Bill Text: MI HB5442 | 2023-2024 | 102nd Legislature | Introduced
Bill Title: Taxation: hotel-motel; state convention facility development act; clarify application to short-term rentals and make other modifications. Amends title & secs. 3, 4, 8, 9 & 19 of 1985 PA 106 (MCL 207.623 et seq.). TIE BAR WITH: HB 5438'24
Spectrum: Partisan Bill (Democrat 22-0)
Status: (Introduced) 2024-02-14 - Per Rule 41 Referred To Committee On Local Government And Municipal Finance [HB5442 Detail]
Download: Michigan-2023-HB5442-Introduced.html
HOUSE BILL NO. 5442
A bill to amend 1985 PA 106, entitled
"State convention facility development act,"
by amending the title and sections 3, 4, 8, 9, and 19 (MCL 207.623, 207.624, 207.628, 207.629, and 207.639), sections 3 and 9 as amended by 2022 PA 276 and sections 4 and 8 as amended by 2009 PA 61.
the people of the state of michigan enact:
An act to impose a state excise tax on owners of short-term rentals and persons engaged in the business of providing rooms for dwelling, lodging, or sleeping purposes to transient guests in certain counties; to provide for the levy, assessment, and collection of the tax; to provide for the disposition and appropriation of the collections from the tax; to create a convention facility development fund; to authorize the distributions from the fund; to authorize the use of distributions from the tax as security for any bonds, obligations, or other evidences of indebtedness issued to finance convention facilities as provided by law and for certain other purposes; to prescribe certain other matters relating to bonds, obligations, or other evidences of indebtedness issued for such purposes.
(a) "Accommodations" means the room or other space provided to transient guests for dwelling, lodging, or sleeping, including furnishings and other accessories, in a facility that is not a campground, hospital, nursing home, emergency shelter, or community mental health or community substance abuse treatment facility. Accommodations do not include food or beverages.
(b) "Commissioner" means the state treasurer.
(c) "Convention facility" means 1 or more facilities owned or leased by a local governmental unit or metropolitan authority created under the regional convention facility authority act, 2008 PA 554, MCL 141.1351 to 141.1379, that are any combination of a convention hall, auditorium, meeting rooms, and exhibition areas that are separate and distinct and contiguous to each other, and related adjacent public areas generally available to members of the public for lease on a short-term basis for holding conventions, meetings, exhibits, and similar events and the necessary site or sites, together with appurtenant properties necessary and convenient for use in connection with the facility. Convention facility includes a qualified convention facility as that term is defined under in section 5 of the regional convention facility authority act, 2008 PA 554, MCL 141.1355.
(d) "Convention hotel" means a facility used in the business of providing accommodations that has more than 80 1 or more rooms for providing accommodations to transient guests and that complies with all of the following:
(i) Is located within a county having a population according to the most recent decennial census of 700,000 or more.
(ii) Is located within a county that is 1 or more of the following:
(A) A county that has a convention facility with 350,000 square feet or more of total exhibit space.
(B) A county that has 2,000 or more rooms to provide accommodations for transient guests.
(e) "Local governmental unit" means a county, township, city, village, or a metropolitan authority formed under the regional convention facility authority act, 2008 PA 554, MCL 141.1351 to 141.1379.
(f) "Owner", with respect to a short-term rental, means that term as defined in section 2 of the short-term rental regulation act.
(g) (f) "Person" means a natural person, partnership, limited partnership, fiduciary, association, corporation, limited liability company, or other entity.
(h) (g) "Public-private arrangement" means a public-private arrangement authorized under the regional convention facility authority act, 2008 PA 554, MCL 141.1351 to 141.1379.
(i) (h) "Room charge" means the charge imposed for the use or occupancy of accommodations, excluding charges for food, beverages, telephone services, the use tax imposed under the use tax act, 1937 PA 94, MCL 205.91 to 205.111, or like services paid in connection with the charge. Room charge does not include reimbursement of the assessment imposed by the community convention or tourism marketing act, 1980 PA 395, MCL 141.871 to 141.880, the convention and tourism marketing act, 1980 PA 383, MCL 141.881 to 141.889, or this act. For a short-term rental, room charge means the occupancy charge as that term is defined in section 2 of the short-term rental regulation act.
(j) "Short-term rental" means a short-term rental as that term is defined in section 2 of the short-term rental regulation act that complies with all of the following:
(i) Is located within a county having a population according to the most recent decennial census of 700,000 or more.
(ii) Is located within a county that is 1 or more of the following:
(A) A county that has a convention facility with 350,000 square feet or more of total exhibit space.
(B) A county that has 2,000 or more rooms to provide accommodations for transient guests.
(k) (i) "Transient guest" means a natural person staying less than 30 consecutive days.
