HOUSE BILL No. 6282 September 17, 2002, Introduced by Reps. Cassis, Newell, Toy, Ruth Johnson, Birkholz, Palmer, Woronchak, Voorhees, Vander Veen, Richardville, Ehardt, Meyer, Van Woerkom, Rocca, Caul, Pappageorge, DeRossett and Kooiman and referred to the Committee on Tax Policy. A bill to amend 1976 PA 451, entitled "The revised school code," by amending sections 1211, 1211d, and 1211e (MCL 380.1211, 380.1211d, and 380.1211e), section 1211 as amended and section 1211e as added by 1994 PA 258 and section 1211d as amended by 1996 PA 69. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 1211. (1) Except as otherwise provided in this section 2 and section 1211c, the board of a school district shall levy not 3 more than 18 mills for school operating purposes or the number of 4 mills levied in 1993 for school operating purposes, whichever is 5 less. AhomesteadPRINCIPAL RESIDENCE and qualified agricul- 6 tural property are exempt from the mills levied under this 7 subsection except for the number of mills by which that exemption 8 is reduced under this subsection. The board of a school district 07067'02 d FDD 2 1 with a foundation allowance calculated under section 20 of the 2 state school aid act of 1979,being section 388.1620 of the3Michigan Compiled LawsMCL 388.1620, for the 1994-95 state 4 fiscal year of more than $6,500.00, may reduce the number of 5 mills from which ahomesteadPRINCIPAL RESIDENCE and qualified 6 agricultural property are exempted under this subsection by up to 7 the number of mills, as certified under section 1211a, required 8 to be levied on ahomesteadPRINCIPAL RESIDENCE and qualified 9 agricultural property for the school district's combined state 10 and local revenue per membership pupil for the school fiscal year 11 ending in 1995 to be equal to the school district's foundation 12 allowance for the state fiscal year ending in 1995, and the board 13 also may levy in 1994 or a succeeding year that number of mills 14 for school operating purposes on ahomesteadPRINCIPAL 15 RESIDENCE and qualified agricultural property. 16 (2) Subject to subsection (3), if the department of treasury 17 determines that the maximum number of mills allowed to be levied 18 under subsection (1) on all classes of property is not sufficient 19 for a school district's combined state and local revenue per mem- 20 bership pupil for the school fiscal year ending in 1995 to be 21 equal to the school district's foundation allowance for that 22 school fiscal year, the board of the school district may levy in 23 1994 or a succeeding year additional mills uniformly on all prop- 24 erty up to the number of mills required for the school district's 25 combined state and local revenue per membership pupil for the 26 school fiscal year ending in 1995 to be equal to the school 07067'02 d 3 1 district's foundation allowance for the state fiscal year ending 2 in 1995. 3 (3) After 1994, the number of mills a school district may 4 levy under this section on any class of property shall not exceed 5 the lesser of the number of mills the school district is certi- 6 fied by the department of treasury under section 1211a to levy on 7 that class of property under this section in 1994 or the number 8 of mills required to be levied on that class of property under 9 this section to ensure that the increase from the immediately 10 preceding state fiscal year in the school district's combined 11 state and local revenue per membership pupil, calculated as if 12 the school district had levied the maximum number of mills the 13 school district was allowed to levy under this section regardless 14 of the number of mills the school district actually levied, does 15 not exceed the lesser of the dollar amount of the increase in the 16 basic foundation allowance under section 20 of the state school 17 aid act of 1979, MCL 388.1620, from the immediately preceding 18 state fiscal year or the percentage increase in the general price 19 level in the immediately preceding calendar year. If the number 20 of mills a school district is allowed to levy under this section 21 in a year after 1994 is less than the number of mills the school 22 district was allowed to levy under this section in the immedi- 23 ately preceding year, any reduction required by this subsection 24 in the school district's millage rate shall be calculated by 25 first reducing the number of mills the school district is allowed 26 to levy under subsection (2) and then increasing the number of 07067'02 d 4 1 mills from which ahomesteadPRINCIPAL RESIDENCE and qualified 2 agricultural property are exempted under subsection (1). 3 (4) Millage levied under this section must be approved by 4 the school electors. For the purposes of this section, millage 5 approved by the school electors before January 1, 1994 for which 6 the authorization has not expired is considered to be approved by 7 the school electors. 8 (5) If a school district levies millage for school operating 9 purposes that is in excess of the limits of this section, the 10 amount of the resulting excess tax revenue shall be deducted from 11 the school district's next regular tax levy. 12 (6) If a school district levies millage for school operating 13 purposes that is less than the limits of this section, the board 14 of the school district may levy at the school district's next 15 regular tax levy an additional number of mills not to exceed the 16 additional millage needed to make up the shortfall. 