HOUSE BILL No. 4621 April 18, 2001, Introduced by Reps. Richardville, Thomas, LaSata, Richner, Cassis, Koetje, Howell, Newell, Frank, Basham, Patterson, Toy, Julian, Kooiman, Vear, Sanborn, Bishop, Mead, DeVuyst, Rivet, Allen, Gilbert, Van Woerkom, Mortimer, Zelenko, Waters, Kolb, Lipsey, Middaugh and Lemmons and referred to the Committee on Commerce. A bill to amend 1992 PA 147, entitled "Neighborhood enterprise zone act," by amending sections 2 and 9 (MCL 207.772 and 207.779), section 9 as amended by 1996 PA 449; and to repeal acts and parts of acts. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 2. As used in this act: 2 (a) "Commission" means the state tax commission created by 3Act No. 360 of the Public Acts of 1927, being sections 209.1014to 209.107 of the Michigan Compiled Laws1927 PA 360, 5 MCL 209.101 TO 209.107. 6 (b) "Condominium unit" means that portion of a structure 7 intended for separate ownership, intended for residential use, 8 and established pursuant to the condominium act,Act No. 59 of9the Public Acts of 1978, being sections 559.101 to 559.275 of the10Michigan Compiled Laws1978 PA 59, MCL 559.101 TO 559.276. 03523'01 JLB 2 1 (c) "Developer" means a person who is the owner of a new 2 facility at the time of construction or of a rehabilitated facil- 3 ity at the time of rehabilitation for which a neighborhood enter- 4 prise zone certificate is applied for or issued. 5 (d) "Local governmental unit" means a QUALIFIED LOCAL GOV- 6 ERNMENTAL UNIT AS THAT TERM IS DEFINED UNDER SECTION 2 OF THE 7 OBSOLETE PROPERTY REHABILITATION ACT, 2000 PA 146, MCL 125.2782. 8city, township, or village that meets all of the applicable fol-9lowing criteria at the time of certification by the Michigan10enterprise zone authority under section 14; or a city that meets113 or more of the applicable following criteria and that has the12largest population of the cities within a metropolitan statisti-13cal area, as designated by the United States bureau of the census14at the time of certification by the Michigan enterprise zone15authority under section 14:16(i) For a city, the following:17(A) Has a population of 10,000 or more according to the most18recent federal decennial census.19(B) Had an average unemployment rate of 8.0% or more during20the most recent calendar year for which the data is available21from the Michigan employment security commission or had a total22millage rate of 84 or more mills levied in the most recent ad23valorem property tax levy.24(C) Had a total millage rate of 63.3 mills or more levied in25the most recent ad valorem property tax levy or levies a city26income tax.03523'01 3 1(D) Has a housing stock of which 60% or more of the units2were built before 1960 as reported in the most recent federal3decennial census.4(E) Has had a percentage increase in state equalized valua-5tion between 1970 and 1990 below 140%.6(F) Had a decline in population of more than 5% between 19707and 1990.8(ii) For a village or township, all of the following:9(A) Has a population of 5,000 or more according to the most10recent federal decennial census.11(B) Had an average unemployment rate of 17% or more during12the most recent calendar year for which the data is available13from the Michigan employment security commission.14(C) Had a total millage rate of 65 mills or more levied in15the most recent ad valorem property tax levy.16(D) Had a decline in population of more than 20% between171970 and 1990.18 (e) "New facility" means a new structure that has as its 19 primary purpose residential housing consisting of 1 or 2 units, 1 20 of which is or will be occupied by an owner as his or her princi- 21 pal residence. New facility includes a new individual condomin- 22 ium unit, in a structure with 1 or more condominium units, that 23 has as its primary purpose residential housing and that is or 24 will be occupied by an owner as his or her principal residence. 25 New facility does not include apartments. 03523'01 4 1 (f) "Neighborhood enterprise zone certificate" or 2 "certificate" means a certificate issued pursuant to sections 4, 3 5, and 6. 4 (g) "Owner" means the record title holder of, or the vendee 5 of the original land contract pertaining to, a new facility or a 6 rehabilitated facility for which a neighborhood enterprise zone 7 certificate is applied for or issued. 8 (h) "Rehabilitated facility" means an existing structure 9 with a current true cash value of $60,000.00 or less per unit 10 that has or will have as its primary purpose residential housing 11 consisting of 1 to 8 units, the owner of which proposes improve- 12 ments that if done by a licensed contractor would cost in excess 13 of $5,000.00 per owner-occupied unit or 50% of the true cash 14 value, whichever is less, or $7,500.00 per nonowner-occupied unit 15 or 50% of the true cash value, whichever is less, and will bring 16 the structure into conformance with minimum local building code 17 standards for occupancy or improve the livability of the units 18 while meeting minimum local building code standards. 