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HB-5096, As Passed Senate, November 10, 2005

HOUSE SUBSTITUTE FOR SENATE SUBSTITUTE FOR

HOUSE BILL NO. 5096

A bill to provide for the exemption of certain property from

certain taxes; to levy and collect a specific tax upon the owners

of certain property; to provide for the disposition of the tax; to

prescribe the powers and duties of certain local government

officials; to provide penalties; and to repeal acts and parts of

acts.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 1. This act shall be known and may be cited as the

"commercial rental property specific tax act".

Sec. 2. As used in this act:

(a) "Additions" and "losses" mean those terms as defined in

section 34d of the general property tax act, 1893 PA 206, MCL

211.34d.

(b) "Commercial rental property" means real property exempt

from the collection of general ad valorem taxes under section 7jj

of the general property tax act, 1893 PA 206, MCL 211.7jj.

1927 PA 360, MCL 209.101 to 209.107.

(d) "Net occupancy loss" means all prior occupancy losses

minus all prior occupancy additions.

(e) "Occupancy addition" means an increase in the value

attributable to an increase in commercial rental property's

occupancy rate that occurs after the effective date of this act.

(f) "Occupancy loss" means a decrease in the value

attributable to a decrease in commercial rental property's

occupancy rate that occurs after the effective date of this act.

(g) "Taxable value" means the taxable value as determined

under section 27a of the general property tax act, 1893 PA 206, MCL

211.27a.

(h) "Transfer of ownership" means that term as defined in

section 27a of the general property tax act, 1893 PA 206, MCL

211.27a.

Sec. 3. Commercial rental property is exempt from ad valorem

property taxes collected under the general property tax act, 1893

PA 206, MCL 211.1 to 211.157, as provided under section 7jj of the

general property tax act, 1893 PA 206, MCL 211.7jj.

Sec. 4. (1) The assessor of each local tax collecting unit in

which there is commercial rental property shall determine annually

as of December 31 the value and adjusted taxable value of each

parcel of commercial rental property located in that local tax

collecting unit.

(2) Except as otherwise provided in this section, commercial

rental property shall be assessed at 50% of its true cash value

under section 3 of article IX of the state constitution of 1963.

(3) Except as otherwise provided in subsection (4), for taxes

levied in 2006 and for each year after 2006, the adjusted taxable

value of each parcel of commercial rental property is the lesser of

the following:

(a) The property's adjusted taxable value in the immediately

preceding year minus any losses, adjusted by any occupancy loss,

multiplied by the lesser of 1.05 or the inflation rate, adjusted by

any occupancy addition, plus all additions. Adjusted taxable value

shall reflect an occupancy addition only if either an occupancy

loss had been previously allowed because of a decrease in the

commercial rental property's occupancy rate or if the value of

commercial rental property that was new construction was reduced

because of a below-market occupancy rate. The amount of any

occupancy addition shall not exceed the amount of any net occupancy

loss. For taxes levied in 2006, the commercial rental property's

adjusted taxable value in the immediately preceding year is the

taxable value that property would have had in 2006 if the property

had been subject to the collection of taxes under the general

property tax act, 1893 PA 206, MCL 211.1 to 211.157.

(b) The commercial rental property's current state equalized

valuation.

(4) In 2006 and each year after 2006, not later than January

15, if an owner of commercial rental property claims an occupancy

loss, that owner shall file a copy of a rent roll for that

commercial rental property or a sworn statement of the square foot

percentage of occupancy of that commercial rental property as of

the immediately preceding December 31 with the assessor of the

local tax collecting unit in which that commercial rental property

is located.

(5) Upon a transfer of ownership of commercial rental property

after 2006, the commercial rental property's adjusted taxable value

for the calendar year following the year of the transfer is the

commercial rental property's state equalized valuation for the

calendar year following the transfer.

(6) If the adjusted taxable value of commercial rental

property is adjusted under subsection (5), a subsequent increase in

the commercial rental property's adjusted taxable value is subject

to the limitation set forth in subsection (3) until a subsequent

transfer of ownership occurs.

(7) An owner of commercial rental property may appeal the

determination of the commercial rental property's adjusted taxable

value at the same time and in the same manner as appeals under the

general property tax act, 1893 PA 206, MCL 211.1 to 211.157.

Sec. 5. (1) There is levied upon the owner of every commercial

rental property a specific tax to be known as the commercial rental

property specific tax.

(2) The amount of the commercial rental property specific tax

in each year shall be determined by multiplying the number of mills

that would be assessed in the local tax collecting unit if the

property were subject to the collection of taxes under the general

property tax act, 1893 PA 206, MCL 211.1 to 211.157, by the

commercial rental property's adjusted taxable value.

(3) The commercial rental property specific tax is an annual

tax, payable at the same times, in the same installments, and to

the same collecting officer or officers as taxes collected under

the general property tax act, 1893 PA 206, MCL 211.1 to 211.157.

(4) The collecting officer or officers shall disburse the

commercial rental property specific tax to and among this state and

cities, townships, villages, school districts, counties, or other

taxing units, at the same times and in the same proportions as

required by law for the disbursement of taxes collected under the

general property tax act, 1893 PA 206, MCL 211.1 to 211.157.

(5) The collecting officer or officers shall send a copy of

the amount of disbursement made to each taxing unit under this

section to the commission on a form provided by the commission.

(6) Commercial rental property located in a renaissance zone

under the Michigan renaissance zone act, 1996 PA 376, MCL 125.2681

to 125.2696, is exempt from the commercial rental property specific

tax levied under this act to the extent and for the duration

provided pursuant to the Michigan renaissance zone act, 1996 PA

376, MCL 125.2681 to 125.2696, except for that portion of the

commercial rental property specific tax attributable to a tax

described in section 7ff(2) of the general property tax act, 1893

PA 206, MCL 211.7ff. The commercial rental property specific tax

calculated under this subsection shall be disbursed proportionately

to the taxing unit or units that levied the tax described in

section 7ff(2) of the general property tax act, 1893 PA 206, MCL

House Bill No. 5096 (H-5) as amended November 10, 2005

211.7ff.

Sec. 6. Unpaid commercial rental property specific taxes are

subject to forfeiture, foreclosure, and sale in the same manner and

at the same time as taxes returned as delinquent under the general

property tax act, 1893 PA 206, MCL 211.1 to 211.157.

Sec. 7. This act is repealed if the adjustment for any

occupancy addition or any occupancy loss required under section

4(3)(a) is determined to be invalid by a court of competent

jurisdiction and that determination is not under appeal.

Enacting section 1. This act does not take effect unless all

of the following bills of the 93rd Legislature are enacted into

law:

(a) House Bill No. 4342.

(b) House Bill No. 4972.

(d) House Bill No. 5095.

(e) House Bill No. 5097.

(f) House Bill No. 5098.

(g) House Bill No. 5106.

(h) House Bill No. 5107.

(i) House Bill No. 5108.

(j) House Bill No. 4973.

(k) Senate Bill No. 633.

[(l) Senate Bill No. 634.]