SB-0885, As Passed Senate, April 16, 2008

HOUSE SUBSTITUTE FOR

SENATE BILL NO. 885

(As amended, April 16, 2008)

<<A bill to amend 1996 PA 376, entitled

"Michigan renaissance zone act,"

by amending sections 3, 8d, 8e, and 10 (MCL 125.2683, 125.2688d,

125.2688e, and 125.2690), section 3 as amended by 2006 PA

304, section 8d as amended by 2006 PA 93, section 8e as added by

2006 PA 270, and section 10 as amended by 2007 PA 186.>>

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 3. As used in this act:

(a) "Agricultural processing facility" means 1 or more

facilities or operations that transform, package, sort, or grade

livestock or livestock products, agricultural commodities, or

plants or plant products, excluding forest products, into goods

that are used for intermediate or final consumption including goods

for nonfood use, and surrounding property.

(b) "Board" means the state administrative board created in

1921 PA 2, MCL 17.1 to 17.3.

criteria in section 7 and includes all of the following:

(i) A map of the proposed renaissance zone that indicates the

geographic boundaries, the total area, and the present use and

conditions generally of the land and structures within those

boundaries.

(ii) Evidence of community support and commitment from

residential and business interests.

(iii) A description of the methods proposed to increase economic

opportunity and expansion, facilitate infrastructure improvement,

and identify job training opportunities.

(iv) Current social, economic, and demographic characteristics

of the proposed renaissance zone and anticipated improvements in

education, health, human services, public safety, and employment if

the renaissance zone is created.

(v) Any other information required by the board.

(d) "Elected county executive" means the elected county

executive in a county organized under 1966 PA 293, MCL 45.501 to

45.521, or 1973 PA 139, MCL 45.551 to 45.573.

(e) "Forest products processing facility" means 1 or more

facilities or operations that transform, package, sort, recycle, or

grade forest or paper products into goods that are used for

intermediate or final use or consumption or for the creation of

biomass or alternative fuels through the utilization of forest

products or forest residue, and surrounding property. Forest

products processing facility does not include an existing facility

or operation that is located in this state that relocates to a

renaissance zone for a forest products processing facility. Forest

products processing facility does not include a facility or

operation that engages primarily in retail sales.

(f) "Local governmental unit" means a county, city, village,

or township.

(g) "Person" means an individual, partnership, corporation,

association, limited liability company, governmental entity, or

other legal entity.

(h) "Qualified local governmental unit" means either of the

following:

(i) A county.

(ii) A city, village, or township that contains an eligible

distressed area as defined in section 11 of the state housing

development authority act of 1966, 1966 PA 346, MCL 125.1411.

(i) "Recovery zone" means a tool and die renaissance recovery

zone created in section 8d.

(j) "Renaissance zone" means a geographic area designated

under this act.

(k) "Renewable energy facility" means a system that creates

energy from a process using agricultural crops or processed

products from agricultural crops; residues from agricultural

products, forest products, paper products industries, and food

production and processing; trees and grasses grown specifically to

be used as energy crops; and gaseous fuels produced from solid

biomass, animal wastes, or landfills.

(l) "Residential rental property" means that term as defined in

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

211.7ff.

(m) "Review board" means the renaissance zone review board

created in section 5.

(n) "Rural area" means an area that lies outside of the

boundaries of an urban area.

(o) "Urban area" means an urbanized area as determined by the

economics and statistics administration, United States bureau of

the census according to the 1990 census.

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 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) ~~(7)~~ 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 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

business 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. 8e. (1) The board, upon recommendation of the board of

the Michigan strategic fund defined in section 4 of the Michigan

strategic fund act, 1984 PA 270, MCL 125.2004, and upon

recommendation of the commission of agriculture if the renewable

energy facility uses agricultural crops or residues, or processed

products from agricultural crops as its primary raw material

source, may designate not more than 10 additional renaissance zones

for renewable energy facilities 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 renaissance zone for a renewable energy facility

within their boundaries.

(2) Each renaissance zone designated for a renewable energy

facility under this section shall be 1 continuous distinct

geographic area.

(3) The board may revoke the designation of all or a portion

of a renaissance zone for a renewable energy facility if the board

determines that the renewable energy facility does 1 or more of the

following in a renaissance zone designated under this section:

(a) Fails to commence operation.

(b) Ceases operation.

from the date the renaissance zone for the renewable energy

facility is designated.

(4) When designating a renaissance zone for a renewable energy

facility, the board shall consider all of the following:

(a) The economic impact on local suppliers who supply raw

materials, goods, and services to the renewable energy facility.

(b) The creation of jobs relative to the employment base of

the community rather than the static number of jobs created.

(d) The economic impact on the community in which the

renewable energy facility is located.

(e) All other things being equal, giving preference to a

business entity already located in this state.

(f) Whether the renewable energy facility can be located in an

existing renaissance zone designated under section 8 or 8a.

(5) Beginning on ~~the effective date of the amendatory act that~~

~~added this subsection~~ July 7, 2006, the board shall require a

development agreement between the Michigan strategic fund and the

renewable energy facility.

