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HB-4540, As Passed Senate, December 8, 2005

SENATE SUBSTITUTE FOR

HOUSE BILL NO. 4540

A bill to amend 1992 PA 147, entitled

"Neighborhood enterprise zone act,"

by amending section 9 (MCL 207.779), as amended by 2003 PA 127.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 9. (1) Except as provided in subsection ~~(10)~~ (14),

there is levied on the owner of a homestead facility, a new

facility, or a rehabilitated facility to which a neighborhood

enterprise zone certificate is issued a specific tax known as the

neighborhood enterprise zone tax.

(2) A homestead facility, a new facility, or a rehabilitated

facility for which a neighborhood enterprise zone certificate is in

effect, but not the land on which the facility is located, is

exempt from ad valorem real property taxes collected under the

general property tax act, 1893 PA 206, MCL 211.1 to 211.157.

(3) ~~The~~ Except as otherwise provided in this section, the

amount of the neighborhood enterprise zone tax on a new facility is

determined each year by multiplying the taxable value of the

facility, not including the land, by 1 of the following:

(a) For property that would otherwise meet the definition of a

principal residence under section 7dd of the general property tax

act, 1893 PA 206, MCL 211.7dd, if that property was not exempt from

ad valorem property taxes under this act, 1/2 of the average rate

of taxation levied in this state in the immediately preceding

calendar year on a principal residence and qualified agricultural

property as defined in section 7dd of the general property tax act,

1893 PA 206, MCL 211.7dd. However, in 1994 only, the average rate

of taxation shall be the average rate of taxation levied in 1993

upon all property in this state upon which ad valorem taxes are

assessed.

(b) For property that is not a principal residence under

section 7dd of the general property tax act, 1893 PA 206, MCL

211.7dd, 1/2 of the average rate of taxation levied upon

commercial, industrial, and utility property upon which ad valorem

taxes are assessed as determined for the immediately preceding

calendar year by the state board of assessors under section 13 of

1905 PA 282, MCL 207.13. However, in 1994 only, the average rate of

taxation shall be the average rate of taxation levied in 1993 upon

all property in this state upon which ad valorem taxes are

assessed.

(4) ~~The~~ Except as otherwise provided in this section, the

amount of the neighborhood enterprise zone tax on a rehabilitated

facility is determined each year by multiplying the taxable value

of the rehabilitated facility, not including the land, for the tax

year immediately preceding the effective date of the neighborhood

enterprise zone certificate by the total mills collected under the

general property tax act, 1893 PA 206, MCL 211.1 to 211.157, for

the current year by all taxing units within which the rehabilitated

facility is located.

(5) Except as otherwise provided in this section, the amount

of the neighborhood enterprise zone tax on a homestead facility is

the sum of all the following:

(a) One-half the number of mills levied for operating purposes

by the local governmental unit in which the neighborhood enterprise

zone is located multiplied by the current taxable value of the

homestead facility not including the land.

(b) One-half the number of mills levied for operating purposes

by the county in which the neighborhood enterprise zone is located

multiplied by the current taxable value of the homestead facility

not including the land.

property tax act, 1893 PA 206, MCL 211.1 to 211.157, for the

current year by all taxing jurisdictions within which the homestead

facility is located excluding the number of mills levied for

operating purposes by the local governmental unit and county in

which the homestead facility is located multiplied by the current

taxable value of the homestead facility not including the land.

(6) In the year 2 years before the year in which the

neighborhood enterprise zone certificate expires for a homestead

facility, for a new facility or a rehabilitated facility in which

the neighborhood enterprise zone certificate was issued after

December 31, 2005, or for a new facility or a rehabilitated

facility in which the neighborhood enterprise zone certificate was

extended 3 years under section 12(1), the neighborhood enterprise

zone tax is the sum of all the following:

(a) Five-eighths the number of mills levied for operating

purposes by the local governmental unit in which the neighborhood

enterprise zone is located multiplied by the current taxable value

of the facility not including the land.

(b) Five-eighths the number of mills levied for operating

purposes by the county in which the neighborhood enterprise zone is

located multiplied by the current taxable value of the facility not

including the land.

property tax act, 1893 PA 206, MCL 211.1 to 211.157, for the

current year by all taxing jurisdictions within which the facility

is located excluding the number of mills levied for operating

purposes by the local governmental unit and county in which the

facility is located multiplied by the current taxable value of the

facility not including the land.

(7) In the year before the year in which the neighborhood

enterprise zone certificate expires for a homestead facility, for a

new facility or a rehabilitated facility in which the neighborhood

enterprise zone certificate was issued after December 31, 2005, or

for a new facility or a rehabilitated facility in which the

neighborhood enterprise zone certificate was extended 3 years under

section 12(1), the neighborhood enterprise zone tax is the sum of

all the following:

(a) Three-fourths the number of mills levied for operating

purposes by the local governmental unit in which the neighborhood

enterprise zone is located multiplied by the current taxable value

of the facility not including the land.

(b) Three-fourths the number of mills levied for operating

purposes by the county in which the neighborhood enterprise zone is

located multiplied by the current taxable value of the facility not

including the land.

property tax act, 1893 PA 206, MCL 211.1 to 211.157, for the

current year by all taxing jurisdictions within which the facility

is located excluding the number of mills levied for operating

purposes by the local governmental unit and county in which the

facility is located multiplied by the current taxable value of the

facility not including the land.

(8) In the year in which the neighborhood enterprise zone

certificate expires for a homestead facility, for a new facility or

a rehabilitated facility in which the neighborhood enterprise zone

certificate was issued after December 31, 2005, or for a new

facility or a rehabilitated facility in which the neighborhood

enterprise zone certificate was extended 3 years under section

12(1), the neighborhood enterprise zone tax is the sum of all the

following:

(a) Seven-eighths the number of mills levied for operating

purposes by the local governmental unit in which the neighborhood

enterprise zone is located multiplied by the current taxable value

of the facility not including the land.

