Bill Text: MI HB5525 | 2015-2016 | 98th Legislature | Engrossed
Bill Title: Property tax; special assessments; state essential services assessment act; modify filing requirements. Amends secs. 3, 7, 9 & 11 of 2014 PA 92 (MCL 211.1053 et seq.).
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2016-05-10 - Assigned Pa 107'16 With Immediate Effect [HB5525 Detail]
Download: Michigan-2015-HB5525-Engrossed.html
HB-5525, As Passed Senate, April 28, 2016
SENATE SUBSTITUTE FOR
HOUSE BILL NO. 5525
A bill to amend 2014 PA 92, entitled
"State essential services assessment act,"
by amending sections 3, 7, 9, and 11 (MCL 211.1053, 211.1057,
211.1059, and 211.1061), sections 3 and 7 as amended by 2015 PA
120.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 3. As used in this act:
(a) Except as otherwise provided in subparagraph (ii),
"acquisition cost" means that term as defined in subparagraph (i),
as follows:
(i) (a)
"Acquisition cost" means
the fair market value of
personal property at the time of acquisition by the first owner,
including the cost of freight, sales tax, and installation, and
other capitalized costs, except capitalized interest. There is a
rebuttable presumption that the acquisition price paid by the first
owner for personal property, and any costs of freight, sales tax,
and installation, and other capitalized costs, except capitalized
interest, reflect the acquisition cost. For property described in
subdivision
(e)(i) that would otherwise
be prior to the current tax
year was exempt under section 7k of the general property tax act,
1893 PA 206, MCL 211.7k, under an industrial facilities exemption
certificate issued under 1974 PA 198, MCL 207.551 to 207.572, and
effective before January 1, 2013, which either has been extended
for property not yet exempt under section 9m or 9n of the general
property tax act, 1893 PA 206, MCL 211.9m and 211.9n, or had an
expiration date after the date the tax levied under this act is
due, and for property described in subdivision (e)(iii) that is
exempt under an industrial facilities exemption certificate issued
under 1974 PA 198, MCL 207.551 to 207.572, and effective before
January 1, 2013, acquisition cost means 1/2 of the fair market
value of that personal property at the time of acquisition by the
first owner, including the cost of freight, sales tax, and
installation, and other capitalized costs, except capitalized
interest. The acquisition cost for personal property exempt under
the Michigan renaissance zone act, 1996 PA 376, MCL 125.2681 to
125.2696, is $0.00 except for the 3 years immediately preceding the
expiration of the exemption of that personal property under the
Michigan renaissance zone act, 1996 PA 376, MCL 125.2681 to
125.2696, during which period of time the acquisition cost for that
personal property means the fair market value of that personal
property at the time of acquisition by the first owner, including
the cost of freight, sales tax, and installation, and other
capitalized costs, except capitalized interest, multiplied by the
percentage reduction in the exemption as provided in section 9(3)
of the Michigan renaissance zone act, 1996 PA 376, MCL 125.2689.
The
state tax commission department
may provide guidelines for
circumstances in which the actual acquisition price is not
determinative of acquisition cost and the basis of determining
acquisition cost in those circumstances. When the acquisition cost,
year of acquisition by the first owner, or both are unknown, the
state
tax commission department may provide guidelines for
estimating the acquisition cost and year of acquisition by the
first
owner. The state tax commission department
may issue
guidelines that allow for the reduction of acquisition cost for
property that is idle, is obsolete or has material obsolescence, or
is surplus.
(ii) Beginning with the 2017 assessment year, for property
that is construction in progress only, "acquisition cost" means 1/2
of the fair market value at the time acquired by the first owner,
including the cost of freight, sales tax, and installation. For
property that is construction in progress, "acquired by" means the
year the property is first reported on the combined form as
prescribed in section 7(8) in the report of the fair market value
and year of acquisition by the first owner of qualified new
personal property or qualified previously existing personal
property.
(b) "Assessment" means the state essential services assessment
levied under section 5.
(c) "Assessment year" means the year in which the state
essential services assessment levied under section 5 is due.
(d) "Eligible claimant" means a person that claims an
exemption for eligible personal property.
(e) "Eligible personal property" means all of the following:
(i) Personal property exempt under section 9m or 9n of the
general property tax act, 1893 PA 206, MCL 211.9m and 211.9n.
(ii) Personal property that is eligible manufacturing personal
property as defined in section 9m of the general property tax act,
1893 PA 206, MCL 211.9m, and that is exempt under section 9f of the
general property tax act, 1893 PA 206, MCL 211.9f, which exemption
was approved under section 9f of the general property tax act, 1893
PA 206, MCL 211.9f, after 2013, unless both of the following
conditions are satisfied:
(A) The application for the exemption was filed with the
eligible local assessing district or Next Michigan development
corporation before August 5, 2014.