Sec. 4. (1) There is hereby levied upon and there shall be collected from owners of short-term rentals and any person engaged in the business of providing accommodations to transient guests in a convention hotel, whether or not membership is required, an excise tax at the following rates:
(a) For a short-term rental or a convention hotel located within a qualified local governmental unit under section 9(4), the following:
(i) A rate of 3% of the room charge for short-term rentals or accommodations in a convention hotel with 81 1 to 160 rooms.
(ii) A rate of 6% of the room charge for accommodations in a convention hotel with more than 160 rooms.
(b) For all other short-term rentals or convention hotels not subject to the tax rates imposed by subdivision (a), the following:
(i) A rate of 1.5% of the room charge for short-term rentals or accommodations in a convention hotel with 81 1 to 160 rooms.
(ii) A rate of 5% of the room charge for accommodations in a convention hotel with more than 160 rooms.
(2) Beginning with the state fiscal year 1987, a person engaged in the business of providing accommodations to transient guests in a convention hotel is exempt from the tax imposed by this act for any state fiscal year in which appropriations of the tax collections pursuant to under this act from that convention hotel have not been made for distributions pursuant to under section 9 that would be received by a qualified local governmental unit from the collections of the tax under this act or section 1207 of the Michigan liquor control code of 1998, 1998 PA 58, MCL 436.2207, that the qualified local governmental unit is eligible to receive.
Sec. 8. (1) The convention facility development fund is created in the state treasury. The collections state treasurer shall deposit all of the following in the convention facility development fund:
(a) Collections from the tax imposed by section 4. shall be deposited in the state treasury, to the credit of the convention facility development fund, which is hereby created within the state treasury.
(b) Collections from the additional tax imposed under section 1207 of the Michigan liquor control code of 1998, 1998 PA 58, MCL 436.2207. , funds
(c) Funds appropriated from the 21st century jobs trust fund under subsection (4). , and amounts
(d) Amounts designated under section 5(b)(iii) of the health and safety fund act, 1987 PA 264, MCL 141.475. , shall also be deposited to the credit of the convention facility development fund.
(2) The convention facility development fund shall be distributed for certain state purposes and to local governmental units for use only for 1 or more of the following purposes:
(a) Acquiring, constructing, improving, enlarging, renewing, replacing, or leasing a convention facility.
(b) In conjunction with an activity listed in subdivision (a), repairing, furnishing, and equipping the convention facility.
(c) Refinancing an activity listed in subdivision (a) or (b).
(d) General fund expenditures.
(e) In the case of a local governmental unit that is a metropolitan authority, for any purpose authorized under the regional convention facility authority act, 2008 PA 554, MCL 141.1351 to 141.1379.
(f) Programs to assist with or provide child care.
(g) Housing activities.
(3) A contract made by a local governmental unit for the purposes included in subsection (2)(a) or (b) concerning a convention facility funded by distributions pursuant to under section 9 shall must contain a fixed price or guaranteed maximum price for the total cost of activities conducted for these purposes pursuant to that contract.
(4) For the fiscal year ending September 30, 2010, $9,000,000.00 is appropriated from the 21st century jobs trust fund described in section 2 of the Michigan trust fund act, 2000 PA 489, MCL 12.252, and transferred to and deposited in the convention facility development fund for purposes authorized under subsection (2)(e).
(5) As used in this section, "21st century jobs trust fund" means that term as defined in section 2 of the Michigan trust fund act, 2000 PA 489, MCL 12.252.
Sec. 9. (1) Except as provided in subsection (5) or (6), on or before the thirtieth day of each month, the state treasurer shall make a distribution from the convention facility development fund to a qualified local governmental unit. The distribution shall must be an amount equal to the sum of the collections from the excise tax levied for accommodations under this act for the previous month from the convention hotels and short-term rentals in the county in which the convention facility is or is to be located and in any county in which convention hotels are located that is contiguous to the county in which the convention facility is located, or is to be located, the additional tax imposed under section 1207 of the Michigan liquor control code of 1998, 1998 PA 58, MCL 436.2207, for the previous month received in the fund, and any distribution received under section 5(b)(iii) of the health and safety fund act, 1987 PA 264, MCL 141.475, and from the 21st century jobs trust fund under section 8(4). However, distributions for any state fiscal year to any qualified local governmental unit under this section shall must not exceed an amount equal to the amount pledged, assigned, or dedicated by the qualified local governmental unit for the payment during that state fiscal year of bonds, obligations, or other evidences of indebtedness incurred pursuant to this act or the regional convention facility authority act, 2008 PA 554, MCL 141.1351 to 141.1379, other than payments under a public-private arrangement, plus any amount necessary to maintain a fully funded debt reserve or other reserves intended to secure the principal and interest on the bonds, obligations, or other evidences of indebtedness as contained in the resolution or ordinance authorizing their issuance.
