SB-0930, As Passed House, December 9, 2004                                  

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                           HOUSE SUBSTITUTE FOR                                 

                                                                                

                           SENATE BILL NO. 930                                  

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                 A bill to amend 1899 PA 188, entitled                                             

                                                                                

    "Michigan estate tax act,"                                                  

                                                                                

    by amending section 3 (MCL 205.203), as amended by 1993 PA 54.              

                                                                                

                THE PEOPLE OF THE STATE OF MICHIGAN ENACT:                      

                                                                                

1       Sec. 3.  (1) The tax and the interest on the tax provided                   

                                                                                

2   for in this act shall become a lien upon the property transferred           

                                                                                

3   until paid, unless payment of the tax has been deferred as                  

                                                                                

4   permitted by this section or section 2d.  If a deferral of                  

                                                                                

5   payment is granted under this section or section 2d, the lien               

                                                                                

6   provided by this section shall attach at the end of the deferral            

                                                                                

7   period granted by this section or section 2d.                               

                                                                                

8       (2) The person to whom the property is transferred and the                  

                                                                                

9   administrator, executor, and trustee of every estate transferred,           

                                                                                

10  shall be personally liable for the tax until its payments; except           

                                                                                

11  that the executor or administrator shall not be personally liable           

                                                                                


                                                                                

1   for the tax upon a reversion or remainder consisting of real                

                                                                                

2   estate where the election provided for in section 7 or the                  

                                                                                

3   deferral in this section or section 2d is made.  The tax shall be           

                                                                                

4   paid to the state.  of Michigan.                                            

                                                                                

5       (3) When the inheritance tax, administration fee, and penalty               

                                                                                

6   and interest, if applicable, for the estate are paid, the revenue           

                                                                                

7   commissioner shall provide notice, on a form prescribed by the              

                                                                                

8   department, to the judge of probate who shall file and preserve             

                                                                                

9   it in that office.  It shall be a voucher in settlement of the              

                                                                                

10  accounts of the executor, administrator, or trustee of the estate           

                                                                                

11  upon which the tax is paid.  The preparation and mailing of the             

                                                                                

12  receipts shall not prejudice the right of the state to a review             

                                                                                

13  of the determination fixing the tax.  The receipts issued under             

                                                                                

14  this section shall show whether the amount paid is a payment of             

                                                                                

15  the tax upon any beneficial interest or upon the entire                     

                                                                                

16  transfer.   But an  An executor, administrator, or trustee of an            

                                                                                

17  estate, in settlement of which a tax is due under this act, shall           

                                                                                

18  not be discharged and the estate or trust closed by a decree of             

                                                                                

19  the court, unless there is produced a receipt signed by the                 

                                                                                

20  revenue commissioner.                                                       

                                                                                

21      (4) All taxes imposed by this act shall accrue and be due and               

                                                                                

22  payable at the time of transfer, which is the date of death,                

                                                                                

23  except that taxes upon the transfer of any estate, property, or             

                                                                                

24  interest limited, conditioned, dependent, or determinable upon              

                                                                                

25  the happening of a contingency or future event, by reason of                

                                                                                

26  which the clear market value cannot be ascertained at the time of           

                                                                                

27  the transfer, shall accrue and become due and payable when the              


                                                                                

1   persons or corporations beneficially entitled shall come into               

                                                                                

2   actual possession or enjoyment.                                             

                                                                                

3       (5)  (2)  The tax and the interest on the tax provided for in               

                                                                                

4   this act may be deferred for reasonable cause shown by the                  

                                                                                

5   executor, administrator, or trustee of the estate of a decedent             

                                                                                

6   who was a professional artist at the date of his or her death for           

                                                                                

7   not more than 10 years without penalty or interest.  The                    

                                                                                

8   executor, administrator, or trustee of the estate may make the              

                                                                                

9   deferral provided by this subsection by filing an affidavit with            

                                                                                

10  the judge of probate, which shall be made in the time and manner            

                                                                                

11  and with the content prescribed by the judge of probate.  The               

                                                                                

12  judge of probate shall determine whether there is reasonable                

                                                                                

13  cause shown to grant a deferral, the length of time for the                 

                                                                                

14  deferral, and the manner of payment of the tax.                             

