HOUSE BILL No. 4898 June 5, 1997, Introduced by Reps. Baade, Hale, Agee, Voorhees, Hanley and Goschka and referred to the Committee on Urban Policy and Economic Development. A bill to amend 1974 PA 198, entitled "An act to provide for the establishment of plant rehabilitation districts and industrial development districts in local govern- mental units; to provide for the exemption from certain taxes; to levy and collect a specific tax upon the owners of certain facil- ities; to provide for the disposition of the tax; to provide for the obtaining and transferring of an exemption certificate and to prescribe the contents of those certificates; to prescribe the powers and duties of the state tax commission and certain offi- cers of local governmental units; and to provide penalties," by amending section 9 (MCL 207.559), as amended by 1996 PA 513. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 9. (1) The legislative body of the local governmental 2 unit, in its resolution approving an application, shall set forth 3 a finding and determination that the granting of the industrial 4 facilities exemption certificate, considered together with the 5 aggregate amount of industrial facilities exemption certificates 6 previously granted and currently in force, shall not have the 7 effect of substantially impeding the operation of the local 03263'97 JLB 2 1 governmental unit or impairing the financial soundness of a 2 taxing unit that levies an ad valorem property tax in the local 3 governmental unit in which the facility is located or to be 4 located. If the state equalized valuation of property proposed 5 to be exempt pursuant to an application under consideration, con- 6 sidered together with the aggregate state equalized valuation of 7 property exempt under certificates previously granted and cur- 8 rently in force, exceeds 5% of the state equalized valuation of 9 the local governmental unit, the commission, with the approval of 10 the state treasurer, shall make a separate finding and shall 11 include a statement in the order approving the industrial facili- 12 ties exemption certificate that exceeding that amount shall not 13 have the effect of substantially impeding the operation of the 14 local governmental unit or impairing the financial soundness of 15 an affected taxing unit. 16 (2) Except for an application for a speculative building, 17 which is governed by subsection (4), the legislative body of the 18 local governmental unit shall not approve an application and the 19 commission shall not grant an industrial facilities exemption 20 certificate unless the applicant complies with all of the follow- 21 ing requirements: 22 (a) The commencement of the restoration, replacement, or 23 construction of the facility occurred not earlier than 12 months 24 before the filing of the application for the industrial facili- 25 ties exemption certificate. If the application is not filed 26 within the 12-month period, the application may be filed within 27 the succeeding 12-month period and the industrial facilities 03263'97 3 1 exemption certificate shall in this case expire 1 year earlier 2 than it would have expired if the application had been timely 3 filed. This subdivision does not apply for applications filed 4 with the local governmental unit after December 31, 1983. 5 (b) For applications made after December 31, 1983, the pro- 6 posed facility shall be located within a plant rehabilitation 7 district or industrial development district that was duly estab- 8 lished in a local governmental unit eligible under this act to 9 establish a district and that was established upon a request 10 filed or by the local governmental unit's own initiative taken 11 before the commencement of the restoration, replacement, or con- 12 struction of the facility. 13 (c) For applications made after December 31, 1983, the com- 14 mencement of the restoration, replacement, or construction of the 15 facility occurred not earlier than 6 months, OR 7 MONTHS IF THE 16 APPLICATION WAS FILED BETWEEN SEPTEMBER 1, 1996 AND OCTOBER 31, 17 1996, before the filing of the application for the industrial 18 facilities exemption certificate. 19 (d) The application relates to a construction, restoration, 20 or replacement program that when completed constitutes a new or 21 replacement facility within the meaning of this act and that 22 shall be situated within a plant rehabilitation district or 23 industrial development district duly established in a local gov- 24 ernmental unit eligible under this act to establish the 25 district. 26 (e) Completion of the facility is calculated to, and will at 27 the time of issuance of the certificate have the reasonable 03263'97 4 1 likelihood to create employment, retain employment, prevent a 2 loss of employment, or produce energy in the community in which 3 the facility is situated. 4 (f) Completion of the facility shall not have the effect of 5 transferring employment from 1 or more local governmental units 6 of this state to the local governmental unit in which the facil- 7 ity is to be located, except that this restriction does not pre- 8 vent the granting of a certificate if the legislative body of 9 each local governmental unit from which employment is to be 10 transferred consents by resolution to the granting of the 11 certificate. If the local governmental unit does not give its 12 consent, a copy of the resolution of denial showing reasons for 13 the denial shall be filed within 20 days after adoption with the 14 department of consumer and industry services. 15 (g) Completion of the facility does not constitute merely 16 the addition of machinery and equipment for the purpose of 17 increasing productive capacity but rather is primarily for the 18 purpose and will primarily have the effect of restoration, 19 replacement, or updating the technology of obsolete industrial 20 property. An increase in productive capacity, even though sig- 21 nificant, is not an impediment to the issuance of an industrial 22 facilities exemption certificate if other criteria in this sec- 23 tion and act are met. This subdivision does not apply to a new 24 facility. 25 (h) The provisions of subdivision (c) do not apply to a new 26 facility located in an existing industrial development district 27 owned by a person who filed an application for an industrial 03263'97 5 1 facilities exemption certificate in April of 1992 if the 2 application was approved by the local governing body and was 3 denied by the state tax commission in April of 1993. 4 (i) The provisions of subdivisions (b) and (c) and 5 section 4(3) do not apply to 1 or more of the following: 6 (i) A facility located in an industrial development district 7 owned by a person who filed an application for an industrial 8 facilities exemption certificate in October 1995 for construction 9 that was commenced in July 1992 in a district that was estab- 10 lished by the legislative body of the local governmental unit in 11 July 1994. An industrial facilities exemption certificate 12 described in this subparagraph shall expire as provided in sec- 13 tion 16(3). 