HB-5349, As Passed House, December 19, 2009

SUBSTITUTE FOR

HOUSE BILL NO. 5349

A bill to amend 1996 PA 376, entitled

"Michigan renaissance zone act,"

by amending sections 3 and 10 (MCL 125.2683 and 125.2690), section

3 as amended by 2008 PA 217 and section 10 as amended by 2008 PA

242, and by adding section 8g.

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) "Eligible next Michigan business" means that term as

defined in section 3 of the Michigan economic growth authority act,

1995 PA 24, MCL 207.803.

(f) ~~(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.

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

village, or township.

(h) "Next Michigan development corporation" means that term as

defined in section 3 of the next Michigan development act.

(i) "Next Michigan development district" means that term as

defined in section 3 of the next Michigan development act.

(j) "Next Michigan renaissance zone" means a renaissance zone

created under section 8g.

(k) ~~(g)~~ "Person" means an individual, partnership,

corporation, association, limited liability company, governmental

entity, or other legal entity.

(l) "Qualified eligible next Michigan business" means an

eligible next Michigan business that has been certified in

accordance with section 8g.

(m) ~~(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.

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

recovery zone created in section 8d.

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

under this act.

(p) ~~(k)~~ "Renewable energy facility" means a facility that

creates energy directly or fuel from the wind, the sun, trees,

grasses, biosolids, algae, agricultural commodities, processed

products from agricultural commodities, or residues from

agricultural processes, wood or forest processes, food production

and processing, or the paper products industry. Renewable energy

facility also includes a facility that creates energy or fuels from

solid biomass, animal wastes, or landfill gases. Renewable energy

facility also includes a facility that focuses on research,

development, or manufacturing of systems or components of systems

used to create energy or fuel from the items described in this

subdivision.

(q) (l) "Residential rental property" means that term as

defined in section 7ff of the general property tax act, 1893 PA

206, MCL 211.7ff.

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

created in section 5.

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

boundaries of an urban area.

(t) ~~(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. 8g. (1) The board of the Michigan strategic fund

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

270, MCL 125.2004, upon the application of a next Michigan

development corporation, may designate next Michigan renaissance

zones for eligible next Michigan businesses within the boundaries

of a next Michigan development district. The number of next

Michigan renaissance zones to be designated for a next Michigan

development district that does not include an eligible urban entity

as defined in the next Michigan development act shall equal the

cumulative number of initial or subsequent local governmental unit

parties to the next Michigan development corporation interlocal

agreement, plus 1 additional next Michigan renaissance zone for

each county party to the interlocal agreement, but shall not exceed

12 for each next Michigan development district. The number of next

Michigan renaissance zones to be designated for a next Michigan

development district that includes an eligible urban entity as

defined in the next Michigan development act shall not exceed 12 as

determined by the president of the Michigan strategic fund. The

number shall not be reduced on account of a reduction in the number

of local government unit parties to the interlocal agreement from

time to time. The next Michigan development corporation shall make

recommendations to the board of the Michigan strategic fund as to

which areas shall be designated as next Michigan renaissance zones

for eligible next Michigan businesses under this act. The aggregate

territory of all next Michigan renaissance zones designated for a

next Michigan development corporation shall not exceed the lesser

of 200 acres times the number of next Michigan renaissance zones

designated for a next Michigan development corporation or 2,000

acres. A next Michigan renaissance zone shall have a duration of

renaissance zone status for a period of not less than 5 years and

not more than 10 years as determined by the board of the Michigan

strategic fund. Except as otherwise provided in this act, if the

board of the Michigan strategic fund determines that the duration

of renaissance zone status for a next Michigan renaissance zone is

less than 10 years, then the president of the Michigan strategic

fund, with the consent of the next Michigan development corporation

and with the consent of the city, village, or township in which the

next Michigan renaissance zone is located, may extend the duration

of renaissance zone status for the next Michigan renaissance zone

for 1 or more periods that when combined do not exceed 10 years.

(2) The next Michigan development corporation shall make

recommendations to the president of the Michigan strategic fund to

certify an eligible next Michigan business as a qualified eligible

next Michigan business entitled to the exemptions, deductions, or

credits as provided in section 9. Upon the recommendation of a next

Michigan development corporation, the Michigan strategic fund may

determine whether an eligible next Michigan business should receive

the benefits of a renaissance zone and certify that eligible next

Michigan business as a qualified eligible next Michigan business

under this act. The president of the Michigan strategic fund shall

certify or deny the application to certify an eligible next

Michigan business as a qualified eligible next Michigan business

within 30 days of receipt of the application. If the president of

the Michigan strategic fund fails to certify or deny the

application for certification within 30 days of receipt of the

application, the application for certification is considered

approved. If the president of the Michigan strategic fund denies

the application for certification within 30 days of receipt of the

application, the applicant may appeal that denial to the board of

the Michigan strategic fund. Upon appeal to the board of the

Michigan strategic fund, if the board of the Michigan strategic

fund fails to certify or deny the application for certification

within 40 days of receipt of the appeal, the application for

certification is considered granted by the board. The president of

the Michigan strategic fund shall notify the next Michigan

development corporation that it has certified a qualified eligible

next Michigan business in a next Michigan development district. The

next Michigan development corporation shall develop an application

process for eligible next Michigan businesses, which process shall

be approved by the president of the Michigan strategic fund. A next

Michigan development corporation shall not recommend and the board

of the Michigan strategic fund shall not certify an eligible next

Michigan business as a qualified eligible next Michigan business

unless that eligible next Michigan business opens a new location in

this state, locates in this state, or is an existing business

located in this state that will materially expand its business in

this state as determined by the president of the Michigan strategic

fund. However, the board of the Michigan strategic fund shall not

certify an eligible next Michigan business as a qualified eligible

next Michigan business if the principal economic effect of the

expansion or location of the eligible next Michigan business into a

next Michigan development district is the transfer of employment

from 1 or more cities, villages, or townships in this state to the

next Michigan development district.

