HB-5600, As Passed Senate, March 20, 2008

SENATE SUBSTITUTE FOR

HOUSE BILL NO. 5600

     A bill to amend 1996 PA 376, entitled

"Michigan renaissance zone act,"

by amending sections 4, 8a, and 12 (MCL 125.2684, 125.2688a, and

125.2692), section 4 as amended by 2006 PA 440, section 8a as

amended by 2006 PA 476, and section 12 as amended by 2002 PA 745.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 4. (1) One or more qualified local governmental units may

apply to the review board to designate the qualified local

governmental unit or units as a renaissance zone if all of the

following criteria are met:

     (a) The geographic area of the proposed renaissance zone is

located within the boundaries of the qualified local governmental

unit or units that apply.

     (b) The application includes a development plan.

     (c) The proposed renaissance zone is not more than 5,000 acres

in size.

     (d) The renaissance zone does not contain more than 10

distinct geographic areas. Except as otherwise provided in this

subdivision, the minimum size of a distinct geographic area is not

less than 5 acres. A qualified local governmental unit or units may

designate not more than 4 8 distinct geographic areas in each

renaissance zone to have no minimum size requirement.

     (e) The application includes the proposed duration of

renaissance zone status, not to exceed 15 years, except as

otherwise provided in this section.

     (f) If the qualified local governmental unit has an elected

county executive, the county executive's written approval of the

application.

     (g) If the qualified local governmental unit is a city, that

city's mayor's written approval of the application.

     (2) A qualified local governmental unit may submit not more

than 1 application to the review board for designation as a

renaissance zone. A resolution provided by a city, village, or

township under section 7(2) does not constitute an application of a

city, village, or township for a renaissance zone under this act.

     (3) For a distinct geographic area described in subsection

(1)(d), a village may include publicly owned land within the

boundaries of any distinct geographic area.

     (4) Beginning December 1, 2006 through December 31, 2011, a

qualified local governmental unit or units in which a renaissance

zone was designated under section 8 or 8a(1) or (3) may designate

additional distinct geographic areas not to exceed a total of 10

distinct geographic areas upon application to and approval by the

board of the Michigan strategic fund if the distinct geographic

area is located in an eligible distressed area as defined in

section 11 of the state housing development authority act of 1966,

1966 PA 346, MCL 125.1411, or is contiguous to an eligible

distressed area, and if the additional distinct geographic area

will increase capital investment and or job creation. The duration

of renaissance zone status for the additional distinct geographic

areas shall not exceed 15 years.

     (5) Through December 31, 2002, if a qualified local

governmental unit or units designate additional distinct geographic

areas in a renaissance zone under subsection (4), the qualified

local governmental unit or units may extend the duration of the

renaissance zone status of 1 or more distinct geographic areas in

that renaissance zone until 2017 upon application to and approval

by the board.

     (6) Through December 31, 2002, a qualified local governmental

unit or units in which a renaissance zone was designated under

section 8 or 8a may, upon application to and approval by the board,

seek to extend the duration of renaissance zone status until 2017.

Upon application, the board may extend the duration of renaissance

zone status.

     (7) Through December 31, 2011, a qualified local governmental

unit or units in which a renaissance zone was designated under

section 8 or 8a(1) or (3) that has not experienced significant

development may, upon application to and approval by the board of

the Michigan strategic fund, seek to extend the duration of

renaissance zone status for 1 or more portions of the renaissance

zone if that zone or portion of a zone is in existence as of March

15, 2008, and if the extension will increase capital investment or

job creation. The board of the Michigan strategic fund may extend

renaissance zone status for 1 or more portions of the renaissance

zone under this subsection for a period of time not to exceed 15

years from the date of the application to the board of the Michigan

strategic fund under this subsection. However, beginning on the

effective date of the amendatory act that added this sentence, if

the board of the Michigan strategic fund extends the duration of 1

or more portions of a renaissance zone under this subsection, the

board of the Michigan strategic fund may revoke that extension if

the board determines that increased capital investment or job

creation will not begin within 1 year of the granting of the

extension or otherwise violates the terms of the written

development agreement between the owner of the real property and

the board of the Michigan strategic fund. Only the qualified local

governmental unit that is requesting the extension of time may

submit the application. If the board of the Michigan strategic fund

extends the duration of 1 or more portions of a renaissance zone,

the board of the Michigan strategic fund shall enter into a written

development agreement with the owner of all real property located

within the boundaries of the portions of the renaissance zone whose

duration has been extended. The written development agreement shall

include, but is not limited to, all of the following:

House Bill No. 5600 as amended March 20, 2008

     (a) The duration of the extension.