(b) Seven-eighths the number of mills levied for operating

purposes by the county in which the neighborhood enterprise zone is

located multiplied by the current taxable value of the facility not

including the land.

property tax act, 1893 PA 206, MCL 211.1 to 211.157, for the

current year by all taxing jurisdictions within which the facility

is located excluding the number of mills levied for operating

purposes by the local governmental unit and county in which the

facility is located multiplied by the current taxable value of the

facility not including the land.

(9) ~~(5)~~ The neighborhood enterprise zone tax is an annual

tax, payable at the same times, in the same installments, and to

the same officer or officers as taxes collected under the general

property tax act, 1893 PA 206, MCL 211.1 to 211.157, are payable.

Except as otherwise provided in this section, the officer or

officers shall disburse the neighborhood enterprise zone tax

received by the officer or officers each year to the state, cities,

townships, villages, school districts, counties, and authorities at

the same times and in the same proportions as required for the

disbursement of taxes collected under the general property tax act,

1893 PA 206, MCL 211.1 to 211.157. To determine the proportion for

the disbursement of taxes under this subsection and for attribution

of taxes under subsection ~~(7)~~ (11) for taxes collected after June

30, 1994, the number of mills levied for local school district

operating purposes to be used in the calculation shall equal the

number of mills for local school district operating purposes levied

in 1993 minus the number of mills levied under the state education

tax act, 1993 PA 331, MCL 211.901 to 211.906, for the year for

which the disbursement is calculated. Local tax collection officers

shall disburse the proceeds of the neighborhood enterprise zone tax

collected on homestead facilities under subsection (5) and on

homestead facilities, new facilities, and rehabilitated facilities

under subsections (6), (7), and (8) each year to the state, cities,

townships, villages, school districts, counties, and authorities in

an amount equal to the sum of the proceeds of the neighborhood

enterprise zone tax collected on the facility multiplied by a

fraction in which the numerator is the number of mills levied by

the taxing unit that was used to calculate the specific tax on the

facility and the denominator is the total number of mills levied by

all the taxing units that was used to calculate the specific tax in

which the property is located.

(10) ~~(6)~~ An intermediate school district receiving state aid

under sections 56, 62, and 81 of the state school aid act of 1979,

1979 PA 94, MCL 388.1656, 388.1662, and 388.1681, of the amount

that would otherwise be disbursed to or retained by the

intermediate school district, all or a portion, to be determined on

the basis of the tax rates being utilized to compute the amount of

state aid, shall be paid to the state treasury to the credit of the

state school aid fund established by section 11 of article IX of

the state constitution of 1963. If and for the period that the

state school aid act of 1979, 1979 PA 94, MCL 388.1601 to 388.1772,

is amended or its successor act is enacted or amended to include a

provision that provides for adjustments in state school aid to

account for the receipt of revenues provided under this act in

place of exempted ad valorem property tax, revenues required to be

remitted or returned to the state treasury to the credit of the

state school aid fund shall be distributed instead to the

intermediate school districts. If the sum of any industrial

facility tax levied under 1974 PA 198, MCL 207.551 to 207.572, the

commercial facilities tax levied under the commercial redevelopment

act, 1978 PA 255, MCL 207.651 to 207.668, and the neighborhood

enterprise zone tax paid to the state treasury to the credit of the

state school aid fund that would otherwise be disbursed to the

intermediate school district exceeds the amount received by the

intermediate school district under sections 56, 62, and 81 of the

state school aid act of 1979, 1979 PA 94, MCL 388.1656, 388.1662,

and 388.1681, the department of treasury shall allocate to each

eligible intermediate school district an amount equal to the

difference between the sum of the industrial facility tax, the

commercial facilities tax, and the neighborhood enterprise zone tax

paid to the state treasury to the credit of the state school aid

fund and the amount the intermediate school district received under

sections 56, 62, and 81 of the state school aid act of 1979, 1979

PA 94, MCL 388.1656, 388.1662, and 388.1681.

(11) ~~(7)~~ For neighborhood enterprise zone taxes levied after

1993 for school operating purposes, the amount that would otherwise

be disbursed to a local school district shall be paid instead to

the state treasury and credited to the state school aid fund

established by section 11 of article IX of the state constitution

of 1963.

(12) ~~(8)~~ The officer or officers shall send a copy of the

amount of disbursement made to each unit under this section to the

commission on a form provided by the commission. The neighborhood

enterprise zone tax is a lien on the real property upon which the

new facility or rehabilitated facility subject to the certificate

is located until paid. The continuance of a certificate is

conditional upon the annual payment of the neighborhood enterprise

zone tax and the ad valorem tax on the land collected under the

general property tax act, 1893 PA 206, MCL 211.1 to 211.157.

(13) ~~(9)~~ If payment of the tax under this act is not made by

the March 1 following the levy of the tax, the tax shall be turned

over to the county treasurer and collected in the same manner as a

delinquent tax under the general property tax act, 1893 PA 206, MCL

211.1 to 211.157.

(14) ~~(10)~~ A homestead facility, a new facility, or a

rehabilitated facility located in a renaissance zone under the

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

125.2696, is exempt from the neighborhood enterprise zone tax

levied under this act to the extent and for the duration provided

pursuant to the Michigan renaissance zone act, 1996 PA 376, MCL

125.2681 to 125.2696, except for that portion of the neighborhood

enterprise zone tax attributable to a special assessment or a tax

described in section 7ff(2) of the general property tax act, 1893

PA 206, MCL 211.7ff. The neighborhood enterprise zone tax

calculated under this subsection shall be disbursed proportionately