Tax Abatement

Currently, there are provisions pursuant to Public Act 198 of 1974, Plant Rehabilitation and Industrial Development Districts, for local units of government to grant tax abatements to new, replacement or restoration of industrial property. Tax benefits under the Act are granted by the legislative body of the city, township or village in which the facility will be located.  The process is started by the adoption of a resolution establishing a plant rehabilitation district (for a rehabilitation project) or an industrial development district (for a new project) after a public hearing.  A request for establishment of the district must be filed with the clerk prior to commencement of construction, alteration, or installation of equipment.

With regard to the tax abatement process, the City of Rochester Hills still has Guidelines for an Industrial Facilities Tax Abatement Program. If you have a project, a copy of the guidelines can be obtained by contacting the Planning Department at (248) 656-4660.

Following is an outline provided by the state for companies to follow in the tax abatement application process.  (Please note the City has a policy on IDD's.)

1)       Establishment of a Plant Rehabilitation District or and Industrial Development District:

i)        Before commencement of a project, a request to establish the district must be filed with the clerk by the owner(s) of 75% of SEV in the district, or by the initiative of the local governmental unit.

ii)       Furnish the local unit with a legal description of the property and possibly complete a local form of application for the district.

iii)      Attend the public hearing and explain the proposed project.

2)       Application for Industrial Facilities Exemption Certificate:

i)        Application (1 original and 3 copies) filed with clerk no later than 6 months after commencement of project, and after the district has been established.

ii)       Complete list of new machinery, equipment, furniture and fixtures which will be used in the facility.  The list should include description, type, identification, date of (expected) acquisition by month/day/year, and  (expected) cost. Pollution control facilities which you intend to apply for under P.A. 250 of 1965, as amended (air) and P.A. 222 of 1966 (water), are to be listed separately.

iii)      List of existing machinery, equipment, furniture and fixtures which will be replaced or renovated.  List of existing machinery, equipment, furniture and fixtures which will continue to be used in the facility.  The list should include description, type, identification, year of acquisition and original cost.  (Not applicable to a new facility or speculative building.)

iv)      Proof of date of construction started (groundbreaking) such as building permit, footings inspection report, certified statement or affidavit from contractor.  Personal property only applications should have attached a certified statement or affidavit as proof of the date personal property installation commenced.

v)        Complete copy of lease agreement as executed, if applicable, verifying lessee has ad valorem real and personal property tax liability.

vi)      Certified copy of the resolution adopted by the local governing unit from which employment will be transferred, if applicable.  An Industrial Facilities Exemption Certificate can be issued only if the governing body of the unit from which employment is to be transferred consents by resolution to the granting of the certificate.  If employment is to be transferred to the new or rehabilitated facility from more that one local government unit, each unit from which employment will be transferred must give its consent.

vii)     Attend the public hearing and explain the proposed project.

viii)  New Requirement: as of December 31, 1993 each applicant must include an agreement signed by the local unit and operator of the facility outlining conditions/recourses to be upheld during the abatement.

The City of Rochester Hills Planning Department has complete copies of the City's current policy and guidelines. Property Tax  Abatement/Exemption forms can be obtained at the Department of Treasury web site.

A copy of Public Act 198 of 1974, it can be acquired online at the Michigan Legislature web site.  Once at this site click on Public Acts in the left margin under Legislature. Please contact the Planning Department, (248) 656-4660, if have a need for assistance on the tax abatement process.