Bill Text: MI HB4103 | 2011-2012 | 96th Legislature | Introduced
Bill Title: Property tax; other; specific tax on exempted personal property; create. Creates new act. TIE BAR WITH: HB 4102'11
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2011-01-19 - Printed Bill Filed 01/19/2011 [HB4103 Detail]
Download: Michigan-2011-HB4103-Introduced.html
HOUSE BILL No. 4103
January 18, 2011, Introduced by Rep. Meadows and referred to the Committee on Tax Policy.
A bill to provide for the exemption of certain property from
certain taxes; to levy and collect a specific tax upon the owners
of certain property; to provide for the disposition of the tax; to
prescribe the powers and duties of certain local government
officials; and to provide penalties.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act shall be known and may be cited as the
"personal property specific tax act".
Sec. 2. As used in this act:
(a) "Commission" means the state tax commission created by
1927 PA 360, MCL 209.101 to 209.107.
(b) "Personal property" means personal property described
under section 8 of the general property tax act, 1893 PA 206, MCL
211.8.
(c) "Taxable value" means the taxable value as determined
under section 27a of the general property tax act, 1893 PA 206, MCL
211.27a.
Sec. 3. (1) All personal property in this state is exempt from
ad valorem property taxes collected under the general property tax
act, 1893 PA 206, MCL 211.1 to 211.155, as provided under section 9l
of the general property tax act, 1893 PA 206, MCL 211.9l.
(2) The specific tax levied under this act shall be
administered as provided in the general property tax act, 1893 PA
206, MCL 211.1 to 211.155, and shall be collected at the same time
and in the same manner as taxes collected under the general
property tax act, 1893 PA 206, MCL 211.1 to 211.155.
Sec. 4. The assessor of each local tax collecting unit in
which there is personal property shall determine annually as of
December 31 the value and taxable value of each parcel of personal
property located in that local tax collecting unit.
Sec. 5. (1) Except as otherwise provided under this act, there
is levied upon the owner of every parcel of personal property a
specific tax to be known as the personal property specific tax.
(2) The amount of the personal property specific tax in each
year shall be equal to all of the following:
(a) The number of mills levied under the state education tax
act, 1993 PA 331, MCL 211.901 to 211.906.
(b) The number of mills levied under the revised school code,
1976 PA 451, MCL 380.1 to 380.1852.
(c) One-half of the number of mills that would be levied by
all taxing units in the local tax collecting unit if the property
were subject to the collection of taxes under the general property
tax act, 1893 PA 206, MCL 211.1 to 211.155, by the personal
property's taxable value.
(3) The personal property specific tax is an annual tax,
payable at the same times, in the same installments, and to the
same collecting officer or officers as taxes collected under the
general property tax act, 1893 PA 206, MCL 211.1 to 211.155.
(4) The collecting officer or officers shall disburse the
personal property specific tax to and among this state and cities,
townships, villages, school districts, counties, or other taxing
units, at the same times and in the same proportions as required by
law for the disbursement of taxes collected under the general
property tax act, 1893 PA 206, MCL 211.1 to 211.155.
(5) The collecting officer or officers shall send a copy of
the amount of disbursement made to each taxing unit under this
section to the commission on a form provided by the commission.
Sec. 6. (1) The following personal property is exempt from the
personal property specific tax levied under this act:
(a) The personal property of charitable, educational, and
scientific institutions incorporated under the laws of this state.
This exemption does not apply to secret or fraternal societies, but
the personal property of all charitable homes of secret or
fraternal societies and nonprofit corporations that own and operate
facilities for the aged and chronically ill in which the net income
from the operation of the nonprofit corporations or secret or
fraternal societies does not inure to the benefit of a person other
than the residents is exempt.
(b) The property of all library associations, circulating
libraries, libraries of reference, and reading rooms owned or
supported by the public and not used for gain.
(c) The property of posts of the grand army of the republic,
sons of veterans' unions, and of the women's relief corps connected
with them, of young men's Christian associations, women's Christian
temperance union associations, young people's Christian unions, a
boy or girl scout or camp fire girls organization, 4-H clubs, and
other similar associations.
(d) Pensions receivable from the United States.
(e) The property of Indians who are not citizens.
(f) The personal property owned and used by a householder such
as customary furniture, fixtures, provisions, fuel, and other
similar equipment, wearing apparel including personal jewelry,
family pictures, school books, library books of reference, and
allied items. Personal property is not exempt under this
subdivision if it is used to produce income, if it is held for
speculative investment, or if it constitutes an inventory of goods
for sale in the regular course of trade.
(g) Household furnishings, provisions, and fuel of not more
than $5,000.00 in taxable value, of each social or professional
fraternity, sorority, and student cooperative house recognized by
the educational institution at which it is located.
