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Chapter 82
TAXATION
Article I. In General
Sec. 82-1. Industrial, commercial and residential facilities tax exemptions.
Secs. 82-2—82-30. Reserved.
Article II. Ad Valorem Property Taxation
Division 1. Generally
Secs. 82-31—82-45. Reserved.
Division 2. Residential Housing Projects and Payments In Lieu Of Taxes
Sec. 82-46. Definitions.
Sec. 82-47. General denial of exemption.
Sec. 82-48. Limited exemption stated.
Sec. 82-49. Ownership entities recognized.
Sec. 82-50. Housing projects eligible.
Sec. 82-51. Payment in lieu of taxes; amount; standards for determination.
Sec. 82-52. Term of exemption.
Sec. 82-53. Service charge constitutes a lien on property.
Sec. 82-54. Collection of service charge.
Sec. 82-55. Requirement to file information; default in payment; violations;
loss of exemption.
See. 82-56. Service fees and special assessments.
Sec. 82-57. Contract requirement.
Sec. 82-58. Denial of application.
Sec. 82-59. Effect on existing projects.
Secs. 82-60—82-80. Reserved.
Article III. Income Tax
Sec. 82-81. Adopted; tax levied.
Sec. 82-82. Personal exemptions and limitations.
CD82:1
TAXATION § 82-46
ARTICLE I. IN GENERAL (c) Fees. All fees for processing applications,
requests for creation of districts, applications for
transfers, and any other actions requested pursu-
Sec. 82-1. Industrial, commercial and
ant to this section shall be determined by the
residential facilities tax exemp-
city commission by resolution, and set forth in
tions.
the city's master fee resolution.
(Code 1975, § 2-6.1; Code 2002, § 82-1; Ord. No.
(a) Finding and declaration of fact; purpose of
1185, § 1, 3-9-1999; Ord. No. 1193, 8-10-1999)
section. The city processes applications and moni-
State law reference—Application fee for industrial
tors compliance for several tax exemptions facilities authorized, MCL 207.555(3).
afforded by state law. These include the follow-
ing: Secs. 82-2—82-30. Reserved.
(1) Applications and continued monitoring
for the establishment of districts and the ARTICLE II. AD VALOREM PROPERTY
issuance of industrial facilities tax exemp- TAXATION*
tion certificates pursuant to Public Act
No. 198 of 1974 (MCL 207.551 et seq.);
DIVISION 1. GENERALLY
(2) Applications and continued monitoring
for the establishment of districts and the Secs. 82-31—82-45. Reserved.
issuance of commercial facilities tax
exemption certificates pursuant to the
DIVISION 2. RESIDENTIAL HOUSING
commercial redevelopment act, Public Act
PROJECTS AND PAYMENTS IN LIEU OF
No. 255 of 1978 (MCL 207.651 et seq.);
TAXES†
(3) Applications and continued monitoring
for qualification of businesses pursuant Sec. 82-46. Definitions.
to the enterprise zone act, Public Act No. The following words, terms and phrases, when
224 of 1985 (MCL 125.2101 et seq.); used in this division, shall have the meanings
ascribed to them in this section, except where
(4) Applications and continued monitoring
the context clearly indicates a different meaning:
of grants of exemptions under Section
15a of Public Act No. 346 of 1946 (MCL Authority means the state housing develop-
125.1415a), or its successor; ment authority.
(5) Applications and continued monitoring Contract rents means all rents in the housing
of exemptions under the neighborhood project expected either directly from a tenant or
enterprise zone act, Public Act No. 147 of by subsidy, vendor payments or paid by a govern-
1992 (MCL 207.771 et seq.). ment or other assisting entity on behalf of a
tenant to the owner or owner's designee or agent
(b) The review of applications and subsequent of a housing project. Contract rents include the
monitoring thereof during the period of any rental amounts to be currently charged for units
exemption required under the above statutes in the housing project, whether a unit is vacant
involves expenditure of staff time, publication or not, and whether or not the rent is actually
and mailing fees, investigations and review. It is paid. Contract rents also include the rentals to
the purpose of this section to establish fees to be be paid for additional facilities by tenants, such
paid by each applicant for each such application as carports or garages, and further include miscel-
to reimburse the city for such expenditure. The
*State law reference—General property tax act, MCL
fees are determined to reflect the actual costs of 211.1 et seq.
the city's responsibilities regarding such applica- †State law reference—Housing project tax exemption
tions, or are specifically authorized by statute. and service charges, MCL 125.1415a.