17 (7) A school district shall not levy mills allocated under 18 the property tax limitation act,Act No. 62 of the Public Acts19of 1933, being sections 211.201 to 211.217a of the Michigan20Compiled Laws1933 PA 62, MCL 211.201 TO 211.217A, other than 21 mills allocated to a school district of the first class for pay- 22 ment to a public library commission under section 11(4) ofAct23No. 62 of the Public Acts of 1933, being section 211.211 of the24Michigan Compiled LawsTHE PROPERTY TAX LIMITATION ACT, 1933 PA 25 62, MCL 211.211, after 1993. 26 (8) As used in this section: 07067'02 d 5 1 (a) "Combined state and local revenue per membership pupil" 2 means that term as defined in section 20 of the state school aid 3 act of 1979, MCL 388.1620. 4 (b) "Foundation allowance" means a school district's founda- 5 tion allowance as calculated under section 20 of the state school 6 aid act of 1979, MCL 388.1620. 7 (c) "General price level" means that term as defined in sec- 8 tion 33 of article IX of the state constitution of 1963. 9(d) "Homestead" and "qualified agricultural property" mean10those terms as defined in section 1211d or in section 7dd of the11general property tax act, Act No. 206 of the Public Acts of 1893,12being section 211.7dd of the Michigan Compiled Laws. If a term13defined in section 1211d is defined in section 7dd of Act No. 20614of the Public Acts of 1893 differently than the term is defined15in section 1211d, then that term as used in this section means16that term as defined in section 7dd of Act No. 206 of the Public17Acts of 1893.18 (D)(e)"Membership" means that term as defined in section 19 6 of the state school aid act of 1979,being section 388.1606 of20the Michigan Compiled LawsMCL 388.1606. 21 (E) "PRINCIPAL RESIDENCE" AND "QUALIFIED AGRICULTURAL 22 PROPERTY" MEAN THOSE TERMS AS DEFINED IN SECTION 1211D OR IN 23 SECTION 7DD OF THE GENERAL PROPERTY TAX ACT, 1893 PA 206, MCL 24 211.7DD. IF A TERM DEFINED IN SECTION 1211D IS DEFINED IN 25 SECTION 7DD OF THE GENERAL PROPERTY TAX ACT, 1893 PA 206, MCL 26 211.7DD, DIFFERENTLY THAN THE TERM IS DEFINED IN SECTION 1211D, 27 THEN THAT TERM AS USED IN THIS SECTION MEANS THAT TERM AS DEFINED 07067'02 d 6 1 IN SECTION 7DD OF THE GENERAL PROPERTY TAX ACT, 1893 PA 206, MCL 2 211.7DD. 3 (f) "School operating purposes" includes expenditures for 4 furniture and equipment, for alterations necessary to maintain 5 school facilities in a safe and sanitary condition, for funding 6 the cost of energy conservation improvements in school facili- 7 ties, for deficiencies in operating expenses for the preceding 8 year, and for paying the operating allowance due from the school 9 district to a joint high school district in which the school dis- 10 trict is a participating school district under part 3a. Taxes 11 levied for school operating purposes do not include any of the 12 following: 13 (i) Taxes levied by a school district for operating a commu- 14 nity college under part 25. 15 (ii) Taxes levied under section 1212. 16 (iii) Taxes levied under section 1356(4) for eliminating an 17 operating deficit. 18 (iv) Taxes levied for operation of a library under section 19 260 or 1451 or for operation of a library established pursuant to 20Act No. 261 of the Public Acts of 1913, being sections 397.26121to 397.262 of the Michigan Compiled Laws1913 PA 261, MCL 22 397.261 TO 397.262, that were not included in the operating mill- 23 age reported by the district to the department as of April 1, 24 1993. However, a district may report to the department not later 25 than April 1, 1994 the number of mills it levied in 1993 for a 26 purpose described in this subparagraph that the school district 27 does not want considered as operating millage and then that 07067'02 d 7 1 number of mills is excluded under this section from taxes levied 2 for school operating purposes. 3 (v) Taxes paid by a school district of the first class to a 4 public library commission pursuant to section 11(4) ofAct5No. 62 of the Public Acts of 1933, being section 211.211 of the6Michigan Compiled LawsTHE PROPERTY TAX LIMITATION ACT, 1933 PA 7 62, MCL 211.211. 8 (vi) Taxes levied under FORMER section 1512 for operation of 9 a community swimming pool. In addition, if a school district 10 included the millage it levied in 1993 for operation of a commu- 11 nity swimming pool as part of its operating millage reported to 12 the department for 1993, the school district may report to the 13 department not later than June 17, 1994 the number of mills it 14 levied in 1993 for operation of a community swimming pool that 15 the school district does not want considered as operating millage 16 and then that number of mills is excluded under this section from 17 taxes levied for school operating purposes. 18 Sec. 1211d.