HB-5454, As Passed House, February 8, 2006

SUBSTITUTE FOR

HOUSE BILL NO. 5454

     A bill to amend 1994 PA 451, entitled

"Natural resources and environmental protection act,"

by amending sections 51105, 51106, 51108, 51113, and 51116 (MCL

324.51105, 324.51106, 324.51108, 324.51113, and 324.51116), section

51105 as amended by 1996 PA 451 and sections 51106, 51108, 51113,

and 51116 as added by 1995 PA 57.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 51105. (1) Commercial forests are not subject to the ad

valorem general property tax after the date the township supervisor

is notified by the department that the land is a commercial forest,

except taxes as previously levied. Except as provided in subsection

(5), commercial forests are subject to an annual specific tax  as

follows:

     (a) Through October 1, 1981, 15 cents per acre.

     (b) After October 1, 1981 and through December 31, 1989, 30

cents per acre.

     (c) After December 31, 1989 and through December 31, 1993, 38

cents per acre.

     (d) Beginning January 1, 1994, of $1.10 per acre.  as adjusted

pursuant to section 51107.

     (2) The supervisor of the township shall remove from the list

of land descriptions assessed and taxed under the ad valorem

general property tax the land descriptions certified to him or her

by the department as being commercial forests and shall enter those

land descriptions on a roll separate from lands assessed and taxed

by the ad valorem general property tax and shall spread against

these commercial forests the specific tax provided by this section.

     (3) The township treasurer shall collect the specific tax at

the same time and in the same manner as ad valorem general property

taxes are collected and this tax is subject to the same collection

charges levied for the collection of ad valorem property taxes.

Commercial forests are subject to return and sale for nonpayment of

taxes in the same manner, at the same time, and under the same

penalties as lands returned and sold for nonpayment of taxes levied

under the ad valorem general property tax laws. A valuation shall

not be determined for descriptions listed as commercial forests and

these lands shall not be considered by the county board of

commissioners or by the state board of equalization in connection

with county or state equalization for ad valorem property taxation

purposes.

     (4) Except as provided in section 51109(2), all sums collected

pursuant to this section shall be distributed by the township

treasurer in the same proportions to the various funds as the ad

valorem general property tax is allocated in the township.

     (5) Commercial forestland located in a renaissance zone under

the Michigan renaissance zone act,  Act No. 376 of the Public Acts

of 1996, being sections 125.2681 to 125.2696 of the Michigan

Compiled Laws  1996 PA 376, MCL 125.2681 to 125.2696, is exempt

from the annual specific tax levied under this section to the

extent and for the duration provided pursuant to  Act No. 376 of

the Public Acts of 1996  that act.

     Sec. 51106. On December 1 of each year, the department shall

certify to the state treasurer the number of acres that are

commercial forestlands in each county and the state treasurer shall

transmit to the treasurer of each county in which these commercial

forests are located a warrant on the state treasurer for an amount

equal to $1.20 per acre  , as adjusted by section 51107, upon  for

each acre of commercial forest in the county. The county treasurer

of each county shall distribute an amount equal to 25 cents per

acre for each acre of commercial forest in the county in the same

proportions between the various funds as the ad valorem general

property tax is distributed by the township treasurers in each

township. Except as provided by section 51109(2), the county

treasurer of each county shall distribute the remainder of the

funds transmitted pursuant to this section  pursuant to the manner

in which  in the same manner and in the same proportion as ad

valorem taxes collected under the ad valorem general property

taxes are distributed.  tax.

     Sec. 51108. (1) An owner of a commercial forest may withdraw

his or her land, in whole or in part, from the operation of this

part upon application to the department and payment of the

withdrawal application fee and penalty, as provided in this

section. However, for a period of 1 year after the effective date

of the 2006 amendments to this section, the withdrawal penalty is

as follows:

     (a) Subject to subdivision (b), the withdrawal penalty that

was in effect immediately prior to the effective date of the 2006

amendments to this section.

     (b) If all of the following occur, an owner of commercial

forest property is not subject to a withdrawal penalty:

     (i) An owner of commercial forestland withdraws his or her land

from the operation of this part as provided in this section.

