 PA 198, MCL 207.551 to 207.572.

(ii) A renaissance zone as that term is defined in the

Michigan renaissance zone act, 1996 PA 376, MCL 125.2681 to

125.2696.

(iii) An enterprise zone as that term is defined in the

enterprise zone act, 1985 PA 224, MCL 125.2101 to 125.2123.

(iv) A brownfield redevelopment zone as that term is

designated under the brownfield redevelopment financing act, 1996

PA 381, MCL 125.2651 to ~~125.2672.~~125.2670.

(v) An empowerment zone designated under subchapter U of

chapter 1 of the internal revenue code of 1986, 26 USC 1391 to

1397F.

(vi) An authority district or a development area as those

terms are defined in the tax increment finance authority act, 1980

PA 450, MCL 125.1801 to 125.1830.

(vii) An authority district as that term is defined in the

local development financing act, 1986 PA 281, MCL 125.2151 to

125.2174.

(viii) A downtown district or a development area as those

terms are defined in 1975 PA 197, MCL 125.1651 to 125.1681.

(ix) An area that contains an eligible taxpayer.

(x) A Next Michigan development district.

(g) "Eligible distressed area" means 1 of the following:

(i) That term as defined in section 11 of the state housing

development authority act of 1966, 1966 PA 346, MCL 125.1411.

(ii) An area that contains an eligible taxpayer.

(h) "Eligible local assessing district" means a city, village,

or township that contains an eligible distressed area or that is a

party to an intergovernmental agreement creating a Next Michigan

development corporation, or a city, village, or township that meets

1 or more of the following conditions and is located in a county

all or a portion of which borders another state or Canada:

(i) Is currently served by not fewer than 4 of the following

existing services:

(A) Water.

(B) Sewer.

(D) Fire.

(E) Trash.

(F) Recycling.

(ii) Is party to an agreement under 1984 PA 425, MCL 124.21 to

124.30, with a city, village, or township that provides not fewer

than 4 of the following existing services:

(A) Water.

(B) Sewer.

(D) Fire.

(E) Trash.

(F) Recycling.

(i) "Eligible Next Michigan business" means that term as

defined in section 3 of the Michigan economic growth authority act,

1995 PA 24, MCL 207.803.

(j) "Eligible personal property" means that term as defined in

section 3(e)(ii) or (iv) of the state essential services assessment

act, 2014 PA 92, MCL 211.1053.

(k) "Eligible taxpayer" means a taxpayer that meets both of

the following conditions:

(i) Is an authorized business.

(ii) Is eligible for tax credits described in section 9 of the

Michigan economic growth authority act, 1995 PA 24, MCL 207.809.

(l) "Existing eligible business" means an eligible business

identified in a resolution adopted under subsection (1) for which

an exemption has been granted under this section.

(m) "New personal property" means personal property that was

not previously subject to tax under this act or was not previously

placed in service in this state and that is placed in an eligible

district after a resolution under subsection (1) is approved. As

used in this subdivision, for exemptions approved by the state

treasurer under subsection (3) after April 30, 1999, new personal

property does not include buildings described in section 14(6) and

personal property described in section 8(h), (i), and (j). For

exemptions subject to resolutions adopted under subsection (1)

after December 31, 2014, new personal property does not include

eligible manufacturing personal property.

(n) "Next Michigan development corporation" and "Next Michigan

development district" mean those terms as defined under the Next

Michigan development act, 2010 PA 275, MCL 125.2951 to 125.2959.

Sec. 9m. (1) Beginning December 31, 2015 and each year

thereafter, qualified new personal property for which an exemption

has been properly claimed under subsection (2) is exempt from the

collection of taxes under this act.

(2) A person shall claim the exemption under this section and

section 9n by filing each year a combined document that includes:

the form to claim the exemption under this section and section 9n,

a report of the fair market value and year of acquisition by the

first owner of qualified new personal property, and for any year

before 2023, a statement under section 19. All of the following

apply to a claim of the exemption under this section:

(a) The combined document shall be in a form and manner

prescribed by the department of treasury.

(b) Leasing companies are not eligible to receive the

exemption under this section and may not use the combined document

prescribed in this section. With respect to personal property that

is the subject of a lease agreement, regardless of whether the

agreement constitutes a lease for financial or tax purposes, all of

the following apply:

(i) If the personal property is eligible manufacturing

personal property, the lessee and lessor may elect that the lessee

report the leased personal property on the combined document.

(ii) An election made by the lessee and the lessor under this

subdivision shall be made in a form and manner approved by the

department.