19 Rehabilitated facility also includes an individual condominium 20 unit, in a structure with 1 or more condominium units that has as 21 its primary purpose residential housing, the owner of which pro- 22 poses the above described improvements. Rehabilitated facility 23 does not include a facility rehabilitated with the proceeds of an 24 insurance policy for property or casualty loss. 25 Sec. 9. (1) Except as provided in subsection (10), there is 26 levied on the owner of a new facility or a rehabilitated facility 03523'01 5 1 to which a neighborhood enterprise zone certificate is issued a 2 specific tax known as the neighborhood enterprise zone tax. 3 (2) A new facility or a rehabilitated facility for which a 4 neighborhood enterprise zone certificate is in effect, but not 5 the land on which the facility is located, is exempt from ad 6 valorem real property taxesleviedCOLLECTED under the general 7 property tax act,Act No. 206 of the Public Acts of 1893, being8sections 211.1 to 211.157 of the Michigan Compiled Laws1893 9 PA 206, MCL 211.1 TO 211.157. 10 (3) The amount of the neighborhood enterprise zone tax on a 11 new facility is determined each year by multiplying thestate12equalized valuationTAXABLE VALUE of the facility, not including 13 the land, by 1 of the following: 14 (a) For property that would otherwise meet the definition of 15 a homestead under section 7dd ofAct No. 206 of the Public Acts16of 1893, being section 211.7dd of the Michigan Compiled LawsTHE 17 GENERAL PROPERTY TAX ACT, 1893 PA 206, MCL 211.7DD, if that prop- 18 erty was not exempt from ad valorem property taxes under this 19 act, 1/2 of the average rate of taxation levied in this state in 20 the immediately preceding calendar year on homestead property and 21 qualified agricultural property as defined in section 7dd ofAct22No. 206 of the Public Acts of 1893THE GENERAL PROPERTY TAX ACT, 23 1893 PA 206, MCL 211.7DD. However, in 1994 only, the average 24 rate of taxation shall be the average rate of taxation levied in 25 1993 upon all property in this state upon which ad valorem taxes 26 are assessed. 03523'01 6 1 (b) For property that is not a homestead under section 7dd 2 ofAct No. 206 of the Public Acts of 1893THE GENERAL PROPERTY 3 TAX ACT, 1893 PA 206, MCL 211.7DD, 1/2 of the average rate of 4 taxation levied upon commercial, industrial, and utility property 5 upon which ad valorem taxes are assessed as determined for the 6 immediately preceding calendar year by the state board of asses- 7 sors under section 13 ofAct No. 282 of the Public Acts of 1905,8being section 207.13 of the Michigan Compiled Laws1905 PA 282, 9 MCL 207.13. However, in 1994 only, the average rate of taxation 10 shall be the average rate of taxation levied in 1993 upon all 11 property in this state upon which ad valorem taxes are assessed. 12 (4) The amount of the neighborhood enterprise zone tax on a 13 rehabilitated facility is determined each year by multiplying the 14state equalized valuationTAXABLE VALUE of the rehabilitated 15 facility, not including the land, for the tax year immediately 16 preceding the effective date of the neighborhood enterprise zone 17 certificate by the total millsleviedCOLLECTED underAct18No. 206 of the Public Acts of 1893THE GENERAL PROPERTY TAX ACT, 19 1893 PA 206, MCL 211.1 TO 211.157, for the current year by all 20 taxing units within which the rehabilitated facility is located. 21 (5) The neighborhood enterprise zone tax is an annual tax, 22 payable at the same times, in the same installments, and to the 23 same officer or officers as taxesimposedCOLLECTED underAct24No. 206 of the Public Acts of 1893THE GENERAL PROPERTY TAX ACT, 25 1893 PA 206, MCL 211.1 TO 211.157, are payable. Except as other- 26 wise provided in this section, the officer or officers shall 27 disburse the neighborhood enterprise zone tax received by the 03523'01 7 1 officer or officers each year to the state, cities, townships, 2 villages, school districts, counties, and authorities at the same 3 times and in the same proportions as required for the disburse- 4 ment of taxes collected underAct No. 206 of the Public Acts of51893THE GENERAL PROPERTY TAX ACT, 1893 PA 206, MCL 211.1 TO 6 211.157. To determine the proportion for the disbursement of 7 taxes under this subsection and for attribution of taxes under 8 subsection (7) for taxes collected after June 30, 1994, the 9 number of mills levied for local school district operating pur- 10 poses to be used in the calculation shall equal the number of 11 mills for local school district operating purposes levied in 1993 12 minus the number of mills levied under the state education tax 13 act,Act No. 331 of the Public Acts of 1993, being14sections 211.901 to 211.906 of the Michigan Compiled Laws1993 15 PA 331, MCL 211.901 TO 211.906, for the year for which the dis- 16 bursement is calculated. 