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SB 1053

Economic development: neighborhood enterprise zones; allowable percentage of neighborhood enterprise zones; modify. Amends sec. 3 of 1992 PA 147 (MCL 207.773).

2025-2026 Regular Session Introduced by Mary Cavanagh and 3 co-sponsors

Michigan SB 1053 modernizes NEZ rules to tighten designation criteria, raise some acreage caps, and require housing goals and inspections for better alignment with planning and hou

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Bill Summary · SB 1053

Overview

SB 1053 is a Michigan bill that amends the Neighborhood Enterprise Zone Act (1992 PA 147) to adjust designation rules, acreage limits, and related requirements for neighborhood enterprise zones (NEZs). The bill alters eligibility thresholds, procedural steps, and certain tax-related provisions to expand or refine how NEZs may be created and operated within local units of government.

Main purpose and intent

  • Modernize and modify the framework governing neighborhood enterprise zones to influence where and how NEZs can be designated.
  • Align zone designations with criteria related to compact development, existing residential density, and infrastructure access.
  • Update ownership, housing, and inspection responsibilities tied to NEZ-designated facilities, and adjust acreage caps for zones containing new, rehabilitated, or homestead facilities.
  • Introduce or clarify tax-related and certificate-related provisions affecting NEZs and certified facilities.

Key provisions and changes

  • Zone designation requirements (Sec. 3(1)):

    • Local governing bodies may designate one or more NEZs by resolution.
    • Each NEZ must contain at least 10 platted parcels, except in a qualified downtown revitalization district where 10 or more facilities may suffice with fewer parcels.
    • All land within an NEZ must be compact and contiguous (contiguity preserved across certain acquisitions).

  • Acreage limitations (Sec. 3(2)):

    • NEZs containing only new or rehabilitated facilities (or a mix) may not exceed 15% (proposed 20%) of the local unit’s total acreage.
    • NEZs containing only homestead facilities may not exceed 10% of total acreage (or, with county board approval, up to 15% (proposed 20%)).
    • The bill appears to raise the cap from 15% to 20% for some categories.

  • Pre-designation procedural requirements (Sec. 3(3)):

    • Mandatory 60-day notice to assessors and taxing units before designation or amendment.
    • Governing body must find consistency with the local master plan and neighborhood preservation/economic development goals.
    • Must adopt a housing goals/objectives statement addressing housing maintenance, preservation, and development for all income levels.
    • Municipal housing inspection ordinance required for populations over 20,000 (optional for 20,000 or less).
    • Inspections required for units in new or rehabilitated facilities prior to sale if a NEZ certificate is in effect.
    • Public hearing must be held within 45 days after notice.

  • Assessment information (Sec. 3(4)):

    • Assessor determines the true cash value (TCV) of property within the proposed NEZ and provides relevant data to the local government.

  • Repeal/amendment timing (Sec. 3(5)):

    • A designation (except for certain zones) may be repealed or amended not sooner than 3 years after adoption/amendment.
    • Repeal/amendment takes effect 6 months after adoption.
    • Existing NEZ certificates remain valid and included in acreage limits until expiry or revocation.

  • Obsolete property rehabilitation districts (Sec. 3(6)):

    • Special provisions for a subset of zones created in 2003, aligning expiration and valuation mechanics with NEZ certificates.

  • Designation criteria in certain cities/townships (Sec. 3(7)):

    • Starting June 1, 2023, new designations must meet:
    • Compact development with at least 5 existing residential units per acre at designation.
    • Proximity to existing development with access to municipal water/sewer on at least one frontage.
    • Tax in lieu of taxes (TIF) adjustments for portions of facilities previously occupied by higher-income households (income threshold noted as 120% of countywide median income).

  • Definitions (Sec. 3(8)):

    • “Adjusted household income” defined as per R 125.101 of the Michigan Administrative Code.

Who is affected

  • Local governmental units (cities, townships, villages) seeking to designate NEZs.
  • Assessors and taxing units within proposed NEZs.
  • Property owners and occupants within NEZ boundaries, including buyers of units in new or rehabilitated facilities.
  • County governments (through approval processes for acreage limitations and TIF-related provisions).
  • Housing compliance and code-enforcement authorities within designated areas.

Procedural and timeline considerations

  • Notice and consultation timeline: 60 days prior to designation; public hearing within 45 days after notice.
  • Consistency findings: must align with master plans and housing goals before adopting a designation.
  • Public transparency: requires statements of housing goals and policies.
  • Designation and amendment rules: most NEZ designations or significant amendments cannot be repealed or amended for at least 3 years; effects take 6 months post-adoption.
  • Transitional rules: provisions for existing certificates and obsolete rehabilitation districts are retained or adjusted as specified.

Notes

  • The bill includes several emphasis areas: density/compact development, infrastructure access, housing goals, and targeted TIF considerations.
  • It proposes increasing certain acreage caps and tightening designation criteria to ensure NEZs align with broader planning and housing objectives.
  • As introduced in June 2026, the bill has sponsors and is assigned to the Finance, Insurance, and Consumer Protection Committee for consideration.

Compiled from official sources — confirm details with the bill’s official record.

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