     (b) The conditions under which the extension is granted.

     (c) The amount of capital investment.

     (d) The number of jobs to be created.

     (e) Any other conditions or requirements reasonably required

by the board of the Michigan strategic fund.

     Sec. 8a. (1) Except as provided in subsections (2), (3), and

(4), the board shall not designate more than 9 additional

renaissance zones within this state under this section. Not more

than 6 of the renaissance zones shall be located in urban areas and

not more than 5 of the renaissance zones shall be located in rural

areas. For purposes of determining whether a renaissance zone is

located in an urban area or rural area under this section, if any

part of a renaissance zone is located within an urban area, the

entire renaissance zone shall be considered to be located in an

urban area.

     (2) 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 13 <<17>> additional renaissance

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 renaissance

zone within their boundaries. The board of the Michigan strategic

fund may designate not more than 1 of the 13 <<17>> additional

renaissance zones described in this subsection as an alternative

energy zone. An alternative energy zone shall promote and increase

the research, development, testing, and manufacturing of

House Bill No. 5600 as amended March 20, 2008

alternative energy technology, alternative energy systems, and

alternative energy vehicles, as those terms are defined in the

Michigan next energy authority act, 2002 PA 593, MCL 207.821 to

207.827. An alternative energy zone shall have a duration of

renaissance zone status for a period not to exceed 20 years as

determined by the board of the Michigan strategic fund. <<Not later

than April 16, 2004, the board of the Michigan strategic fund may

designate not more than 1 of the 13 additional renaissance zones

described in this subsection as a pharmaceutical renaissance zone.

A pharmaceutical renaissance zone shall promote and increase the

research, development, and manufacturing of pharmaceutical products

of an eligible pharmaceutical company.>> The board of the Michigan

strategic fund may designate not more than 8 of the additional 13

<<17>> renaissance zones described in this subsection as a

redevelopment renaissance zone. A redevelopment renaissance zone

shall promote the redevelopment of existing industrial facilities

or the development of property for industrial purposes. <<The board of

the Michigan strategic fund may designate not more than 1 of the 17

additional renaissance zones described in this subsection as a

pharmaceutical recovery renaissance zone. A pharmaceutical recovery

renaissance zone shall promote the development or redevelopment of

existing underutilized facilities currently occupied or formerly occupied

by a pharmaceutical companY.>> Before

designating a renaissance zone under this subsection, the board of

the Michigan strategic fund may enter into a development agreement

with the city, township, or village in which the renaissance zone

will be located and the owner or developer of the facility or

property located in the renaissance zone. The development agreement

for a redevelopment renaissance zone described only in subsection

(6)(b)(vi) or (vii) may provide for the payment of 1 or more of the

taxes described in section 9.

     (3) In addition to the not more than 9 additional renaissance

zones described in subsection (1), the board may designate

House Bill No. 5600 as amended March 20, 2008

additional renaissance zones within this state in 1 or more

qualified local governmental units if that qualified local

governmental unit or units contain a military installation that was

operated by the United States department of defense and was closed

in 1977 or after 1990.

     (4) Land owned by a county or the qualified local governmental

unit or units adjacent to a zone as described in subsection (3) may

be included in this zone.

     (5) Notwithstanding any other provision of this act, property

located in the alternative energy zone that is classified as

commercial real property under section 34c of the general property

tax act, 1893 PA 206, MCL 211.34c, and that the authority, with the

concurrence of the assessor of the local tax collecting unit,

determines is not used to directly promote and increase the

research, development, testing, and manufacturing of alternative

energy technology, alternative energy systems, and alternative

energy vehicles as those terms are defined in the Michigan next

energy authority act, 2002 PA 593, MCL 207.821 to 207.827, is not

eligible for any exemption, deduction, or credit under section 9.

     (6) As used in this section:

<<   (a) "Eligible pharmaceutical company" means a company that

meets all of the following criteria:

     (i) Is engaged primarily in manufacturing, research and

development, and sale of pharmaceuticals.

     (ii) Has not less than 8,499 employees located in this state,

all of whom are located within a 100-mile radius of each other.

     (iii) Of the total number of employees located in this state,

House Bill No. 5600 as amended March 20, 2008

has not less than 4,800 engaged primarily in research and

development of pharmaceuticals.>>

     <<(a) "Pharmaceutical recovery renaissance zone" means a renaissance zone that includes a geographic area that is located in 1 or both of the following:

     (i) In a city with a population of more than 70,000 and less than 85,000 and in a county with a population of more than 235,000 and less than 250,000.