(iii) Absent an election, the personal property shall be

reported by the lessor on the personal property statement unless

the exemption for eligible manufacturing personal property is

claimed by the lessee on the combined document.

completed and delivered to the assessor of the township or city in

which the qualified new personal property is located by February 20

of each year. However, if February 20 of a year is a Saturday,

Sunday, or legal holiday, the delivery deadline for that year is

the next day that is not a Saturday, Sunday, or legal holiday. For

purposes of a combined document delivered by the United States

Postal Service, the delivery is timely if the postmark date is on

or before the delivery deadline prescribed in this subdivision and

the combined document is received by the assessor of the township

or city not later than 7 days after that delivery deadline. If the

combined document prescribed in this section is not timely

delivered to the assessor of the township or city, a late

application may be filed directly with the March board of review

before its final adjournment by submitting the combined document

prescribed in this section and offering sufficient evidence of good

cause for the late filing, such as sufficient evidence of the

untimely death or serious illness of an accountant or other

individual employed to prepare the combined document. The board of

review shall not accept a filing after adjournment of its March

meeting.

(d) The assessor shall transmit to the department of treasury

the information contained in the combined document filed under this

section, and other parcel information required by the department of

treasury, in the form and manner prescribed by the department of

treasury by no later than April 1.

(e) A person claiming an exemption under this section shall

rescind the claim of exemption by December 31 of the year in which

exempted property is no longer eligible for the exemption by filing

with the assessor of the township or city a rescission affidavit in

a form prescribed by the department of treasury.

(f) The assessor of the township or city shall annually

transmit the rescission affidavits filed, or the information

contained in the rescission affidavits filed, under this section to

the department of treasury in the form and in the manner prescribed

by the department of treasury no later than April 1.

(3) If the assessor of the township or city believes that

personal property for which the form claiming an exemption is

timely filed ~~by February 20~~ each year under subsection (2)(c) is

not qualified new personal property or the form filed was

incomplete, the assessor may deny that claim for exemption by

notifying the person that filed the form in writing of the reason

for the denial and advising the person that the denial shall be

appealed to the board of review under section 30 by filing a

combined document as prescribed under subsection (2). If the denial

is issued after the first meeting of the March board of review that

follows the organizational meeting, the appeal of the denial is

either to the March board of review or the Michigan tax tribunal by

filing a petition and a completed combined document as prescribed

under subsection (2), within 35 days of the denial notice. The

assessor may deny a claim for exemption under this subsection for

the current year only. If the assessor denies a claim for

exemption, the assessor shall remove the exemption of that personal

property and amend the tax roll to reflect the denial and the local

treasurer shall within 30 days of the date of the denial issue a

corrected tax bill for any additional taxes.

(4) A person claiming an exemption for qualified new personal

property exempt under this section shall maintain books and records

and shall provide access to those books and records as provided in

section 22.

(5) If a person fraudulently claims an exemption for personal

property under this section, that person is subject to the

penalties provided for in section 21(2).

(6) For 2016 only, if an owner of qualified new personal

property did not file form 5278 by February 22, 2016 or filed an

incomplete form 5278 by February 22, 2016 to claim the exemption

under this section with the assessor of the city or township in

which the qualified new personal property is located, that owner

may file form 5278 with the assessor of the city or township in

which the qualified new personal property is located no later than

May 31, 2016. If the assessor determines that the property

qualifies for the exemption under this section, the assessor shall

immediately amend the assessment roll to reflect the exemption. The

assessor of the township or city shall transmit the affidavits

filed, or the information contained in the affidavits filed, under

this section, and other parcel information required by the

department of treasury, to the department of treasury in the form

and in the manner prescribed by the department of treasury no later

than June 7, 2016. The owner shall still be required to meet all

deadlines required under section 7 of the state essential services

assessment act, 2014 PA 92, MCL 211.1057. If the assessor of the

township or city believes that personal property for which an

affidavit claiming an exemption filed under this subsection by May

31, 2016 is not qualified new personal property, the assessor may

deny that claim for exemption by notifying the person that filed

the affidavit in writing of the reason for the denial and advising

the person that the denial may be appealed to the Michigan tax

tribunal within 35 days of the date of the denial.

(7) For 2017 only, if an owner of qualified new personal

property did not file the combined document by February 21, 2017 to

claim the exemption under this section with the assessor of the

city or township in which the qualified new personal property is

located, that owner may file the combined document with the

assessor of the city or township in which the qualified new

personal property is located no later than May 31, 2017. If the

assessor determines that the property qualifies for the exemption

under this section, the assessor shall immediately amend the

assessment roll to reflect the exemption. The assessor of the

township or city shall transmit the combined document filed, or the

information contained in the combined document filed, under this

section, and other parcel information required by the department of

treasury, to the department of treasury in the form and in the

manner prescribed by the department of treasury no later than June

9, 2017. The owner shall still meet all deadlines required under

section 7 of the state essential services assessment act, 2014 PA

92, MCL 211.1057. If the assessor of the township or city believes

that personal property for which a combined document claiming an

exemption filed under this subsection by May 31, 2017 is not

qualified new personal property, the assessor may deny that claim

for exemption by notifying the person that filed the combined

document in writing of the reason for the denial and advising the

person that the denial may be appealed to the Michigan tax tribunal

within 35 days of the date of the denial.

