January 30, 2003, Introduced by Reps. Sak, Spade, Vagnozzi, Gleason, O'Neil and Paletko and referred to the Committee on Tax Policy.
A bill to amend 1976 PA 225, entitled
"An act to defer the collection of special assessments on
homestead properties; to provide for conditions of eligibility
for such a deferment; to prescribe the powers and duties of the
department of treasury, local assessing officers, and local
collecting officers; to provide for the advancement of moneys by
the state to indemnify special assessment districts for losses
from deferment of collections; to provide for the advancement of
money by the state to an owner for the repayment of loans used by
the owner to pay special assessments; to provide for the
collection of deferred special assessments and interest thereon,
and the disposition of these collections; to make an
appropriation; and to prescribe penalties,"
by amending the title and sections 1, 2, 3, 4, 5, 6, 7, 8, 8a, 9,
and 10 (MCL 211.761, 211.762, 211.763, 211.764, 211.765, 211.766,
211.767, 211.768, 211.768a, 211.769, and 211.770), the title and
sections 2, 3, 4, and 10 as amended by 1980 PA 403 and section 8a
as amended by 1981 PA 59, and by adding section 4a.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
1 TITLE
2 An act to defer the collection of special assessments and
1 property taxes on homestead properties; to provide for conditions
2 of eligibility for such a deferment; to prescribe the powers and
3 duties of the department of treasury, local assessing officers,
4 and local collecting officers; to provide for the advancement of
5 moneys money by the state to indemnify special
assessment
6 districts and local tax collecting units for losses from
7 deferment of collections; to provide for the advancement of money
8 by the state to an owner for the repayment of loans used by the
9 owner to pay special assessments and property taxes; to provide
10 for the collection of deferred special assessments and property
11 taxes and interest thereon, and the disposition of these
12 collections; to make an appropriation; and to prescribe
13 penalties.
14 Sec. 1. As used in this act:
15 (a) "Department" means the department of treasury.
16 (b) "Equity" means the difference between twice the state
17 equalized valuation of a homestead and any outstanding mortgage,
18 land contract, lien, or other encumbrance, including a lien
19 imposed under this act.
20 (c) (b) "Totally
and permanently disabled" means a person
21 as defined described in 42 U.S.C. section 416 section
216(i)
22 of title II of the social security act, chapter 531, 49
23 Stat. 620, 42 U.S.C. 416.
24 (d) (c) "Homestead"
means a dwelling or a unit in a
25 multiple-unit dwelling,
owned and occupied as a home by the an
26 owner, thereof,
including all contiguous unoccupied real
27 property owned by the person
owner. Homestead includes a
1 dwelling and an outbuilding used in connection with a dwelling,
2 situated on the lands
property of another.
3 (e) (d) "Owner"
includes a person eligible for the
4 exemption specified in this act, who is purchasing a homestead
5 under a mortgage or land
contract, or who owns a dwelling
6 situated on the leased lands of another, or who is a
7 tenant-stockholder of a cooperative housing corporation.
8 (f) (e) "Special
assessment" means an assessment against
9 real property calculated on a benefit or ad valorem basis for
10 curb and gutter, sidewalk, sewer, water, or street paving; a
11 drain; a connection fee or similar charge for a sewer or water
12 system; or the land contract on a parcel of property acquired
13 under the circumstances
set forth in section 3(2) 3(3).
14 Special assessment does not include charges for current service.
15 Sec. 2. (1) The
payment of special assessments assessed
16 and property taxes levied and due and payable on a homestead in
17 any year in which the owner meets all of the terms and conditions
18 of this act shall be deferred until 1 year after the owner's
19 death, subject to further order by the probate court or until the
20 homestead or any part of the homestead is conveyed or transferred
21 to another or a contract to sell the homestead is entered into.
