HB-6024, As Passed House, December 13, 2012HB-6024, As Passed Senate, December 12, 2012

SENATE SUBSTITUTE FOR

HOUSE BILL NO. 6024

A bill to authorize the creation of special assessment

districts; to provide for the levy and collection of special

assessments on certain property to defray the costs of essential

services equipment and essential services; and to authorize the

issuance of bonds and other obligations in anticipation of the

collection of special assessments.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 1. This act shall be known and may be cited as the "local

unit of government essential services special assessment act".

Sec. 2. As used in this act:

(a) "Commercial personal property" means personal property

classified as commercial personal property under section 34c of the

general property tax act, 1893 PA 206, MCL 211.34c.

House Bill No. 6024 (S-1) as amended December 13, 2012

(b) "Commercial real property" means real property classified

as commercial real property under section 34c of the general

property tax act, 1893 PA 206, MCL 211.34c.

(i) Ambulance services.

(ii) Fire services.

(iii) Police services.

[(iv) Jail operations.]

(d) "Essential services equipment" means motor vehicles,

apparatus, equipment, housing, and other items needed to provide

essential services.

(e) "General property tax act" means the general property tax

act, 1893 PA 206, MCL 211.1 to 211.155.

(f) "Industrial personal property" means personal property

classified as industrial personal property under section 34c of the

general property tax act, 1893 PA 206, MCL 211.34c.

(g) "Industrial real property" means real property classified

as industrial real property under section 34c of the general

property tax act, 1893 PA 206, MCL 211.34c.

(h) "Local unit of government" means a county, township,

village, or city or any authority created to provide essential

services.

(i) "Taxable value" means that value determined under section

27a of the general property tax act, 1893 PA 206, MCL 211.27a.

Sec. 3. (1) Beginning January 1, 2016, the legislative body of

a local unit of government may by resolution propose that all or a

portion of the cost of essential services equipment, the cost for

maintenance of the essential services equipment, and the cost for

provision of essential services be defrayed by a special assessment

levied on industrial real property and commercial real property

located in that local unit of government, which industrial real

property and commercial real property is conclusively presumed to

be benefited by the provision of the essential services equipment

and the essential services.

(2) The local unit of government shall schedule a hearing on

the question of creating a special assessment district, and on the

question of defraying all or a portion of the cost of the essential

services equipment, the cost for maintenance of the essential

services equipment, and the cost for provision of essential

services by special assessment on the industrial real property and

commercial real property to be especially benefited.

(3) The hearing required under subsection (2) shall be a

public meeting held in compliance with the open meetings act, 1976

PA 267, MCL 15.261 to 15.275. Public notice of the time, date, and

place of the meeting shall be given in the manner required by the

open meetings act, 1976 PA 267, MCL 15.261 to 15.275. In addition,

the local unit of government shall publish in a newspaper of

general circulation in the proposed special assessment district a

notice stating the time, place, and purpose of the meeting. If

there is not a newspaper of general circulation in the proposed

special assessment district, notices shall be posted in not less

than 3 public places in the proposed special assessment district.

This notice shall be published or posted not less than 5 days

before the hearing. On the day appointed for the hearing, the

legislative body of the local unit of government shall be in

session to hear objections that may be offered against the creation

of the special assessment district and on the question of defraying

the cost of the essential services equipment, the cost for

maintenance of the essential services equipment, and the cost for

provision of essential services by special assessment.

(4) Following the hearing under subsection (3), if the

legislative body of the local unit of government determines to

create a special assessment district, it shall by resolution

determine the boundaries of the special assessment district, which

shall be coterminous with the boundaries of the local unit of

government.

(5) A local unit of government is not required to establish a

special assessment district under this section more than once. A

local unit of government shall modify the boundaries of the special

assessment district if the boundaries of the local unit of

government change after the special assessment district is

established.

Sec. 4. (1) If a local unit of government creates a special

assessment district under section 3, that local unit of government

shall calculate the amount of the special assessment levy on each

parcel of industrial real property and commercial real property

located in the special assessment district in the following manner,

subject to the limitation provided under subsection (2):

(a) Calculate the total taxable value of all industrial

personal property and commercial personal property in the local

unit of government in 2013.

(b) From the amount determined in subdivision (a), subtract

the total taxable value of all industrial personal property and

commercial personal property in the local unit of government in the

current year.

by the lowest general operating millage rate levied by the local

unit of government in the period between 2012 and the year

immediately preceding the current year.

(d) Subtract from the result of the calculation in subdivision

of personal property under section 9o of the general property tax

act, 1893 PA 206, MCL 211.9o, from general operating millage.

(e) Multiply the result of the calculation in subdivision (d)

by the percentage of the local unit of government's general

operating millage used to fund essential services and essential

services equipment in fiscal year 2012.

(f) Add to the result of the calculation in subdivision (e) an

amount calculated as follows:

(i) Multiply the result of the calculation in subdivision (b)

by the lowest millage rate for a millage dedicated solely for

essential services and essential services equipment levied by the

local unit of government in the period between 2012 and the year

immediately preceding the current year. If a local unit of

government has levied more than 1 millage dedicated solely for

essential services and essential services equipment, perform the

calculation under this subparagraph for each individual dedicated

millage and add the results of each calculation to determine a

total sum.

