HB-6213, As Passed Senate, December 20, 2018

 

 

 

 

 

 

 

 

 

 

 

SENATE SUBSTITUTE FOR

 

HOUSE BILL NO. 6213

 

 

 

 

 

 

 

 

 

 

 

 

     A bill to amend 1893 PA 206, entitled

 

"The general property tax act,"

 

by amending sections 7dd and 34c (MCL 211.7dd and 211.34c), section

 

7dd as amended by 2015 PA 107 and section 34c as amended by 2012 PA

 

409.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 7dd. As used in sections 7cc and 7ee:

 

     (a) "Owner" means any of the following:

 

     (i) A person who owns property or who is purchasing property

 

under a land contract.

 

     (ii) A person who is a partial owner of property.

 

     (iii) A person who owns property as a result of being a

 

beneficiary of a will or trust or as a result of intestate

 

succession.

     (iv) A person who owns or is purchasing a dwelling on leased

 

land.

 

     (v) A person holding a life lease in property previously sold

 

or transferred to another.

 

     (vi) A grantor who has placed the property in a revocable

 

trust or a qualified personal residence trust.

 

     (vii) The sole present beneficiary of a trust if the trust

 

purchased or acquired the property as a principal residence for the

 

sole present beneficiary of the trust, and the sole present

 

beneficiary of the trust is totally and permanently disabled. As

 

used in this subparagraph, "totally and permanently disabled" means

 

disability as defined in section 216 of title II of the social

 

security act, 42 USC 416, without regard as to whether the sole

 

present beneficiary of the trust has reached the age of retirement.

 

     (viii) A cooperative housing corporation.

 

     (ix) A facility as defined by former 1976 PA 440 and

 

registered under the continuing care community disclosure act, 2014

 

PA 448, MCL 554.901 to 554.993.

 

     (b) "Person", for purposes of defining owner as used in

 

section 7cc, means an individual and for purposes of defining owner

 

as used in section 7ee means an individual, partnership,

 

corporation, limited liability company, association, or other legal

 

entity.

 

     (c) "Principal residence" means the 1 place where an owner of

 

the property has his or her true, fixed, and permanent home to

 

which, whenever absent, he or she intends to return and that shall

 

continue as a principal residence until another principal residence

is established. Except as otherwise provided in this subdivision,

 

principal residence includes only that portion of a dwelling or

 

unit in a multiple-unit dwelling that is subject to ad valorem

 

taxes and that is owned and occupied by an owner of the dwelling or

 

unit. Principal residence also includes all of an owner's

 

unoccupied property classified as residential that is adjoining or

 

contiguous to the dwelling subject to ad valorem taxes and that is

 

owned and occupied by the owner. Beginning December 31, 2007,

 

principal residence also includes all of an owner's unoccupied

 

property classified as timber-cutover real property under section

 

34c that is adjoining or contiguous to the dwelling subject to ad

 

valorem taxes and that is owned and occupied by the owner.

 

Contiguity is not broken by boundary between local tax collecting

 

units, a road, a right-of-way, or property purchased or taken under

 

condemnation proceedings by a public utility for power transmission

 

lines if the 2 parcels separated by the purchased or condemned

 

property were a single parcel prior to the sale or condemnation.

 

Except as otherwise provided in this subdivision, principal

 

residence also includes any portion of a dwelling or unit of an

 

owner that is rented or leased to another person as a residence as

 

long as that portion of the dwelling or unit that is rented or

 

leased is less than 50% of the total square footage of living space

 

in that dwelling or unit. Principal residence also includes a life

 

care facility for purposes of former 1976 PA 440 that is registered

 

under the continuing care community disclosure act, 2014 PA 448,

 

MCL 554.901 to 554.993. Principal residence also includes property

 

owned by a cooperative housing corporation and occupied by tenant

stockholders. Property that qualified as a principal residence

 

shall continue to qualify as a principal residence for 3 years

 

after all or any portion of the dwelling or unit included in or

 

constituting the principal residence is rented or leased to another

 

person as a residence if all of the following conditions are

 

satisfied:

 

     (i) The owner of the dwelling or unit is absent while on

 

active duty in the armed forces of the United States.