22 The death of a spouse shall
does not terminate the deferment of
23 special assessments or property taxes for a homestead owned by
24 husband and wife under tenancy by the entireties as long as the
25 surviving spouse does not remarry. Special assessments and
26 property taxes deferred under this act may be paid in full at any
27 time.
1 (2) If the collecting officer or the department determines
2 that legal or equitable title to a homestead or any part of a
3 homestead for which special assessments or property taxes are
4 deferred under this act is conveyed or transferred or a contract
5 to sell the homestead or part of a homestead is entered into, and
6 the deferment is not terminated, the owner or owner's estate
7 shall be is subject to an interest rate of 1% per month
or
8 fraction of a month, on the amount deferred, computed from the
9 date of conveyance, transfer, or contractual agreement. The
10 amount of interest shall be payable to the collecting officer and
11 transmitted by that office pursuant to section 9.
12 (3) The department shall notify each owner whose special
13 assessments or property taxes are authorized to be deferred under
14 this act that if legal or equitable title to the homestead or any
15 part of the homestead is conveyed or transferred or a contract to
16 sell the homestead or part of the homestead is entered into, the
17 deferment is terminated and the amount deferred is immediately
18 due and payable, plus interest as provided in subsection (2).
19 Sec. 3. (1) An owner of a homestead who is 65 years of age
20 or older, or who
is totally and permanently disabled, who
21 claims a dependency exemption under section 30(2) of the income
22 tax act of 1967, 1967 PA 281, MCL 206.30, for a child who is less
23 than 18 years old, or who is an adult in need of protective
24 services as defined in section 11 of the social welfare act, 1939
25 PA 280, MCL 400.11, and who is a citizen of the United States, a
26 resident of this state for 5 or more years, and the sole owner of
27 the homestead for 5 3
or more years is eligible for the
1 deferment of special assessments and property taxes levied on
2 that homestead pursuant to this act, if the equity in that
3 owner's homestead is not less than 25% of twice the state
4 equalized valuation of that homestead. The owner and the owner's
5 spouse shall not have received during the last calendar year
6 household income as
defined in section 508 of Act No. 281 of the
7 Public Acts of 1967,
as amended, being section 206.508 of the
8 Michigan Compiled
Laws, the income tax act of 1967,
1967 PA 281,
9 MCL 206.508, in excess of
$8,000.00; this amount shall be
10 increased to $10,000.00. for the determination of
eligibility
11 for a deferment after
December 31, 1982. The gross amount
of
12 the a special assessment deferred under this
act, exclusive of
13 interest, shall not be less than $300.00.
14 (2) The maximum dollar amount of household income required by
15 subsection (1) to be eligible for the deferment of special
16 assessments or property taxes under this act shall be adjusted
17 each year, beginning on January 1, 1984, pursuant to the annual
18 average percentage increase or decrease in the Detroit consumer
19 price index --all
items as defined and reported by the United
20 States department of
labor, bureau of labor statistics. The
21 adjustment shall be
made by multiplying the annual average
22 percentage increase or
decrease in the Detroit consumer price
23 index for the prior
calendar year by the current maximum dollar
24 amount of the
household income requirement as adjusted by this
25 subsection. The
resultant product shall be added to the maximum
26 dollar amount of the
household income requirement as adjusted by
27 this subsection and
then rounded off to the nearest whole number,
1 which shall be the new
household income requirement for the
2 current year.
3 (3) After January
1, 1975, a A person 65 years of age or
4 older who otherwise qualifies under this section
for deferral
5 of special assessments or
property taxes who fails failed to
6 pay a prior delinquent special assessment or property tax
7 assessment and thereby
lost the property his or her homestead
8 to the local unit of
government who purchased the property
9 through tax forfeiture,
foreclosure, and sale may reacquire the
10 property from the local unit of government through a land
11 contract. The A
land contract for a parcel of property
12 homestead reacquired
under the circumstances set forth in this
13 subsection shall be treated as a special assessment for purposes
14 of this act.