Supp. No. 16 CD82:3
§ 82-46 MUSKEGON CITY CODE
laneous income, such as income from vending does not include cable or other television services,
machines or laundry equipment. The portion of telephone or communication utilities or solid
additional facility rents and miscellaneous income waste services.
to be attributed to contract rents shall be
determined by reference to the floor plan of the Workforce housing means rental units or other
facility which includes and clearly exhibits the housing options included in the definitions found
housing project (therefore the exempt portion of at section 15a(10)(d) of Public Act No. 346 of
the facility), and the portion of contract rents 1966 (MCL 125.1415a(10)(d)).
shall be determined by the ratio of the housing (Code 1975, § 2-6(c); Code 2002, § 82-46; Ord. No.
project square footage to the entire square foot- 2072, 4-9-2002; Ord. No. 2303, § 1(82-46), 2-14-
age of the facility. The term "contract rents" does 2012; Ord. No. 2538, 5-27-2025)
not include charges for utilities.
Elderly persons means persons determined by Sec. 82-47. General denial of exemption.
authority guidelines, rules, and practices to have
attained the age and have the status to constitute The exemption from ad valorem property taxes
them as elderly persons. provided by Section 15a of Public Act No. 346 of
1966 (MCL 125.1415a) shall not apply to all or
Housing project means a residential facility any class of housing projects within the city
consisting of rental units offered to the following boundaries except as provided in this division.
persons; it does not mean the portion of any (Code 1975, § 2-6(a); Code 2002, § 82-47)
facility which is not so occupied by: State law reference—Authority to so provide, MCL
125.1415a(5).
(1) Elderly persons as defined in this sec-
tion.
Sec. 82-48. Limited exemption stated.
(2) Low income persons and families as
defined by the authority. A limited exemption, only if authorized by
(3) Workforce housing as defined by in this Public Act No. 346 of 1966 (MCL 125.1401 et
section. seq.), is hereby granted, limited however to the
projects described and authorized by this divi-
HUD means the United States Department of sion and further having a signed contract with
Housing and Urban Development. the city pursuant to this division entered into by
the city in its sole discretion. No other residential
Low income persons and families means all project, even if authorized by Public Act No. 346
low income persons and families included in the of 1966 (MCL 125.1401 et seq.), shall be entitled
definitions found at section 15a(8) of Public Act to an exemption.
No. 346 of 1966 (MCL 125.1415a(8)). (Code 1975, § 2-6(b); Code 2002, § 82-48)
Mortgage loan means a loan made by the
authority or insured by HUD to the sponsor for Sec. 82-49. Ownership entities recognized.
the construction and/or permanent financing of a
housing project. No housing project shall be eligible for an
exemption under this division unless it is owned
Service charge means the same as payment in
by a nonprofit housing corporation, consumer
lieu of taxes.
housing cooperative, or limited dividend housing
Sponsor means a developer of a housing project. corporation as described in Section 15a of Public
The term "sponsor" includes an applicant for Act No. 346 of 1966 (MCL 125.1415a). The
exemption under this division. exemption shall not be available to mobile home
park corporations or mobile home park associa-
Utilities means public water, public sanitary tions.
sewer, gas or electric service. The term "utilities" (Code 1975, § 2-6(d); Code 2002, § 82-49)
Supp. No. 16 CD82:4
TAXATION § 82-50
Sec. 82-50. Housing projects eligible.
The following housing projects shall be eligible
for the exemption in the city:
(1) Housing projects receiving direct mortgage
loans from or insured by HUD or the
authority for at least 70 percent of the
total construction or rehabilitation costs
of the housing project.
(2) Housing projects where at least 70 percent
of the total construction or rehabilitation
costs of the housing project come from
the proceeds of a grant or advance of
funds from the authority.
