HB-5854, As Passed House, April 27, 2006

SUBSTITUTE FOR

HOUSE BILL NO. 5854

     A bill to amend 1973 PA 186, entitled

"Tax tribunal act,"

by amending sections 35 and 37 (MCL 205.735 and 205.737), as

amended by 2003 PA 131, and by adding section 35a.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 35. (1) The provisions of this section apply to a

proceeding before the tribunal that is commenced before January 1,

2007.

     (2)  (1) A proceeding before the tribunal is original and

independent and is considered de novo. For an assessment dispute as

to the valuation of property or if an exemption is claimed, the

assessment must be protested before the board of review before the

tribunal acquires jurisdiction of the dispute under subsection  (2)

(3), except as otherwise provided in this section for a year in

which the July or December board of review has authority to

determine a claim of exemption for qualified agricultural property

or for an appeal of a denial of a principal residence exemption by

the department of treasury, and in section 37(5) and (7). For a

dispute regarding a determination of a claim for exemption of

qualified agricultural property for a year in which the July or

December board of review has authority to determine a claim of

exemption for qualified agricultural property, the claim for

exemption must be presented to either the July or December board of

review before the tribunal acquires jurisdiction of the dispute.

For a special assessment dispute, the special assessment must be

protested at the hearing held for the purpose of confirming the

special assessment roll before the tribunal acquires jurisdiction

of the dispute.

(3)  (2) The jurisdiction of the tribunal in an assessment

dispute is invoked by a party in interest, as petitioner, filing a

written petition on or before June 30 of the tax year involved.

Except in the residential property and small claims division, a

written petition is considered filed by June 30 of the tax year

involved if it is sent by certified mail on or before June 30 of

that tax year. In the residential property and small claims

division, a written petition is considered filed by June 30 of the

tax year involved if it is postmarked by first-class mail or

delivered in person on or before June 30 of the tax year involved.

All petitions required to be filed or served by a day during which

the offices of the tribunal are not open for business shall be

filed by the next business day. In all other matters, the

jurisdiction of the tribunal is invoked by a party in interest, as

petitioner, filing a written petition within  30  35 days after the

final decision, ruling, determination, or order that the petitioner

seeks to review.  , or within 35 days if the appeal is pursuant to

section 22(1) of 1941 PA 122, MCL 205.22. Except in the

residential property and small claims division, a written petition

is considered filed if it is sent by certified mail or delivered in

person on or before expiration of the period in which an appeal may

be made as provided by law. In the residential property and small

claims division, a written petition is considered filed if it is

postmarked by first-class mail or delivered in person on or before

expiration of the period in which an appeal may be made as provided

by law. An appeal of a contested tax bill shall be made within 60

days after mailing by the assessment district treasurer and the

appeal is limited solely to correcting arithmetic errors or

mistakes and is not a basis of appeal as to disputes of valuation

of the property, the property's exempt status, or the property's

equalized value resulting from equalization of its assessment by

the county board of commissioners or the state tax commission.

Service of the petition on the respondent shall be by certified

mail. For an assessment dispute, service of the petition shall be

mailed to the assessor of that governmental unit if the respondent

is the local governmental unit. Except for petitions filed under

chapter 6, a copy of the petition shall also be sent to the

secretary of the school board in the local school district in which

the property is located and to the clerk of any county that may be

affected.

(4)  (3) The petition or answer may be amended at any time by

leave of the tribunal and in compliance with its rules. If a tax

was paid while the determination of the right to the tax is pending

before the tribunal, the taxpayer may amend his or her petition to

seek a refund of that tax.

(5)  (4) A person or legal entity may appear before the

tribunal in his or her own behalf  , or may be represented by an

attorney or by any other person.

     Sec. 35a. (1) The provisions of this section apply to a

proceeding before the tribunal that is commenced after December 31,

2006.

     (2) A proceeding before the tribunal is original and

independent and is considered de novo.

     (3) Except as otherwise provided in this section or by law,

for an assessment dispute as to the valuation or exemption of

property, the assessment must be protested before the board of

review before the tribunal acquires jurisdiction of the dispute

under subsection (6).

     (4) In the 2007 tax year and each tax year after 2007, both of

the following apply:

     (a) For an assessment dispute as to the valuation or exemption

of property classified under section 34c of the general property

tax act, 1893 PA 206, MCL 211.34c, as commercial real property,

industrial real property, or developmental real property, the

assessment may be protested before the board of review or appealed

directly to the tribunal without protest before the board of review

as provided in subsection (6).