(B) The resolution approving the exemption states that the
project is expected to have total new personal property of over
$25,000,000.00 within 5 years of the adoption of the resolution by
the eligible local assessing district or Next Michigan development
corporation.
(iii) Personal property subject to an extended industrial
facilities exemption certificate under section 11a of 1974 PA 198,
MCL 207.561a.
(iv) Personal property subject to an extended exemption under
section 9f(8)(a) of the general property tax act, 1893 PA 206, MCL
211.9f.
(f) "Fund board" means the board of directors of the Michigan
strategic fund created under the Michigan strategic fund act, 1984
PA 270, MCL 125.2001 to 125.2094.
(g) "Michigan economic development corporation" means the
Michigan economic development corporation, the public body
corporate created under section 28 of article VII of the state
constitution of 1963 and the urban cooperation act of 1967, 1967
(Ex Sess) PA 7, MCL 124.501 to 124.512, by a contractual interlocal
agreement effective April 5, 1999, and subsequently amended,
between local participating economic development corporations
formed under the economic development corporations act, 1974 PA
338, MCL 125.1601 to 125.1636, and the Michigan strategic fund.
(h) "Michigan strategic fund" means the Michigan strategic
fund created under the Michigan strategic fund act, 1984 PA 270,
MCL 125.2001 to 125.2094.
(i) "Next Michigan development corporation" means that term as
defined under the Next Michigan development act, 2010 PA 275, MCL
125.2951 to 125.2959.
(j) "Department" means the department of treasury.
Sec.
7. (1) The department of treasury shall collect and
administer the assessment as provided in this section.
(2) Not later than May 1 in each assessment year, the
department
of treasury shall make available in electronic form to
each eligible claimant a statement for calculation of the
assessment as provided in section 5. That statement shall be
developed from the information submitted by the eligible claimant
on the combined document as required by sections 9m and 9n of the
general property tax act, 1893 PA 206, MCL 211.9m and 211.9n.
(3) Not later than August 15 in each assessment year, each
eligible
claimant shall submit electronically to the department of
treasury
revise as necessary and
certify the completed statement ,
in
a form and manner prescribed by the department of treasury, and
make full payment of the assessment levied under section 5 for that
assessment
year as calculated in section 5(2). The department of
treasury
may waive or delay the electronic filing
certification
requirement
at its discretion. The department of treasury may
accept a timely filed statement that calculates the tax under this
act that is transmitted and certified using reporting software
approved
by the department, of treasury, subject to audit under
subsection
(6). A statement submitted certified
by an eligible
claimant shall include all of the eligible claimant's eligible
personal property located in this state subject to the assessment
levied
under section 5. The completed statement required under this
subsection shall not be subject to disclosure under the freedom of
information act, 1976 PA 442, MCL 15.231 to 15.246.
(4)
If an eligible claimant does not submit certify the
statement and full payment of the assessment levied under section 5
by
August 15, the department of treasury shall issue a notice to
the eligible claimant not later than September 15. The notice shall
include a statement explaining the consequences of nonpayment as
set forth in subsection (5) and instructing the eligible claimant
of its potential responsibility under subsection (5)(e). An
eligible claimant shall submit payment in full by October 15 of the
assessment year along with a penalty of 1% per week on the unpaid
balance for each week payment is not made in full up to a maximum
of 5% of the total amount due and unpaid. For the eligible
claimant's first assessment year, the penalty shall be waived if
the
eligible claimant submits certifies
the statement and makes
full payment of the assessment levied under section 5 by September
15.
An eligible claimant may amend a filed certified statement for
the current year up to September 15. Payments made due to an
amended statement are subject to the penalties as described in this
subsection.
The department of treasury shall issue refunds for
overpayments due to an amended statement. All refunds due to
overpayment shall be remitted without interest except as provided
by section 37 of the tax tribunal act, 1973 PA 186, MCL 205.737.
(5) For any assessment year in which an eligible claimant does
not submit payment in full and any penalty due under subsection (4)
or
(6) by October 15, or if the state tax commission department
discovers that the property is not eligible under section 9m or 9n
of the general property tax act, 1893 PA 206, MCL 211.9m and
211.9n, all of the following shall apply:
(a)
The state tax commission department
shall issue an order
to
rescind no later than the first
Monday in December for the
assessment year any exemption described in section 9m or 9n of the
general property tax act, 1893 PA 206, MCL 211.9m and 211.9n,
granted for any parcel for which payment in full and any penalty
due
have not been received or for which the state tax commission
department discovers that the property is not eligible under
section 9m or 9n of the general property tax act, 1893 PA 206, MCL
211.9m and 211.9n.
