SB-1483, As Passed Senate, December 4, 2008

SUBSTITUTE FOR

SENATE BILL NO. 1483

A bill to amend 1996 PA 376, entitled

"Michigan renaissance zone act,"

by amending sections 8d and 9 (MCL 125.2688d and 125.2689), section

8d as amended by 2008 PA 117 and section 9 as amended by 2007 PA

186.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 8d. (1) The board of the Michigan strategic fund

described in section 4 of the Michigan strategic fund act, 1984 PA

270, MCL 125.2004, may designate not more than 25 35 tool and die

renaissance recovery zones within this state in 1 or more cities,

villages, or townships if that city, village, or township or

combination of cities, villages, or townships consents to the

creation of a recovery zone within their boundaries. A recovery

zone shall have a duration of renaissance zone status for a period

of not less than 5 years and not more than 15 years as determined

by the board of the Michigan strategic fund. If the Michigan

strategic fund determines that the duration of renaissance zone

status for a recovery zone is less than 15 years, then the Michigan

strategic fund, with the consent of the city, village, or township

or combination of cities, villages, or townships in which the

qualified tool and die business is located, may extend the duration

of renaissance zone status for the recovery zone for 1 or more

periods that when combined do not exceed 15 years. Not less than 1

of the recovery zones shall consist of 1 or more qualified tool and

die businesses that have a North American industrial classification

system (NAICS) of 332997.

(2) The board of the Michigan strategic fund may designate a

recovery zone within this state if the recovery zone consists of

not less than 4 and not more than 20 qualified tool and die

businesses at the time of designation. If the board of the Michigan

strategic fund designated 1 or more recovery zones that contain

less than 20 qualified tool and die businesses before December 19,

2005, the board of the Michigan strategic fund may add additional

qualified tool and die businesses to that recovery zone subject to

the limitations contained in this subsection. A recovery zone shall

consist of only qualified tool and die business property. The board

of the Michigan strategic fund may combine existing recovery zones

that are comprised solely of tool and die businesses that are

parties to the same qualified collaborative agreement. Where 2 or

more recovery zones have been combined, the board of the Michigan

strategic fund may continue to designate additional recovery zones,

provided that no more than 25 tool and die recovery zones exist at

1 time.

(3) The board of the Michigan strategic fund may revoke the

designation of all or a portion of a recovery zone with respect to

1 or more qualified tool and die businesses if those qualified tool

and die businesses fail or cease to participate in or comply with a

qualified collaborative agreement. A qualified tool and die

business may enter into another qualified collaborative agreement

once it is designated part of a recovery zone.

(4) One or more qualified tool and die businesses subject to a

qualified collaborative agreement may merge into another group of

qualified tool and die businesses subject to a different qualified

collaborative agreement upon application to and approval by the

Michigan strategic fund.

(5) A qualified tool and die business in a recovery zone may

have a different period of renaissance zone status than other

qualified tool and die businesses in the same recovery zone.

(6) The board of the Michigan strategic fund may modify an

existing recovery zone to add 1 or more qualified tool and die

businesses with the consent of all other qualified tool and die

businesses that are participating in the recovery zone.

(7) The board of the Michigan strategic fund may modify an

existing recovery zone to add additional property under the same

terms and conditions as the existing recovery zone if all of the

following are met:

(a) The additional real property is contiguous to existing

qualified tool and die business property and will become qualified

tool and die business property once it is brought into operation as

determined by the board of the Michigan strategic fund.

(b) The city, village, or township in which the qualified tool

and die business is located consents to the modification.

(8) Beginning on the effective date of the amendatory act that

added this subsection, a recovery zone may include a qualified tool

and die business that has 75 or more full-time employees if that

qualified tool and die business has entered into a written

agreement with the board of the Michigan strategic fund and the

city, village, or township, or a combination of cities, villages,

or townships, in which the qualified tool and die business is

located.

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

(a) "Qualified collaborative agreement" means an agreement

that demonstrates synergistic opportunities, including, but not

limited to, all of the following:

(i) Sales and marketing efforts.