(ii) Subtract from the result of the calculation in

subparagraph (i) the reduction in revenue in 2014 resulting from the

exemption of personal property under section 9o of the general

property tax act, 1893 PA 206, MCL 211.9o, from the millages

included in the calculation in subparagraph (i).

(g) Divide the result of the calculation in subdivision (f) by

the total taxable value of all industrial real property and

commercial real property in the local unit of government on which

is located personal property exempt under sections 9m and 9n of the

general property tax act, 1893 PA 206, MCL 211.9m and 211.9n.

(h) Multiply the essential services millage rate calculated in

subdivision (g) by the taxable value of each parcel of industrial

real property and commercial real property in the local unit of

government on which is located personal property exempt under

sections 9m and 9n of the general property tax act, 1893 PA 206,

MCL 211.9m and 211.9n, in the current year.

(2) Subject to subsection (3), for each parcel of industrial

real property and commercial real property subject to the special

assessment levy calculated under subsection (1), the amount of the

special assessment levy calculated under subsection (1) shall not

exceed an amount calculated as follows:

(a) Multiply the lowest general operating millage rate levied

by the local unit of government in the period between 2012 and the

year immediately preceding the current year by the percentage of

the local unit of government's general operating millage used to

fund essential services and essential services equipment in the

2012 fiscal year.

(b) Add to the result of the calculation under subdivision (a)

the lowest millage rate for a millage dedicated solely for

essential services and essential services equipment levied by the

local unit of government in the period between 2012 and the year

immediately preceding the current year. If a local unit of

government has levied more than 1 millage dedicated solely for

essential services and essential services equipment, perform the

calculation under this subparagraph for each individual dedicated

millage and add the results of each calculation to determine a

total sum.

(b) by 50% of the true cash value of all personal property exempt

under sections 9m and 9n of the general property tax act, 1893 PA

206, MCL 211.9m and 211.9n, located on that industrial real

property or commercial real property in the current year.

(3) The limitation under subsection (2) on the special

assessment levied under this section does not apply unless an owner

of the industrial real property or commercial real property subject

to the special assessment submits an affidavit claiming the

limitation with the local unit of government within 30 days after

the special assessment is assessed. The affidavit shall be in a

form prescribed by the department of treasury. The affidavit shall

include, but is not limited to, a statement of the estimated true

cash value of all personal property exempt under sections 9m and 9n

of the general property tax act, 1893 PA 206, MCL 211.9m and

211.9n, located on that industrial real property or commercial real

property in the year in which the limitation is claimed.

House Bill No. 6024 as amended December 12, 2012

(4) The special assessment calculated under this section shall

be assessed and collected at the same time and in the same manner

as taxes collected in the July levy under the general property tax

act.

(5) It is the intent of the legislature that the special

assessment levied under this section results in a proportionate

allocation of the financial cost of essential services and

essential services equipment across all classes of real property

and that the amount of the special assessment levied under this

section accurately corresponds to the benefit received by the

industrial real property and commercial real property that is

conclusively presumed to be benefited by the essential services

equipment and the essential services provided under this act.

Sec. 5. (1) A local unit of government may issue bonds or

other obligations in anticipation of the collection of a special

assessment authorized under this act.

(2) Bonds or other obligations issued under this act are

subject to the revised municipal finance act, 2001 PA 34, MCL

141.2101 to 141.2821.

(3) If authorized by a majority vote of the qualified electors

of the local unit of government, the local unit of government may,

at the time of issuance, pledge the full faith and credit of the

local unit of government for the payment of bonds or other

obligations issued under this act.

Sec. 6. From the amounts collected under this act, a

municipality shall first replace the amount of ad valorem property

taxes <<used>> for the payment of principal and interest

House Bill No. 6024 (S-1) as amended December 13, 2012

of essential service obligations incurred before 2013 pledging the

unlimited or limited taxing power of the municipality, that are

lost from the exemptions provided by sections 9m, 9n, and 9o of the

general property tax act, 1893 PA 206, MCL 211.9m, 211.9n, and

211.9o. A municipality shall not collect assessments under this act

if it has increased a millage rate for essential service

obligations incurred before 2013 pledging the unlimited or limited

taxing power of the municipality as a result of the exemptions

provided by sections 9m, 9n, and 9o of the general property tax

act, 1893 PA 206, MCL 211.9m, 211.9n, and 211.9o.

Sec. 7. Any charter provision of the local unit of government

notwithstanding, the creation of a special assessment district, the

levy of a special assessment, and the exercise of other powers

under this act shall not be subject to a referendum vote of the

electors of that local unit of government.

[Enacting section 1. This act does not take effect unless House Bill No. 6026 of the 96th Legislature is approved by a majority of the qualified electors of this state voting on the question at an election to be held on the August regular election date in 2014.]