(h) The working tools of a mechanic of not more than $500.00
in taxable value. "Mechanic", as used in this subdivision, means a
person skilled in a trade pertaining to a craft or in the
construction or repair of machinery if the person's employment by
others is dependent on his or her furnishing the tools.
(i) Fire engines and other implements used in extinguishing
fires owned or used by an organized or independent fire company.
(j) Property actually used in agricultural operations and farm
implements held for sale or resale by retail servicing dealers for
use in agricultural production. As used in this subdivision,
"agricultural operations" means farming in all its branches,
including cultivation of the soil, growing and harvesting of an
agricultural, horticultural, or floricultural commodity, dairying,
raising of livestock, bees, fur-bearing animals, or poultry, turf
and tree farming, raising and harvesting of fish, collecting,
evaporating, and preparing maple syrup if the owner of the property
has $25,000.00 or less in annual gross wholesale sales, and any
practices performed by a farmer or on a farm as an incident to, or
in conjunction with, farming operations, but excluding retail sales
and food processing operations. Property used in agricultural
operations includes all of the following:
(i) A methane digester and a methane digester electric
generating system if the person claiming the exemption complies
with all of the following:
(A) After the construction of the methane digester or the
methane digester electric generating system is completed, the
person claiming the exemption submits to the local tax collecting
unit an application for the exemption and a copy of certification
from the department of agriculture that it has verified that the
farm operation on which the methane digester or methane digester
electric generating system is located is in compliance with the
appropriate system of the Michigan agriculture environmental
assurance program in the year immediately preceding the year in
which the affidavit is submitted. Three years after an application
for exemption is approved and every 3 years thereafter, the person
claiming the exemption shall submit to the local tax collecting
unit an affidavit attesting that the department of agriculture has
verified that the farm operation on which the methane digester or
methane digester electric generating system is located is in
compliance with the appropriate system of the Michigan agriculture
environmental assurance program. The application for the exemption
under this subparagraph shall be in a form prescribed by the
department of treasury and shall be provided to the person claiming
the exemption by the local tax collecting unit.
(B) When the application is submitted to the local tax
collecting unit, the person claiming the exemption also submits
certification provided by the department of natural resources and
environment that he or she is not currently being investigated for
a violation of part 31 of the natural resources and environmental
protection act, 1994 PA 451, MCL 324.3101 to 324.3133, that within
a 3-year period immediately preceding the date the application is
submitted to the local tax collecting unit, he or she has not been
found guilty of a criminal violation under part 31 of the natural
resources and environmental protection act, 1994 PA 451, MCL
324.3101 to 324.3133, and that within a 1-year period immediately
preceding the date the application is submitted to the local tax
collecting unit, he or she has not been found responsible for a
civil violation that resulted in a civil fine of $10,000.00 or more
under part 31 of the natural resources and environmental protection
act, 1994 PA 451, MCL 324.3101 to 324.3133.
(C) The person claiming an exemption cooperates by allowing
access for not more than 2 universities to collect information
regarding the effectiveness of the methane digester and the methane
digester electric generating system in generating electricity and
processing animal waste and production area waste. Information
collected under this sub-subparagraph shall not be provided to the
public in a manner that would identify the owner of the methane
digester or the methane digester electric generating system or the
farm operation on which the methane digester or the methane
digester electric generating system is located. The identity of the
owner of the methane digester or the methane digester electric
generating system and the identity of the owner and location of the
farm operation on which the methane digester or the methane
digester electric generating system is located are exempt from
disclosure under the freedom of information act, 1976 PA 442, MCL
15.231 to 15.246. As used in this sub-subparagraph, "university"
means a public 4-year institution of higher education created under
article VIII of the state constitution of 1963.
(D) The person claiming the exemption ensures that the methane
digester and methane digester electric generating system are
operated under the specific supervision and control of persons
certified by the department of agriculture as properly qualified to
operate the methane digester, methane digester electric generating
system, and related waste treatment and control facilities. The
department of agriculture shall consult with the department of
natural resources and environment and the Michigan state university
cooperative extension service in developing the operator
certification program.
(ii) A biomass gasification system. As used in this
subparagraph, "biomass gasification system" means apparatus and
equipment that thermally decomposes agricultural, food, or animal
waste at high temperatures and in an oxygen-free or a controlled
oxygen-restricted environment into a gaseous fuel and the equipment
used to generate electricity or heat from the gaseous fuel or store
the gaseous fuel for future generation of electricity or heat.
(iii) A thermal depolymerization system. As used in this
subparagraph, "thermal depolymerization system" means apparatus and
equipment that use heat to break down natural and synthetic
polymers and that can accept only organic waste.
