SB-1111, As Passed Senate, April 20, 2006
March 2, 2006, Introduced by Senators BROWN, HAMMERSTROM, CROPSEY, JELINEK, BIRKHOLZ, SIKKEMA, GOSCHKA, GEORGE, SANBORN, PATTERSON, CASSIS, McMANUS, ALLEN, BISHOP, JOHNSON and VAN WOERKOM and referred to the Committee on Economic Development, Small Business and Regulatory Reform.
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
governmental units; to provide for the exemption from certain
taxes; to levy and collect a specific tax upon the owners of
certain facilities; to impose and provide for the disposition of an
administrative fee; 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 officers of local governmental units; and to provide
penalties,"
by amending section 2 (MCL 207.552), as amended by 2005 PA 267.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 2. (1) "Commission" means the state tax commission
created by 1927 PA 360, MCL 209.101 to 209.107.
(2) "Facility" means either a replacement facility, a new
facility, or, if applicable by its usage, a speculative building.
(3) "Replacement facility" means 1 of the following:
(a) In the case of a replacement or restoration that occurs on
the same or contiguous land as that which is replaced or restored,
industrial property that is or is to be acquired, constructed,
altered, or installed for the purpose of replacement or restoration
of obsolete industrial property together with any part of the old
altered property that remains for use as industrial property after
the replacement, restoration, or alteration.
(b) In the case of construction on vacant noncontiguous land,
property that is or will be used as industrial property that is or
is to be acquired, constructed, transferred, or installed for the
purpose of being substituted for obsolete industrial property if
the obsolete industrial property is situated in a plant
rehabilitation district in the same city, village, or township as
the land on which the facility is or is to be constructed and
includes the obsolete industrial property itself until the time as
the substituted facility is completed.
(4) "New facility" means new industrial property other than a
replacement facility to be built in a plant rehabilitation district
or industrial development district.
(5) "Local governmental unit" means a city, village, or
township located in this state.
(6) "Industrial property" means land improvements, buildings,
structures, and other real property, and machinery, equipment,
furniture, and fixtures or any part or accessory whether completed
or in the process of construction comprising an integrated whole,
the primary purpose and use of which is the engaging in a high-
technology activity, operation of a logistical optimization center,
operation of qualified commercial activity, the manufacture of
goods or materials, creation or synthesis of biodiesel fuel, or the
processing of goods and materials by physical or chemical change;
property acquired, constructed, altered, or installed due to the
passage of proposal A in 1976; the operation of a hydro-electric
dam by a private company other than a public utility; or
agricultural processing facilities. Industrial property includes
facilities related to a manufacturing operation under the same
ownership, including, but not limited to, office, engineering,
research and development, warehousing, or parts distribution
facilities. Industrial property also includes research and
development laboratories of companies other than those companies
that manufacture the products developed from their research
activities and research development laboratories of a manufacturing
company that are unrelated to the products of the company. For
applications approved by the legislative body of a local
governmental unit between June 30, 1999 and December 31, 2007,
industrial property also includes an electric generating plant that
is not owned by a local unit of government, including, but not
limited to, an electric generating plant fueled by biomass.
Industrial property also includes convention and trade centers over
250,000 square feet in size. Industrial property also includes a
federal reserve bank operating under 12 USC 341, located in a city
with a population of 750,000 or more. Industrial property may be
owned or leased. However, in the case of leased property, the
lessee is liable for payment of ad valorem property taxes and shall
furnish proof of that liability. Industrial property does not
include any of the following:
(a) Land.
(b) Property of a public utility other than an electric
generating plant that is not owned by a local unit of government
and for which an application was approved by the legislative body
of a local governmental unit between June 30, 1999 and December 31,
2007.
(c) Inventory.
(7) "Obsolete industrial property" means industrial property
the condition of which is substantially less than an economically
efficient functional condition.
(8) "Economically efficient functional condition" means a
state or condition of property the desirability and usefulness of
which is not impaired due to changes in design, construction,
technology, or improved production processes, or from external
influencing
factors which that
make the property less desirable
and valuable for continued use.
(9) "Research and development laboratories" means building and
structures, including the machinery, equipment, furniture, and
fixtures located in the building or structure, used or to be used
for research or experimental purposes that would be considered
qualified research as that term is used in section 41 of the
internal revenue code, 26 USC 41, except that qualified research
also includes qualified research funded by grant, contract, or
otherwise by another person or governmental entity.
(10) "Manufacture of goods or materials" or "processing of
goods or materials" means any type of operation that would be
conducted by an entity included in the classifications provided by
sector 31-33 — manufacturing, of the North American industry
classification system, United States, 1997, published by the office
of management and budget, regardless of whether the entity
conducting that operation is included in that manual.
(11) "High-technology activity" means that term as defined in
section 3 of the Michigan economic growth authority act, 1995 PA
24, MCL 207.803.
(12) "Logistical optimization center" means a sorting and
distribution center that supports a private passenger motor vehicle
assembly center and its manufacturing process for the purpose of
optimizing transportation, just-in-time inventory management, and
material handling, and to which all of the following apply:
(a) The sorting and distribution center is within 2 miles of a
private passenger motor vehicle assembly center that, together with
supporting facilities, contains at least 800,000 square feet.
(b) The sorting and distribution center contains at least
950,000 square feet.
(c) The sorting and distribution center has applied for an
industrial facilities exemption certificate after June 30, 2005 and
before January 1, 2006.
(d) The private passenger motor vehicle assembly center is
located on land conditionally transferred by a township with a
population of more than 25,000 under 1984 PA 425, MCL 124.21 to
124.30, to a city with a population of more than 100,000 that
levies an income tax under the city income tax act, 1964 PA 284,
MCL 141.501 to 141.787.
(13) "Commercial property" means that term as defined in
section 2 of the obsolete property rehabilitation act, 2000 PA 146,
MCL 125.2782.
(14) "Qualified commercial activity" means commercial property
that meets all of the following:
(a)
An application for an exemption certificate approved by
the
local governmental unit is filed for approval by the state tax
commission
not later than April 30, 2006.
(a) (b)
At least 90% of the property, excluding the
surrounding
green space, is Is used for warehousing, distribution,
and
logistics or logistic purposes
that provide food for
institutional,
restaurant, hospital, or hotel customers or for a
communication service center.
(c)
Is located within a village and is within 15 miles of a
Michigan state border.
(b) (d)
Occupies
1 or more buildings a building or
structures
structure that together are is greater than 300,000
100,000 square feet in size.