Supp. No. 16 CD82:4.1
TAXATION § 82-51
(3) Housing projects in which at least 70 of this act. The service charge to be paid in lieu
percent of the total construction or of taxes by any housing project exempt under
rehabilitation costs of the housing project this division shall be determined as follows:
are funded by the net proceeds from an
authority-aided mortgage loan, but only (1) Amount. Except as provided in subsec-
where the authority aid consists of the tion (2)(h) of this section, the service
allocation of tax credits from the author- charge shall be in an amount no less
ity to the applicant for the exemption. than one percent nor more than 20 percent
of the contract rents charged for the total
(4) Housing projects which satisfy all of the of all units in the exempt housing project,
following criteria: whether the units are occupied or not
a. The project had previously received and whether or not the rents are paid. In
a project-based Section 8 contract no event shall the service charge exceed
which is scheduled to expire within the ad valorem real property taxes which
one year; would be paid for the housing project if it
were not exempt.
b. The city determines that the HAP
contract renewal is in the best inter- (2) The payments in lieu of taxes to be made
est of the city and the residents of by housing projects exempt from ad
project; valorem taxes under this division are
c. The project had previously received hereby established by the city pursuant
tax exemption and a pilot from the to section 15a of Public Act No. 346 of
city; 1966 (MCL 125.1415a), without regard
to the amounts otherwise set forth in
d. Within 27 months after the contract such section of this act. The service
with the city pursuant to the terms charge to be paid in lieu of taxes by any
hereof, the project receives a MSHDA housing project exempt under this divi-
financing commitment, a HUD sion shall be determined as follows:
insured financing commitment or a
reservation of low income housing 1. Amount. Except as provided in
tax credits; and subsection (2)(h) of this section, the
service charge shall be in an amount
e. Renovations commence within 12
no less than one percent nor more
months after receipt of a MSHDA
than 20 percent of the contract rents
financing commitment, a HUD
charged for the total of all units in
insured financing commitment or a
the exempt housing project, whether
reservation of low income housing
the units are occupied or not and
tax credits.
whether or not the rents are paid.
(Code 1975, § 2-6(e); Code 2002, § 82-50; Ord. No.
In no event shall the service charge
2303, § 1(82-50), 2-14-2012)
exceed the ad valorem real property
taxes which would be paid for the
Sec. 82-51. Payment in lieu of taxes; housing project if it were not exempt.
amount; standards for
determination. 2. Standards for determining the
amount of the payment in lieu of
The payments in lieu of taxes to be made by taxes. The city's PILOT policy shall
housing projects exempt from ad valorem taxes guide the city in determining the
under this division are hereby established by the amount of service charge (not less
city pursuant to section 15a of Public Act No. than the minimum) which will be
346 of 1966 (MCL 125.1415a), without regard to paid to the city for a housing project
the amounts otherwise set forth in such section exempt under this division.
Supp. No. 11 CD82:5
§ 82-51 MUSKEGON CITY CODE
3. Property or unit becoming ineligible. of compliance or occupancy is issued by the city,
In the event any residential unit is therefore affecting the taxes due in the following
found to be occupied by persons who year, and shall terminate on the happening of
are not eligible to occupy exempt any of the following:
units under this division, the service
(1) Refinancing of the authority-aided, or
charge for that unit, prorated, shall
authority or HUD mortgage loan, except
equal the general property taxes
to convert from a construction to an end
which would be payable (prorate)
loan.
for that unit. In the event the city
determines that more than 50 (2) Any violation or default under section
percent of the units in the housing 82-55.
project are occupied by such ineligible (3) The day falling 25 years after the effec-
persons, than the entire housing tive date of the contract for the exemp-
project shall be immediately liable tion required by this division, or the
for a service charge in an amount period determined by the contract,
equal to the ad valorem property whichever is shorter.
taxes which would otherwise be
charged by tax bills normally issu- (4) For exemptions applicable to projects
ing in the year of the city's aimed at redeveloping existing multi-
determination. family residential housing projects, which
receive Michigan State Housing Develop-
(3) Property or unit becoming ineligible. In ment Authority approval between October
the event any residential unit is found to 1, 2002 and December 1, 2002, the day
be occupied by persons who are not eligible falling 35 years after the effective date of
to occupy exempt units under this divi- the contract for the exemption required
sion, the service charge for that unit, by this division, or the period determined
prorated, shall equal the general property by the contract, whichever is shorter.
taxes which would be payable (prorata)
(5) For projects which satisfy the criteria of
for that unit. In the event the city
section 82-50(4), the tax exemption shall
determines that more than 50 percent of
begin upon acquisition of the project by
the units in the housing project are
the sponsor and shall extend until the
occupied by such ineligible persons, then final maturity of the authority-aided or
the entire housing project shall be federally-aided mortgage, whichever is
immediately liable for a service charge in longer, but not to exceed 40 years from
an amount equal to the ad valorem the closing. If the criteria of section
property taxes which would otherwise be 82-50(4) are not met within two years of
charged by tax bills normally issuing in the date of the contract between the city
the year of the city's determination. and the sponsor, the tax exemption and
(Code 1975, § 2-6(f); Code 2002, § 82-51; Ord. No. PILOT
2303, § 1(82-51), 2-14-2012; Ord. No. 2357, § 1,
3-14-2017; Ord. No 2395, § 1, 12-18-2018; Ord.
