[Ord. No. 1405, 2-16-2005]
It is acknowledged that it is a proper public purpose of the
State of Michigan and its political subdivisions to provide housing
for its elderly persons of low and moderate income and to encourage
the development of such housing by providing for a service charge
in lieu of property taxes in accordance with the State Housing Development
Authority Act of 1966 (1966 PA 346, as amended, MCLA § 125.1401
et seq.) ("Act"). The City is authorized by the Act to establish or
charge a service charge to be paid in lieu of taxes by any or all
classes of housing exempt from taxation under the Act at any amount
it chooses not to exceed the taxes that would be paid but for the
Act.
It is further acknowledged that such housing for elderly persons
of low or moderate income is a public necessity, and as the City will
be benefited and improved by such housing, the encouragement of the
same by providing certain real estate tax exemption therefore is a
valid public purpose, further, that the continuation of the provisions
of this article for tax exemption and the service charge in lieu of
taxes during the period contemplated in this article are essential
to the determination of economic feasibility of housing developments
which are constructed and financed in reliance on such tax exemption.
[Ord. No. 1405, 2-16-2005; Ord. No. 1472, 4-18-2007]
For purposes of this article, the following words and phrases
shall have the meanings respectively ascribed to them by this section:
ACT
The State Housing Development Authority Act, being Public
Act 346 of 1966, of the State of Michigan, as amended.
AUTHORITY
The Michigan State Housing Development Authority.
CONTRACT RENTS
The rent payable to the owner of a qualified housing project
under the owner's contract for the same including the portion of the
rent payable by the tenant as well as that payable under any governmental
subsidy.
DISABLED
A person who has a disability, as the term is defined pursuant
to the Persons with Disabilities Act (Act 220 of the Public Acts of
1976) as existing or hereafter amended, or such federal acts as may
define such term, as existing or hereafter amended, including but
not limited to Section 504 of the Rehabilitation Act of 1972, the
Federal Fair Housing Act, or the Americans with Disabilities Act.
ELDERLY
Those persons: (i) 62 years of age or older; or (ii) who
otherwise qualify pursuant to the rules and regulations or practices
of the HUD or the Authority for residency in an elderly housing project
and are subject to a resolution of the City Council approving a project
under (ii) of this section.
ELDERLY HOUSING PROJECT
A specific parcel of property, or divisible portion thereof,
improved for rental to a low or moderate income individual which qualifies
as an elderly housing project under the rules and regulations or standard
practices of HUD or the Authority to the extent it is occupied by
the elderly or held for rental exclusively to the elderly.
EXTENDED USE PERIOD
The time period described in the regulatory agreement entered
into between the sponsor of an elderly housing project and the Authority.
LOW-INCOME HOUSING TAX CREDIT
A tax credit that is established under Section 42 of the
Internal Revenue Code of 1986, as amended, that is allocated and administered
by the Authority.
LOW-INCOME INDIVIDUAL
An elderly person whose household income does not exceed
the definition of a low-income individual under the statutes, rules,
and regulations or standard practices of HUD or the Authority.
MODERATE-INCOME INDIVIDUAL
An elderly person whose household income does not exceed
the definition of a moderate-income individual under the statutes,
rules, and regulations or standard practices of HUD or the Authority.
MORTGAGE LOAN
A loan made by the Authority or insured by HUD to the sponsor
for the construction and permanent financing of an elderly housing
project.
UTILITIES
Fuel, public water, public sanitary sewer service and/or
electrical service.
[Ord. No. 1405, 2-16-2005]
It is determined that the class of housing projects to which the exemption set forth in Section
33.1-34 shall apply, and for which a service charge shall be paid in lieu of taxes, shall be elderly housing projects, which are constructed and established pursuant to the Act, after January 1, 2005. Article
I of Chapter
33.1 shall apply to all elderly housing projects constructed prior to December 1, 1991. Article
II of Chapter
33.1 shall apply to all elderly housing projects constructed prior to January 1, 2005.
[Ord. No. 1405, 2-16-2005; Ord. No. 1472, 4-18-2007]
That portion of an elderly housing projects exclusively and
especially designated for and occupied by elderly or disabled persons
of low and moderate income developed and constructed upon a parcel
of land within the City sufficient for the operation of such project
(but no larger) shall be exempt from all property taxation beginning
in the year following commencement of construction and continuing
as long as:
(1) The mortgage loan insured by HUD or assisted or financed by the Authority
remains outstanding and unpaid; or
(2) The tax credit compliance period or any extended use period for low-income
housing tax credits remain in effect; or
(3) HUD or the Authority has any interest in such property.
Notwithstanding the foregoing, an elderly housing project, including
units occupied by the disabled, shall be subject to a service charge
in lieu of property taxes in the amounts hereinafter set forth which
shall be applied against contract rents of the preceding calendar
year, exclusive of utility charges paid by tenants or by the project
equal to 4% for the entire life of the loan.
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Notwithstanding the foregoing, in no event shall the service
charge, at any time, be less than the property taxes upon the land
only without improvements for the tax year prior to the date when
construction was commenced. If the land was exempt from property taxes
in the tax year prior to the date when construction was commenced,
the service charge shall be not less than the property taxes upon
the land only without improvements assuming it was assessable and
not exempt.
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[Ord. No. 1405, 2-16-2005]
The service charge in lieu of taxes as determined hereunder
shall be payable in the same manner as general property taxes are
payable in the City; except, that the annual payment shall be paid
on or before July 1 of each year. The entire tax collection procedure
provided by the General Property Tax Act shall be effective with respect
to such payment including, but not by way of limitation, the provisions
providing for interest and penalties on late payments, return of delinquent
taxes and the sale of lands for delinquent taxes.
[Ord. No. 1405, 2-16-2005]
Notwithstanding the provisions of Section 15(a)(5) of the Act to the contrary, the City shall adopt a resolution between
the City and a sponsor of an elderly housing project establishing
a contract to provide tax exemption and accept payments in lieu thereof
naming HUD or the Authority as a third party beneficiary to such contract.
[Ord. No. 1405, 2-16-2005]
The various sections and provisions of this article shall be
deemed to be severable, and should any section or provision of this
article be declared by any court of competent jurisdiction to be unconstitutional
or invalid, the same shall not affect the validity of this article
as a whole or any section or provision hereof other than the section
or provision so declared to be unconstitutional or invalid.
[Ord. No. 1405, 2-16-2005]
This article shall become effective immediately upon its adoption
and publication by the City Council. All ordinances or parts of ordinances
in conflict herewith are hereby repealed.