     (ii) In a city with a population of more than 42,000 and less than 55,000 and in a county with a population of more than 235,000 and less than 250,000.>>

     (b) "Redevelopment renaissance zone" means a renaissance zone

that meets 1 of the following:

     (i) All of the following:

     (A) Is located in a city with a population of more than 7,500

and less than 8,500 and is located in a county with a population of

more than 60,000 and less than 70,000.

     (B) Contains only all or a portion of an industrial site of

200 or more acres.

     (ii) All of the following:

     (A) Is located in a city with a population of more than 13,000

and less than 14,000 and is located in a county with a population

of more than 1,000,000 and less than 1,300,000.

     (B) Contains only all or a portion of an industrial site of

300 or more contiguous acres.

     (iii) All of the following:

     (A) Is located in a township with a population of more than

5,500 and is located in a county with a population of less than

24,000.

     (B) Contains only all or a portion of an industrial site of

more than 850 acres and has railroad access.

     (iv) All of the following:

     (A) Is located in a city with a population of more than 40,000

and less than 44,000 and is located in a county with a population

of more than 81,000 and less than 87,000.

     (B) Contains only all or a portion of an industrial site of

more than 475 acres.

     (v) All of the following:

     (A) Is located in a city with a population of more than 21,000

and less than 26,000 and is located in a county with a population

of more than 573,000 and less than 625,000.

     (B) Contains only all or a portion of an industrial site of

less than 45 acres in size.

     (vi) All of the following:

     (A) Is located in a city with a population of more than

190,000 and less than 250,000 and is located in a county with a

population of more than 573,000 and less than 625,000.

     (B) Contains only all or a portion of an industrial site of

more than 14 acres and less than 16 acres in size.

     (C) Is approved by the board of the Michigan strategic fund on

or before April 1, 2007.

     (vii) All of the following:

     (A) Is located in a city with a population of more than 35,500

and less than 36,800 and is located in a county with a population

of more than 157,000 and less than 162,000.

     (B) Contains only all or a portion of an industrial site

comprised of 1 or more adjacent parcels totaling 5 or more acres.

     (C) Is approved by the board of the Michigan strategic fund on

or before April 1, 2007.

(viii) All of the following:

     (A) Is located in a city with a population of more than 40,000

and less than 44,000 and is located in a county with a population

of more than 81,000 and less than 87,000.

     (B) Contains only all or a portion of an industrial site

composed of 1 or more adjacent parcels totaling 100 or more acres.

     (C) Is approved by the board of the Michigan strategic fund on

or before April 1, 2008.

     Sec. 12. (1) This state shall reimburse intermediate school

districts each year for all tax revenue lost as the result of the

exemption of property under this act, based on the property's

taxable value in that year, from taxes levied under section 625a of

the revised school code, 1976 PA 451, MCL 380.625a; from taxes

levied for area vocational-technical program operating purposes

under section 681 of the revised school code, 1976 PA 451, MCL

380.681; and from taxes levied for special education operating

purposes under section 1724a of the revised school code, 1976 PA

451, MCL 380.1724a.

     (2) This state shall reimburse local school districts each

year for all tax revenue lost as the result of the exemption of

property under this act from taxes levied under section 1211 of the

revised school code, 1976 PA 451, MCL 380.1211, based on the

property's taxable value in that year.

     (3) This state shall reimburse a community college district

and a public library each year for all tax revenue lost as a result

of the exemption of property under this act, based on the

property's taxable value in that year, from taxes levied or

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

211.1 to 211.157.

     (4) Intermediate school districts, community college

districts, and public libraries eligible for reimbursement under

subsections (1) and (3) shall report to and on a date determined by

the department of treasury all revenue lost for which reimbursement

under subsections (1) and (3) is claimed. A local school district

eligible for reimbursement under subsection (2) shall report each

year on a date determined by the department of treasury all revenue

lost for which reimbursement under subsection (2) is claimed.

     (5) This state shall reimburse the school aid fund for all

revenues lost as the result of the establishment of renaissance

zones. Foundation allowances calculated under section 20 of the

state school aid act of 1979, 1979 PA 94, MCL 388.1620, shall not

be reduced as a result of lost revenues arising from this act.

     (6) This state shall reimburse a county each year for all tax

revenue lost as a result of the exemption of property under this

act, based on the property's taxable value in that year, for

renaissance zones in which the duration of renaissance zone status

was extended under section 4(7) after the effective date of the

amendatory act that added this subsection, from taxes levied or

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

211.1 to 211.157.

     Enacting section 1. This amendatory act does not take effect

unless Senate Bill No. 885 of the 94th Legislature is enacted into

law.