(8) As used in this section:

(a) "Affiliated person" means a sole proprietorship,

partnership, limited liability company, corporation, association,

flow-through entity, member of a unitary business group, or other

entity related to a person claiming an exemption under this

section.

(b) "Direct integrated support" means any of the following:

(i) Research and development related to goods produced in

industrial processing and conducted in furtherance of that

industrial processing.

(ii) Testing and quality control functions related to goods

produced in industrial processing and conducted in furtherance of

that industrial processing.

(iii) Engineering related to goods produced in industrial

processing and conducted in furtherance of that industrial

processing.

(iv) Receiving or storing equipment, materials, supplies,

parts, or components for industrial processing, or scrap materials

or waste resulting from industrial processing, at the industrial

processing site or at another site owned or leased by the owner or

lessee of the industrial processing site.

(v) Storing of finished goods inventory if the inventory was

produced by a business engaged primarily in industrial processing

and if the inventory is stored either at the site where it was

produced or at another site owned or leased by the business that

produced the inventory.

(vi) Sorting, distributing, or sequencing functions that

optimize transportation and just-in-time inventory management and

material handling for inputs to industrial processing.

personal property located on occupied real property if that

personal property is predominantly used in industrial processing or

direct integrated support. For personal property that is

construction in progress and part of a new facility not in

operation, eligible manufacturing personal property means all

personal property that is part of that new facility if that

personal property will be predominantly used in industrial

processing when the facility becomes operational. Personal property

that is not owned, leased, or used by the person who owns or leases

occupied real property where the personal property is located is

not eligible manufacturing personal property, unless the personal

property is located on the occupied real property to carry on a

current on-site business activity. Personal property that is placed

on occupied real property solely to qualify the personal property

for an exemption under this section or section 9n is not eligible

manufacturing personal property. Utility personal property as

described in section 34c(3)(e) and personal property used in the

generation, transmission, or distribution of electricity for sale

are not eligible manufacturing personal property. Personal property

located on occupied real property is predominantly used in

industrial processing or direct integrated support if the result of

the following calculation is more than 50%:

(i) Multiply the original cost of all personal property that

is subject to the collection of taxes under this act and all

personal property that is exempt from the collection of taxes under

sections 7k, 9b, 9f, 9n, and 9o and this section that is located on

that occupied real property and that is not construction in

progress by its percentage of use in industrial processing or in

direct integrated support. For an item of personal property that is

used in industrial processing, its percentage of use in industrial

processing shall equal the percentage of the exemption the property

would be eligible for under section 4t of the general sales tax

act, 1933 PA 167, MCL 205.54t, or section 4o of the use tax act,

1937 PA 94, MCL 205.94o. Utility personal property as described in

section 34c(3)(e) and personal property used in the generation,

transmission, or distribution of electricity for sale is not

included in this calculation.

(ii) Divide the result of the calculation under subparagraph

(i) by the total original cost of all personal property that is

subject to the collection of taxes under this act and all personal

property that is exempt from the collection of taxes under sections

7k, 9b, 9f, 9n, and 9o and this section that is located on that

occupied real property and that is not construction in progress.

Utility personal property as described in section 34c(3)(e) and

personal property used in the generation, transmission, or

distribution of electricity for sale is not included in this

calculation.

(d) "Fair market value" means the fair market value of

personal property at the time of acquisition by the first owner,

including the cost of freight, sales tax, installation, and other

capitalized costs, except capitalized interest. There is a

rebuttable presumption that the acquisition price paid by the first

owner for personal property, and any costs of freight, sales tax,

installation, and other capitalized costs, except capitalized

interest, reflect the fair market value.

(e) "Industrial processing" means that term as defined in

section 4t of the general sales tax act, 1933 PA 167, MCL 205.54t,

or section 4o of the use tax act, 1937 PA 94, MCL 205.94o.

Industrial processing does not include the generation,

transmission, or distribution of electricity for sale.

(f) "New personal property" means property that was initially

placed in service in this state or outside of this state after

December 31, 2012 or that was construction in progress on or after

December 31, 2012 that had not been placed in service in this state

or outside of this state before 2013.

