REAL PROPERTY: CERVIDAE H.B. 4271 (H-2): FLOOR ANALYSIS
House Bill 4271 (Substitute H-2 as reported without amendment)
Sponsor: Representative Joe Hune
House Committee: Tax Policy
Senate Committee: Agriculture, Forestry and Tourism
CONTENT
The bill would amend the General Property Tax Act to include farming operations that harvest cervidae onsite in the definition of "agricultural operations", for the purpose of classifying agricultural real property.
The Act lists a number of activities that are agricultural operations, including farming; dairying; growing and harvesting any agricultural, horticultural, or floricultural commodity; and raising livestock. The bill would add farming operations that harvest cervidae on site where at least 60% of the cervidae were born as part of the farming operation. "Livestock" under the bill would include cattle, sheep, new world camelids, goats, bison, privately owned cervids, ratites, swine, equine, poultry, aquaculture, and rabbits, but not dogs and cats.
(Under the Act, qualified agricultural property (which includes property classified as agricultural) is exempt from the tax levied by a local school district for school operating purposes to the extent provided in the Revised School Code. The Act also exempts transfers of qualified agricultural property from the definition of "transfer of ownership", under certain circumstances. This means that annual assessment increases remain limited to the lesser of 5% or the rate of inflation, and the assessed value does not revert to 50% of the true cash value (State equalized valuation) upon the transfer.)
MCL 211.34c Legislative Analyst: Curtis Walker
FISCAL IMPACT
The bill would increase School Aid Fund expenditures by an unknown amount. The taxable value of property that would qualify for the exemption from school operating mills under the bill is unknown. The exemption would reduce local school district revenue. However, because of per-pupil funding guarantees under the School Aid Fund, any reduction in locally raised revenue would be offset by increased expenditures from the School Aid Fund.
The bill also could reduce future increases in State and local property tax revenue by an unknown amount because, if the property were sold and the new owner filed the necessary documentation, the taxable value of the property would not increase to equal the State equalized value of the property, as it does under current law.
Date Completed: 5-18-06 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. hb4271/0506