(b)
The Upon request of the
department, the state tax
commission shall issue an order to rescind no later than the first
Monday in December for the assessment year any exemption under
section 9f of the general property tax act, 1893 PA 206, MCL
211.9f, which exemption was approved under section 9f of the
general property tax act, 1893 PA 206, MCL 211.9f, after 2013 for
any parcel for which payment in full and any penalty due have not
been received or for which the state tax commission discovers that
the
property is not eligible under section 9m or 9n of the general
property
tax act, 1893 PA 206, MCL 211.9m and 211.9n.personal
property.
(c)
The Upon request of the
department, the state tax
commission shall issue an order to rescind no later than the first
Monday in December for the assessment year any exemption for
eligible personal property subject to an extended industrial
facilities exemption certificate under section 11a of 1974 PA 198,
MCL 207.561a, for any parcel for which payment in full and any
penalty
due have not been received or for which the state tax
commission
department discovers that the property is not eligible
under
section 9m or 9n of the general property tax act, 1893 PA
206,
MCL 211.9m and 211.9n.personal
property.
(d)
The Upon request of the
department, the state tax
commission shall issue an order to rescind no later than the first
Monday in December for the assessment year any extended exemption
for eligible personal property under section 9f(8)(a) of the
general property tax act, 1893 PA 206, MCL 211.9f, for any parcel
for which payment in full and any penalty due have not been
received
or for which the state tax commission department discovers
that
the property is not eligible under section 9m or 9n of the
general
property tax act, 1893 PA 206, MCL 211.9m and
211.9n.personal property.
(e) The eligible claimant shall file with the assessor of the
township
or city within 30 days of the date of the state tax
commission
order to rescind rescission issued under subdivisions
(a) to (d) a statement under section 19 of the general property tax
act, 1893 PA 206, MCL 211.19, for all property for which the
exemption has been rescinded under this section.
(f)
Within 60 days of an order of a
rescission by the state
tax
commission under subdivisions (a) to
(d), the treasurer of the
local tax collecting unit shall issue amended tax bills for any
taxes, including penalty and interest, that were not billed under
the general property tax act, 1893 PA 206, MCL 211.1 to 211.155, or
under 1974 PA 198, MCL 207.551 to 207.572, and that are owed as a
result
of the order of rescission.
(6) An eligible claimant shall provide access to the books and
records, for audit purposes, relating to the location and
description; the date of purchase, lease, or acquisition; and the
purchase price, lease amount, or value of all personal property
owned by, leased by, or in the possession of that person or a
related entity if requested by the assessor of the township or
city,
county equalization department, or department of treasury for
the year in which the statement is filed and the immediately
preceding
3 years. The department of treasury shall develop and
implement an audit program which includes, but is not limited to,
the audit of statements submitted under subsection (3) and amended
statements submitted under subsection (4) for the current calendar
year and the 3 calendar years immediately preceding the
commencement of an audit. An assessment as a result of an audit
shall be paid in full within 35 days of issuance and shall include
penalties and interest as described in section 154(3) of the
general property tax act, 1893 PA 206, MCL 211.154. Refunds as a
result of an audit under this subsection shall be without interest.
The exemption for personal property for which an assessment has
been issued as a result of an audit under this subsection shall be
subject to the rescission provisions of subsection (5) for the
years of the assessment if full payment is not timely made as
required by this subsection.
(7) An eligible claimant may appeal an assessment levied under
section 5 or a penalty or rescission under this section to the
state
tax commission Michigan tax
tribunal by filing a petition not
later than December 31 in that tax year. An eligible claimant may
appeal an assessment issued, including penalties, interest, or
rescission, as a result of an audit conducted under subsection (6)
by
filing a petition with the state tax commission Michigan tax
tribunal
within 30 35 days
of the date of that assessment's
issuance.
The department of treasury may appeal to the state tax
commission
Michigan tax tribunal by filing a petition for the
current calendar year and 3 immediately preceding calendar years.
The
state tax commission shall decide any appeal based on the
written
petition and the written recommendation of state tax
commission
staff and any other relevant information. The department
of
treasury or any eligible claimant may appeal the determination
of
the state tax commission to the Michigan tax tribunal within 35
days
of the date of the determination.
(8)
For any year before 2023, the The
department of treasury
may require eligible claimants to annually file by February 20 of
the
each year a combined document that includes the affidavit
form
to claim the exemption under sections 9f(9), 9m, and 9n of the
general property tax act, 1893 PA 206, MCL 211.9f, 211.9m, and
211.9n,
the affidavit and under section 11a of 1974 PA 198, MCL
207.561a, a report of the fair market value and year of acquisition
by the first owner of eligible personal property, and for any year
before 2023, a statement under section 19 of the general property
tax
act, 1893 PA 206, MCL 211.19. , and a report of the acquisition
cost
and year of acquisition by the first owner of eligible
personal
property. All of the
following apply to the filing of a
combined document under this subsection:
(a) The combined document shall be in a form prescribed by the
state
tax commission. department.