15 (4) The owner of
a homestead who is 65 years of age or older
16 or is totally and
permanently disabled, a citizen of the United
17 States, a resident of
this state for 5 or more years, and the
18 sole owner of the
homestead for 5 or more years, in the year the
19 special assessment was
levied, and A person who
qualifies under
20 this section for deferral of special assessments or property
21 taxes who has borrowed money from a lending institution to pay a
22 special assessment or
property taxes before the effective date
23 of this subsection,
shall be January 8, 1981 is
eligible to
24 receive money from the special revolving fund created in section
25 10, to be used for
the purpose of repaying to repay the lending
26 institution the principal amount used by the person to pay the
27 special assessment or property taxes. The department shall cause
1 a lien on the homestead in favor of the state to be recorded with
2 the appropriate register of deeds, indicating the amount of the
3 money paid and identifying the homestead. Money paid from the
4 fund under this subsection shall be treated as if the money had
5 been paid as deferred property taxes or special assessment.
6 Sec. 4. An owner may apply to the local assessing officer
7 for deferment of the payment of special assessments on the
8 owner's homestead. An owner may apply to the department for
9 deferment of the payment of property taxes levied on the owner's
10 homestead. The application shall be made upon an affidavit form
11 to be furnished and made available by the department at
12 convenient locations throughout the state. The affidavit form
13 shall contain the
following statement in 10-point boldface
14 boldfaced type located immediately above the affiant's
15 signature: "If this deferment is authorized the state will place
16 a lien on your property." The affidavit shall contain a
17 statement that the owner applying for the deferment of special
18 assessments or property taxes under this act has received or has
19 applied for all credits available to that owner under sections
20 520 and 522 of the income tax act of 1967, 1967 PA 281,
21 MCL 206.520 and 206.522. A person making a false affidavit for
22 the purpose of obtaining deferment of special assessments or
23 property taxes under this act is guilty of perjury. If the
24 homestead is owned jointly by husband and wife, each spouse shall
25 sign and file the affidavit. If the homestead is encumbered by a
26 mortgage or an unpaid balance on a land contract, a deferment of
27 special assessments or property taxes shall not be made without
1 the written consent of the mortgagee or the land contract vendor,
2 which shall be filed with the affidavit. The affidavit shall be
3 filed with the local assessing officer for the deferment of
4 special assessments and with the department for the deferment of
5 property taxes at least
30 days after before the due date of a
6 special assessment or installment of a special assessment or
7 property tax bill for which deferment is requested.
8 Sec. 4a. The application provided for in section 4 shall
9 contain both of the following:
10 (a) A statement that the owner applying for the deferment has
11 property and casualty insurance on that owner's homestead in an
12 amount not less than the amount of all special assessments and
13 property taxes deferred.
14 (b) An assignment to the state of the owner's interest in the
15 property and casualty insurance on that owner's homestead in an
16 amount equal to the total amount of all special assessments and
17 property taxes deferred.
18 Sec. 5. (1) Upon receipt of the affidavit, the local
19 assessing officer for the deferment of a special assessment and
20 the department for the deferment of property taxes shall promptly
21 examine it to determine if the applicant meets the requirements
22 of this act and shall make an inspection of the property and
23 property records and
conduct an investigation and survey as it
24 deems necessary. An applicant shall not be compelled to
supply
25 information not reasonably essential to a proper determination of
26 the eligibility of the owner and the homestead for the relief
27 provided under this act. The local assessing officer for the
1 deferment of a special assessment and the department for the
2 deferment of property taxes
shall promptly make its a decision
3 with respect to an application under this section and shall
4 notify the applicant of its
that decision not later than the
5 due date for a special assessment or for the property taxes
6 involved in the application. A decision of the local assessing
7 officer shall be is
final except as otherwise provided
8 pursuant to under the state constitution of 1963.
9 (2) The department shall annually do all of the following for
10 the deferment of property taxes under this act:
11 (a) Determine that the person on whose behalf property taxes
12 are deferred is eligible for the deferral of property taxes under
13 section 3.
