HB-5454, As Passed Senate, May 23, 2006

SENATE 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, and 51116 (MCL 324.51105,

324.51106, 324.51108, and 324.51116), section 51105 as amended by

1996 PA 451 and sections 51106, 51108, 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 otherwise provided in

part 512 and 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.

(a)  (d) Beginning January 1, 1994  Until December 31, 2006,

$1.10 per acre.  as adjusted pursuant to section 51107.

     (b) Beginning January 1, 2007 through December 31, 2011, $1.20

per acre.

     (c) Beginning January 1, 2012 and every 5 years after that

date, the amount of the annual specific tax under this section

shall be increased by 5 cents per acre.

     (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. (1) 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 each

acre of  the following for commercial forest in the county:  . The

     (a) Until December 31, 2011, $1.20 per acre.

     (b) Beginning January 1, 2012 and every 5 years after that

date, the amount of the annual payment under this section shall be

increased by 5 cents per acre.

     (2) From the payments received under subsection (1), 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  received under 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.

     (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:

     (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).  Except as provided in subsection

(4), the withdrawal penalty shall be calculated in the following

manner:

     (a) Multiply the number of acres of commercial forestland

withdrawn from the operation of this part by the average value per

acre for comparable property acquired after December 31, 2004 under

subpart 14 of part 21, as determined by the state tax commission

under section 2153.

     (b) Multiply the product of the calculation in subdivision (a)

by the total millage rate levied by all taxing units in the local

tax collecting unit in which the property is located.

     (c) Multiply the product of the calculation in subdivision (b)

by the number of years, to a maximum of 7 years, in which the

property withdrawn from the operation of this part has been

designated as commercial forestland under this part.

     (4) 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

forestland 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.

     (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.

     (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).

     (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. 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, 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) Senate Bill No. 912.

     (c) Senate Bill No. 917.