SB 722

Act No. 35
Public Acts of 2026
Approved by the Governor
July 21, 2026
Filed with the Secretary of State
July 22, 2026
EFFECTIVE
DATE: July 22, 2026
state of michigan
103rd Legislature
Regular session of 2026
Introduced by Senator Moss
ENROLLED SENATE BILL No. 722
AN ACT to amend 2005 PA 210,
entitled �An act to provide for the establishment of commercial rehabilitation
districts in certain local governmental units; to provide for the exemption
from certain taxes; to levy and collect a specific tax upon the owners of
certain qualified facilities; to provide for the disposition of the tax; to
provide for the obtaining and transferring of an exemption certificate and to
prescribe the contents of those certificates; to prescribe the powers and
duties of certain local governmental officials; and to provide penalties,� 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:
Sec.
2. As used in this act:
(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) �Commercial property� means land improvements classified
by law for general ad valorem tax purposes as real property including real
property assessable as personal property 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 also 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) �Commercial rehabilitation district� or �district� means
an area not less than 3 acres in size of a qualified local governmental unit
established 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) �Commercial
rehabilitation exemption certificate� or �certificate� means the certificate
issued under section 6.
(e) �Commercial rehabilitation tax� means the specific tax
levied under this act.
(f) �Commission� means the state tax commission created by
1927 PA 360, MCL 209.101 to 209.107.
(g) �Department� means the department of treasury.
(h) �Multifamily residential use� means multifamily housing
consisting of 5 or more units.
(i) �Qualified facility� means, 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.
(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 that, within the immediately preceding 15 years, was commercial
property.
(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 if an application for a
certificate has been filed with that city before July 1, 2010.
(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.
(j) Qualified facility does not include either of the
following:
(i) Property that is to be used as a
professional sports stadium.
(ii) Property that is to be used as a casino.
As used in this 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 under the Michigan Gaming Control
and Revenue Act, 1996 IL 1, MCL 432.201 to 432.226.
(k) �Qualified local governmental unit� means a city,
village, or township.
(l) �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 is located in an
underserved area in a qualified local governmental unit that is 1 of the
following:
(A) A qualified local governmental unit as defined in section
2 of the obsolete property rehabilitation act, 2000 PA 146, MCL 125.2782.
(B) Designated as rural as defined by the United States
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) �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 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.
(C) New or improved fixed building equipment, including
heating, ventilation, and lighting.
(D) Reducing multistory facilities to 1 or 2 stories.
(E) Improved structural support, including foundations.
(F) Improved roof structure and cover.
(G) Floor replacement.
(H) Improved wall placement.
(I) Improved exterior and interior appearance of buildings.
(J) Other physical changes required to restore or change the
property to an economically efficient condition.
(ii) New construction of a qualified retail
food establishment.
(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
the new construction is an economic benefit to the local community as
determined by the qualified local governmental unit.
(iv) New construction on vacant property from
which a previous structure has been demolished, if the new construction is an
economic benefit to the local community as determined by the qualified local
governmental unit.
(n) Rehabilitation 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) �Taxable value� means
the value determined under section 27a of the general property tax act, 1893 PA
206, MCL 211.27a.
(p) �Underserved area� means an area determined by the
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 must contain all of
the following:
(a) A statement that unless revoked as provided in this act
the certificate remains in force for the period stated in the certificate.
(b) 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 under sections 8(d) and 14(6) of the general property tax act, 1893 PA
206, MCL 211.8 and 211.14.
(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 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 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 211.155.
(2) Unless earlier revoked as provided in section 12, a
commercial rehabilitation exemption certificate 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 12 years. If the number of years determined is less
than 12, subject to subsection (3), the certificate may be reviewed by the
legislative body of the qualified local governmental unit and extended. The total
amount of time determined for the certificate including any extensions must not
exceed 12 years after the completion of the qualified facility. The certificate
commences on its effective date and ends on December 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, is considered the date of completion of
the qualified facility.
(3) If the number of years determined by
the legislative body of the qualified local governmental unit for the period a
certificate remains in force is less than 12 years, the review of the
certificate for the purpose of determining an extension under subsection (2)
must be based on factors, criteria, and objectives that are placed in writing,
determined and approved when the certificate is approved by resolution of the
legislative body of the qualified local governmental unit and sent, by
certified mail, to the applicant, the assessor of the local tax collecting unit
in which the qualified facility is located, and the commission.
Sec.
14. Not later than 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,
2035, but an exemption in effect on that date continues until the expiration of
the exemption certificate.
This act is ordered to take
immediate effect.
Secretary of the Senate
Clerk of the House of
Representatives
Approved___________________________________________
____________________________________________________
Governor