14 (b) Secure an assignment to this state of any credit allowed
15 under sections 520 or 522 of the income tax act of 1967, 1967
16 PA 281, MCL 206.520 and 206.522, payable to the person on whose
17 behalf the property taxes are deferred during the period in which
18 property taxes are deferred on that person's homestead, which
19 credit shall be applied to any lien imposed on that homestead
20 under this act.
21 (c) Determine that the person on whose behalf property taxes
22 are deferred has property and casualty insurance on his or her
23 homestead in an amount not less than the amount of all special
24 assessments and property taxes deferred and that the person on
25 whose behalf property taxes are deferred has assigned to the
26 state his or her interest in that property and casualty insurance
27 in an amount equal to the total amount of all special assessments
1 and property taxes deferred.
2 Sec. 6. The department shall pay the entire balance owing,
3 including delinquent amounts, of the special assessment or
4 property tax of an applicant who qualifies under this act. The
5 department shall transmit to the collecting officer the sum of
6 money required to indemnify the local special assessment district
7 or local tax collecting unit for a revenue loss resulting from
8 the deferment of the special assessment or property tax. At the
9 same time, the department
shall cause the recording of record a
10 lien in favor of the state with the register of deeds of the
11 county in which the homestead is located and notify the county
12 treasurer of the county in which the homestead is located of the
13 special assessment or property taxes deferred, indicating the
14 amount deferred for property taxes and for each special
15 assessment and
identifying the homestead. The If payment is
16 made as required by this section, the county treasurer shall keep
17 a record of the notice and shall require that the homestead be
18 included in the subsequent return of delinquent taxes by each
19 collecting officer, that the property is identified on the
20 delinquent roll as provided in this act, and that the amount of
21 special assessment or property taxes shown on the roll as due and
22 unpaid are the same as the amount approved by the department for
23 deferment. The sum received by the collecting officer from the
24 department shall be
distributed to the several special
25 assessment districts
in direct proportion to their respective
26 shares of the total of
special assessments deferred in the
same
27 manner that distribution would be made had the same amount been
1 received from the payment of the special assessments or property
2 taxes. The If
payment is made as required by this section, the
3 collecting officer shall enter on the current tax roll opposite
4 each homestead for which deferment is allowed a notation that
5 payment is deferred pursuant to this act.
6 Sec. 7. The
treasurer of any a city, township, or
7 village, required by Act
No. 206 of the Public Acts of 1893, as
8 amended, being
sections 211.1 to 211.157 of the Michigan Compiled
9 Laws the general property tax act, 1893 PA 206, MCL
211.1 to
10 211.157, to make a return of delinquent taxes to the county
11 treasurer, shall include in the delinquent tax roll all
12 homesteads for which
deferment of special assessments are or
13 property taxes is approved, and shall enter on the delinquent tax
14 roll opposite each such
item special assessment or property tax
15 levy a notation that
payment is deferred pursuant to under this
16 act. In a city collecting its own delinquent taxes, the
17 treasurer similarly shall
note on the city tax record of each
18 such property for which special assessments or property
taxes
19 are deferred that payment
is deferred pursuant to under this
20 act. The collection of special assessments or property taxes
21 deferred for all such
homesteads under this act shall be made
22 thereafter only in accordance with this act, any law,
23 ordinance, or charter to the contrary notwithstanding.
24 Sec. 8. Upon termination of the deferment of special
25 assessments or property taxes under this act, the collection
26 procedures of Act No.