(iv) Machinery that is capable of simultaneously harvesting
grain or other crops and biomass and machinery used for the purpose
of harvesting biomass. As used in this subparagraph, "biomass"
means crop residue used to produce energy or agricultural crops
grown specifically for the production of energy.
(v) Machinery used to prepare the crop for market operated
incidental to a farming operation that does not substantially alter
the form, shape, or substance of the crop and is limited to
cleaning, cooling, washing, pitting, grading, sizing, sorting,
drying, bagging, boxing, crating, and handling if not less than 33%
of the volume of the crops processed in the year ending on the
applicable tax day or in at least 3 of the immediately preceding 5
years were grown by the farmer in Michigan who is the owner or user
of the crop processing machinery.
(k) Personal property of not more than $500.00 in taxable
value used by a householder in the operation of a business in the
householder's dwelling or at 1 other location in the city,
township, or village in which the householder resides.
(l) The products, materials, or goods processed or otherwise
and in whatever form, but expressly excepting alcoholic beverages,
located in a public warehouse, United States customs port of entry
bonded warehouse, dock, or port facility on December 31 of each
year, if those products, materials, or goods are designated as in
transit to destinations outside this state pursuant to the
published tariffs of a railroad or common carrier by filing the
freight bill covering the products, materials, or goods with the
agency designated by the tariffs, entitling the shipper to
transportation rate privileges. Products in a United States customs
port of entry bonded warehouse that arrived from another state or a
foreign country, whether awaiting shipment to another state or to a
final destination within this state, are considered to be in
transit and temporarily at rest, and not subject to the collection
of taxes under this act. To obtain an exemption for products,
materials, or goods under this subdivision, the owner shall file a
sworn statement with, and in the form required by, the assessing
officer of the tax district in which the warehouse, dock, or port
facility is located, at a time between the tax day, December 31,
and before the assessing officer closes the assessment rolls
describing the products, materials, or goods, and reporting their
cost and value as of December 31 of each year. The status of
persons and products, materials, or goods for which an exemption is
requested is determined as of December 31, which is the tax day.
Any property located in a public warehouse, dock, or port facility
on December 31 of each year that is exempt from taxation under this
subdivision but that is not shipped outside this state pursuant to
the particular tariff under which the transportation rate privilege
was established shall be assessed upon the immediately succeeding
or a subsequent assessment roll by the assessing officer and taxed
at the same rate of taxation as other taxable property for the year
or years for which the property was exempted to the owner at the
time of the omission unless the owner or person entitled to
possession of the products, materials, or goods is a resident of,
or authorized to do business in, this state and files with the
assessing officer, with whom statements of taxable property are
required to be filed, a statement under oath that the products,
materials, or goods are not for sale or use in this state and will
be shipped to a point or points outside this state. If a person,
firm, or corporation claims exemption by filing a sworn statement,
the person, firm, or corporation shall append to the statement of
taxable property required to be filed in the immediately succeeding
year or, if a statement of taxable property is not filed for the
immediately succeeding year, to a sworn statement filed on a form
required by the assessing officer, a complete list of the property
for which the exemption was claimed with a statement of the manner
of shipment and of the point or points to which the products,
materials, or goods were shipped from the public warehouse, dock,
or port facility. The assessing officer shall assess the products,
materials, or goods not shipped to a point or points outside this
state upon the immediately succeeding assessment roll or on a
subsequent assessment roll and the products, materials, or goods
shall be taxed at the same rate of taxation as other taxable
property for the year or years for which the property was exempted
to the owner at the time of the omission. The records, accounts,
and books of warehouses, docks, or port facilities, individuals,
partnerships, corporations, owners, or those in possession of
tangible personal property shall be open to and available for
inspection, examination, or auditing by assessing officers. A
warehouse, dock, port facility, individual, partnership,
corporation, owner, or person in possession of tangible personal
property shall report within 90 days after shipment of products,
materials, or goods in transit, for which an exemption under this
section was claimed or granted, the destination of shipments or
parts of shipments and the cost value of those shipments or parts
of shipments to the assessing officer. A warehouse, dock, port
facility, individual, partnership, corporation, or owner is subject
to a fine of $100.00 for each failure to report the destination and
cost value of shipments or parts of shipments as required in this
subdivision. A person, firm, individual, partnership, corporation,
or owner failing to report products, materials, or goods located in
a warehouse, dock, or port facility to the assessing officer is
subject to a fine of $100.00 and a penalty of 50% of the final
amount of taxes found to be assessable for the year on property not
reported, the assessable taxes and penalty to be spread on a
subsequent assessment roll in the same manner as general taxes on
personal property. For the purpose of this subdivision, a public
warehouse, dock, or port facility means a warehouse, dock, or port
facility owned or operated by a person, firm, or corporation
engaged in the business of storing products, materials, or goods
for hire for profit who issues a schedule of rates for storage of
the products, materials, or goods and who issues warehouse receipts
pursuant to 1909 PA 303, MCL 443.50 to 443.55. A United States
customs port of entry bonded warehouse means a customs warehouse
within a classification designated by 19 CFR 19.1 and that is
located in a port of entry, as defined by 19 CFR 101.1. A portion
of a public warehouse, United States customs port of entry bonded
warehouse, dock, or port facility leased to a tenant or a portion
of any premises owned or leased or operated by a consignor or
consignee or an affiliate or subsidiary of the consignor or
consignee is not a public warehouse, dock, or port facility.