 

     (ii) The dwelling or unit would otherwise qualify as the

 

owner's principal residence.

 

     (iii) Except as otherwise provided in this subparagraph, the

 

owner files an affidavit with the assessor of the local tax

 

collecting unit on or before May 1 attesting that it is his or her

 

intent to occupy the dwelling or unit as a principal residence upon

 

completion of active duty in the armed forces of the United States.

 

A copy of an affidavit filed under this subparagraph shall be

 

forwarded to the department of treasury pursuant to a schedule

 

prescribed by the department of treasury.

 

     (d) "Qualified agricultural property" means unoccupied

 

property and related buildings classified as agricultural, or other

 

unoccupied property and related buildings located on that property

 

devoted primarily to agricultural use as defined in section 36101

 

of the natural resources and environmental protection act, 1994 PA

 

451, MCL 324.36101. Related buildings include a residence occupied

 

by a person employed in or actively involved in the agricultural

 

use and who has not claimed a principal residence exemption on

 

other property. For taxes levied after December 31, 2008, property

shall not lose its status as qualified agricultural property as a

 

result of an owner or lessee of that property implementing a

 

wildlife risk mitigation action plan. Notwithstanding any other

 

provision of this act to the contrary, if after December 31, 2008

 

the classification of property was changed as a result of the

 

implementation of a wildlife risk mitigation action plan, the owner

 

of that property may appeal that change in classification to the

 

board of review under section 30 in the year in which the

 

amendatory act that added this sentence takes effect or in the 3

 

immediately succeeding years. Property used for commercial storage,

 

commercial processing, commercial distribution, commercial

 

marketing, or commercial shipping operations or other commercial or

 

industrial purposes is not qualified agricultural property. A

 

parcel of property is devoted primarily to agricultural use only if

 

more than 50% of the parcel's acreage is devoted to agricultural

 

use. An owner shall not receive an exemption for that portion of

 

the total state equalized valuation of the property that is used

 

for a commercial or industrial purpose or that is a residence that

 

is not a related building. As used in this subdivision:

 

     (i) "Project" means certain risk mitigating measures, which

 

may include, but are not limited to, the following:

 

     (A) Making it difficult for wildlife to access feed by storing

 

livestock feed securely, restricting wildlife access to feeding and

 

watering areas, and deterring or reducing wildlife presence around

 

livestock feed by storing feed in an enclosed barn, wrapping bales

 

or covering stacks with tarps, closing ends of bags, storing grains

 

in animal-proof containers or bins, maintaining fences, practicing

small mammal and rodent control, or feeding away from wildlife

 

cover.

 

     (B) Minimizing wildlife access to livestock feed and water by

 

feeding livestock in an enclosed area, feeding in open areas near

 

buildings and human activity, removing extra or waste feed when

 

livestock are moved, using hay feeders to reduce waste, using

 

artificial water systems to help keep livestock from sharing water

 

sources with wildlife, fencing off stagnant ponds, wetlands, or

 

areas of wildlife habitats that pose a disease risk, and keeping

 

mineral feeders near buildings and human activity or using devices

 

that restrict wildlife usage.

 

     (ii) "Wildlife risk mitigation action plan" means a written

 

plan consisting of 1 or more projects to help reduce the risks of a

 

communicable disease spreading between wildlife and livestock that

 

is approved by the department of agriculture and rural development

 

under the animal industry act, 1988 PA 466, MCL 287.701 to

 

287.746.287.747.