17 (6) An intermediate school district receiving state aid 18 under sections 56, 62, and 81 of the state school aid act of 19 1979,Act No. 94 of the Public Acts of 1979, being sections20388.1656, 388.1662, and 388.1681 of the Michigan Compiled Laws21 1979 PA 94, MCL 388.1656, 388.1662, AND 388.1681, of the amount 22 that would otherwise be disbursed to or retained by the interme- 23 diate school district, all or a portion, to be determined on the 24 basis of the tax rates being utilized to compute the amount of 25 state aid, shall be paid to the state treasury to the credit of 26 the state school aid fund established by section 11 of article IX 27 of the state constitution of 1963. If and for the period that 03523'01 8 1 the state school aid act of 1979,Act No. 94 of the Public Acts2of 1979, being sections 388.1601 to 388.1772 of the Michigan3Compiled Laws1979 PA 94, MCL 388.1601 TO 388.1772, is amended 4 or its successor act is enacted or amended to include a provision 5 that provides for adjustments in state school aid to account for 6 the receipt of revenues provided under this act in place of 7 exempted ad valorem property tax, revenues required to be remit- 8 ted or returned to the state treasury to the credit of the state 9 school aid fund shall be distributed instead to the intermediate 10 school districts. If the sum of any industrial facility tax 11 levied underAct No. 198 of the Public Acts of 1974, being12sections 207.551 to 207.572 of the Michigan Compiled Laws1974 13 PA 198, MCL 207.551 TO 207.572, the commercial facilities tax 14 levied under the commercial redevelopment act,Act No. 255 of15the Public Acts of 1978, being sections 207.651 to 207.668 of the16Michigan Compiled Laws1978 PA 255, MCL 207.651 TO 207.668, and 17 the neighborhood enterprise zone tax paid to the state treasury 18 to the credit of the state school aid fund that would otherwise 19 be disbursed to the intermediate school district exceeds the 20 amount received by the intermediate school district under 21 sections 56, 62, and 81 ofAct No. 94 of the Public Acts of221979THE STATE SCHOOL AID ACT OF 1979, 1979 PA 94, MCL 388.1656, 23 388.1662, AND 388.1681, the department of treasury shall allocate 24 to each eligible intermediate school district an amount equal to 25 the difference between the sum of the industrial facility tax, 26 the commercial facilities tax, and the neighborhood enterprise 27 zone tax paid to the state treasury to the credit of the state 03523'01 9 1 school aid fund and the amount the intermediate school district 2 received under sections 56, 62, and 81 ofAct No. 94 of the3Public Acts of 1979THE STATE SCHOOL AID ACT OF 1979, 1979 4 PA 94, MCL 388.1656, 388.1662, AND 388.1681. 5 (7) For neighborhood enterprise zone taxes levied after 1993 6 for school operating purposes, the amount that would otherwise be 7 disbursed to a local school district shall be paid instead to the 8 state treasury and credited to the state school aid fund estab- 9 lished by section 11 of article IX of the state constitution of 10 1963. 11 (8) The officer or officers shall send a copy of the amount 12 of disbursement made to each unit under this section to the com- 13 mission on a form provided by the commission. The neighborhood 14 enterprise zone tax is a lien on the real property upon which the 15 new facility or rehabilitated facility subject to the certificate 16 is located until paid. The continuance of a certificate is con- 17 ditional upon the annual payment of the neighborhood enterprise 18 zone tax and the ad valorem tax on the land COLLECTED underAct19No. 206 of the Public Acts of 1893THE GENERAL PROPERTY TAX ACT, 20 1893 PA 206, MCL 211.1 TO 211.157. 21 (9) If payment of the tax under this act is not made by the 22 March 1 following the levy of the tax, the tax shall be turned 23 over to the county treasurer and collected in the same manner as 24 a delinquent tax underAct No. 206 of the Public Acts of 189325 THE GENERAL PROPERTY TAX ACT, 1893 PA 206, MCL 211.1 TO 211.157. 26 (10) A new facility or a rehabilitated facility located in a 27 renaissance zone under the Michigan renaissance zone act,Act03523'01 10 1No. 376 of the Public Acts of 1996, being sections 125.2681 to2125.2696 of the Michigan Compiled Laws1996 PA 376, MCL 125.2681 3 TO 125.2696, is exempt from the neighborhood enterprise zone tax 4 levied under this act to the extent and for the duration provided 5 pursuant toAct No. 376 of the Public Acts of 1996THE MICHIGAN 6 RENAISSANCE ZONE ACT, 1996 PA 376, MCL 125.2681 TO 125.2696, 7 except for that portion of the neighborhood enterprise zone tax 8 attributable to a special assessment or a tax described in sec- 9 tion 7ff(2) of the general property tax act,Act No. 206 of the10Public Acts of 1893, being section 211.7ff of the Michigan11Compiled Laws1893 PA 206, MCL 211.7FF. The neighborhood enter- 12 prise zone tax calculated under this subsection shall be dis- 13 bursed proportionately to the local taxing unit or units that 14 levied the special assessment or the tax described in section 15 7ff(2) ofAct No. 206 of the Public Acts of 1893THE GENERAL 16 PROPERTY TAX ACT, 1893 PA 206, MCL 211.7FF. 17 Enacting section 1. Section 17 of the neighborhood enter- 18 prise zone act, 1992 PA 147, MCL 207.787, is repealed. 03523'01 Final page. JLB