(g) "Occupied real property" means any of the following:

(i) A parcel of real property that is entirely owned, leased,

or otherwise occupied by a person claiming an exemption under this

section or under section 9n.

(ii) Contiguous parcels of real property that are entirely

owned, leased, or otherwise occupied by a person claiming an

exemption under this section or under section 9n and that host a

single, integrated business operation engaged primarily in

industrial processing, direct integrated support, or both. A

business operation is not engaged primarily in industrial

processing, direct integrated support, or both if it engages in

significant business activities that are not directly related to

industrial processing or direct integrated support. Contiguity is

not broken by a boundary between local tax collecting units, a

road, a right-of-way, or property purchased or taken under

condemnation proceedings by a public utility for power transmission

lines if the 2 parcels separated by the purchased or condemned

property were a single parcel prior to the sale or condemnation. As

used in this subparagraph, "single, integrated business operation"

means a company that combines 1 or more related operations or

divisions and operates as a single business unit.

(iii) The portion of a parcel of real property that is owned,

leased, or otherwise occupied by a person claiming the exemption

under this section or under section 9n or by an affiliated person.

(h) "Original cost" means the fair market value of personal

property at the time of acquisition by the first owner. There is a

rebuttable presumption that the acquisition price paid by the first

owner for personal property reflects the original cost of that

personal property. The department of treasury may provide

guidelines for 1 or more of the following circumstances:

(i) Determining original cost of personal property when the

actual acquisition price paid by the first owner for personal

property is not determinative of the original cost of that personal

property.

(ii) Estimating original cost of personal property when the

actual acquisition price paid by the first owner for the personal

property is unknown.

(iii) Adjusting original cost of personal property when the

personal property is idle, is obsolete or has material

obsolescence, or is surplus.

(i) "Person" means an individual, partnership, corporation,

association, limited liability company, or any other legal entity.

(j) "Qualified new personal property" means property that

meets all of the following conditions:

(i) Is eligible manufacturing personal property.

(ii) Is new personal property.

Sec. 9n. (1) Beginning December 31, 2015 and each year

thereafter, qualified previously existing personal property for

which an exemption has been properly claimed under subsection (2)

is exempt from the collection of taxes under this act.

(2) A person shall claim the exemption under this section and

section 9m by filing each year a combined document that includes:

the form to claim the exemption under this section and section 9m,

a report of the fair market value and year of acquisition by the

first owner of qualified previously existing personal property, and

for any year before 2023, a statement under section 19. All of the

following apply to a claim of the exemption under this section:

(a) The combined document shall be in a form and manner

prescribed by the department of treasury.

(b) Leasing companies are not eligible to receive the

exemption under this section and may not use the combined document

prescribed in this section. With respect to personal property that

is the subject of a lease agreement, regardless of whether the

agreement constitutes a lease for financial or tax purposes, all of

the following apply:

(i) If the personal property is eligible manufacturing

personal property, the lessee and lessor may elect that the lessee

report the leased personal property on the combined document.

(ii) An election made by the lessee and the lessor under this

subdivision shall be made in a form and manner approved by the

department.

(iii) Absent an election, the personal property shall be

reported by the lessor on the personal property statement unless

the exemption for eligible manufacturing personal property is

claimed by the lessee on the combined document.

completed and delivered to the assessor of the township or city in

which the qualified previously existing personal property is

located by February 20 of each year. However, if February 20 of a

year is a Saturday, Sunday, or legal holiday, the delivery deadline

for that year is the next day that is not a Saturday, Sunday, or

legal holiday. For purposes of a combined document delivered by the

United States Postal Service, the delivery is timely if the

postmark date is on or before the delivery deadline prescribed in

this subdivision and the combined document is received by the

assessor of the township or city not later than 7 days after that

delivery deadline. If the combined document prescribed in this

section is not timely delivered to the assessor of the township or

city, a late application may be filed directly with the March board

of review before its final adjournment by submitting the combined

document prescribed in this section and offering sufficient

evidence of good cause for the late filing, such as sufficient

evidence of the untimely death or serious illness of an accountant

or other individual employed to prepare the combined document. The

board of review shall not accept a filing after adjournment of its

March meeting.

(d) The assessor shall transmit to the department of treasury

the information contained in the combined document filed under this

section, and other parcel information required by the department of

treasury and in the manner prescribed by the department of treasury

no later than April 1.

(e) A person claiming an exemption under this section shall

rescind the claim of exemption by December 31 of the year in which

exempted property is no longer eligible for the exemption by filing

with the assessor of the township or city a rescission affidavit in

a form prescribed by the department of treasury.

