(A) Title. This section shall be known and cited as the city tax exemption section.
(B) Preamble. It is acknowledged that it is a proper public purpose of the state and its political subdivisions to provide housing for its elderly citizens of low income and to encourage the development of the housing by providing for a service charge in lieu of property taxes in accordance with the State Housing Development Authority Act of 1966 (Public Act 346 of 1966 being M.C.L.A. §§ 125.1401 et seq., as amended). The city is authorized by this Act to establish or change the service charge to be paid in lieu of taxes by any or all classes of housing exempt from taxation under this Act at any amount it chooses not to exceed the taxes that would be paid but for this Act. It is further acknowledged that the housing for elderly persons of low income is a public necessity, and as the city will be benefitted and improved by the housing, the encouragement of the same by providing certain real estate tax exemption for the housing is a valid public purpose; further, that the continuance of the provisions of this section for tax exemption and the service charge in lieu of taxes during the periods contemplated in this section are essential to the determination of economic feasibility of housing developments which are constructed and financed in reliance on the section and service charge.
(C) Definitions. For the purpose of this section, the following definitions shall apply unless the context clearly indicates or requires a different meaning.
ACT. The State Housing Development Authority Act, being Public Act 346 of 1966, being M.C.L.A. §§ 125.1401 et seq. of the state, as amended.
ANNUAL SHELTER RENTS. The total collections during an agreed annual period from all occupants of a housing development representing rents or occupancy charges exclusive of charges for gas, electricity, heat or other utilities furnished to the occupants.
AUTHORITY. The State Housing Development Authority.
CONTRACT RENTS. Are as defined by the United States Department of Housing and Urban Development in regulations promulgated pursuant to § 8 of the United States Housing Act of 1937, as amended.
ELDERLY PERSONS. A family where the head of household is 62 years of age or older or a single person who is 62 years of age or older.
ELDERLY PERSONS OF LOW INCOME. Elderly persons who meet the eligibility criteria set by the authority and/or federal government.
HOUSING DEVELOPMENT. A development which contains a significant element of housing for elderly persons of low income and such elements of other housing, commercial, recreational, industrial, communal and educational facilities as the authority determines improve the quality of the development as it relates to housing for persons of low income.
HUD. The Department of Housing and Urban Development of the United States government.
MORTGAGE LOAN. A loan to be made by the authority or Farmers Home Administration or the Department of Housing and Urban Development to the sponsor for the construction and permanent financing of the Housing Development or a mortgage loan insured by HUD.
PERSONS OF LOW INCOME. Persons and families eligible to move into a Housing Development.
SPONSOR. Persons or entities which have applied to either the authority for a mortgage loan to finance a housing development or to another governmental entity for a federally-aided loan, as defined by the Act.
UTILITIES. Fuel, water, sanitary sewer service and/or electrical service which are paid by the housing development.
(D) Class of housing developments. It is determined that the class of housing developments to which the tax exemption shall apply and for which a service charge shall be paid in lieu of the taxes shall be multiple-dwellings for elderly persons of low income which are financed or assisted by the authority or which are federally aided, as defined in the Act.
(E) Establishment of annual service charge. Housing developments for elderly persons of low income and the property on which they shall be constructed shall be exempt from all property taxes from and after the commencement of construction. The city, acknowledging that the sponsor and the authority, in the case of a sponsor receiving a mortgage loan from the authority, have established the economic feasibility of the housing development in reliance upon the enactment and continuing effect of this section and the qualification of the housing developments for exemption from all property taxes and a payment in lieu of taxes as established in this section, will accept payment of an annual service charge for public services in lieu of all property taxes. The annual service charge shall be equal to 7% of the difference between the annual shelter rent for authority-aided housing developments actually collected and utilities.
(F) Resolution; contractual effect. A resolution of the City Council granting tax exempt status, as provided in this section, shall be adopted for each housing development qualified under the terms and provisions of this section. Notwithstanding the provisions of 15(a)(5) of the Act, to the contrary, a contract between the city and the sponsor with the authority as third party beneficiary under the contract, to provide tax exemption and accept payments in lieu of taxes as previously described will be effectuated by enactment of a resolution by the City Council.
(G) Payment of service charge. The service charge in lieu of taxes as determined under this section shall be payable in the same manner as general property taxes are payable to the city except that the annual payment shall be paid on or before December 31 of each year.
(H) Duration. The tax exempt status of a housing development approved for the status by resolution of the City Council shall remain in effect and shall not terminate so long as the mortgage loan for the housing development remains outstanding and unpaid, or for the period as the authority or other governmental entity has any interest in the property; provided, the construction of the housing development commences within one year from the effective date of the resolution of the City Council approving the housing development for tax exempt status as provided in this section.
(Ord. 2008-10, passed 7-30-2008)