(m) Personal property owned by a bank or trust company
organized under the laws of this state, a national banking
association, or an incorporated bank holding company as defined in
section 1841 of the bank holding company act of 1956, 12 USC 1841,
that controls a bank, national banking association, trust company,
or industrial bank subsidiary located in this state. Buildings
owned by a state or national bank, trust company, or incorporated
bank holding company and situated upon real property that the state
or national bank, trust company, or incorporated bank holding
company is not the owner of the fee are considered real property
and are not exempt under this section. Personal property owned by a
state or national bank, trust company, or incorporated bank holding
company that is leased, loaned, or otherwise made available to and
used by a private individual, association, or corporation in
connection with a business conducted for profit is not exempt under
this section.
(n) Farm products, processed or otherwise, the ultimate use of
which is for human or animal consumption as food, except wine,
beer, and other alcoholic beverages regularly placed in storage in
a public warehouse, dock, or port facility while in storage are
considered in transit and only temporarily at rest and are not
subject to the collection of taxes under this act. The assessing
officer is the determining authority as to what constitutes, is
defined as, or classified as, farm products as used in this
subdivision. The records, accounts, and books of warehouses, docks,
or port facilities, individuals, partnerships, corporations,
owners, or those in possession of farm products shall be open to
and available for inspection, examination, or auditing by assessing
officers.
(o) Sugar, in solid or liquid form, produced from sugar beets,
dried beet pulp, and beet molasses if owned or held by processors.
(p) The personal property of a parent cooperative preschool.
As used in this subdivision, "parent cooperative preschool" means a
nonprofit, nondiscriminatory educational institution maintained as
a community service and administered by parents of children
currently enrolled in the preschool, that provides an educational
and developmental program for children younger than compulsory
school age, that provides an educational program for parents,
including active participation with children in preschool
activities, that is directed by qualified preschool personnel, and
that is licensed under 1973 PA 116, MCL 722.111 to 722.128.
(q) All equipment used exclusively in wood harvesting, but not
including portable or stationary sawmills or other equipment used
in secondary processing operations. As used in this subdivision,
"wood harvesting" means clearing land for forest management
purposes, planting trees, all forms of cutting or chipping trees,
and loading trees on trucks for removal from the harvest area.
(r) Liquefied petroleum gas tanks located on residential or
agricultural property used to store liquefied petroleum gas for
residential or agricultural property use.
(s) Water conditioning systems used for a residential
dwelling.
(t) For taxes levied after December 31, 2000, aircraft
excepted from the registration provisions of the aeronautics code
of the state of Michigan, 1945 PA 327, MCL 259.1 to 259.208, and
all other aircraft operating under the provisions of a certificate
issued under 14 CFR part 121, and all spare parts for such
aircraft.
(2) As used in this section:
(a) "Biogas" means a mixture of gases composed primarily of
methane and carbon dioxide.
(b) "Methane digester" means a system designed to facilitate
the production, recovery, and storage of biogas from the anaerobic
microbial digestion of animal or food waste.
(c) "Methane digester electric generating system" means a
methane digester and the apparatus and equipment used to generate
electricity or heat from biogas or to store biogas for the future
generation of electricity or heat.
Sec. 7. (1) A special tool is exempt from the collection of
the personal property specific tax levied under this act.
(2) As used in this section:
(a) "Product" means an item of tangible property that is
directly created or produced through the manufacturing process. A
product may be any of the following items:
(i) A part.
(ii) A special tool.
(iii) A component.
(iv) A sub-assembly.
(v) Completed goods that are available for sale or lease in
wholesale or retail trade.
(b) "Special tool" means a finished or unfinished device such
as a die, jig, fixture, mold, pattern, special gauge, or similar
device, that is used, or is being prepared for use, to manufacture
a product and that cannot be used to manufacture another product
without substantial modification of the device. The length of the
economic life of the product manufactured shall not be considered
in making a determination whether a device used to manufacture that
product is a special tool. Special tools do not include the
following:
(i) A device that differs in character from dies, jigs,
fixtures, molds, patterns, or special gauges.