                                                                                

15      (6)  (3)  A proceeding to enforce a lien against any property               

                                                                                

16  under this act shall be instituted by information, in the name of           

                                                                                

17  the people of this state, addressed to the circuit court for the            

                                                                                

18  county in which the property is situated.  It shall be signed by            

                                                                                

19  the attorney general and need not be otherwise verified.  A                 

                                                                                

20  person owning the property or an interest in the property as                

                                                                                

21  shown by the record in the office of the register of deeds, or by           

                                                                                

22  the records of the probate court, at the time of the commencement           

                                                                                

23  of the proceedings, shall be made a party to the action, and all            

                                                                                

24  other persons having a right or interest in the property, may               

                                                                                

25  make themselves parties to the proceeding, on motion to the                 

                                                                                

26  court, and notice to complainant, and may file their intervening            

                                                                                

27  or cross-claims, or answers claiming the benefit of cross-claims,           


                                                                                

1   and notices of lis pendens therein.  Intervening or cross-claims            

                                                                                

2   shall be made on oath.                                                      

                                                                                

3       (7)  (4)  The information shall show the name of the                        

                                                                                

4   deceased, the date of death, the place of residence at the time             

                                                                                

5   of death, the county in which the estate was probated, the                  

                                                                                

6   description of the property transferred, whether by will or under           

                                                                                

7   the intestate laws, and against which the lien exists, the name             

                                                                                

8   of the person or persons to whom it was transferred, the amount             

                                                                                

9   of taxes determined by the probate court upon the transfer, the             

                                                                                

10  date of the determination and whether the property is owned by              

                                                                                

11  the person or persons to whom it was transferred by will or under           

                                                                                

12  the intestate laws or by a subsequent purchaser, naming that                

                                                                                

13  purchaser.  The information shall also show that the taxes                  

                                                                                

14  determined upon the transfer of the property have not been paid             

                                                                                

15  and the amount of interest due upon the date of the filing of the           

                                                                                

16  information.  In those cases in which the property upon which the           

                                                                                

17  lien exists is owned by the person or persons to whom it was                

                                                                                

18  transferred by will or under the intestate laws, the petition for           

                                                                                

19  relief shall be that the court determine the amount due; that the           

                                                                                

20  defendant pay to the county treasurer of the county, in which the           

                                                                                

21  estate was probated, for and in behalf of this state, whatever              

                                                                                

22  sum shall appear to be due, together with the costs of the                  

                                                                                

23  proceeding, and that in default of that payment the property upon           

                                                                                

24  which the lien exists, may be sold in the manner provided in this           

                                                                                

25  act, to satisfy the taxes, interest, and cost.                              

                                                                                

26      (8) In those cases in which the property upon which the lien                

                                                                                

27  exists is owned by a subsequent purchaser, the petition for                 


                                                                                

1   relief shall be that the court determine the amount due and that            

                                                                                

2   the property upon which the lien exists may be sold in the manner           

                                                                                

3   provided in this act to satisfy the taxes, interest, and costs of           

                                                                                

4   the proceeding.                                                             

                                                                                

5       (9) The information may contain other and further allegations               

                                                                                

6   and petitions considered material and permitted by the rules and            

                                                                                

7   practice of the court.                                                      

                                                                                

8       (10)  (5)  A certified copy of the order of determination of                

                                                                                

9   the inheritance tax, for which the lien exists, certified by                

                                                                                

10  either the judge or register of probate of the court that                   

                                                                                

11  determined the tax or by the revenue commissioner, may be                   

                                                                                

12  attached to the information.  When attached, the copy shall be              

                                                                                

13  considered a part of the information and shall be prima facie               

                                                                                

14  evidence of the determination of the inheritance tax and the                

                                                                                

15  accruing of the lien against the property.  A certificate of the            

                                                                                

16  revenue commissioner stating that the inheritance tax, or any               

                                                                                

17  part of the tax determined upon the transfer of the property upon           

                                                                                

18  which the lien exists, has not been paid, may be attached to the            

                                                                                

19  information.  When attached, the certificate shall be considered            

                                                                                

20  a part of the information and shall be prima facie evidence of              

                                                                                

21  the nonpayment of the amount of the tax and interest shown to be            

                                                                                

22  unpaid by the certificate.                                                  

