WORKFORCE HOUSING; TAX EXEMPTION S.B. 432:
SUMMARY AS ENACTED
Senate Bill 432 (as enacted) PUBLIC ACT 239 of 2022
Sponsor: Senator Wayne A. Schmidt
Senate Committee: Economic and Small Business Development
House Committee: Local Government and Municipal Finance
CONTENT
The bill amended the State Housing Development Authority Act to do the following:
-- Exempt a housing project that is being developed or rehabilitated for workforce housing and that is located in a municipality that approves the project from all ad valorem property taxes imposed by the State or by any political subdivision, public body, or taxing district of the State.
-- Prescribe the amount of annual service charge that an owner of a project described above must pay in lieu of taxes.
-- Require the owner of the housing project to allocate the benefits of any tax exemption exclusively to low-income individuals or families, workforce housing, or to the maintenance and preservation of the housing project.
The bill took effect December 13, 2022.
Under the Act, except as otherwise provided, if a housing project owned by a nonprofit housing corporation, consumer housing cooperative, limited dividend housing corporation, mobile home park corporation, or mobile home park association is financed with a Federally aided or Michigan State Housing Development Authority-aided mortgage or advance or grant from the Authority, then the housing project is exempt from all ad valorem property taxes imposed by the State or by any political subdivision, public body, or taxing district in which the project is located.
Under the bill, this exemption also applies to a housing project that is being developed for workforce housing that is located in a municipality and is subject to a municipal ordinance that is adopted by the governing body of that municipality to approve a housing project for tax exemption. The approval or denial of a tax exemption must be in accordance with an ordinance or resolution concerning the selection of workforce housing projects that are adopted by the governing body. If the housing project is eligible for an exemption, the local assessing officer must provide a copy of the certified notification of the exemption to the treasurer of the county in which the project is located, within five days after receiving the certified notification of exemption.
(The bill defines "workforce housing" as retail units or other housing options that are reasonably affordable to, and occupied by, a household whose total household income is not greater than 120% of the area median income and published by the United States Department of Housing and Urban Development. "Area median income" means that term as defined in Section 59: the median income for an area as determined under Federal law.)
The Act requires the owner of a housing project exempt from taxation to pay to the municipality in which the project is located an annual service charge for public service in lieu of taxes. Pr