Act 198 Industrial Exemption
In order to maintain the development and redevelopment of industrial property, and provide an adequate tax base, plus the creation and/or retention of jobs, an application for an Industrial Faculties Exemption will be reviewed on it merits with respect to which it will assist the City of Adrian in achieving its defined goals and objectives. All rights, obligations and procedures concerning Industrial Facilities Exemptions are subject to the Plant Rehabilitation and Industrial Development Districts Act, P.A. 198 of 1974 as Amended.
Goals and Objectives
- To expand the City of Adrian’s tax based through expansion of existing industries and attraction of new industries.
- To serve a good public purpose, such as, increase in economic vitality of the industrial districts and increase employment.
- To promote the diversification and stabilization of the City of Adrian’s present industrial base to lessen the impact of unemployment in the City of Adrian during recessional periods.
- To upgrade the City of Adrian’s current labor force by promoting more skilled and/or technical oriented jobs.
- To increase the City of Adrian’s average level of income through promotion of higher paying jobs.
- To enhance/promote the overall general attractiveness of the City of Adrian.
- The applicant for the Industrial Faculties Exemption must be meeting all current financial obligations to the City of Adrian.
- The development of the proposed industrial facilities will comply with all City of Adrian ordinances, land use plans and environmental objectives.
- The proposed industrial development facilities will be compatible with the City of Adrian’s present and future requirements for City services, including but not limited to, utilities, infrastructures and public safety.
Industrial properties eligible for the tax abatement benefits under P.A. 198 of 1974, as Amended are those properties engaged in the high-technology activity, the manufacture of goods or materials, creation or synthesis of bio-diesel fuel, or the processing of goods and materials by physical or chemical change, the operation of hydro-electric dam by a private company other than a public utility or agricultural processing facilities . Related facilities of Michigan manufacturers, such as, offices, engineering, research and development, warehousing or parts distribution are also eligible for the exemption.
The Industrial Facilities Exemption applies to real property, such as, land improvements, buildings, structures or other real property, and personal property, such machinery, equipment, furniture and fixtures. The Industrial Facilities Exemption also applies to leased property, where the executed lease verifies that the lessee has the responsibility for the ad valorem real and personal property taxes. A complete copy of the executed lease must be submitted with the application for Industrial Facilities Exemption Certificate provided by the State Tax Commission.
Land and inventory are specifically excluded by statute.
The exemption covers only the specific project that is described on the application for and Industrial Facilities Exemption Certificate. Any existing buildings or equipment, which existed prior to the construction of a “new facility”, are not exempt under the Act. If the property is a “rehabilitation”, the value of the existing obsolete building and/or equipment are exempt from ad valorem taxes, but will be used as the base for the Industrial Facility tax. Any structures or equipment added subsequent to the completion of the project are fully taxable on the ad valorem tax roll.
Establishment of Industrial Development District or Plant Rehabilitation District:
- The City of Adrian Commission, by resolution, or by written request filed by the owner(s) of 75% of the state equalized value of the industrial property located within the proposed plant rehabilitation district or industrial development district. The owner(s) file the written request with the City Clerk, on the request form for Establishment of a District Application approved by the City Commission. A request for establishment of a district must be filed with the City Clerk prior to commencement of construction, alteration or acquisition of equipment.
- Before adopting a resolution establishing a plant rehabilitation district or industrial development district, a written notice by certified mail from the City Clerk must be provided to all owners of real property within the proposed district prior to a public hearing.
- After establishment of an industrial development district or plant rehabilitation district, application is made to the City Clerk on the form prescribed by the State Tax Commission, for review by the City Assessor and Community Development Director. Along with the submission of the application for IFT exemption, the applicant will also submit a signed copy of IFT Letter of Understanding. A notice will be given to each taxing unit that levies ad valorem property taxes affected by the proposed application to afford the taxing units an opportunity for a public hearing.
- The application for the Industrial Facilities Abatement is reviewed by the City Assessor and Community Development Director for completeness and determination of the number of years to be granted for real and/or personal property. The number of years as determined by the City Assessor and Community Development Director will be as a recommendation to the City Commission. The number of years granted will be based on the IFT Request worksheet approved by the City Commission. The City of Adrian Commission reserves the right to exercise its discretion in applying the IFT guidelines in any individual case. The City of Adrian Commission also reserves the right to modify the IFT abatement policy/guidelines to reflect changing objectives, conditions and/or priorities.
- The City Commission will, by resolution, approve or disapprove the application for an IFT not more than 60 days after receipt of the application by the City Clerk. If the application is disapproved, the reasons shall be set forth in writing in a resolution. If approved, the City Clerk shall forward the application to the State Tax Commission within 60 days of the approval or before October 31 of that year to receive the exemption in the following year, which will be accompanied by the Letter of Understanding and Affidavit of Fees signed by both the applicant and an authorized representative from the City of Adrian . The State Tax Commission(STC) has final approval over the IFT application. If the STC disapproves the application the clerk will return the application to the applicant, at which time the applicant has 10 days from the date of the disapproval to appeal the disapproval to the STC.
- When (if) the IFT application is given final approval by the STC, the applicant understands that they will be in compliance with ACT 198 of 1974, as Amended and with policies and procedures set forth by City of Adrian Commission.|