August 17, 2005, Introduced by Rep. Sheen and referred to the Committee on Tax Policy.
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; and to provide penalties.
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) "Adjusted taxable value" means taxable value of commercial
rental property adjusted by any occupancy addition or occupancy
loss.
(b) "Commercial rental property" means real property that
meets all of the following conditions:
(i) Is classified as commercial real property under section 34c
of the general property tax act, 1893 PA 206, MCL 211.34c.
(ii) All or a portion is subject to a lease or is offered for
lease.
(c) "Commission" means the state tax commission created by
1927 PA 360, MCL 209.101 to 209.107.
(d) "Occupancy addition" means an increase in the value
attributable to commercial rental property's occupancy rate.
(e) "Occupancy loss" means an adjustment in value because of a
decrease in commercial rental property's occupancy rate.
(f) "Taxable value" means the taxable value as determined
under 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, taxable value, and adjusted taxable
value of each parcel of commercial rental property located in that
local tax collecting unit.
(2) For purposes of determining the adjusted taxable value of
commercial rental property, both of the following apply:
(a) The value of an occupancy addition for the increased
occupancy rate is the product of the increase in the true cash
value of the commercial rental property attributable to the
increased occupancy rate multiplied by a fraction the numerator of
which is the adjusted taxable value of the commercial rental
property in the immediately preceding year and the denominator of
which is the true cash value of the commercial rental property in
the immediately preceding year, and then multiplied by the lesser
of 1.05 or the inflation rate. 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.
(b) The value of an occupancy loss for a decrease in the
commercial rental property's occupancy rate is the product of the
decrease in the true cash value of the commercial rental property
attributable to the decreased occupancy rate multiplied by a
fraction the numerator of which is the adjusted taxable value of
the commercial rental property in the immediately preceding year
and the denominator of which is the true cash value of the
commercial rental property in the immediately preceding year.
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) Except as otherwise provided in subsections (5) and (6),
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) For intermediate school districts receiving state aid
under sections 56, 62, and 81 of the state school aid act of 1979,
1979 PA 94, MCL 388.1656, 388.1662, and 388.1681, of the amount of
commercial rental property specific tax that would otherwise be
disbursed to an intermediate school district, all or a portion, to
be determined on the basis of the tax rates being utilized to
compute the amount of state aid, shall be paid to the state
treasury to the credit of the state school aid fund established by
section 11 of article IX of the state constitution of 1963.
(6) The amount of commercial rental property specific tax
described in subsection (2) that would otherwise be disbursed to a
local school district for school operating purposes shall be paid
instead to the state treasury and credited to the state school aid
fund established by section 11 of article IX of the state
constitution of 1963.
(7) 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.
(8) 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
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.
Enacting section 1. This act does not take effect unless
Senate Bill No.____ or House Bill No. 5097(request no. 04125'05 a*)
of the 93rd Legislature is enacted into law.