No. 2423, § 1, 11-26-2019; Ord. No. 2446, § I,
2-9-2021)
State law reference—Service charge authorized, MCL
125.1415a(2).
Sec. 82-52. Term of exemption.
Except as provided in subsection (5) or (6) of
this section, the exemption term shall begin on
the tax day of the year in which a final certificate
Supp. No. 11 CD82:6
TAXATION § 82-57
shall terminate at the end of the two year taxes, the city shall issue a tax bill for the
period and the sponsor shall be responsi premises and include the required payment as a
ble for any other remedies agreed to be delinquent tax.
tween the city and sponsor. (Code 1975, § 2-6(i); Code 2002, § 82-54)
(6) For projects which originally were fi Sec. 82-55. Requirement to file information;
nanced through a Michigan State Hous default in payment; violations;
ing Development Authority financed or loss of exemption.
aided mortgage and low income housing
tax credits and for which the Michigan The sponsor or owner shall file annually with
State Housing Development Authority fi the city treasurer a statement of contract rents to
nanced or aided mortgage is to be paid off be charged and/or received, the statement to be
between February 6, 2014 and December filed within 30 days after December 31 of each
30, 2014 but the restrictions applicable to year. Failure to timely file such statement, the
low income housing tax credits remains in filing of an inaccurate statement, any misrepre
place, the tax exemption shall begin upon sentation in the amount of rents, or the failure to
acquisition of the project by the sponsor timely pay any service charge shall be considered
and shall extend until the date specified violations of this division and the commission of
in the contract for housing exemption, but any one violation shall result in the permanent,
not to exceed 40 years from the closing. immediate loss of the exemption for the current
year and thereafter. The city may require that
(Code 1975, § 2-6(g); Code 2002, § 82-52; Ord. No.
information presented in the statement be certi
2092, § 82-52, 10-22-2002; Ord. No. 2303, § 1(82
fied by an independent auditor.
52), 2-14-2012; Ord. No. 2317, § 1(82-52), 3-11
(Code 1975, § 2-6(j); Code 2002, § 82-55)
2014)
Sec. 82-56. Service fees and special assess
Sec. 82-53. Service charge constitutes a lien ments.
on property.
Except as otherwise provided by law, a housing
The service charge shall constitute a lien on project otherwise exempt under this section shall
the housing project property and improvements, not be exempt from special assessments or service
effective at the same times and enforceable in the fees or charges levied or charged by the city.
same manner as general property taxes. (Code 1975, § 2-6(k); Code 2002, § 82-56) '
(Code 1975, § 2-6(h); Code 2002, § 82-53)
Sec. 82-57. Contract requirement.
Sec. 82-54. Collection of service charge. Except for housing projects previously deter
mined to be exempt prior to the enactment of this
The service charge as determined by this divi division, each housing project which is exempt
sion shall be payable in the same manner as under this division must sign an agreement with
general property taxes, except that the annual the city by which the exemption set forth in this
payment shall be paid on or before July 1 of each division is granted, and further providing for the
year during which the exemption is in effect. The payment in lieu of taxes, consenting to the provi
entire tax collection procedure provided by the sions of this division and recognizing the condi
general property tax act (MCL 211.1 et seq.) shall tions whereby exemption may be lost. The city
be effective and utilized with respect to such may require any reasonable conditions in such
payment, including, but not limited to, the provi contract, including, but not limited to, such mat
sions providing for interest and penalties on late ters as limitations on the years for which the
payments, return of delinquent taxes, tax liens, exemption may be continued, requirements for
and the sale of lands for delinquent taxes. In the completing the project within a time certain,
event of a delinquency in the payment in lieu of requirements for completing nonexempt units or
CD82:7
§ 82-57 MUSKEGON CITY CODE
facilities and time limits for completion, as well as Sec. 82-59. Effect on existing projects.
the number of such units. Each contract shall
have a complete and final floor plan attached Housing projects which have been previously
(subject only to insubstantial amendment by as- determined and treated as exempt pursuant to
built drawings), which shall govern the determi Public Act No. 346 of 1966 (MCL 125.1401 et seq.)
nation of the payment in lieu of taxes as appro under previous ordinances of the city shall con
priate under this division. No exemption may be tinue their exempt status, and further shall con
granted unless and until the contract is com tinue the present payments to the city as pres
pleted, approved by the city commission and signed. ently determined. To the extent their present
(Code 1975, § 2-6(1); Code 2002, § 82-57) contracts do not conflict with this division, this
division shall control their exemptions.