(ii) Standard tools.
(iii) Machinery or equipment, even if customized, and even if
used in conjunction with special tools.
(c) "Standard tool" means a die, jig, fixture, mold, pattern,
gauge, or other tool that is not a special tool. Standard tool does
not include machinery or equipment, even if customized, and even if
used in conjunction with special tools or standard tools.
Sec. 8. (1) Personal property that is inventory is exempt from
the collection of the personal property specific tax levied under
this act.
(2) As used in this section:
(a) "Heavy earth moving equipment" means industrial
construction equipment that meets all of the following criteria:
(i) Is self-propelled.
(ii) Weighs 10,000 pounds or more.
(iii) Is designed and principally intended to move, transport,
or reconfigure dirt, earth, soil, or other construction material at
a construction site.
(b) "Inventory" means 1 of the following:
(i) The stock of goods held for resale in the regular course of
trade of a retail or wholesale business.
(ii) Finished goods, goods in process, and raw materials of a
manufacturing business.
(iii) Materials and supplies, including repair parts and fuel.
(iv) Heavy earth moving equipment subject to 1 or more lease
agreements with the same person totaling not more than 1 year and
principally intended for sale rather than lease. A lease agreement
used to support this exemption shall be made available to the
assessor on request and shall be considered confidential
information to be used for assessment purposes only.
(3) Inventory does not include the following:
(a) Personal property, other than heavy earth moving
equipment, under lease or principally intended for lease rather
than sale.
(b) Heavy earth moving equipment subject to 1 or more lease
agreements with the same person totaling more than 1 year or
principally intended for lease rather than sale.
(c) Personal property for which a deduction or allowance for
depreciation, depletion, or amortization is allowed or has been
taken under the internal revenue code of 1986.
Sec. 9. (1) Computer software is exempt from the personal
property specific tax levied under this act unless either of the
following is true:
(a) The software is incorporated as a permanent component of a
computer, machine, piece of equipment, or device, or of real
property, and the software is not commonly available separately.
(b) The cost of the software is included as part of the cost
of a computer, machine, piece of equipment, or device, or of the
cost of real property on the books or records of the taxpayer.
(2) This section shall not be construed to affect the value of
a machine, device, piece of equipment, or computer, or the value of
real property, or to affect the taxable status of any other
personal property subject to tax under this act.
(3) As used in this section, "computer software" means a set
of statements or instructions that when incorporated in a machine-
usable medium is capable of causing a machine or device having
information processing capabilities to indicate, perform, or
achieve a particular function, task, or result.
Sec. 10. Intangible personal property is exempt from the
collection of the personal property specific tax levied under this
act.
Sec. 11. Until December 30, 2018, personal property located in
an area designated as a rural enterprise community as of the
effective date of the amendatory act that added this section under
title XIII of the omnibus budget reconciliation act of 1993, Public
Law 103-66, 107 Stat. 416, that is a component part of a natural
gas distribution system is exempt from the personal property
specific tax levied under this act.
Sec. 12. Bottled water coolers available for lease or subject
to an existing lease are exempt from the personal property specific
tax levied under this act.
Sec. 13. Personal property classified under section 34c of the
general property tax act, 1893 PA 206, MCL 211.34c, as industrial
personal property or commercial personal property is exempt from
that portion of the personal property specific tax described in
section 5(2)(b) to the extent provided under section 1211 of the
revised school code, 1976 PA 451, MCL 380.1211. Personal property
classified under section 34c of the general property tax act, 1893
PA 206, MCL 211.34c, as industrial personal property is exempt from
that portion of the personal property specific tax described in
section 5(2)(a), as provided in section 3 of the state education
tax act, 1993 PA 331, MCL 211.903.
Sec. 14. Personal property located in a renaissance zone under
the Michigan renaissance zone act, 1996 PA 376, MCL 125.2681 to
125.2696, is exempt from the personal property specific 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.
Sec. 15. (1) The governing body of an eligible local assessing
district may adopt a resolution to exempt from the collection of
taxes under this act all new personal property owned or leased by
an eligible business located in 1 or more eligible districts or
distressed parcels designated in the resolution. The clerk of the
eligible local assessing district shall notify in writing the
assessor of the local tax collecting unit in which the eligible
district or distressed parcel is located and the legislative body
of each taxing unit that levies ad valorem property taxes in the
eligible local assessing district in which the eligible district or
distressed parcel is located. Before acting on the resolution, the
governing body of the eligible local assessing district shall
afford the assessor and a representative of the affected taxing
units an opportunity for a hearing.
(2) The exemption under this section is effective on the
December 31 immediately succeeding the adoption of the resolution
by the governing body of the eligible local assessing district and
shall continue in effect for a period specified in the resolution.