     (ii) The former commercial forestland is placed on the

assessment roll in the local tax collecting unit in which the

former commercial forestland is located.

     (iii) The owner of the former commercial forestland claims and

is granted an exemption from the tax levied by a local school

district for school operating purposes under section 7jj of the

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

     (2) Except as otherwise provided by this section, upon

application to the department to withdraw commercial forestland

from the operation of this part, the applicant shall forward to the

department a withdrawal application fee in the amount of $1.00 per

acre with a minimum withdrawal application fee of $200.00 per

application and a maximum withdrawal application fee of $1,000.00

per application.

     (3) Except as otherwise provided in this section, an

application to withdraw commercial forestland from the operation of

this part shall be granted upon the payment to the township

treasurer in which the commercial forestland is located of a

penalty per acre equal to the  product of the current average ad

valorem property tax per acre on timber cutover real property

within the township in which the commercial forestland is located,

as determined by the township assessor, multiplied by 1 of the

following:  sum of the ad valorem general property tax from which

the forestland was exempted under section 51105 for the preceding

10 years, but not longer than the period for which the property has

been designated as commercial forestland.

     (a) For forestland determined to be a commercial forest before

January 1, 1994, the number of years, to a maximum of 7 years, that

the land was subject to this part.

     (b) For forestland determined to be a commercial forest after

December 31, 1993, the number of years, to a maximum of 15 years,

that the land was subject to this part.

     (4) For purposes of calculating the penalty in subsection (3),

if the township in which the commercial forestland is located does

not contain any real property classified as timber cutover real

property under the general property tax act, Act No. 206 of the

Public Acts of 1893, being sections 211.1 to 211.157 of the

Michigan Compiled Laws, then 1 of the following applies:

     (a) If there is timber cutover real property located within

the county in which the commercial forestland is located, the per

acre average of the ad valorem property tax for all timber cutover

real property located in the county in which the commercial

forestland is located shall be used in calculating the penalty

under subsection (3).

     (b) If there is no timber cutover real property located within

the county in which the commercial forestland is located, the per

acre average of the ad valorem property tax for all timber cutover

real property in townships contiguous to the county in which the

commercial forestland is located shall be used in calculating the

penalty under subsection (3).

(4)  (5) An application to withdraw commercial forestland

from the operation of this part that meets 1 or more of the

following requirements shall be granted without payment of the

withdrawal application fee or penalty under this section:

     (a) Commercial forestland that has been donated to a public

body for public use prior to withdrawal.

     (b) Commercial forestland that has been exchanged for property

belonging to a public body if the property received is designated

as a commercial forest as determined by the department.

     (c) Commercial forestland that has been condemned for public

use.

(5)  (6) The department shall remit the withdrawal

application fee paid pursuant to subsection (2) to the state

treasurer for deposit into the fund. The penalty received by the

township treasurer under subsection (3) shall be distributed by the

township treasurer in the same proportions to the various funds as

the ad valorem general property tax is allocated in the township,

except as provided by section 51109(2).

(6)  (7) If an application to withdraw commercial forestland

is granted, the department shall immediately notify the applicant,

the supervisor of the township, and the register of deeds of the

county in which the lands are located of the action and shall file

with those officials a list of the lands withdrawn.

     Sec. 51113. (1) Except as provided in this section, the owner

of a commercial forest shall not use that land in a manner that is

prejudicial to its development as a commercial forest, use the land

for agricultural, mineral extraction except as provided in this

section, grazing, industrial, developed recreational, residential,

resort, commercial, or developmental purposes, or deny the general

public the privilege of hunting and fishing on commercial

forestland unless the land is closed to hunting or fishing, or

both, by order of the department or by an act of the legislature.

For land classified as commercial forest under this part on or

after March 30, 1995, the owner of the commercial forestland shall

provide to the department documentation that he or she will provide

access to the general public for hunting and fishing as required

under this section. The documentation shall include 1 or more of

the following:

     (a) If the public access will be provided through land owned

by the owner of the commercial forestland, a statement certifying

the area or areas through which the general public may access the

commercial forestland.

