SENATE BILL NO. 722
A bill to amend 2005 PA 210, entitled
"Commercial rehabilitation act,"
by amending sections 2, 6, 7, 14, and 16 (MCL 207.842, 207.846, 207.847, 207.854, and 207.856), section 2 as amended by 2011 PA 82, section 6 as amended by 2019 PA 44, and section 16 as amended by 2020 PA 217.
the people of the state of michigan enact:
(a) "Commencement" of the rehabilitation means the date the first building or other trade permit is issued related to the rehabilitation of the qualified facility, unless sufficient documented proof can be provided to show that rehabilitation did not start until a later date. Commencement of the rehabilitation does not include demolition activity, or the issuance of a demolition permit, that occurs before the issue date of the first building or other trade permit.
(b) (a) "Commercial property" means land improvements classified by law for general ad valorem tax purposes as real property including real property assessable as personal property pursuant to under sections 8(d) and 14(6) of the general property tax act, 1893 PA 206, MCL 211.8 and 211.14, the primary purpose and use of which is the operation of a commercial business enterprise or multifamily residential use. Commercial property shall also include includes facilities related to a commercial business enterprise under the same ownership at that location, including, but not limited to, office, engineering, research and development, warehousing, parts distribution, retail sales, and other commercial activities. Commercial property also includes a building or group of contiguous buildings previously used for industrial purposes that will be converted to the operation of a commercial business enterprise. Commercial property does not include any of the following:
(i) Land.
(ii) Property of a public utility.
(c) (b) "Commercial rehabilitation district" or "district" means an area not less than 3 acres in size of a qualified local governmental unit established as provided in under section 3. However, if the commercial rehabilitation district is located in a downtown or business area or contains a qualified retail food establishment, as determined by the legislative body of the qualified local governmental unit, the district may be less than 3 acres in size.
(d) (c) "Commercial rehabilitation exemption certificate" or "certificate" means the certificate issued under section 6.
(e) (d) "Commercial rehabilitation tax" means the specific tax levied under this act.
(f) (e) "Commission" means the state tax commission created by 1927 PA 360, MCL 209.101 to 209.107.
(g) (f) "Department" means the department of treasury.
(h) (g) "Multifamily residential use" means multifamily housing consisting of 5 or more units.
(i) (h) "Qualified facility" means, a except as otherwise provided in subdivision (j), any of the following:
(i) A qualified retail food establishment or a building or group of contiguous buildings of commercial property that is 15 years old or older or has been allocated for a new markets tax credit under section 45D of the internal revenue code of 1986, 26 USC 45D. Qualified facility also includes a
(ii) A building or a group of contiguous buildings, a portion of a building or group of contiguous buildings previously used for commercial or industrial purposes, obsolete industrial property, and vacant property which, that, within the immediately preceding 15 years, was commercial property. as defined in subdivision (a). Qualified facility shall also include vacant
(iii) Vacant property located in a city with a population of more than 500,000 according to the most recent federal decennial census and from which a previous structure has been demolished and on which commercial property is or will be newly constructed provided if an application for a certificate has been filed with that city before July 1, 2010. A qualified facility also includes a
(iv) A hotel or motel that has additional meeting or convention space that is attached to a convention and trade center that is over 250,000 square feet in size and that is located in a county with a population of more than 1,100,000 and less than 1,600,000 as of the most recent decennial census. A qualified
(j) Qualified facility does not include property either of the following:
(i) Property that is to be used as a professional sports stadium. A qualified facility does not include property
(ii) Property that is to be used as a casino. As used in this subdivision, subparagraph, "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 under the Michigan gaming control and revenue act, Gaming Control and Revenue Act, 1996 IL 1, MCL 432.201 to 432.226.
(k) (i) "Qualified local governmental unit" means a city, village, or township.
(l) (j) "Qualified retail food establishment" means property that meets all of the following requirements:
(i) The property will be used primarily as a retail supermarket, grocery store, produce market, or delicatessen that offers unprocessed USDA-inspected meat and poultry products or meat products that carry the USDA organic seal, fresh fruits and vegetables, and dairy products for sale to the public.
(ii) The property meets is located in an underserved area in a qualified local governmental unit that is 1 of the following:
(A) Is located in a qualified local governmental unit that is also located in a A qualified local governmental unit as defined in section 2 of the obsolete property rehabilitation act, 2000 PA 146, MCL 125.2782. , and is located in an underserved area.
(B) Is located in a qualified local governmental unit that is designated Designated as rural as defined by the United States census bureau and is located in an underserved area.Census Bureau.
(iii) The property was used as residential, commercial, or industrial property as allowed and conducted under the applicable zoning ordinance for the immediately preceding 30 years.
(m) (k) "Rehabilitation" means, except as otherwise provided in subdivision (n), changes to a qualified facility that are required to restore or modify the property, together with all appurtenances, to an economically efficient condition. Rehabilitation includes major all of the following:
(i) Major renovation and modification including, but not necessarily limited to, all of the following:
(A) The improvement of floor loads. ,
(B) The correction of deficient or excessive height. , new
(C) New or improved fixed building equipment, including heating, ventilation, and lighting. , reducing
(D) Reducing multistory facilities to 1 or 2 stories. , improved
(E) Improved structural support, including foundations. , improved
(F) Improved roof structure and cover. , floor
(G) Floor replacement. , improved
(H) Improved wall placement. , improved
(I) Improved exterior and interior appearance of buildings. , and other
(J) Other physical changes required to restore or change the property to an economically efficient condition. Rehabilitation for a
(ii) New construction of a qualified retail food establishment. also includes new construction. Rehabilitation also includes new
(iii) New construction of a qualified facility that is a hotel or motel that has additional meeting or convention space that is attached to a convention and trade center that is over 250,000 square feet in size and that is located in a county with a population of more than 1,100,000 and less than 1,600,000 as of the most recent decennial census, if that the new construction is an economic benefit to the local community as determined by the qualified local governmental unit. Rehabilitation also includes new
(iv) New construction on vacant property from which a previous structure has been demolished, and if the new construction is an economic benefit to the local community as determined by the qualified local governmental unit.