     (b) For an assessment dispute as to the valuation or exemption

of property classified under section 34c of the general property

tax act, 1893 PA 206, MCL 211.34c, as commercial personal property,

industrial personal property, or utility personal property, the

assessment may be protested before the board of review or appealed

directly to the tribunal without protest before the board of review

as provided in subsection (6), if a statement of assessable

property is filed under section 19 of the general property tax act,

1893 PA 206, MCL 211.19, prior to the commencement of the board of

review for the tax year involved.

     (5) For a dispute regarding a determination of a claim of

exemption of a principal residence or qualified agricultural

property for a year in which the July or December board of review

has authority to determine a claim of exemption for a principal

residence or qualified agricultural property, the claim of

exemption shall be presented to either the July or December board

of review before the tribunal acquires jurisdiction of the dispute.

For a special assessment dispute, the special assessment shall be

protested at the hearing held for the purpose of confirming the

special assessment roll before the tribunal acquires jurisdiction

of the dispute.

     (6) The jurisdiction of the tribunal in an assessment dispute

as to property classified under section 34c of the general property

tax act, 1893 PA 206, MCL 211.34c, as commercial real property,

industrial real property, developmental real property, commercial

personal property, industrial personal property, or utility

personal property is invoked by a party in interest, as petitioner,

filing a written petition on or before May 31 of the tax year

involved. The jurisdiction of the tribunal in an assessment dispute

as to property classified under section 34c of the general property

tax act, 1893 PA 206, MCL 211.34c, as agricultural real property,

residential real property, timber-cutover real property, or

agricultural personal property is invoked by a party in interest,

as petitioner, filing a written petition on or before July 31 of

the tax year involved. In all other matters, the jurisdiction of

the tribunal is invoked by a party in interest, as petitioner,

filing a written petition within 35 days after the final decision,

ruling, or determination. An appeal of a contested tax bill shall

be made within 60 days after mailing by the assessment district

treasurer and the appeal is limited solely to correcting arithmetic

errors or mistakes and is not a basis of appeal as to disputes of

valuation of the property, the property's exempt status, or the

property's equalized value resulting from equalization of its

assessment by the county board of commissioners or the state tax

commission. Service of the petition on the respondent shall be by

certified mail. For an assessment dispute, service of the petition

shall be mailed to the assessor of that local tax collecting unit

if the respondent is the local tax collecting unit. Except for

petitions filed under chapter 6, a copy of the petition shall also

be sent to the secretary of the school board in the local school

district in which the property is located and to the clerk of any

county that may be affected.

     (7) A petition is considered filed on or before the expiration

of the time period provided in this section or by law if 1 or more

of the following occur:

     (a) The petition is postmarked by the United States postal

service on or before the expiration of that time period.

     (b) The petition is delivered in person on or before the

expiration of that time period.

     (c) The petition is given to a designated delivery service for

delivery on or before the expiration of that time period and the

petition is delivered by that designated delivery service or, if

the petition is not delivered by that designated delivery service,

the petitioner establishes that the petition was given to that

designated delivery service for delivery on or before the

expiration of that time period.

     (8) A petition required to be filed by a day during which the

offices of the tribunal are not open for business shall be filed by

the next business day.

     (9) A petition or answer may be amended at any time by leave

of the tribunal and in compliance with its rules. If a tax was paid

while the determination of the right to the tax is pending before

the tribunal, the taxpayer may amend his or her petition to seek a

refund of that tax.

     (10) A person or legal entity may appear before the tribunal

in his or her own behalf or may be represented by an attorney or by

any other person.

     (11) As used in this section, "designated delivery service"

means a delivery service provided by a trade or business that is

designated by the tribunal for purposes of this subsection. The

tribunal shall issue a tribunal notice not later than December 31

in each calendar year designating not less than 1 delivery service

for the immediately succeeding calendar year. The tribunal may

designate a delivery service only if the tribunal determines that

the delivery service meets all of the following requirements:

     (a) Is available to the general public.

     (b) Is at least as timely and reliable on a regular basis as

the United States postal service.

     (c) Records electronically to a database kept in the regular

course of business or marks on the petition the date on which the

petition was given to the delivery service for delivery.

     (d) Any other requirement the tribunal prescribes.

     Sec. 37. (1) The tribunal shall determine a property's taxable

value pursuant to section 27a of the general property tax act, 1893

PA 206, MCL 211.27a.