(6) Until the maximum number of additional renaissance zones

for renewable energy facilities described in subsection (1) is met,

if the board designates a renaissance zone under this section,

section 8c, or section 8f for a facility that is a forest products

processing facility or an agricultural processing facility and that

also meets the definition of a renewable energy facility, then the

board shall only designate that renaissance zone as a renaissance

zone for a renewable energy facility under this section.

(7) As used in this section, "development agreement" means a

written agreement between the Michigan strategic fund and the

renewable energy facility that includes, but is not limited to, all

of the following:

(a) A requirement that the renewable energy facility comply

with all state and local laws.

(b) A requirement that the renewable energy facility report

annually to the Michigan strategic fund on all of the following:

(i) The amount of capital investment made at the facility.

(ii) The number of individuals employed at the facility at the

beginning and end of the reporting period as well as the number of

individuals transferred to the facility from another facility owned

by the renewable energy facility.

(iii) The percentage of raw materials purchased in this state.

Senate Bill No. 885 as amended April 16, 2008

by the Michigan strategic fund.

Senate Bill No. 885 as amended April 16, 2008

Sec. 10. (1) An individual who is a resident of a renaissance

zone or a business that is located and conducts business activity

within a renaissance zone or a person that owns property located in

a renaissance zone is not eligible for the exemption, deduction, or

credit listed in section 9(1) or (2) for that taxable year if 1 or

more of the following apply:

(a) The resident, business, or property owner is delinquent on

December 31 of the prior tax year under 1 or more of the following:

(i) ~~The single business tax act,~~ Former 1975 PA 228 ~~, MCL 208.1~~

~~to 208.145,~~ or the Michigan business tax act, 2007 PA 36, MCL

208.1101 to 208.1601.

(ii) The income tax act of 1967, 1967 PA 281, MCL 206.1 to

206.532.

(iii) 1974 PA 198, MCL 207.551 to 207.572.

(iv) The commercial redevelopment act, 1978 PA 255, MCL 207.651

to 207.668.

(v) The enterprise zone act, 1985 PA 224, MCL 125.2101 to

125.2123.

(vi) 1953 PA 189, MCL 211.181 to 211.182.

(vii) The technology park development act, 1984 PA 385, MCL

207.701 to 207.718.

(viii) Part 511 of the natural resources and environmental

protection act, 1994 PA 451, MCL 324.51101 to 324.51120.

(ix) The neighborhood enterprise zone act, 1992 PA 147, MCL

207.771 to 207.786.

(x) The city utility users tax act, 1990 PA 100, MCL 141.1151

to 141.1177.

(b) The resident, business, or property owner is substantially

delinquent as defined in a written policy by the qualified local

governmental unit in which the renaissance zone is located on

December 31 of the prior tax year under 1 or both of the following:

(i) The city income tax act, 1964 PA 284, MCL 141.501 to

141.787.

(ii) Taxes, fees, and special assessments collected under the

general property tax act, 1893 PA 206, MCL 211.1 to 211.155.

residential rental property is not in substantial compliance with

all applicable state and local zoning, building, and housing laws,

ordinances, or codes and, except as otherwise provided in this

subdivision, the residential rental property owner has not filed an

affidavit before December 31 in the immediately preceding tax year

with the local tax collecting unit in which the residential rental

property is located as required under section 7ff of the general

property tax act, 1893 PA 206, MCL 211.7ff. Beginning December 31,

2004, a residential rental property owner is not required to file

an affidavit if the qualified local governmental unit in which the

residential rental property is located determines that the

residential rental property is in substantial compliance with all

applicable state and local zoning, building, and housing laws,

ordinances, and codes on December 31 of the immediately preceding

tax year.

(2) An individual who is a resident of a renaissance zone is

eligible for an exemption, deduction, or credit under section 9(1)

and (2) until the department of treasury determines that the

aggregate state and local tax revenue forgone as a result of all

exemptions, deductions, or credits granted under this act to that

individual reaches $10,000,000.00.

(3) A casino located and conducting business activity within a

renaissance zone is not eligible for the exemption, deduction, or

credit listed in section 9(1) or (2). Real property in a

renaissance zone on which a casino is operated, personal property

of a casino located in a renaissance zone, and all property

associated or affiliated with the operation of a casino is not

eligible for the exemption, deduction, or credit listed in section

Senate Bill No. 885 (H-3) as amended March 20, 2008

9(1) or (2). As used in this subsection, "casino" means a casino or

a parking lot, hotel, motel, or retail store owned or operated by a

casino, an affiliate, or an affiliated company, regulated by this

state pursuant to the Michigan gaming control and revenue act, ~~the~~

~~Initiated Law of 1996~~ 1996 IL 1, MCL 432.201 to 432.226.

(4) For tax years beginning on or after January 1, 1997, an

individual who is a resident of a renaissance zone shall not be

denied the exemption under subsection (1) if the individual failed

to file a return on or before December 31 of the prior tax year

under subsection (1)(a)(ii) and that individual was entitled to a

refund under that act.

(5) For tax years beginning on or after January 1, 2006, a

business that is located and conducts business activity within a

renaissance zone shall not be denied the exemption under subsection

(1) if the business failed to file a return on or before December

31 of the prior tax year under subsection (1)(a)(i) and that

business had no tax liability under that act for the tax year for

which the return was not filed.

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