NONPROFIT HOUSING S.B. 65: COMMITTEE SUMMARY
Senate Bill 65 (as introduced 1-25-05)
Sponsor: Senator Ron Jelinek
Committee: Finance
Date Completed: 6-13-06
CONTENT
The bill would amend the General Property Tax Act to allow a local governing body to exempt certain nonprofit housing property from the property tax.
Under the bill, the governing body of a local tax collecting unit could adopt a resolution to exempt eligible nonprofit housing property from the tax collected under the Act. The clerk of the local tax collecting unit would have to notify in writing the tax assessor of that unit and the legislative body of each taxing unit that levied ad valorem property taxes in that unit. Before acting on the resolution, the governing body would have to give the assessor and a representative of the affected taxing units an opportunity for a hearing.
The exemption would take effect on the December 31 immediately after the adoption of the resolution or the issuance of a building permit for the eligible nonprofit housing property, whichever was later, and would remain in effect for two years or until ownership of the property was transferred, whichever came first. A copy of the resolution would have to be filed with the State Tax Commission.
The bill would define "eligible nonprofit housing property" would mean property owned by a charitable nonprofit housing organization, which the organization intended to transfer to a low-income person after construction or renovation of the property was completed. "Charitable nonprofit housing organization" would mean a charitable nonprofit organization whose primary purpose was the construction or renovation of residential housing for conveyance to a low-income person.
"Low-income person" would mean a person with a family income of not more than 60% of the statewide median gross income, who was eligible to participate in the charitable nonprofit housing organization's program based on criteria established by that organization.
Proposed MCL 211.7jj Legislative Analyst: Curtis Walker
FISCAL IMPACT
The bill would reduce State and local property tax revenue, and increase School Aid Fund expenditures, by an unknown and likely negligible amount. It is unknown how many properties would be affected by the bill, the value of those properties, the applicable millage rates, the average duration of the exemption, the location of the properties, or whether a local unit would approve the necessary resolution. The reduction in State property tax revenue would lower School Aid Fund revenue. Expenditures from the School Aid Fund
would increase to offset any reduction in local school operating revenue in order to maintain per-pupil funding guarantees.
This estimate is preliminary and will be revised as new information becomes available.
Fiscal Analyst: David Zin
Analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent. sb65/0506