However, an exemption shall not be granted under this section after
December 31, 2012 for an eligible business located in an eligible
district identified in subsection (6)(e)(ix) or in an eligible local
assessing district identified in subsection (6)(g)(ii). A copy of
the resolution shall be filed with the state tax commission, the
state treasurer, and the president of the Michigan strategic fund.
A resolution is not effective unless approved as provided in
subsection (3).
(3) Not more than 60 days after receipt of a copy of the
resolution adopted under subsection (1), the state tax commission
shall determine if the new personal property subject to the
exemption is owned or leased by an eligible business and if the
eligible business is located in 1 or more eligible districts. If
the state tax commission determines that the new personal property
subject to the exemption is owned or leased by an eligible business
and that the eligible business is located in 1 or more eligible
districts, the state treasurer, with the written concurrence of the
president of the Michigan strategic fund, shall approve the
resolution adopted under subsection (1) if the state treasurer and
the president of the Michigan strategic fund determine that
exempting new personal property of the eligible business is
necessary to reduce unemployment, promote economic growth, and
increase capital investment in this state. In addition, for an
eligible business located in an eligible local assessing district
described in subsection (6)(g)(ii), the resolution adopted under
subsection (1) shall be approved if the state treasurer and the
president of the Michigan strategic fund determine that granting
the exemption is a net benefit to this state, that expansion,
retention, or location of an eligible business will not occur in
this state without this exemption, and that there is no significant
negative effect on employment in other parts of this state as a
result of the exemption.
(4) Subject to subsection (5), if an existing eligible
business sells or leases new personal property exempt under this
section to an acquiring eligible business, the exemption granted to
the existing eligible business shall continue in effect for the
period specified in the resolution adopted under subsection (1) for
the new personal property purchased or leased from the existing
eligible business by the acquiring eligible business and for any
new personal property purchased or leased by the acquiring eligible
business.
(5) An exemption for an existing eligible business shall
continue in effect for an acquiring eligible business under
subsection (4) only if the continuation of the exemption is
approved in a resolution adopted by the governing body of an
eligible local assessing district.
(6) As used in this section:
(a) "Acquiring eligible business" means an eligible business
that purchases or leases assets of an existing eligible business,
including the purchase or lease of new personal property exempt
under this section, and that will conduct business operations
similar to those of the existing eligible business at the location
of the existing eligible business within the eligible district.
(b) "Authorized business" means that term as defined in
section 3 of the Michigan economic growth authority act, 1995 PA
24, MCL 207.803.
(c) "Distressed parcel" means a parcel of real property
located in a city or village that meets all of the following
conditions:
(i) Is located in a qualified downtown revitalization district.
As used in this subparagraph, "qualified downtown revitalization
district" means an area located within 1 or more of the following:
(A) The boundaries of a downtown district as defined in
section 1 of 1975 PA 197, MCL 125.1651.
(B) The boundaries of a principal shopping district or a
business improvement district as defined in section 1 of 1961 PA
120, MCL 125.981.
(C) The boundaries of the local governmental unit in an area
that is zoned and primarily used for business as determined by the
local governmental unit.
(ii) Meets 1 of the following conditions:
(A) Has a blighted or functionally obsolete building located
on the parcel. As used in this sub-subparagraph, "blighted" and
"functionally obsolete" mean those terms as defined in section 2 of
the brownfield redevelopment financing act, 1996 PA 381, MCL
125.2652.
(B) Is a vacant parcel that had been previously occupied.
(iii) Is zoned to allow for mixed use.
(d) "Eligible business" means, effective August 7, 1998, a
business engaged primarily in manufacturing, mining, research and
development, wholesale trade, office operations, or the operation
of a facility for which the business that owns or operates the
facility is an eligible taxpayer. Eligible business does not
include a casino, retail establishment, professional sports
stadium, or that portion of an eligible business used exclusively
for retail sales. As used in this subdivision, "casino" means a
casino regulated by this state pursuant to the Michigan gaming
control and revenue act, 1996 IL 1, MCL 432.201 to 432.226, and all
property associated or affiliated with the operation of a casino,
including, but not limited to, a parking lot, hotel, motel, or
retail store.
(e) "Eligible district" means 1 or more of the following:
(i) An industrial development district as that term is defined
in 1974 PA 198, MCL 207.551 to 207.572.
(ii) A renaissance zone as that term is defined in the Michigan
renaissance zone act, 1996 PA 376, MCL 125.2681 to 125.2696.
(iii) An enterprise zone as that term is defined in the
enterprise zone act, 1985 PA 224, MCL 125.2101 to 125.2123.