 

     Sec. 34c. (1) Not later than the first Monday in March in each

 

year, the assessor shall classify every item of assessable property

 

according to the definitions contained in this section. Following

 

the March board of review, the assessor shall tabulate the total

 

number of items and the valuations as approved by the board of

 

review for each classification and for the totals of real and

 

personal property in the local tax collecting unit. The assessor

 

shall transmit to the county equalization department and to the

 

state tax commission the tabulation of assessed valuations and

 

other statistical information the state tax commission considers

necessary to meet the requirements of this act and 1911 PA 44, MCL

 

209.1 to 209.8.

 

     (2) The classifications of assessable real property are

 

described as follows:

 

     (a) Agricultural real property includes parcels used partially

 

or wholly for agricultural operations, with or without buildings.

 

For taxes levied after December 31, 2002, agricultural real

 

property includes buildings on leased land used for agricultural

 

operations. If a parcel of real property is classified as

 

agricultural real property and is engaged in agricultural

 

operations, any contiguous parcel owned by the same taxpayer, that

 

is a vacant parcel, a wooded parcel, or a parcel on which is

 

located 1 or more agricultural outbuildings that comprise more than

 

50% of the taxable value of all buildings on that parcel as

 

indicated by the assessment records for the local tax collecting

 

unit in which that parcel is located, shall be classified as

 

agricultural real property. Contiguity is not broken by a boundary

 

between local tax collecting units, a section boundary, a road, a

 

right-of-way, or property purchased or taken under condemnation

 

proceedings by a public utility for power transmission lines if the

 

2 parcels separated by the purchased or condemned property were a

 

single parcel prior to the sale or condemnation. For purposes of

 

this subsection, contiguity requires that the parcel classified as

 

agricultural real property by reason of its agriculture use and the

 

vacant parcel, wooded parcel, or parcel on which is located 1 or

 

more agricultural outbuildings must be immediately adjacent to each

 

other, without intervening parcels that do not qualify for

classification as agricultural real property based on their actual

 

agricultural use. It is the intent of the legislature that if a

 

parcel of real property is classified as agricultural real property

 

and is engaged in agricultural operations, any contiguous parcel

 

owned by the same taxpayer, that is a vacant parcel, a wooded

 

parcel, or a parcel on which is located 1 or more agricultural

 

outbuildings that comprise more than 50% of the taxable value of

 

all buildings on that parcel as indicated by the assessment records

 

for the local tax collecting unit in which that parcel is located,

 

shall be classified as agricultural real property even if the

 

contiguous parcels are located in different local tax collecting

 

units. Property shall not lose its classification as agricultural

 

real property as a result of an owner or lessee of that property

 

implementing a wildlife risk mitigation action plan. As used in

 

this subdivision:

 

     (i) "Agricultural outbuilding" means a building or other

 

structure primarily used for agricultural operations.

 

     (ii) "Agricultural operations" means the following:

 

     (A) Farming in all its branches, including cultivating soil.

 

     (B) Growing and harvesting any agricultural, horticultural, or

 

floricultural commodity.

 

     (C) Dairying.

 

     (D) Raising livestock, bees, fish, fur-bearing animals, or

 

poultry, including operating a game bird hunting preserve licensed

 

under part 417 of the natural resources and environmental

 

protection act, 1994 PA 451, MCL 324.41701 to 324.41712, and also

 

including farming operations that harvest cervidae on site where

not less than 60% of the cervidae were born as part of the farming

 

operation. As used in this subparagraph, "livestock" includes, but

 

is not limited to, cattle, sheep, new world camelids, goats, bison,

 

privately owned cervids, ratites, swine, equine, poultry,

 

aquaculture, and rabbits. Livestock does not include dogs and cats.

 

     (E) Raising, breeding, training, leasing, or boarding horses.

 

     (F) Turf and tree farming.

 

     (G) Performing any practices on a farm incident to, or in

 

conjunction with, farming operations. A commercial storage,

 

processing, distribution, marketing, or shipping operation is not

 

part of agricultural operations.