     (b) If the public access will be provided through land owned

by a person other than the owner of the commercial forestland, a

copy of an easement that grants rights to the general public to

access the commercial forestland.

     (c) If the public access will be provided through public land

accessible to the general public, a statement identifying those

public lands through which the general public may access the

commercial forestland.

     (d) If portions of commercial forestland are contiguous only

at a point, documentation of public access shall be provided for

each portion of land as provided in subdivisions (a) to (c).

     (2) For land classified as commercial forest under this part

on or after March 30, 1995, if the location of the public access to

the commercial forestland for hunting or fishing changes by an act

of the owner, the owner of the commercial forestland shall provide

to the department an update to the documentation under subsection

(1).

     (3) Failure of an owner of commercial forestland to maintain

access to the general public for hunting and fishing as provided in

this section is a violation of this part and subjects the

commercial forestland to declassification under section 51116.

(4)  (2) Exploration for minerals  shall be  is permitted on

land listed under this part. Except as provided in subsections  (3)

(5) and  (4)  (6), before the removal of any commercial mineral

deposits, the owner shall withdraw the portion of the commercial

forestland directly affected by the removal pursuant to section

51108. The withdrawal of commercial forestland due to mineral

removal as provided in this section and section 51108 shall not

cause the remaining portion of the commercial forestland to be

withdrawn due to insufficient acreage of the remaining commercial

forestland.

(5)  (3) Upon application to and approval by the department,

sand and gravel may be removed from the commercial forest without

affecting the land's status as a commercial forest. The department

shall approve an application to remove sand and gravel deposits

only if the removal site is not greater than 5 acres, excluding

access to the removal site, and the sand and gravel are to be

utilized by 1 or more of the following:

     (a) The owner of a commercial forest for personal use if the

owner of the commercial forest is also the owner of the sand and

gravel deposits.

     (b) The owner of the sand and gravel deposits for his or her

personal use or for sale to the owner of the commercial forest for

personal use, if the owner of the commercial forest is not also the

owner of the sand and gravel deposits.

     (c) This state, a local unit of government, or a county road

commission, for governmental use.

(6)  (4) Upon application to and approval by the department,

deposits of oil and gas owned by this state may be removed from the

commercial forest without affecting the land's status as a

commercial forest.

     Sec. 51116.  If an owner of a commercial forestland uses his

or her commercial forest in violation of this part, fails to pay

any specific tax under section 51105, fails to report to the

department pursuant to section 51111, removes minerals in violation

of section 51113, or, after an owner certifies to the department

that a forest management plan has been prepared and is in effect,

fails to plant, harvest, or remove forest products in compliance

with the owner's forest management plan, the department may upon

notice to the owner and hearing declassify all or a portion of the

commercial forest. If,  at the  after providing notice and an

opportunity for a hearing, the department determines that  the  a

commercial  forests were  forest was used in violation of this

part, that the owner failed to pay the specific tax pursuant to

section 51105, that the owner failed to report to the department

pursuant to section 51111, that minerals were removed in violation

of section 51113, that the owner failed to maintain public access

for hunting or fishing under section 51113, or, after an owner

certifies to the department that a forest management plan has been

prepared and is in effect, that the owner failed to plant, harvest,

or remove forest products in compliance with the owner's forest

management plan, then the department shall  declassify  remove the

commercial forest designation for the commercial forest, serve a

notice of declassification of the lands upon the owner, and record

a copy of the declassification in the office of the register of

deeds of the county in which the lands are located. Upon

declassification, the land is subject to the ad valorem general

property tax. Within 30 days after the service of the

declassification notice on the owner, the owner shall pay both of

the following:

     (a) A fee equal to the withdrawal application fee described in

section 51108 to the department for deposit into the fund.

     (b) An amount equal to the penalty described in section 51108

to the township treasurer of the township in which the land is

located to be distributed, except as provided in section 51109(2),

in the same proportions to the various funds as the ad valorem

general property tax is allocated in the township.

     Enacting section 1. This amendatory act does not take effect

unless all of the following bills of the 93rd Legislature are

enacted into law:

     (a) House Bill No. 5455.

     (b) House Bill No. 5462.

     (c) House Bill No. 5628.