(3) Upon request of the next Michigan development corporation,

the president of the Michigan strategic fund may modify an existing

next Michigan renaissance zone to add additional property under the

same terms and conditions as the existing next Michigan renaissance

zone if all of the following are met:

(a) The additional real property is located within the

boundaries of the next Michigan development district and will be

owned or operated by a qualified eligible next Michigan business

once it is brought into operation as determined by the board of the

Michigan strategic fund.

(b) The next Michigan development corporation and the city,

village, or township in which the qualified eligible next Michigan

business is located consent to the modification.

(1) will not be exceeded.

(4) A qualified eligible next Michigan business in a next

Michigan renaissance zone shall be granted renaissance zone status

for a period of up to 10 years.

(5) The next Michigan development corporation or the president

of the Michigan strategic fund may revoke the designation of all or

a portion of a next Michigan renaissance zone or the certification

of a qualified eligible next Michigan business if the next Michigan

development corporation or the president of the Michigan strategic

fund determines 1 or more of the following:

(a) The qualified eligible next Michigan business proposed in

the application fails, or a preponderance of businesses proposed in

the application fail, to commence operation within 2 years from the

date of the certification as a qualified eligible next Michigan

business.

(b) The qualified eligible next Michigan business proposed in

the application to commence operation within the next Michigan

renaissance zone ceases operation, provided that designation shall

not be revoked if the qualified eligible next Michigan business has

assigned its rights to a successor entity engaged in a qualified

eligible next Michigan business.

the application to commence operation within the next Michigan

renaissance zone fails to commence construction or renovation

within 1 year from the date of the certification as a qualified

eligible next Michigan business.

(d) The qualified eligible next Michigan business fails to

meet jobs and investment criteria set forth in the application and

approved as a condition by the president or the board of the

Michigan strategic fund.

(e) The local governmental unit in which the qualified

eligible next Michigan business is located withdraws from the next

Michigan development corporation interlocal agreement, provided

that the tax incentives previously granted to the qualified

eligible next Michigan business shall remain in full force and

effect for the stated term of the tax incentives so long as the

qualified eligible next Michigan business satisfies all of the

conditions upon which the tax incentives were granted.

(6) If the next Michigan development corporation revokes the

designation of all or a portion of a next Michigan renaissance zone

or the certification of a qualified eligible next Michigan

business, a qualified eligible next Michigan business affected may

appeal that revocation to the president of the Michigan strategic

fund as determined by the president of the Michigan strategic fund.

If the designation of all or a portion of a next Michigan

renaissance zone or the certification of a qualified eligible next

Michigan business is revoked, the designation may subsequently be

restored by the president of the Michigan strategic fund to the

same site and in respect of a qualified eligible next Michigan

business, but the duration of the restored designation shall not

exceed the term of the original designation. If the designation of

a next Michigan renaissance zone is revoked and not restored, the

next Michigan renaissance zone designation may be transferred by

the next Michigan development corporation to other property within

the next Michigan development district. The duration of such

transferred zone shall be for the full term initially determined

for that next Michigan renaissance zone.

(7) Upon request of the next Michigan development corporation,

the president of the Michigan strategic fund may extend the

duration of renaissance zone status for 1 or more portions of a

next Michigan renaissance zone if the extension will increase

capital investment or job creation, and the next Michigan

development corporation and the city, village, or township in which

that portion of the next Michigan renaissance zone is located

consents to extend the duration of renaissance zone status. The

president of the Michigan strategic fund may extend renaissance

zone status for 1 or more portions of the next Michigan renaissance

zone under this subsection for a period of time not to exceed 5

additional years as determined by the president of the Michigan

strategic fund.

(8) Before an eligible next Michigan business is certified as

a qualified eligible next Michigan business, the president of the

Michigan strategic fund and the board of the Michigan strategic

fund shall enter into a written agreement with the next Michigan

development corporation and a qualified eligible next Michigan

business in respect of the terms and conditions of granting and

retaining renaissance zone status, certification as a qualified

eligible next Michigan business, and any other related matters. The

written agreement also shall contain a remedy provision that

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

(a) A requirement that all or a portion of the exemptions,

deductions, or credits described in section 9 shall be revoked

under the procedures set forth in this act if the qualified

eligible next Michigan business is determined to be in violation of

the provisions of this act or the written agreement or relocates

outside the next Michigan development district for a period of

years after renaissance zone status expires as set forth in the

written agreement.

(b) A requirement that the qualified eligible next Michigan

business may be required to repay all or a portion of the

exemptions, deductions, or credits described in section 9 if the

qualified eligible next Michigan business is determined to be in

violation of the provisions of this act or the written agreement or

relocates outside the next Michigan development district for a

period of years after renaissance zone status expires as set forth

in the written agreement.

(9) Except as otherwise provided in this subsection, the

commencement of renaissance zone status under this section shall

take effect on January 1 in the year following designation.

However, for purposes of the taxes exempted under section 9(2), the

commencement of renaissance zone status under this section shall

take effect on December 31 in the year immediately preceding the

year in which the commencement under this section takes effect.

Unless otherwise limited as provided in this act, each qualified

next Michigan eligible business certified under this act shall be

entitled to renaissance zone status for not less than 10 years.

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) Former 1975 PA 228 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

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, 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) 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.

(6) In a next Michigan renaissance zone, only property owned

or leased by a qualified eligible next Michigan business and

business activity conducted in a next Michigan renaissance zone by

a qualified eligible next Michigan business are eligible for the

exemptions, deductions, or credits described in section 9.