(iv) A brownfield redevelopment zone as that term is designated
under the brownfield redevelopment financing act, 1996 PA 381, MCL
125.2651 to 125.2672.
(v) An empowerment zone designated under subchapter U of
chapter 1 of the internal revenue code of 1986, 26 USC 1391 to
1397F.
(vi) An authority district or a development area as those terms
are defined in the tax increment finance authority act, 1980 PA
450, MCL 125.1801 to 125.1830.
(vii) An authority district as that term is defined in the
local development financing act, 1986 PA 281, MCL 125.2151 to
125.2174.
(viii) A downtown district or a development area as those terms
are defined in 1975 PA 197, MCL 125.1651 to 125.1681.
(ix) An area that contains an eligible taxpayer.
(f) "Eligible distressed area" means 1 of the following:
(i) That term as defined in section 11 of the state housing
development authority act of 1966, 1966 PA 346, MCL 125.1411.
(ii) An area that contains an eligible taxpayer.
(g) "Eligible local assessing district" means a city, village,
or township that contains an eligible distressed area or a city,
village, or township that meets 1 or more of the following
conditions and is located in a county all or a portion of which
borders another state or Canada:
(i) Is currently served by not fewer than 4 of the following
existing services:
(A) water.
(B) sewer.
(C) police.
(D) fire.
(E) trash.
(F) recycling.
(ii) Is party to an agreement under 1984 PA 425, MCL 124.21 to
124.30, with a city, village, or township that provides not fewer
than 4 of the following existing services:
(A) water.
(B) sewer.
(C) police.
(D) fire.
(E) trash.
(F) recycling.
(h) "Eligible taxpayer" means a taxpayer that meets both of
the following conditions:
(i) Is an authorized business.
(ii) Is eligible for tax credits described in section 9 of the
Michigan economic growth authority act, 1995 PA 24, MCL 207.809.
(i) "Existing eligible business" means an eligible business
identified in a resolution adopted under subsection (1) for which
an exemption has been granted under this section.
(j) "New personal property" means personal property that was
not previously subject to tax under this act or was not previously
placed in service in this state and that is placed in an eligible
district after a resolution under subsection (1) is approved by the
eligible local assessing district.
Sec. 16. (1) Alternative energy personal property is exempt
from the collection of taxes under this act as provided in this
section.
(2) If the Michigan next energy authority certifies
alternative energy personal property as eligible for the exemption
under this section as provided in the Michigan next energy
authority act, 2002 PA 593, MCL 207.821 to 207.827, the Michigan
next energy authority shall forward a copy of that certification to
all of the following:
(a) The secretary of the local school district in which the
alternative energy personal property is located.
(b) The treasurer of the local tax collecting unit in which
the alternative energy personal property is located.
(3) Within 60 days after receipt of the certification of
alternative energy personal property under subsection (2), the
school board for the local school district in which the alternative
energy personal property is located, with the written concurrence
of the superintendent of the local school district, may adopt a
resolution to not exempt that alternative energy personal property
from a tax levied in that local school district under section 1212
of the revised school code, 1976 PA 451, MCL 380.1212, or a tax
levied under the revised school code, 1976 PA 451, MCL 380.1 to
380.1852, to retire outstanding bonded indebtedness. If a
resolution is adopted under this subsection, a copy of the
resolution shall be forwarded to the Michigan next energy
authority, to the treasurer of the local tax collecting unit, and
to the state treasurer. If a resolution is not adopted under this
subsection, that alternative energy personal property is exempt
from a tax levied in that local school district under section 1212
of the revised school code, 1976 PA 451, MCL 380.1212, or a tax
levied under the revised school code, 1976 PA 451, MCL 380.1 to
380.1852, to retire outstanding bonded indebtedness, for the period
provided in subsection (5).
(4) Within 60 days after receipt of the certification of
alternative energy personal property under subsection (2), the
governing body of the local tax collecting unit in which the
alternative energy personal property is located may adopt a
resolution to not exempt that alternative energy personal property
from the taxes collected in that local tax collecting unit, except
taxes collected under sections 1211 and 1212 of the revised school
code, 1976 PA 451, MCL 380.1211 and 380.1212, a tax levied under
the revised school code, 1976 PA 451, MCL 380.1 to 380.1852, to
retire outstanding bonded indebtedness, or the tax levied by this
state under the state education tax act, 1993 PA 331, MCL 211.901
to 211.906. The clerk of the local tax collecting unit shall notify
in writing the assessor of the local tax collecting unit in which
the alternative energy personal property is located and the
legislative body of each taxing unit that levies ad valorem
property taxes in that local tax collecting unit in which the
alternative energy personal property is located. Notice of the
meeting at which the resolution will be considered shall be
provided as required under the open meetings act, 1976 PA 267, MCL
15.261 to 15.275. Before acting on the resolution, the governing
body of the local tax collecting unit shall afford the assessor and
a representative of the affected taxing units an opportunity for a
hearing. If a resolution is adopted under this subsection, a copy
of the resolution shall be forwarded to the Michigan next energy
authority and to the state treasurer. If a resolution is not
adopted under this subsection, that alternative energy personal
property is exempt from the taxes collected in that local tax
collecting unit for the period provided in subsection (5), except
as otherwise provided in this section.