(f) The assessor of the township or city shall annually

transmit the rescission affidavits filed, or the information

contained in the rescission affidavits filed, under this section to

the department of treasury in the form and in the manner prescribed

by the department of treasury no later than April 1.

(3) If the assessor of the township or city believes that

personal property for which the form claiming an exemption is

timely filed ~~by February 20~~ each year under subsection (2)(c) is

not qualified previously existing personal property or the form

filed was incomplete, the assessor may deny that claim for

exemption by notifying the person that filed the form in writing of

the reason for the denial and advising the person that the denial,

shall be appealed to the board of review under section 30 by filing

a combined document as prescribed under subsection (2). If the

denial is issued after the first meeting of the March board of

review that follows the organizational meeting, the appeal of the

denial is either to the March board of review or the Michigan tax

tribunal by filing a petition and a completed combined document as

prescribed under subsection (2), within 35 days of the denial

notice. The assessor may deny a claim for exemption under this

subsection for the current year only. If the assessor denies a

claim for exemption, the assessor shall remove the exemption of

that personal property and amend the tax roll to reflect the denial

and the local treasurer shall within 30 days of the date of the

denial issue a corrected tax bill for any additional taxes.

(4) A person claiming an exemption for qualified previously

existing personal property exempt under this section shall maintain

books and records and shall provide access to those books and

records as provided in section 22.

(5) If a person fraudulently claims an exemption for personal

property under this section, that person is subject to the

penalties provided for in section 21(2).

(6) For 2016 only, if an owner of qualified previously

existing personal property did not file form 5278 by February 22,

2016 or filed an incomplete form 5278 by February 22, 2016 to claim

the exemption under this section with the assessor of the city or

township in which the qualified previously existing personal

property is located, that owner may file form 5278 with the

assessor of the city or township in which the qualified previously

existing personal property is located no later than May 31, 2016.

If the assessor determines the property qualifies for the exemption

under this section, the assessor shall immediately amend the

assessment roll to reflect the exemption. The assessor of the

township or city shall transmit the affidavits filed, or the

information contained in the affidavits filed, under this section,

and other parcel information required by the department of

treasury, to the department of treasury in the form and in the

manner prescribed by the department of treasury no later than June

7, 2016. The owner shall still be required to meet all deadlines

required under section 7 of the state essential services assessment

act, 2014 PA 92, MCL 211.1057. If the assessor of the township or

city believes that personal property for which an affidavit

claiming an exemption filed under this subsection by May 31, 2016

is not qualified previously existing personal property, the

assessor may deny that claim for exemption by notifying the person

that filed the affidavit in writing of the reason for the denial

and advising the person that the denial may be appealed to the

Michigan tax tribunal within 35 days of the date of the denial.

(7) For 2017 only, if an owner of qualified previously

existing personal property did not file the combined document by

February 21, 2017 to claim the exemption under this section with

the assessor of the city or township in which the qualified

previously existing personal property is located, that owner may

file the combined document with the assessor of the city or

township in which the qualified previously existing personal

property is located no later than May 31, 2017. If the assessor

determines the property qualifies for the exemption under this

section, the assessor shall immediately amend the assessment roll

to reflect the exemption. The assessor of the township or city

shall transmit the combined document filed, or the information

contained in the combined document filed, under this section, and

other parcel information required by the department of treasury, to

the department of treasury in the form and in the manner prescribed

by the department of treasury no later than June 9, 2017. The owner

shall still meet all deadlines required under section 7 of the

state essential services assessment act, 2014 PA 92, MCL 211.1057.

If the assessor of the township or city believes that personal

property for which a combined document claiming an exemption filed

under this subsection by May 31, 2017 is not qualified previously

existing personal property, the assessor may deny that claim for

exemption by notifying the person that filed the combined document

in writing of the reason for the denial and advising the person

that the denial may be appealed to the Michigan tax tribunal within

35 days of the date of the denial.

(8) As used in this section:

(a) "Direct integrated support", "eligible manufacturing

personal property", "fair market value", and "industrial

processing" mean those terms as defined in section 9m.

(b) "Person" means an individual, partnership, corporation,

association, limited liability company, or any other legal entity.

personal property that meets both of the following conditions:

(i) Is eligible manufacturing personal property.

(ii) Was first placed in service within this state or outside

this state more than 10 years before the current calendar year.

Sec. 9o. (1) Beginning December 31, 2013, eligible personal

property for which an exemption has been properly claimed under

this section is exempt from the collection of taxes under this act.