 

     (iii) "Project" means certain risk mitigating measures, which

 

may include, but are not limited to, the following:

 

     (A) Making it difficult for wildlife to access feed by storing

 

livestock feed securely, restricting wildlife access to feeding and

 

watering areas, and deterring or reducing wildlife presence around

 

livestock feed by storing feed in an enclosed barn, wrapping bales

 

or covering stacks with tarps, closing ends of bags, storing grains

 

in animal-proof containers or bins, maintaining fences, practicing

 

small mammal and rodent control, or feeding away from wildlife

 

cover.

 

     (B) Minimizing wildlife access to livestock feed and water by

 

feeding livestock in an enclosed area, feeding in open areas near

 

buildings and human activity, removing extra or waste feed when

 

livestock are moved, using hay feeders to reduce waste, using

 

artificial water systems to help keep livestock from sharing water

 

sources with wildlife, fencing off stagnant ponds, wetlands, or

areas of wildlife habitats that pose a disease risk, and keeping

 

mineral feeders near buildings and human activity or using devices

 

that restrict wildlife usage.

 

     (iv) "Wildlife risk mitigation action plan" means a written

 

plan consisting of 1 or more projects to help reduce the risks of a

 

communicable disease spreading between wildlife and livestock that

 

is approved by the department of agriculture and rural development

 

under the animal industry act, 1988 PA 466, MCL 287.701 to

 

287.746.287.747.

 

     (b) Commercial real property includes the following:

 

     (i) Platted or unplatted parcels used for commercial purposes,

 

whether wholesale, retail, or service, with or without buildings.

 

     (ii) Parcels used by fraternal societies.

 

     (iii) Parcels used as golf courses, boat clubs, ski areas, or

 

apartment buildings with more than 4 units.

 

     (iv) For taxes levied after December 31, 2002, buildings on

 

leased land used for commercial purposes.

 

     (c) Developmental real property includes parcels containing

 

more than 5 acres without buildings, or more than 15 acres with a

 

market value in excess of its value in use. Developmental real

 

property may include farm land or open space land adjacent to a

 

population center, or farm land subject to several competing

 

valuation influences.

 

     (d) Industrial real property includes the following:

 

     (i) Platted or unplatted parcels used for manufacturing and

 

processing purposes, with or without buildings.

 

     (ii) Parcels used for utilities sites for generating plants,

pumping stations, switches, substations, compressing stations,

 

warehouses, rights-of-way, flowage land, and storage areas.

 

     (iii) Parcels used for removal or processing of gravel, stone,

 

or mineral ores.

 

     (iv) For taxes levied after December 31, 2002, buildings on

 

leased land used for industrial purposes.

 

     (v) For taxes levied after December 31, 2002, buildings on

 

leased land for utility purposes.

 

     (e) Residential real property includes the following:

 

     (i) Platted or unplatted parcels, with or without buildings,

 

and condominium apartments located within or outside a village or

 

city, which are used for, or probably will be used for, residential

 

purposes.

 

     (ii) Parcels that are used for, or probably will be used for,

 

recreational purposes, such as lake lots and hunting lands, located

 

in an area used predominantly for recreational purposes.

 

     (iii) For taxes levied after December 31, 2002, a home,

 

cottage, or cabin on leased land, and a mobile home that would be

 

assessable as real property under section 2a except that the land

 

on which it is located is not assessable because the land is

 

exempt.

 

     (f) Timber-cutover real property includes parcels that are

 

stocked with forest products of merchantable type and size, cutover

 

forest land with little or no merchantable products, and marsh

 

lands or other barren land. However, when a typical purchase of

 

this type of land is for residential or recreational uses, the

 

classification shall be changed to residential.

     (3) The classifications of assessable personal property are

 

described as follows:

 

     (a) Agricultural personal property includes any agricultural

 

equipment and produce not exempt by law.