(Code 1975, § 2-6(n); Code 2002, § 82-59)
Sec. 82-58. Denial of application.
The city is not required by this section to grant Secs. 82-60—82-80. Reserved.
an application which may otherwise qualify un
der this division. The city may deny an applica
tion in its sole discretion. In determining whether ARTICLE III. INCOME TAX*
to deny a project, the city may use, but is not
limited to, the following standards. The city would See. 82-81. Adopted; tax levied.
deny a project for exemption if the project applied
for: (a) The city hereby levies and provides for the
assessment and collection of an excise tax on
(1) Constitutes a development which diverts, income as authorized by law.
subverts, alters or is contrary to the mas
ter plan of the city; (b) The provisions of Chapter 2 of Public Act
No. 284 of 1964 (MCL 141.601), known as the
(2) Fails to contribute to the improvement of
"Uniform City Income Tax Act," is hereby incor
neighborhoods in the city;
porated, with the exception of sections 60, 61, and
(3) Concentrates exempt housing in one or 87, in its entirety in this division. The rate of tax
more areas of the city; authorized by Section 11 of such Chapter 2 (MCL
141.611), being an annual tax of one percent on
(4) Adversely affects the property tax base of corporations and resident individuals and one-
the city; half percent on nonresident individuals for gen
(5) Creates significant public burdens, such eral revenue purposes, is hereby imposed in ac
as traffic, public works or infrastructure, cordance with such section.
health, safety, school population or ser
vice capabilities; (c) The provisions of Chapter 3 of Public Act
No. 284 of 1964, added by Public Act No. 42 of
(6) Results in the concentration of low in 1969 (MCL 141.701), is hereby incorporated in its
come or elderly housing in a neighborhood entirety in this division. The collection of tax
or is contrary to the encouragement of authorized by Section 60 of such Chapter 3 (MCL
economically diverse housing develop 141.760) shall be on a monthly basis for those
ment; employers where the amount withheld in a calen
dar month exceeds $100.00.
(7) Is sponsored by a developer who fails to
demonstrate acceptable financial, mana (d) The effective date for the levying, assessing
gerial or construction capabilities; or and collecting of the tax shall be July 1, 1993.
(Code 1975, § 2-6.2(a); Code 2002, § 82-81; Ord.
(8) Results in a project or development which
No. 2141, 11-9-2004)
is harmful to the health, safety and wel
fare of the city. *State law reference—City income tax act, MCL 141.501
(Code 1975, § 2-6(m); Code 2002, § 82-58) et seq.
CD82:8
TAXATION § 82-82
Sec. 82-82. Personal exemptions and limita
tions.
(a) Deductions and personal and dependency
exemptions. An individual taxpayer in computing
his taxable income is allowed a deduction of
$600.00 for each personal and dependency exemp
tion which the taxpayer has under the rules for
determining exemptions and dependents as pro
vided in the Federal Internal Revenue Code. The
taxpayer may claim his spouse and dependents as
exemptions, but if the taxpayer and the spouse
are both subject to the tax imposed by this sec
tion, the number of exemptions claimed by each of
them when added together shall not exceed the
total number of exemptions allowed under this
section.
(b) Additional exemptions. An additional ex
emption is allowed for each of the following for
which the taxpayer qualifies:
(1) A taxpayer who is paraplegic, quadriple
gic or hemiplegic or who is totally and
permanently disabled as defined in sec
tion 216 of title II of the social security
act, 42 USC 416.
(2) A taxpayer who is blind as defined in
section 504 of the income tax act of 1967
(MCL 206.504).
(3) A taxpayer who is a deaf person as defined
in section 2 of the deaf person's interpret
ers act (MCL 393.502).
(4) A taxpayer who is 65 years of age or older.
(c) Total exemption. In the event a person's
adjusted gross income is less than $600.00, such
person shall be entirely exempt from taxation
under this section.
(Code 1975, § 2-6.2(b); Code 2002, § 82-82)
State law reference—Authority to so provide, MCL
141.631(2), (3).
CD82:9
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