(2) An owner of eligible personal property shall claim the

exemption under this section by annually filing ~~an affidavit~~ a

statement with the local tax collecting unit in which the eligible

personal property is located not later than February 10 20 in each

tax year or, if February 20 is a Saturday, Sunday, or legal

holiday, not later than the next day that is not a Saturday,

Sunday, or legal holiday. ~~The affidavit~~ For purposes of a statement

delivered by the United States Postal Service, the filing is timely

if the postmark date is on or before the filing deadline prescribed

in this subsection and the statement is received by the local tax

collecting unit not later than 7 days after that filing deadline.

If the statement is not timely filed with the local tax collecting

unit, a late submission may be filed directly with the March board

of review before its final adjournment by submitting the statement

prescribed in this subsection and offering sufficient evidence of

good cause for the late filing, such as sufficient evidence of the

untimely death or serious illness of an accountant or other

individual employed to help prepare the statement. The board of

review shall not accept a filing after adjournment of its March

meeting. A statement filed under this subsection shall be in a form

prescribed by the state tax commission and shall include any

address where any property owned by, leased to, or in the

possession of that owner or a related entity is located within that

local tax collecting unit. The ~~affidavit~~ statement shall require

the owner to attest that the combined true cash value of all

industrial personal property and commercial personal property in

that local tax collecting unit owned by, leased to, or in the

possession of that owner or a related entity on December 31 of the

immediately preceding year is less than $80,000.00.

(3) If ~~an affidavit~~ a statement claiming the exemption under

this section is filed as provided in subsection (2), the owner of

that eligible personal property is not required to ~~also~~ file a

statement under section 19. ~~in that tax year.~~

(4) A person who claims an exemption for eligible personal

property under this section shall maintain books and records and

shall provide access to those books and records as provided in

section 22.

(5) If the assessor of the local tax collecting unit believes

that personal property for which ~~an affidavit~~ a statement claiming

an exemption is timely and properly filed under subsection (2) is

not eligible personal property, the assessor may deny that claim

for exemption by notifying the person that filed the ~~affidavit~~

statement in writing of the reason for the denial and advising the

person that the denial may be appealed to the board of review under

section 30 ~~or 53b~~ during that tax year. The assessor may deny a

claim for exemption for the current year and for the 3 immediately

preceding calendar years. If the assessor denies a claim for

exemption, the assessor shall remove the exemption of that personal

property and, if the tax roll is in the local tax collecting unit's

possession, amend the tax roll to reflect the denial and the local

treasurer shall within 30 days of the date of the denial issue a

corrected tax bill for any additional taxes with interest at the

rate of 1% per month or fraction of a month and penalties computed

from the date the taxes were last payable without interest or

penalty. If the tax roll is in the county treasurer's possession,

the tax roll shall be amended to reflect the denial and the county

treasurer shall within 30 days of the date of the denial prepare

and submit a supplemental tax bill for any additional taxes,

together with interest at the rate of 1% per month or fraction of a

month and penalties computed from the date the taxes were last

payable without interest or penalty. Interest on any tax set forth

in a corrected or supplemental tax bill shall again begin to accrue

60 days after the date the corrected or supplemental tax bill is

issued at the rate of 1% per month or fraction of a month. Taxes

levied in a corrected or supplemental tax bill shall be returned as

delinquent on the March 1 in the year immediately succeeding the

year in which the corrected or supplemental tax bill is issued.

(6) If a person fraudulently claims an exemption for personal

property under this section, that person is subject to the

penalties provided for in section 21(2).

~~(7) For 2014 only, if an owner of eligible personal property~~

~~did not timely file an affidavit to claim the exemption under this~~

~~section, that owner may file an appeal with the March 2014 board of~~

~~review to claim the exemption.~~

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

(a) "Commercial personal property" means personal property

that is classified as commercial personal property under section

34c or would be classified as commercial personal property under

section 34c if not exempt from the collection of taxes under this

act under this section or section 9m or 9n.

(b) "Control", "controlled by", and "under common control

with" mean the possession of the power to direct or cause the

direction of the management and policies of a related entity,

directly or indirectly, whether derived from a management position,

official office, or corporate office held by an individual; by an

ownership interest, beneficial interest, or equitable interest; or

by contractual agreement or other similar arrangement. There is a

rebuttable presumption that control exists if any person, directly

or indirectly, owns, controls, or holds the power to vote, directly

or by proxy, 10% or more of the ownership interest of any other

person or has contributed more than 10% of the capital of the other

person. Indirect ownership includes ownership through attribution

or through 1 or more intermediary entities.

of the following conditions:

(i) Is industrial personal property or commercial personal

property.

(ii) The combined true cash value of all industrial personal

property and commercial personal property in that local tax

collecting unit owned by, leased to, or in the possession of the

person claiming an exemption under this section or a related entity

on December 31 of the immediately preceding year is less than

$80,000.00.