(ii) Development of standardized processes.

(iii) Development of tooling standards.

(iv) Standardized project management methods.

(v) Improved ability for specialized or small niche shops to

develop expertise and compete successfully on larger programs.

(b) "Qualified tool and die business" means a business entity

that meets all of the following:

(i) Has a North American industrial classification system

(NAICS) of 332997, 333511, 333512, 333513, 333514, or 333515; or

has a North American industrial classification system (NAICS) of

337215 and operates a facility within an existing renaissance zone,

which facility is adjacent to real property not located in a

renaissance zone and is located within 1/4 mile of a Michigan

technical education center.

(ii) Has entered into a qualified collaboration agreement as

approved by the Michigan strategic fund consisting of not fewer

than 4 or more than 20 other business entities at the time of

designation that have a North American industrial classification

system (NAICS) of 332997, 333511, 333512, 333513, 333514, or

333515.

(iii) ~~Has~~ Except as otherwise provided by the board of the

Michigan strategic fund, has fewer than 75 full-time employees.

of the following:

(i) Property owned by 1 or more qualified tool and die

businesses and used by those qualified tool and die businesses

primarily for tool and die business operations. Qualified tool and

die business property is used primarily for tool and die business

operations if the qualified tool and die businesses that own the

qualified tool and die business property generate 75% or more of

the qualified tool and die businesses' gross revenue from tool and

die operations that take place on the qualified tool and die

business property at the time of designation.

(ii) Property leased by 1 or more qualified tool and die

businesses for which the qualified tool and die business is liable

for ad valorem property taxes and which is used by those qualified

tool and die businesses primarily for tool and die business

operations. Qualified tool and die business property is used

primarily for tool and die business operations if the qualified

tool and die businesses that lease the qualified tool and die

business property generate 75% or more of the qualified tool and

die businesses' gross revenue from tool and die operations that

take place on the qualified tool and die business property at the

time of designation. The qualified tool and die business shall

furnish proof of its ad valorem property tax liability to the

department of treasury.

Sec. 9. (1) Except as otherwise provided in section 10, an

individual who is a resident of a renaissance zone or a business

that is located and conducts business activity within a renaissance

zone shall receive the exemption, deduction, or credit as provided

in the following for the period provided under section 6(2)(b):

(a) Section 39b of ~~the single business tax act,~~ former 1975 PA

228 ~~, MCL 208.39b,~~ or section 433 of the Michigan business tax act,

2007 PA 36, MCL 208.1433.

(b) Section 31 of the income tax act of 1967, 1967 PA 281, MCL

206.31.

PA 284, MCL 141.635.

(d) Section 5 of the city utility users tax act, 1990 PA 100,

MCL 141.1155.

(2) Except as otherwise provided in section 10, property

located in a renaissance zone is exempt from the collection of

taxes under all of the following:

(a) Section 7ff of the general property tax act, 1893 PA 206,

MCL 211.7ff.

(b) Section 11 of 1974 PA 198, MCL 207.561.

255, MCL 207.662.

(d) Section 21c of the enterprise zone act, 1985 PA 224, MCL

125.2121c.

(e) Section 1 of 1953 PA 189, MCL 211.181.

(f) Section 12 of the technology park development act, 1984 PA

385, MCL 207.712.

(g) Section 51105 of the natural resources and environmental

protection act, 1994 PA 451, MCL 324.51105.

(h) Section 9 of the neighborhood enterprise zone act, 1992 PA

147, MCL 207.779.

(3) ~~During~~ Except for tool and die renaissance recovery zones

that have a duration of less than 15 years, during the last 3 years

that the taxpayer is eligible for an exemption, deduction, or

credit described in subsections (1) and (2), the exemption,

deduction, or credit shall be reduced by the following percentages:

(a) For the tax year that is 2 years before the final year of

designation as a renaissance zone, the percentage shall be 25%.

(b) For the tax year immediately preceding the final year of

designation as a renaissance zone, the percentage shall be 50%.

a renaissance zone, the percentage shall be 75%.