     (2) The tribunal shall determine a property's state equalized

valuation by multiplying its finding of true cash value by a

percentage equal to the ratio of the average level of assessment in

relation to true cash values in the assessment district, and

equalizing that product by application of the equalization factor

that is uniformly applicable in the assessment district for the

year in question. The property's state equalized valuation shall

not exceed 50% of the true cash value of the property on the

assessment date.

     (3) The petitioner has the burden of proof in establishing the

true cash value of the property. The assessing agency has the

burden of proof in establishing the ratio of the average level of

assessments in relation to true cash values in the assessment

district and the equalization factor that was uniformly applied in

the assessment district for the year in question.

     (4) If the taxpayer paid additional taxes as a result of the

unlawful assessments on the same property after filing the

petition, or if in subsequent years an unlawful assessment is made

against the same property, the taxpayer, not later than the filing

deadline prescribed in section  35(2)  35 for a proceeding before

the tribunal that is commenced before January 1, 2007 or section

35a for a proceeding before the tribunal that is commenced after

December 31, 2006, except as otherwise provided in subsections (5)

and (7), may amend the petition to join all of the claims for a

determination of the property's taxable value, state equalized

valuation, or exempt status and for a refund of payments based on

the unlawful assessments. The motion to amend the petition to add a

subsequent year shall be accompanied by a motion fee equal to 50%

of the filing fee to file a petition to commence an appeal for that

property in that year. A sum determined by the tribunal to have

been unlawfully paid or underpaid shall bear interest from the date

of payment to the date of judgment and the judgment shall bear

interest to date of its payment. However, a sum determined by the

tribunal to have been underpaid shall not bear interest for any

time period prior to 28 days after the tribunal's decision.

Interest required by this subsection shall accrue for periods

before April 1, 1982 at a rate of 6% per year, shall accrue for

periods after March 31, 1982 but before April 1, 1985 at a rate of

12% per year, and shall accrue for periods after March 31, 1985 but

before April 1, 1994 at a rate of 9% per year. After March 31, 1994

but before January 1, 1996, interest shall accrue at an interest

rate set monthly at a per annum rate based on the auction rate of

the 91-day discount treasury bill rate for the first Monday in each

month, plus 1%. After December 31, 1995, interest shall accrue at

an interest rate set each year based on the average auction rate of

91-day discount treasury bills in the immediately preceding state

fiscal year as certified by the department of treasury, plus 1%.

The department of treasury shall certify the interest rate within

60 days after the end of the immediately preceding fiscal year. The

tribunal shall order the refund of all or part of a property tax

administration fee paid in connection with taxes that the tribunal

determines were unlawfully paid.

     (5) A motion to amend a petition to add subsequent years is

not necessary in the following circumstances:

     (a)  For petitions filed after December 31, 1987, if  If the

tribunal has jurisdiction over a petition alleging that the

property is exempt from taxation, the appeal for each subsequent

year for which an assessment has been established shall be added

automatically to the petition. However, upon leave of the tribunal,

the petitioner or respondent may request that any subsequent year

be excluded from appeal at the time of the hearing on the petition.

     (b) If the residential property and small claims division of

the tribunal has jurisdiction over a petition, the appeal for each

subsequent year for which an assessment has been established shall

be added automatically to the petition. The residential property

and small claims division shall automatically add to an appeal of a

final determination of a claim for exemption of a principal

residence or of qualified agricultural property each subsequent

year in which a claim for exemption of that principal residence or

that qualified agricultural property is denied. However, upon leave

of the tribunal, the petitioner or respondent may request that any

subsequent year be excluded from appeal at the time of the hearing

on the petition.

     (6) The notice of the hearing on a petition shall include a

statement advising the petitioner of the right to amend his or her

petition to include or exclude subsequent years as provided by

subsections (4) and (5).

     (7) If the final equalization multiplier for the tax year is

greater than the tentative multiplier used in preparing the

assessment notice and as a result of action of the state board of

equalization or county board of commissioners a taxpayer's

assessment as equalized is in excess of 50% of true cash value,

that person may appeal directly to the tax tribunal without a prior

protest before the local board of review. The appeal shall be filed

under this subsection on or before the third Monday in August and

shall be heard in the same manner as other appeals of the tribunal.

An appeal pursuant to this subsection shall not result in an

equalized value less than the assessed value multiplied by the

tentative equalization multiplier used in preparing the assessment

notice.