(iii) Is not leased to or used by a person that previously

owned the property or a person that, directly or indirectly,

controls, is controlled by, or is under common control with the

person that previously owned the property.

(d) "Industrial personal property" means personal property

that is classified as industrial personal property under section

34c or would be classified as industrial personal property under

section 34c if not exempt from the collection of taxes under this

act under this section or section 9m or 9n.

(e) "Person" means an individual, partnership, corporation,

association, limited liability company, or any other legal entity.

(f) "Related entity" means a person that, directly or

indirectly, controls, is controlled by, or is under common control

with the person claiming an exemption under this section.

Sec. 19. (1) A supervisor or other assessing officer, as soon

as possible after entering upon the duties of his or her office or

as required under the provisions of any charter that makes special

provisions for the assessment of property, shall ascertain the

taxable property in his or her assessing district, the person to

whom it should be assessed, and that person's residence.

(2) Except as otherwise provided in section 9m, 9n, or 9o, the

supervisor or other assessing officer shall require any person whom

he or she believes has personal property in their possession to

make a statement of all the personal property of that person

whether owned by that person or held for the use of another to be

completed and delivered to the supervisor or assessor by February

20 of each year, or, if February 20 of a year is a Saturday,

Sunday, or legal holiday, the next day that is not a Saturday,

Sunday, or legal holiday of that year. For purposes of a statement

delivered by the United States Postal Service, the delivery is

timely if the postmark date is on or before the delivery deadline

prescribed in this subsection and the statement is received by the

supervisor or other assessing officer not later than 7 days after

that delivery deadline. If the statement is not timely delivered to

the supervisor or other assessing officer, a late submission may be

filed directly with the March board of review before its final

adjournment by submitting the statement prescribed in this

subsection and offering sufficient evidence of good cause for the

late filing, such as sufficient evidence of the untimely death or

serious illness of an accountant or other individual employed to

prepare the statement. The board of review shall not accept a

filing after adjournment of its March meeting. A notice the

supervisor or other assessing officer provides regarding ~~that~~ the

statement required under this subsection shall also do all of the

following:

(a) Notify the person to whom such notice is given of the

exemptions available under sections 9m, 9n, and 9o.

(b) Explain where information about those exemptions, the

forms and requirements for claiming those exemptions, and the forms

for the statement otherwise required under this section are

available.

year.

(3) If a supervisor, an assessing officer, a county tax or

equalization department provided for in section 34, or the state

tax commission considers it necessary to require from any person a

statement of real property assessable to that person, it shall

notify the person, and that person shall submit the statement.

(4) A local tax collecting unit may provide for the electronic

filing of the statement required under subsection (2) or (3).

(5) A statement under subsection (2) or (3) shall be in a form

prescribed by the state tax commission. If a local tax collecting

unit has provided for electronic filing of the statement under

subsection (4), the filing format shall be prescribed by the state

tax commission. The state tax commission shall not prescribe more

than 1 format for electronically filing a statement under

subsection (2) or more than 1 format for electronically filing a

statement under subsection (3).

(6) A statement under subsection (2) or (3) shall be signed

manually, by facsimile, or electronically. A supervisor or assessor

shall not require that a statement required under subsection (2) or

(3) be filed by February 20 of each year.

(7) A supervisor or assessor shall not accept a statement

under subsection (2) or (3) as final or sufficient if that

statement is not in the proper form or does not contain a manual,

facsimile, or electronic signature. A supervisor or assessor shall

preserve a statement that is not in the proper form or is not

signed as in other cases, and that statement may be used to make

the assessment and as evidence in any proceeding regarding the

assessment of the person furnishing that statement.

(8) An electronic or facsimile signature, for a statement

required under this section, or a statement required under section

9o, or a combined document required under section 9m or 9n, or

under section 7 of the state essential services assessment act,

2014 PA 92, MCL 211.1057, shall be accepted by a local tax

collecting unit. ~~using a procedure prescribed by the state tax~~

~~commission.~~

(9) The department of treasury's use of a statement, or

information on a statement, provided under this subsection is

subject to section 28(1)(f) of 1941 PA 122, MCL 205.28.