(b) As provided in sections 9m and 9n of the general property
tax act, 1893 PA 206, MCL 211.9m and 211.9n, leasing companies are
not eligible to receive the exemption for qualified new personal
property and qualified previously existing personal property and
may not use the combined document prescribed in this section. With
respect to personal property that is the subject of a lease
agreement, regardless of whether the agreement constitutes a lease
for financial or tax purposes, all of the following apply:
(i) If the personal property is eligible manufacturing
personal property, the lessee and lessor may elect that the lessee
report the leased personal property on the combined document.
(ii) An election made by the lessor and the lessee under this
subdivision shall be made in a form and manner approved by the
department.
(iii) Absent an election, the personal property shall be
reported by the lessor on the personal property statement unless
the exemption for eligible manufacturing personal property is
claimed by the lessee on the combined document.
(c) For eligible personal property exempt under the Michigan
renaissance zone act, 1996 PA 376, MCL 125.2681 to 125.2696, an
eligible claimant shall report the fair market value of that
personal property at the time of acquisition by the first owner,
including the cost of freight, sales tax, installation, and other
capitalized costs, except capitalized interest.
(d) The combined document shall be filed with the assessor of
the township or city in which the eligible personal property is
located.
(e) The assessor shall transmit the information contained in
the combined document filed under this subsection, and other parcel
information
required by the department, of treasury, to the
department
of treasury in the form and in the manner prescribed by
the
department of treasury no later than April 1.
Sec. 9. (1) The fund board may adopt a resolution to exempt
from the assessment under this act eligible personal property
designated in the resolution as provided in this section and
described in subsection (3)(c) that is owned by, leased to, or in
the possession of an eligible claimant. In the resolution, the fund
board may determine that the eligible personal property designated
in the resolution shall be subject to the alternative state
essential services assessment under the alternative state essential
services assessment act. The resolution shall not be approved if
the state treasurer, or his or her designee to the fund board,
votes against the resolution.
(2) An exemption under this section is effective in the
assessment year immediately succeeding the year in which the fund
board adopts the resolution under subsection (1) and shall continue
in effect for a period specified in the resolution. A copy of the
resolution
shall be filed with the state tax commission.department.
(3) The fund board shall provide for a detailed application,
approval, and compliance process published and available on the
fund's website. The detailed application, approval, and compliance
process shall, at a minimum, contain the following:
(a) An eligible claimant, or a next Michigan development
corporation on behalf of an eligible claimant, may apply for an
exemption to the assessment in a form and manner determined by the
fund board.
(b) After receipt of an application, the fund may enter into
an agreement with an eligible claimant if the eligible claimant
agrees to make certain investments of eligible personal property in
this state.
(c) An eligible claimant shall present a business plan or
demonstrate that a minimum of $25,000,000.00 will be invested in
additional eligible personal property in this state during the
duration of the written agreement.
(d) The written agreement shall provide in a clear and concise
manner all of the conditions imposed, including specific time
frames, on the eligible claimant, to receive the exemption to the
assessment under this section.
(e) The written agreement shall provide that the exemption
under this section is revoked if the eligible claimant fails to
comply with the provisions of the written agreement.
(f) The written agreement shall provide for a repayment
provision on the exemption to the assessment if the eligible
claimant fails to comply with the provisions of the written
agreement.
(g) The written agreement shall provide for an audit provision
that requires the fund to verify that the specific time frames for
the investment have been met.
(4) The fund board shall consider the following criteria to
the extent reasonably applicable to the type of investment proposed
when approving an exemption to the assessment:
(a) Out-of-state competition.
(b) Net-positive return to this state.
(c) Level of investment made by the eligible claimant.
(d) Business diversification.
(e) Reuse of existing facilities.
(f) Near-term job creation or significant job retention as a
result of the investment made in eligible personal property.
(g) Strong links to Michigan suppliers.
(h) Whether the project is in a local unit of government that
contains an eligible distressed area as that term is defined in
section 11 of the state housing development authority act of 1966,
1966 PA 346, MCL 125.1411.
(5) The fund board, or the Michigan economic development
corporation, may charge actual and reasonable fees for costs
associated with administering the activities authorized under this
section.
Sec. 11. (1) Proceeds of the assessment collected under
section 7 shall be credited to the general fund.
(2) Beginning in fiscal year 2014-2015 and each fiscal year
thereafter, the legislature shall appropriate funds in an amount
equal
to the necessary expenses incurred by the department of
treasury
in implementing this act.