(2) Notwithstanding the distributions provided by subsection (1), if a local governmental unit becomes a qualified local governmental unit entitled to receive distributions from the tax imposed under section 1207 of the Michigan liquor control code of 1998, 1998 PA 58, MCL 436.2207, or from the tax imposed by this act in counties in which the convention facility is located or in a county in which a convention hotel is located that is contiguous to the county in which the convention facility is located, and from any distribution under section 5(b)(iii) of the health and safety fund act, 1987 PA 264, MCL 141.475, no other qualified local governmental unit is entitled to distributions pursuant to under this section for which that qualified local governmental unit has previously become entitled, until such time as that the qualified local governmental unit ownership or leasehold interest described in subsection (3) is transferred to another local governmental unit. If that transfer renders the transferee a qualified local governmental unit, the transferee is, immediately upon on that transfer, entitled to the distributions to a qualified local governmental unit provided in subsection (1) and the priority provided to a qualified local governmental unit in this subsection, notwithstanding that the amount of the distributions may increase as a result of that transfer. A transfer under this subsection includes a transfer that occurs on a transfer date under the regional convention facility authority act, 2008 PA 554, MCL 141.1351 to 141.1379.
(3) Notwithstanding the provisions of subsection (2), if the transfer and lease of a qualified convention facility to an authority is disapproved and the authority is dissolved under section 19(1) of the regional convention facility authority act, 2008 PA 554, MCL 141.1369, then a distribution from the convention facility development fund of proceeds received under section 5(b)(iii) of the health and safety fund act, 1987 PA 264, MCL 141.475, shall must be made to a building authority for a county having a population of not less than 1,000,000 and not more than 1,500,000 according to the most recent federal decennial census for the purpose of developing, leasing, or operating a convention facility as defined in this act and no other qualified local governmental unit is entitled to any distribution of proceeds received under section 5(b)(iii) of the health and safety fund act, 1987 PA 264, MCL 141.475.
(4) As used in this act, "qualified local governmental unit" means, except as otherwise provided in this subsection, a city, village, township, county, or authority that is located in, or includes within its territory or jurisdiction, a county in which convention hotels or short-term rentals are located and that either is the owner or lessee of a convention facility with 350,000 square feet or more of total exhibit space on July 30, 1985 or, if such a convention facility does not exist, will be the owner or lessee of a convention facility with 350,000 square feet or more of total exhibit space through the application of distributions under this section to the purchase or lease of a convention facility. Qualified local governmental unit includes a metropolitan authority that leases, develops, operates, and maintains a qualified convention facility under the regional convention facility authority act, 2008 PA 554, MCL 141.1351 to 141.1379. If the transfer and lease of a qualified convention facility to an authority is disapproved and the authority is dissolved under section 19(1) of the regional convention facility authority act, 2008 PA 554, MCL 141.1369, then for purposes of any distribution from the convention facility development of proceeds under section 5(b)(iii) of the health and safety fund act, 1987 PA 264, MCL 141.475, qualified local governmental unit means a building authority for a county having a population of not less than 1,000,000 and not more than 1,500,000 according to the most recent federal decennial census.
(5) Before the 2015-2016 fiscal year, collections from the excise tax levied for accommodations under this act and collections from the tax imposed under section 1207 of the Michigan liquor control code of 1998, 1998 PA 58, MCL 436.2207, shall not be paid to a qualified local governmental unit for the repayment of bonds, obligations, or other evidences of indebtedness incurred after 2007.
(6) Beginning in fiscal year 2015-2016, and each fiscal year thereafter, if a transfer and a lease of a qualified convention facility is disapproved and an authority is dissolved under section 19(1) of the regional convention facility authority act, 2008 PA 554, MCL 141.1369, then the collections from the excise tax levied for accommodations under this act shall must be distributed to each county in which it was levied based on the amount collected in that county. However, if an excise tax for accommodations is levied in a qualified city at a rate greater than the rate levied in that portion of the county in which the qualified city is not located, the qualified city shall receive the collections of the excise tax for accommodations in an amount equal to the difference between the rate levied in the qualified city and the rate levied in that portion of the county in which the qualified city is not located. The funds described in this subsection are not available for a distribution of under subsection (1). As used in this subsection, "qualified city" means that term as defined in section 5 of the regional convention facility authority act, 2008 PA 554, MCL 141.1355.
(7) If a building authority becomes a qualified local governmental unit under subsection (4), collections from distributions under section 5(b)(iii) of the health and safety fund act, 1987 PA 264, MCL 141.475, shall be paid by the state treasurer on or before the thirtieth day of each month to that building authority.
Sec. 19. The excise tax imposed pursuant to this act shall take takes effect on the first day of the calendar month, but not less than 29 days, after a facility becomes a convention hotel or a short-term rental as certified by the state treasurer.
Enacting section 1. This amendatory act does not take effect unless Senate Bill No.____ or House Bill No. 5438 (request no. 03372'23 **) of the 102nd Legislature is enacted into law.