Sec. 53b. (1) If there has been a qualified error, the

qualified error shall be verified by the local assessing officer

and approved by the board of review. Except as otherwise provided

in subsection ~~(9),~~ (7), the board of review shall meet for the

purposes of this section on Tuesday following the second Monday in

December and on Tuesday following the third Monday in July. If

approved, the board of review shall file an affidavit within 30

days relative to the qualified error with the proper officials and

all affected official records shall be corrected. If the qualified

error results in an overpayment or underpayment, the rebate,

including any interest paid, shall be made to the taxpayer or the

taxpayer shall be notified and payment made within 30 days of the

notice. A rebate shall be without interest. The treasurer in

possession of the appropriate tax roll may deduct the rebate from

the appropriate tax collecting unit's subsequent distribution of

taxes. The treasurer in possession of the appropriate tax roll

shall bill to the appropriate tax collecting unit the tax

collecting unit's share of taxes rebated. Except as otherwise

provided in ~~subsections~~ subsection (6) ~~and (8)~~ and section 27a(4),

a correction under this subsection may be made for the current year

and the immediately preceding year only.

(2) Action pursuant to subsection (1) may be initiated by the

taxpayer or the assessing officer.

(3) The board of review meeting in July and December shall

meet only for the purpose described in subsection (1) and to hear

appeals provided for in sections 7u, 7cc, 7ee, and 7jj. ~~, and 9o.~~

If an exemption under section 7u is approved, the board of review

shall file an affidavit with the proper officials involved in the

assessment and collection of taxes and all affected official

records shall be corrected. If an appeal under section 7cc, 7ee, or

7jj ~~, or 9o~~ results in a determination that an overpayment has been

made, the board of review shall file an affidavit and a rebate

shall be made at the times and in the manner provided in subsection

(1). Except as otherwise provided in sections 7cc, 7ee, and 7jj,

~~and 9o,~~ a correction under this subsection shall be made for the

year in which the appeal is made only. If the board of review

approves an exemption or provides a rebate for property under

section 7cc, 7ee, or 7jj as provided in this subsection, the board

of review shall require the owner to execute the affidavit provided

for in section 7cc, 7ee, or 7jj and shall forward a copy of any

section 7cc affidavits to the department of treasury.

(4) If an exemption under section 7cc is approved by the board

of review under this section, the provisions of section 7cc apply.

If an exemption under section 7cc is not approved by the board of

review under this section, the owner may appeal that decision in

writing to the department of treasury within 35 days of the board

of review's denial and the appeal shall be conducted as provided in

section 7cc(8).

(5) An owner or assessor may appeal a decision of the board of

review under this section regarding an exemption under section 7ee

or 7jj to the residential and small claims division of the Michigan

tax tribunal. An owner is not required to pay the amount of tax in

dispute in order to receive a final determination of the

residential and small claims division of the Michigan tax tribunal.

However, interest and penalties, if any, shall accrue and be

computed based on interest and penalties that would have accrued

from the date the taxes were originally levied as if there had not

been an exemption.

(6) A correction under this section that approves a principal

residence exemption pursuant to section 7cc may be made for the

year in which the appeal was filed and the 3 immediately preceding

tax years.

~~(7) For the appeal of a denial of a claim of exemption for~~

~~personal property under section 9o, if an exemption is approved,~~

~~the board of review shall remove the personal property from the~~

~~assessment roll.~~

~~(8) If an exemption for personal property under section 9o is~~

~~approved, the board of review shall file an affidavit with the~~

~~proper officials involved in the assessment and collection of taxes~~

~~and all affected official records shall be corrected. If the board~~

~~of review does not approve an exemption under section 9o, the~~

~~person claiming the exemption for that personal property may appeal~~

~~that decision in writing to the Michigan tax tribunal. A correction~~

~~under this subsection that approves an exemption under section 9o~~

~~may be made for the year in which the appeal was filed and the~~

~~immediately preceding 3 tax years.~~

(7) ~~(9)~~ The governing body of the city or township may

authorize, by adoption of an ordinance or resolution, 1 or more of

the following alternative meeting dates for the purposes of this

section:

(a) An alternative meeting date during the week of the second

Monday in December.

(b) An alternative meeting date during the week of the third

Monday in July.

(8) ~~(10)~~ As used in this section, "qualified error" means 1 or

more of the following:

(a) A clerical error relative to the correct assessment

figures, the rate of taxation, or the mathematical computation

relating to the assessing of taxes.

(b) A mutual mistake of fact.

section 7hh(3)(b).

(d) An error of measurement or calculation of the physical

dimensions or components of the real property being assessed.

(e) An error of omission or inclusion of a part of the real

property being assessed.

(f) An error regarding the correct taxable status of the real

property being assessed.

(g) An error made by the taxpayer in preparing the statement

of assessable personal property under section 19.

(h) An error made in the denial of a claim of exemption for

personal property under section 9o.

Enacting section 1. This amendatory act takes effect December

31, 2017.

Enacting section 2. This amendatory act does not take effect

unless all of the following bills of the 99th Legislature are

enacted into law:

(a) Senate Bill No._571