(n) Rehabilitation shall does not include improvements aggregating less than 10% of the true cash value of the property at commencement of the rehabilitation of the qualified facility.
(o) (l) "Taxable value" means the value determined under section 27a of the general property tax act, 1893 PA 206, MCL 211.27a.
(p) (m) "Underserved area" means an area determined by the Michigan department of agriculture and rural development that contains a low or moderate income census tract and a below average supermarket density, an area that has a supermarket customer base with more than 50% living in a low income census tract, or an area that has demonstrated significant access limitations due to travel distance.
Sec. 6. (1) Not more than 60 days after receipt of a copy of the application and resolution adopted under section 5, the commission shall approve or disapprove the resolution.
(2) Following approval of the application by the legislative body of the qualified local governmental unit and the commission, the commission shall issue to the applicant a commercial rehabilitation exemption certificate in the form the commission determines, which shall must contain all of the following:
(a) A legal description of the real property on which the qualified facility is located.
(a) (b) A statement that unless revoked as provided in this act the certificate shall remain remains in force for the period stated in the certificate.
(b) (c) A statement of the taxable value of the qualified facility, separately stated for real and personal property, for the tax year immediately preceding the effective date of the certificate after deducting the taxable value of the land and personal property other than personal property assessed pursuant to under sections 8(d) and 14(6) of the general property tax act, 1893 PA 206, MCL 211.8 and 211.14.
(d) A statement of the period of time authorized by the legislative body of the qualified local governmental unit within which the rehabilitation shall be completed.
(e) If the period of time authorized by the legislative body of the qualified local governmental unit pursuant to subdivision (b) is less than 10 years, the exemption certificate shall contain the factors, criteria, and objectives, as determined by the resolution of the qualified local governmental unit, necessary for extending the period of time, if any.
(3) Except as otherwise provided in subsection (5) or section 8(4), the effective date of the certificate is the December 31 immediately following the date of issuance of the certificate.
(4) The commission shall file with the clerk of the qualified local governmental unit a copy of the commercial rehabilitation exemption certificate, and the commission shall maintain a record of all certificates filed. The commission shall also send , by certified mail, a copy of the commercial rehabilitation exemption certificate to the applicant and the assessor of the local tax collecting unit in which the qualified facility is located.
(5) If the commission receives an application under this act for a commercial rehabilitation exemption certificate and the application is made complete before the October 31 following the year in which the application is received by the commission, the commission may issue for that property a commercial rehabilitation exemption certificate that has an effective date of December 31 of the year in which the application was received by the commission.
(6) If an error or mistake in an application for a commercial rehabilitation exemption certificate is discovered after the qualified local governmental unit has passed a resolution approving the application or after the commission has issued a certificate for the application, an applicant may submit an amended application in the same manner as an original application under this act that corrects the error or mistake. The legislative body of the qualified local governmental unit and the commission may approve or deny the amended application. If the commission previously issued a certificate for the original application and approves an amended application under this subsection, the commission shall issue an amended certificate for the amended application pursuant to this section with the same effective date as the original certificate.
Sec. 7. (1) A qualified facility for which a commercial rehabilitation exemption certificate is in effect, but not the land on which the rehabilitated facility is located, or personal property other than personal property assessed pursuant to under sections 8(d) and 14(6) of the general property tax act, 1893 PA 206, MCL 211.8 and 211.14, for the period on and after the effective date of the certificate and continuing so long as the commercial rehabilitation exemption certificate is in force, is exempt from ad valorem property taxes collected under the general property tax act, 1893 PA 206, MCL 211.1 to 211.157.211.155.
(2) Unless earlier revoked as provided in section 12, a commercial rehabilitation exemption certificate shall remain remains in force and effect for a period to be determined by the legislative body of the qualified local governmental unit. The certificate may be issued for a period of at least 1 year, but not to exceed 10 12 years. If the number of years determined is less than 10, 12, subject to subsection (3), the certificate may be subject to review reviewed by the legislative body of the qualified local governmental unit and the certificate may be extended. The total amount of time determined for the certificate including any extensions shall must not exceed 10 12 years after the completion of the qualified facility. The certificate shall commence with commences on its effective date and end ends on the December 31 immediately following the last day 30 of the last year of the number of years determined. The date of issuance of a certificate of occupancy, if required by appropriate authority, shall be is considered the date of completion of the qualified facility.
Sec. 14. Not later than October June 15 each year, each qualified local governmental unit granting a commercial rehabilitation exemption shall report to the commission on the status of each exemption. The report must include the current value of the property to which the exemption pertains, the value on which the commercial rehabilitation tax is based, and a current estimate of the number of jobs retained or created by the exemption.
Sec. 16. A new exemption shall not be granted under this act after December 31, 2025, 2035, but an exemption then in effect shall continue on that date continues until the expiration of the exemption certificate.