 

     (b) Commercial personal property includes the following:

 

     (i) All equipment, furniture, and fixtures on commercial

 

parcels, and inventories not exempt by law.

 

     (ii) All outdoor advertising signs and billboards.

 

     (iii) Well drilling rigs and other equipment attached to a

 

transporting vehicle but not designed for operation while the

 

vehicle is moving on the highway.

 

     (iv) Unlicensed commercial vehicles or commercial vehicles

 

licensed as special mobile equipment or by temporary permits.

 

     (c) Industrial personal property includes the following:

 

     (i) All machinery and equipment, furniture and fixtures, and

 

dies on industrial parcels, and inventories not exempt by law.

 

     (ii) Personal property of mining companies.

 

     (d) For taxes levied before January 1, 2003, residential

 

personal property includes a home, cottage, or cabin on leased

 

land, and a mobile home that would be assessable as real property

 

under section 2a except that the land on which it is located is not

 

assessable because the land is exempt.

 

     (e) Utility personal property includes the following:

 

     (i) Electric transmission and distribution systems, substation

 

equipment, spare parts, gas distribution systems, and water

 

transmission and distribution systems.

 

     (ii) Oil wells and allied equipment such as tanks, gathering

lines, field pump units, and buildings.

 

     (iii) Inventories not exempt by law.

 

     (iv) Gas wells with allied equipment and gathering lines.

 

     (v) Oil or gas field equipment stored in the open or in

 

warehouses such as drilling rigs, motors, pipes, and parts.

 

     (vi) Gas storage equipment.

 

     (vii) Transmission lines of gas or oil transporting companies.

 

     (4) For taxes levied before January 1, 2003, buildings on

 

leased land of any classification are improvements where the owner

 

of the improvement is not the owner of the land or fee, the value

 

of the land is not assessed to the owner of the building, and the

 

improvement has been assessed as personal property pursuant to

 

under section 14(6).

 

     (5) If the total usage of a parcel includes more than 1

 

classification, the assessor shall determine the classification

 

that most significantly influences the total valuation of the

 

parcel.

 

     (6) An owner of any assessable property who disputes the

 

classification of that parcel shall notify the assessor and may

 

protest the assigned classification to the March board of review.

 

An owner or assessor may appeal the decision of the March board of

 

review by filing a petition with the state tax commission not later

 

than June 30 in that tax year. The state tax commission shall

 

arbitrate the petition based on the written petition and the

 

written recommendations of the assessor and the state tax

 

commission staff. An appeal may not be taken from the decision of

 

the state tax commission regarding classification complaint

petitions and the state tax commission's determination is final and

 

binding for the year of the petition.

 

     (7) The department of treasury may appeal the classification

 

of any assessable property to the residential and small claims

 

division of the Michigan tax tribunal not later than December 31 in

 

the tax year for which the classification is appealed.

 

     (8) This section shall not be construed to encourage the

 

assessment of property at other than the uniform percentage of true

 

cash value prescribed by this act.

 

     (9) The assessor of each city or township in which is located

 

property that is subject to payment in lieu of taxes under subpart

 

14 of part 21 of the natural resources and environmental protection

 

act, 1994 PA 451, MCL 324.2152 to 324.2154, shall place that

 

property on an assessment roll that is separate from the assessment

 

roll prepared under section 24. For purposes of calculating the

 

debt limitation imposed by section 11 of article VII of the state

 

constitution of 1963, the separate assessment roll for property

 

that is subject to payment in lieu of taxes under subpart 14 of

 

part 21 of the natural resources and environmental protection act,

 

1994 PA 451, MCL 324.2152 to 324.2154, required by this subsection

 

shall be combined with the assessment roll prepared under section

 

24.

 

     Enacting section 1. This amendatory act takes effect 90 days

 

after the date it is enacted into law.

 

     Enacting section 1. This amendatory act does not take effect

 

unless House Bill No. 6205 of the 99th Legislature is enacted into

 

law.