SB-0913, As Passed Senate, May 23, 2006

SUBSTITUTE FOR

SENATE BILL NO. 913

     A bill to impose a state recapture tax on the change in use of

certain qualified forest property; to provide for the

administration of the recapture tax; to prescribe the powers and

duties of certain state and local officers; to provide for the

collection and distribution of the recapture tax; and to prescribe

penalties and provide remedies.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

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

"qualified forest property recapture tax act".

     Sec. 2. As used in this act:

     (a) "Benefit period" means the period in years between the

date of the first exempt transfer and the conversion by a change in

use, not to exceed the 10 years immediately preceding the year in

which the qualified forest property is converted by a change in

use.

     (b) "Benefit received on that property" means the sum of the

number of mills levied in the local tax collecting unit on the

qualified forest property in each year of the benefit period,

multiplied by the difference in each year of the benefit period

between the true cash taxable value of the property and the

property's taxable value as determined under section 27a of the

general property tax act, 1893 PA 206, MCL 211.27a.

     (c) "Converted by a change in use" means that due to a change

in use the property is no longer qualified forest property as

determined by the assessor of the local tax collecting unit based

on a recommendation from the department of natural resources.

     (d) "Exempt transfer" means a conveyance of property that is

not a transfer of ownership pursuant to section 27a(7)(o) of the

general property tax act, 1893 PA 206, MCL 211.27a.

     (e) "Forest products" means that term as defined in section

7jj of the general property tax act, 1893 PA 206, MCL 211.7jj.

     (f) "Person" means an individual, partnership, corporation,

limited liability company, association, governmental entity, or

other legal entity.

     (g) "Qualified forest property" means that term as defined in

section 7jj of the general property tax act, 1893 PA 206, MCL

211.7jj.

     (h) "Recapture tax" means the qualified forest property

recapture tax imposed under this act.

     (i) "Treasurer" means the state treasurer.

     (j) "True cash taxable value" means the taxable value the

property would have had if section 27a(7)(o) of the general

property tax act, 1893 PA 206, MCL 211.27a, were not in effect.

     Sec. 3. (1) Beginning January 1, 2007, the qualified forest

property recapture tax provided under section 4 is imposed as

provided in this section if the property is converted by a change

in use after December 31, 2006.

     (2) The recapture tax is the obligation of the person who

owned the property at the time the property was converted by a

change in use. If a recapture tax is imposed on the owner of the

property under this subsection, the recapture tax is a lien on the

property subject to the recapture tax until paid. If the recapture

tax is not paid within 90 days of the date the property was

converted by a change in use, the treasurer may bring a civil

action against the owner of the property as of the date the

property was converted by a change in use. If the recapture tax

remains unpaid on the March 1 in the year immediately succeeding

the year in which the property is converted by a change in use, the

property on which the recapture tax is due shall be returned as

delinquent to the county treasurer of the county in which the

property is located. Property returned as delinquent under this

section, and upon which the recapture tax, interest, penalties, and

fees remain unpaid after the property is returned as delinquent to

the county treasurer, is subject to forfeiture, foreclosure, and

sale for the enforcement and collection of the delinquent taxes as

provided in sections 78 to 79a of the general property tax act,

1893 PA 206, MCL 211.78 to 211.79a.

     Sec. 4. The recapture tax under this act shall be imposed at

the following rate:

     (a) If the property is converted by a change in use and there

have not been 1 or more harvests of forest products on that

property consistent with the approved forest management plan, the

recapture tax shall be calculated in the following manner:

     (i) Multiply the property's state equalized valuation at the

time the property is converted by a change in use by the total

millage rate levied by all taxing units in the local tax collecting

unit in which the property is located.

     (ii) Multiply the product of the calculation under subparagraph

(i) by 7.

     (iii) Multiply the product of the calculation under subparagraph

(ii) by 2.

     (b) If the property is converted by a change in use and there

have been 1 or more harvests of forest products on that property

consistent with the approved forest management plan, the recapture

tax shall be calculated in the following manner:

     (i) Multiply the property's state equalized valuation at the

time the property is converted by a change in use by the total

millage rate levied by all taxing units in the local tax collecting

unit in which the property is located.

     (ii) Multiply the product of the calculation under subparagraph

(i) by 7.

     (c) In addition to the recapture tax calculated under

subdivision (a) or (b), if property is converted by a change in use

and the taxable value of the property was not adjusted under

section 27a(3) of the general property tax act, 1893 PA 206, MCL

211.27a, after a transfer of ownership of the property due to the

provisions of section 27a(7)(o) of the general property tax act,

1893 PA 206, MCL 211.27a, the recapture tax shall include the

benefit received on that property.

     Sec. 5. (1) The recapture tax shall be collected by the

treasurer.

     (2) The assessor of the local tax collecting unit shall notify

the treasurer of the date the property is converted by a change in

use.

     (3) The treasurer shall credit the proceeds of the recapture

tax collected under this act to the general fund of this state.

     Sec. 6. This act shall be administered by the department of

treasury under 1941 PA 122, MCL 205.1 to 205.31.

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

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

law:

     (a) Senate Bill No. 912.

     (b) Senate Bill No. 914.