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HB 6212

Economic development: plant rehabilitation; requirements related to an industrial facilities exemption certificate; modify. Amends sec. 7 of 1974 PA 198 (MCL 207.557).

2023-2024 Regular Session Introduced by Kristian Grant and 1 co-sponsor

Expands industrial facilities exemption eligibility to include warehousing and distribution, not just manufacturing.

placed on third reading
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Bill Summary · HB 6212

Summary of House Bill 6212 (Economic development: plant rehabilitation; requirements related to an industrial facilities exemption certificate; modify)

Overview

  • Bill number: HB 6212
  • Title: Economic development: plant rehabilitation; requirements related to an industrial facilities exemption certificate; modify (amends sec. 7 of 1974 PA 198, MCL 207.557)
  • Status: Placed on third reading
  • Introduced: January 23, 2025
  • Context: House Bill package updating the Industrial Facilities Exemption Program (IFEP) to broaden eligibility, particularly for warehousing and distribution facilities

What the bill would do

  • Expand eligibility for industrial facilities exemption certificates (IFT) under the Plant Rehabilitation and Industrial Development Act to include warehousing and distribution facilities, not just manufacturing.
  • Remove certain geographic eligibility constraint that currently restricts qualified commercial activity to properties in counties bordering another state or Canada.
  • Expand the definition of “speculative building” to include buildings constructed for warehousing or distribution facilities before a specific user is identified, in addition to the existing manufacturing-focused criteria.
  • Add warehousing or distribution to provisions describing the use or potential use of a speculative building (as already applicable to manufacturing).
  • Change the effective date rule for a speculative building’s IFT certificate to the first December 31 after the date the certificate is issued (instead of the current rule that ties the date to when the building is used as a manufacturing facility).
  • House 6211 specifically would codify warehousing/distribution within the speculative-building provisions; 6212 governs the timing adjustment for speculative certificates. These changes are interdependent and would take effect only if the related Senate measures (SB 536 and SB 537) are enacted.

Key provisions and mechanisms

  • Industrial facilities exemption certificates apply to new and rehabilitated facilities, granting property tax abatements on the facility (land generally excluded) for up to 12 years.
    • New facilities: approximately 50% of the regular property tax rate (IFT) with potential reduction of the state education tax (SET) by 50% or 100%.
    • Rehabilitated facilities: IFT at the same rate as local property tax, with the pre-renovation value used for taxable value (100% exemption on the improvements).
  • Local units approve certificates; the State Tax Commission must verify compliance with the act, with possible concurrence from the Department of Licensing and Regulatory Affairs and notification to the State Treasurer regarding SET.
  • The act’s definitions (industrial property, qualified commercial activity, development organization) guide eligibility and district requirements.

Who is affected

  • Property owners and developers planning warehousing/distribution facilities or speculative warehousing projects.
  • Local governments (cities, towns, counties) seeking to attract or facilitate industrial/warehouse development.
  • State Treasury and the State Tax Commission, which administer exemptions and verify compliance.
  • School districts and ISDs potentially affected by shifts in tax revenue distributions due to exemptions.

Fiscal and timeline considerations

  • Fiscal impact: The package would reduce state and local property tax revenue by an indeterminate amount, depending on how many properties qualify, location, value, and millage rates. Revenue loss is contingent on activity that would not occur but for these changes.
  • Timing: For speculative certificates, the new rule sets the effective date to December 31 following the issuance date. The bill depends on enactment of related Senate bills (SB 536/537) for full effect, with interlinked provisions across HB 6211/6212.

Additional notes

  • The committee analyses emphasize potential expanded support for speculative development by broadening eligibility to warehousing and distribution, aiming to redevelop vacant industrial sites in Michigan. The exact revenue and local impact will depend on implementation and geographic uptake.

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

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