(5) The exemption under this section applies to taxes levied
after December 31, 2010 and before January 1, 2013.
(6) As used in this section:
(a) "Alternative energy personal property" means all of the
following:
(i) An alternative energy system.
(ii) An alternative energy vehicle.
(iii) All personal property of an alternative energy technology
business.
(iv) The personal property of a business that is not an
alternative energy technology business that is used solely for the
purpose of researching, developing, or manufacturing an alternative
energy technology.
(b) "Alternative energy system", "alternative energy vehicle",
"alternative energy technology", and "alternative energy technology
business" mean those terms as defined in the Michigan next energy
authority act, 2002 PA 593, MCL 207.821 to 207.827.
Sec. 17. (1) Upon application for an exemption under this
section by the administration of an innovations center, the
governing body of a local tax collecting unit may adopt a
resolution to exempt from the collection of taxes under this act
all personal property that is owned or used by any qualified high-
technology business located in that innovations center and all
personal property that is owned or used by the administration of
that innovations center. The clerk of the local tax collecting unit
shall notify in writing the assessor of the local tax collecting
unit and the legislative body of each taxing unit that levies ad
valorem property taxes in the local tax collecting unit. Before
acting on the resolution, the governing body of the local tax
collecting unit shall afford the assessor and a representative of
the affected taxing units an opportunity for a hearing. A copy of
the resolution shall be filed with the state tax commission. The
application for exemption under this section shall be in a form
prescribed by the state tax commission.
(2) The administration of an innovations center may claim the
exemption under subsection (1) by filing an affidavit claiming the
exemption with the assessor of the local tax collecting unit. The
affidavit shall be in a form prescribed by the state tax
commission.
(3) As used in this section:
(a) "Certified technology park" means that term as defined in
section 2 of the local development financing act, 1986 PA 281, MCL
125.2152.
(b) "High-technology activity" means 1 or more of the
following:
(i) Advanced computing, which is any technology used in the
design and development of any of the following:
(A) Computer hardware and software.
(B) Data communications.
(C) Information technologies.
(ii) Advanced materials, which are materials with engineered
properties created through the development of specialized process
and synthesis technology.
(iii) Biotechnology, which is any technology that uses living
organisms, cells, macromolecules, microorganisms, or substances
from living organisms to make or modify a product, improve plants
or animals, or develop microorganisms for useful purposes.
Biotechnology does not include human cloning as defined in section
16274 of the public health code, 1978 PA 368, MCL 333.16274, or
stem cell research with embryonic tissue.
(iv) Electronic device technology, which is any technology that
involves microelectronics, semiconductors, electronic equipment,
and instrumentation, radio frequency, microwave, and millimeter
electronics, and optical and optic-electrical devices, or data and
digital communications and imaging devices.
(v) Engineering or laboratory testing related to the
development of a product.
(vi) Technology that assists in the assessment or prevention of
threats or damage to human health or the environment, including,
but not limited to, environmental cleanup technology, pollution
prevention technology, or development of alternative energy
sources.
(vii) Medical device technology, which is any technology that
involves medical equipment or products other than a pharmaceutical
product that has therapeutic or diagnostic value and is regulated.
(viii) Life science technology, which is any technology that has
a medical diagnostic or treatment value, including, but not limited
to, pharmaceutical products.
(ix) Product research and development.
(c) "Innovations center" means real property that meets all of
the following conditions:
(i) Is a business incubator as that term is defined in section
2 of the local development financing act, 1986 PA 281, MCL
125.2152.
(ii) Is located within a single building.
(iii) Is primarily used to provide space and administrative
assistance to 1 or more qualified high-technology businesses
located within the building.
(d) "Qualified high-technology business" means a business that
is either of the following:
(i) A business with not less than 25% of the total operating
expenses of the business used for research and development as
determined under generally accepted accounting principles.
(ii) A business whose primary business activity is high-
technology activity.
Sec. 18. Unpaid personal property specific taxes are subject
to collection as provided under the general property tax act, 1893
PA 206, MCL 211.1 to 211.155.
Enacting section 1. This act does not take effect unless
Senate Bill No.____ or House Bill No. 4102(request no. 00489'11) of
the 96th Legislature is enacted into law.