                                                                                

23      (11)  (6)  If an infant, insane, or otherwise mentally                      

                                                                                

24  incompetent person has an interest in the property upon which the           

                                                                                

25  lien exists, service of process shall be made upon that person in           

                                                                                

26  the same manner and with the same effect as upon persons not                

                                                                                

27  under a disability, whether the infant, insane, or otherwise                


                                                                                

1   mentally incompetent person is within or without the                        

                                                                                

2   jurisdiction.                                                               

                                                                                

3       (12)  (7)  After the issuing and service of process against                 

                                                                                

4   the infant, insane, or otherwise incompetent person, a guardian             

                                                                                

5   ad litem may be appointed for the infant, insane, or otherwise              

                                                                                

6   incompetent person by the court upon motion of the attorney                 

                                                                                

7   general, or the guardian ad litem may be appointed by the court             

                                                                                

8   upon the request of the infant, and in the case of an insane or             

                                                                                

9   otherwise incompetent person, at the request of the person's                

                                                                                

10  general guardian.                                                           

                                                                                

11      (13)  (8)  If upon the hearing of the cause it appears that                 

                                                                                

12  the inheritance taxes or interest, or both, upon the transfer of            

                                                                                

13  the property upon which the lien exists have not been paid, the             

                                                                                

14  court shall decree the amount of taxes and interest on the taxes            

                                                                                

15  found to be due, together with costs to be determined by the                

                                                                                

16  court, to be paid by the person or persons owning the property,             

                                                                                

17  or any interest in the property, within 3 months after the entry            

                                                                                

18  of the decree and that in default of payment that the property              

                                                                                

19  upon which the lien exists, be sold to satisfy the taxes,                   

                                                                                

20  interest, and costs.  If it appears that the person or persons to           

                                                                                

21  whom was transferred the property by will or under the intestate            

                                                                                

22  laws have parted with their interest before the institution of              

                                                                                

23  the proceedings provided for in this section, and that the                  

                                                                                

24  property is owned by a subsequent purchaser, the court shall                

                                                                                

25  decree that the property be sold to satisfy the taxes, interest,            

                                                                                

26  and costs, unless the owner satisfies the taxes, interest, and              

                                                                                

27  costs within 3 months after the entry of the decree.   However,             


                                                                                

1   in those                                                                    

                                                                                

2       (14) In cases in which it appears that 2 or more pieces or                  

                                                                                

3   parcels of land were transferred by will or under the intestate             

                                                                                

4   laws to 1 person, and that that person, before the institution of           

                                                                                

5   the proceedings provided for in this section, has parted with any           

                                                                                

6   or all of the pieces or parcels of land, and that the court can             

                                                                                

7   ascertain from the order of determination the amount of                     

                                                                                

8   inheritance tax determined upon the transfer of each piece or               

                                                                                

9   parcel, and that the lien against all of the pieces or parcels is           

                                                                                

10  being foreclosed in 1 proceeding, the court may decree the sale             

                                                                                

11  of that piece or parcel to satisfy the amount of tax determined             

                                                                                

12  upon the transfer of that piece or parcel, together with the                

                                                                                

13  interest thereon and pro rata costs of the proceeding.  A piece             

                                                                                

14  or parcel of property shall not be sold to satisfy taxes,                   

                                                                                

15  interest, and costs within 3 months after the entry of the                  

                                                                                

16  decree.                                                                     

                                                                                

17      (15) If the person or persons owning the property or an                     

                                                                                

18  interest in the property, or the person's heirs, executors,                 

                                                                                

19  administrators, or a person lawfully claiming  from or  under               

                                                                                

20  him or them  that person, within 6 months after the  time  date            

                                                                                

21  of the sale redeems the entire premises sold, by paying to the              

                                                                                

22  register of deeds in whose office the deed is deposited, as                 

                                                                                

23  provided by subsection  (12)  (20), for the benefit of the                  

                                                                                

24  purchaser, or the purchaser's executors, administrators, or                 

                                                                                

25  assigns the sum which was bid  at the time  on the date of sale,            

                                                                                

26  with interest, at the rate of 6%, together with the sum of $1.00            

                                                                                

27  as a fee for the care and custody of the redemption money, and              


     Senate Bill No. 930 (H-1) as amended December 9, 2004

   

1   the fee paid by the purchaser for recording his or her deed, then           

                                                                                

2   the deed  shall be  is void.  and of no effect, but if  If a                

                                                                                

3   distinct lot or parcel separately sold is redeemed leaving a                

                                                                                

4   portion of the premises unredeemed, then the deed shall be                  

                                                                                

5   inoperative merely  void only to the parcel or parcels redeemed.           