(1) Except as otherwise provided in subsection19(2), asAS used in this section and in section 1211: 20(a) "Homestead" means that portion of a dwelling or unit in21a multiple-unit dwelling that is subject to ad valorem taxes and22is owned and occupied as a principal residence by an owner of the23dwelling or unit. Homestead also includes all of an owner's24unoccupied property classified as residential that is adjoining25or contiguous to the dwelling subject to ad valorem taxes and26that is owned and occupied as a principal residence by the27owner. Contiguity is not broken by a road or a right-of-way.07067'02 d 8 1Homestead also includes any portion of a principal single-family2dwelling or a single-family unit in a multiple-unit dwelling used3as a residence of an owner that is rented or leased to another4person as a residence as long as that portion of the principal5residence that is rented or leased is less than 50% of the total6square footage of living space in the principal residence.7Homestead also includes a life care facility registered under the8living care disclosure act, Act No. 440 of the Public Acts of91976, being sections 554.801 to 554.844 of the Michigan Compiled10Laws. Homestead also includes property owned by a cooperative11housing corporation and occupied as a principal residence by12tenant stockholders.13 (A)(b)"Owner" means a person who is 1 of the following: 14 (i) A person who owns property or who is purchasing property 15 under a land contract. 16 (ii) A person who is a partial owner of property. 17 (iii) A person who owns property as a result of being a ben- 18 eficiary of a will or trust or as a result of intestate 19 succession. 20 (iv) A person who owns or is purchasing a dwelling on leased 21 land. 22 (v) A person holding a life lease in property previously 23 sold or transferred to another. 24 (vi) A grantor who has placed the property in a revocable 25 trust or a qualified personal residence trust. 26 (B)(c)"Person", for purposes of ahomesteadPRINCIPAL 27 RESIDENCE, means an individual and, for purposes of qualified 07067'02 d 9 1 agricultural property, means an individual, partnership, 2 corporation, limited liability company, association, or other 3 legal entity. 4 (C)(d)"Principal residence"means the 1 place where a5person has his or her true, fixed, and permanent home to which,6whenever absent, he or she intends to return and that shall con-7tinue as a principal residence until another principal residence8is establishedAND "QUALIFIED AGRICULTURAL PROPERTY" MEAN THOSE 9 TERMS AS DEFINED IN SECTION 7DD OF THE GENERAL PROPERTY TAX ACT, 10 1893 PA 206, MCL 211.7DD. 11(e) "Qualified agricultural property" means unoccupied12property and related buildings classified as agricultural, or13other unoccupied property and related buildings located on that14property devoted primarily to agricultural use as defined in sec-15tion 36101 of part 361 (farmland and open space preservation) of16the natural resources and environmental protection act, Act17No. 451 of the Public Acts of 1994, being section 324.36101 of18the Michigan Compiled Laws. Related buildings include a resi-19dence occupied by a person employed in or actively involved in20the agricultural use and who has not claimed an exemption on a21homestead on other property. Property used for commercial stor-22age, commercial processing, commercial distribution, commercial23marketing, or commercial shipping operations or other commercial24or industrial purposes is not qualified agricultural property. A25parcel of property is devoted primarily to agriculture use only26if more than 50% of the parcel's acreage is devoted to27agricultural use. An owner shall not receive an exemption for07067'02 d 10 1that portion of the total state equalized valuation of the2property that is used for a commercial or industrial purpose or a3residence that is not a related building.4(2) If a term defined in this section is defined in section57dd of the general property tax act, Act No. 206 of the Public6Acts of 1893, being section 211.7dd of the Michigan Compiled7Laws, differently than that term is defined in subsection (1),8then that term as used in this section and in section 1211 means9that term as defined in section 7dd of Act No. 206 of the Public10Acts of 1893.11 Sec. 1211e. (1) Subject to subsection (2), to claim an 12 exemption under section 1211(1) for qualified agricultural prop- 13 erty for the 1994 tax year, if an affidavit claiming an exemption 14 on ahomesteadPRINCIPAL RESIDENCE was not filed for the prop- 15 erty by May 1, 1994, an affidavit claiming the exemption on qual- 16 ified agricultural property shall be filed with the local assess- 17 ing unit by June 1, 1994. If property is qualified agricultural 18 property and is classified as agricultural property under section 19 34c of the general property tax act,Act No. 206 of the Public20Acts of 1893, being section 211.34c of the Michigan Compiled21Laws1893 PA 206, MCL 211.34C, that property is exempt and an 22 affidavit claiming the exemption does not need to be filed. 23 (2) If there are provisions inAct No. 206 of the Public24Acts of 1893THE GENERAL PROPERTY TAX ACT, 1893 PA 206, MCL 25 211.1 TO 211.157, that are inconsistent with subsection (1), the 26 provisions ofAct No. 206 of the Public Acts of 1893THE 07067'02 d 11 1 GENERAL PROPERTY TAX ACT, 1893 PA 206, MCL 211.1 TO 211.157, 2 prevail. 3 Enacting section 1. This amendatory act does not take 4 effect unless Senate Bill No. _____ or House Bill No. 6283 5 (request no. 07067'02) of the 91st Legislature is enacted into 6 law. 07067'02 d Final page. FDD