14 (ii) A facility located in an industrial development dis- 15 trict that was established in January 1994 and was owned by a 16 person who filed an application for an industrial facilities 17 exemption certificate in February 1994 if the personal property 18 and real property portions of the application were approved by 19 the legislative body of the local governmental unit and the per- 20 sonal property portion of the application was approved by the 21 state tax commission in December 1994 and the real property por- 22 tion of the application was denied by the state tax commission in 23 December 1994. An industrial facilities exemption certificate 24 described in this subparagraph shall expire as provided in sec- 25 tion 16(3). 26 (iii) A facility located in an industrial development 27 district that was established in December 1995 and was owned by a 03263'97 6 1 person who filed an application for an industrial facilities 2 exemptions certificate in November or December 1995 for construc- 3 tion that was commenced in September 1995. 4 (j) The provisions of subdivision (c) do not apply to any of 5 the following: 6 (i) A new facility located in an existing industrial devel- 7 opment district owned by a person who filed an application for an 8 industrial facilities exemption certificate in October 1993 if 9 the application was approved by the legislative body of the local 10 governmental unit and the real property portion of the applica- 11 tion was denied by the state tax commission in December 1993. 12 (ii) A new facility located in an existing industrial devel- 13 opment district owned by a person who filed an application for an 14 industrial facilities exemption certificate in September 1993 if 15 the personal property portion of the application was approved by 16 the legislative body of the local governmental unit and the real 17 property portion of the application was denied by the legislative 18 body of the local governmental unit in October 1993 and subse- 19 quently approved by the legislative body of the local governmen- 20 tal unit in September 1994. 21 (iii) A facility located in an existing industrial develop- 22 ment district owned by a person who filed an application for an 23 industrial facilities exemption certificate in August 1993 if the 24 application was approved by the local governmental unit in 25 September 1993 and the application was denied by the state tax 26 commission in December 1993. 03263'97 7 1 (iv) A facility located in an existing industrial 2 development district occupied by a person who filed an 3 application for an industrial facilities exemption certificate in 4 June of 1995 if the application was approved by the legislative 5 body of the local governmental unit in October of 1995 for con- 6 struction that was commenced in November or December of 1994. 7 (v) A facility located in an existing industrial development 8 district owned by a person who filed an application for an indus- 9 trial facilities exemption certificate in June of 1995 if the 10 application was approved by the legislative body of the local 11 governmental unit in July of 1995 and the personal property por- 12 tion of the application was approved by the state tax commission 13 in November of 1995. 14 (3) If the replacement facility when completed will not be 15 located on the same premises or contiguous premises as the obso- 16 lete industrial property, then the applicant shall make provision 17 for the obsolete industrial property by demolition, sale, or 18 transfer to another person with the effect that the obsolete 19 industrial property shall within a reasonable time again be 20 subject to assessment and taxation under the general property tax 21 act,Act No. 206 of the Public Acts of 1893, being sections22211.1 to 211.157 of the Michigan Compiled Laws1893 PA 206, MCL 23 211.1 TO 211.157, or be used in a manner consistent with the gen- 24 eral purposes of this act, subject to approval of the 25 commission. 26 (4) The legislative body of the local governmental unit 27 shall not approve an application and the commission shall not 03263'97 8 1 grant an industrial facilities exemption certificate that applies 2 to a speculative building unless the speculative building is or 3 is to be located in a plant rehabilitation district or industrial 4 development district duly established by a local governmental 5 unit eligible under this act to establish a district; the specu- 6 lative building was constructed less than 9 years before the 7 filing of the application for the industrial facilities exemption 8 certificate; the speculative building has not been occupied since 9 completion of construction; and the speculative building other- 10 wise qualifies under subsection (2)(e) and (f) for an industrial 11 facilities exemption certificate. An industrial facilities 12 exemption certificate granted under this subsection shall expire 13 as provided in section 16(3). 14 (5) Not later than September 1, 1989, the commission shall 15 provide to all local assessing units the name, address, and tele- 16 phone number of the person on the commission staff responsible 17 for providing procedural information concerning this act. After 18 October 1, 1989, a local unit of government shall notify each 19 prospective applicant of this information in writing. 20 (6) Notwithstanding any other provision of this act, if on 21 December 29, 1986 a local governmental unit passed a resolution 22 approving an exemption certificate for 10 years for real and per- 23 sonal property but the commission did not receive the application 24 until 1992 and the application was not made complete until 1995, 25 then the commission shall issue, for that property, an industrial 26 facilities exemption certificate that begins December 30, 1987 27 and ends December 30, 1997. The facility described in this 03263'97 9 1 subsection shall be taxed under this act as if it was granted an 2 industrial facilities exemption certificate on December 30, 3 1987. 4 (7) Notwithstanding any other provision of this act, if a 5 local governmental unit passed a resolution approving an indus- 6 trial facilities exemption certificate for a new facility on July 7 8, 1991 but rescinded that resolution and passed a resolution 8 approving an industrial facilities exemption certificate for that 9 same facility as a replacement facility on October 21, 1996, the 10 commission shall issue for that property an industrial facilities 11 exemption certificate that begins December 30, 1991 and ends 12 December 2003. The replacement facility described in this sub- 13 section shall be taxed under this act as if it was granted an 14 industrial facilities exemption certificate on December 30, 15 1991. 03263'97 Final page. JLB