                                                                                

6   and to those portions not redeemed shall remain valid and of               

                                                                                

7   full effect.                                                                

                                                                                

8       (16) [The register of deeds shall not determine the amount necessary for    

                                                                                

9   redemption.                                                 ]               

                                                                                

10  The purchaser shall attach an affidavit with the deed to be                 

                                                                                

11  recorded that states the exact amount required to redeem the                

                                                                                

12  property under subsection (15), including any daily per diem                

                                                                                

13  amounts, and the date by which the property must be redeemed                

                                                                                

14  shall be stated in the certificate of the commissioner or other             

                                                                                

15  person making the sale.  [                                                  

                                                                                

16                                                                              

                                                                                

17                                ]  The purchaser may include in the           

                                                                                

18  affidavit the name of a designee responsible on behalf of the               

                                                                                

19  purchaser to assist the person redeeming the property in                    

                                                                                

20  computing the exact amount required to redeem the property.  The            

                                                                                

21  designee may charge a fee as stated in the affidavit [and may be authorized by the purchaser to receive redemption funds].  The                                

                                                                                

22  purchaser shall accept the amount computed by the designee.                 

                                                                                

23      (17)  (9)  If it appears to the court after the expiration of               

                                                                                

24  3 months from the date of entry of the decree from a certificate            

                                                                                

25  of the state of Michigan to whom the taxes, interest, penalties,            

                                                                                

26  and costs were to be paid, attached to a petition of the attorney           

                                                                                

27  general for an order of sale of the property, that the same have            


                                                                                

1   not been paid, the court shall enter an order directing the                 

                                                                                

2   circuit court commissioner, or some other person duly authorized            

                                                                                

3   by the order of the court, to sell the property.  The sale shall            

                                                                                

4   be at public vendue between the hours of 9 a.m. and 6 p.m. at the           

                                                                                

5   courthouse or at another place as the court directs, within 60              

                                                                                

6   days after the date of the order and on the date specified on the           

                                                                                

7   order.  The court may, if necessary, by further order adjourn the           

                                                                                

8   sale from time to time.  The circuit court commissioner, or other           

                                                                                

9   person authorized to make the sale, may, if bids are not received           

                                                                                

10  equal to the amount of taxes, interest, and costs, adjourn the              

                                                                                

11  sale from time to time, but the sale shall not be adjourned for             

                                                                                

12  more than 60 days at any 1 time.                                            

                                                                                

13      (18)  (10)  Upon receipt of a certified copy of the order of                

                                                                                

14  sale the circuit court commissioner, or other person duly                   

                                                                                

15  authorized by the order of the court to conduct the sale, shall             

                                                                                

16  publish the sale in some newspaper printed in the county or                 

                                                                                

17  another paper as the court may direct, once in each week, for 3             

                                                                                

18  weeks in succession.  If the sale is adjourned by order of the              

                                                                                

19  court, or by the circuit court commissioner, or other person duly           

                                                                                

20  authorized by the order of the court, to conduct the sale the               

                                                                                

21  same publication shall be had of the order or notice adjourning             

                                                                                

22  the sale as is provided in this section for publishing the order            

                                                                                

23  of sale.  Proof of publication shall be filed with the court                

                                                                                

24  before the sale.                                                            

                                                                                

25      (19)  (11)  The circuit court commissioner, or other person                 

                                                                                

26  authorized to make the sale shall make and file a report of the             

                                                                                

27  sale.  The report shall be entitled in the court and cause, and             


                                                                                

1   shall be certified and filed with the court.                                