206 of the Public Acts of 1893, as
27 amended the general property tax act, 1893 PA 206, MCL
211.1 to
1 211.157, and any provisions of any law, ordinance, or charter
2 applicable to the collection of delinquent taxes in a city
3 collecting its own
delinquent taxes, suspended by the terms of
4 under this act during the period of deferment, shall again apply
5 to the deferred special
assessments the same as they would have
6 applied had no or property taxes as if a deferment had not
been
7 authorized and all of the special assessments or property taxes
8 had been levied initially
in the third year preceding the
9 calendar year in which the deferment was terminated, except that
10 the provisions of those laws, ordinances, and charters with
11 respect to collection fees, interest, penalties, and other
12 charges shall not be applicable to the collection of, or
13 foreclosure of the lien for special assessments or property taxes
14 deferred. hereunder.
The lien for deferred special assessments
15 or property taxes shall be for the amount of the special
16 assessments or property taxes only and shall not have any
17 additional fee, penalty, or interest added except as provided in
18 this act.
19 Sec. 8a. (1) Except for an owner or owner's estate
20 qualifying for deferment of special assessments under this act
21 before January 8, 1981, the payment of special assessments or
22 property taxes deferred under this act made by the owner or
23 owner's estate shall include interest computed for periods after
24 January 8, 1981, at a rate of 1/2 of 1% per month or fraction of
25 a month.
26 (2) The department shall notify each owner whose special
27 assessments or property taxes are authorized to be deferred under
1 this act of the interest rate provided in this section.
2 (3) The lien created in section 6 for special assessments or
3 property taxes deferred
under this act shall include an amount
4 of interest as provided in this section.
5 (4) The department of treasury shall refund to each owner
6 who, before the
effective date of this subsection January 8,
7 1981, paid their special assessment or property taxes and was
8 subject to the interest payment of subsection (1), an amount
9 equal to the difference between the interest paid and the
10 interest which that
would have been due at a rate of 1/2 of 1%
11 per month or fraction of a month.
12 (5) If a deferment of a special assessment was terminated by
13 an owner solely by payment of the deferred special assessment
14 after January 8, 1981,
and before the effective date of this
15 subsection June 4, 1981, the owner may reapply within 60
days of
16 the effective date of this subsection to the local assessing
17 officer for reinstitution of the previously deferred special
18 assessment and the department of treasury shall refund the amount
19 of the special assessment paid and redeferred to the owner.
20 Sec. 9. Upon receipt of payment of special assessments or
21 property taxes deferred under this act, the collecting officer
22 shall forthwith transmit
the amount received to the department
23 as reimbursement for the
sums theretofore advanced , to
24 indemnify the local special assessment districts or local tax
25 collecting unit.
26 Sec. 10. (1) There is created a special revolving fund
27 within the department to pay special assessments and property
1 taxes under this act and the sum of $3,000,000.00 of the
2 principal of the Michigan veterans' trust fund shall be used for
3 this investment purpose.
4 (2) An amount which
that is paid by the department to a
5 local assessment district or local tax collecting unit for a
6 deferred special assessment or deferred property taxes shall be
7 paid from the special revolving fund created in subsection (1).
8 (3) From the amounts received by the department as payment
9 for deferred special assessments or property taxes under this
10 act, the department shall credit, on a quarterly basis, 1/2 of
11 the total amount received to the special revolving fund created
12 in this section, and shall transmit the remainder of this
13 quarterly payment to the Michigan veterans' trust fund until the
14 initial $3,000,000.00 set forth in subsection (1) is repaid to
15 the Michigan veterans' trust fund.
16 (4) After the initial $3,000,000.00 set forth in
17 subsection (1) is repaid to the Michigan veterans' trust fund,
18 the department shall credit, on a quarterly basis, the total
19 amount received to the special revolving fund created in this
20 section.
21 (5) (4) Interest
received pursuant to section 8a, and civil
22 penalties received pursuant to section 2, shall be credited in
23 full to the special revolving fund created in this section.
24 (6) (5) Amounts
required to be transmitted to the Michigan
25 veterans' trust fund under subsection (3) shall be reduced by the
26 amount of principal and
earnings which was returned to the
27 Michigan veterans' trust
fund before the effective date of this
1 subsection January 8, 1981.