                                                                                

2       (20)  (12)  Deeds shall thereupon be executed by the circuit                

                                                                                

3   court commissioner or other person making the sale, specifying              

                                                                                

4   the names of the parties in the action, the date of the                     

                                                                                

5   determination of the inheritance tax, the name of the deceased,             

                                                                                

6   the county in which the estate was probated, with a description             

                                                                                

7   of the premises and the amount for which each parcel of land                

                                                                                

8   described was sold.  The commissioner, or other person making the           

                                                                                

9   sale, shall indorse upon each deed when the deed shall become               

                                                                                

10  operative, if the premises are not redeemed according to law.               

                                                                                

11  The deed or deeds, as soon as practicable and within 20 days                

                                                                                

12  after the sale, shall be deposited with the register of deeds of            

                                                                                

13  the county in which the land described is situated, and the                 

                                                                                

14  register shall indorse on the deed the time the deed was                    

                                                                                

15  received, shall record the deed at length in a book to be                   

                                                                                

16  provided for in his or her office for that purpose, and shall               

                                                                                

17  index the deed in the regular index of deeds.  The fees for                 

                                                                                

18  recording the deed shall be paid by the purchaser and be included           

                                                                                

19  among the other costs and expenses.  If the premises or a parcel            

                                                                                

20  of the premises shall be redeemed, the register of deeds shall              

                                                                                

21  write on the face of the record the word "Redeemed", stating at             

                                                                                

22  what date the entry is made and signing the entry with his or her           

                                                                                

23  official signature.  Unless the premises described in the deed,             

                                                                                

24  or a parcel of the premises, is redeemed within the time limited            

                                                                                

25  for redemption, as provided in this section, the deed shall                 

                                                                                

26  thereupon as to all parcels not redeemed, become operative and              

                                                                                

27  shall vest in the grantee named in the deed, the grantee's heirs            


                                                                                

1   or assigns all the right, title, and interest therein which the             

                                                                                

2   person or persons received either from the deceased by reason of            

                                                                                

3   the transfer to them by will or under the intestate laws, or as             

                                                                                

4   subsequent purchasers.                                                      

                                                                                

5       (21)  (13)  The proceeds of each sale provided for in this                  

                                                                                

6   section shall be paid to the treasurer of the county where the              

                                                                                

7   estate was probated, to be applied to the discharge of the tax,             

                                                                                

8   interest, penalty, and costs, and if there is any surplus, it               

                                                                                

9   shall be brought into court for the use of the defendant, or the            

                                                                                

10  person entitled  thereto  to the money, subject to the order of             

                                                                                

11  the court.   The redemption money paid to the register of deeds             

                                                                                

12  shall be paid to the persons entitled to the money as soon as               

                                                                                

13  practical, and in those cases in which the state was the                    

                                                                                

14  purchaser, the money shall be paid to the state of Michigan, and            

                                                                                

15  if there be any surplus after the tax, interest, penalty, and               

                                                                                

16  costs are satisfied, that surplus shall be brought into court for           

                                                                                

17  the use of the defendant or the person entitled to the surplus,             

                                                                                

18  subject to the order of the court.                                          

                                                                                

19      (14) Upon the filing of the information, a fee of $2.00                     

                                                                                

20  shall be paid to the court, which shall be in full of all                   

                                                                                

21  register fees and charges in the proceedings.                               

                                                                                

22      (22) The circuit court commissioner, or other person                        

                                                                                

23  authorized by the court to make the sale, shall be entitled to              

                                                                                

24  only the following fees:  and no others:  For attending and                 

                                                                                

25  adjourning a sale, $1.00; for attending and making a sale, $1.50;           

                                                                                

26  mileage, 1 way, 10 cents per mile; executing deed or deeds on               

                                                                                

27  real estate sales, 25 cents for each deed necessarily executed;             


     Senate Bill No. 930 (H-1) as amended December 9, 2004

   

1   making and filing a report of sale, $1.00.  The cost of                     

                                                                                

2   publishing any legal notices required to be published shall be at           

                                                                                

3   the rate of 70 cents per folio for the first insertion, and 35              

                                                                                

4   cents per folio for each subsequent insertion.  The fees which              

                                                                                

5   are provided for in this act shall be added by the circuit court            

                                                                                

6   commissioner, or other person duly authorized to make the sale,             

                                                                                

7   to the tax, interest, penalties, and costs awarded by the court             

                                                                                

8    as charges against the land.

    [(23) The amount stated in any affidavits recorded under this section shall be the amount necessary to satisfy the requirements for redemption under this section.]