November 9, 2005, Introduced by Senators TOY, KUIPERS, HARDIMAN, GOSCHKA, ALLEN and McMANUS and referred to the Committee on Local, Urban and State Affairs.
A bill to amend 1893 PA 206, entitled
"The general property tax act,"
by amending sections 59, 78, 78m, 87b, 87c, and 87d (MCL 211.59,
211.78, 211.78m, 211.87b, 211.87c, and 211.87d), section 59 as
amended by 2001 PA 97, section 78 as added by 1999 PA 123, section
78m as amended by 2003 PA 263, section 87b as amended by 2002 PA
198, section 87c as amended by 2002 PA 165, and section 87d as
amended by 1982 PA 503.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 59. (1) A person may pay the taxes, any 1 of the taxes, a
portion of the taxes specified by resolution of the county board of
commissioners, or if a specification is not made by a resolution of
the county board of commissioners, a portion of the taxes approved
by the county treasurer on a parcel or description of property
returned as delinquent, or on an undivided share of a parcel or
description of property returned as delinquent. For taxes levied on
real property before January 1, 1999 and for taxes levied on
personal property, the amount paid under this subsection shall
include interest computed from the March 1 after the taxes were
assessed at the rate of 1% per month or fraction of a month, except
as provided in section 89, and 4% of the delinquent taxes as a
county property tax administration fee that shall be a minimum of
$1.00 per payment of delinquent taxes, except as provided in
section 89. Payment under this subsection shall be made to the
county treasurer of the county in which the property is situated,
at any time before the property is sold at a tax sale held pursuant
to
section 60 , bid off to this state pursuant to section 70, or
forfeited to a county treasurer pursuant to section 78g. The county
treasurer and the treasurer for the local tax collecting unit shall
allocate and distribute the taxes and interest paid proportionately
among the county or local tax collecting unit funds and the
property tax administration fee returned as delinquent under
section 44(6) to the treasurer of the local tax collecting unit who
transmitted the taxes returned as delinquent. For taxes levied
before January 1, 1999, on all descriptions of property with unpaid
taxes on the October 1 before the time prescribed for the sale of a
tax lien on the property, an additional $10.00 shall be charged for
expenses, which shall be a lien on the property. If collected,
$5.00 of this expense charge shall be credited to a restricted
revenue fund of this state, to be known as the delinquent property
tax administration fund, to reimburse this state for the cost of
publishing the lists of property and other expenses, and $5.00
shall belong to the general fund of the county to reimburse the
county for the expense incurred in preparing the list of delinquent
property for sale or forfeiture.
(2) For taxes levied before January 1, 1999, the property tax
administration fee paid to the county treasurer shall be credited
to the general fund of the county and the property tax
administration fee paid to the state treasurer shall be credited to
the
delinquent property tax administration fund. Amounts credited
to
the general fund of the county shall be used only for the
purposes
specified in subsection (6).
(3) For taxes levied before January 1, 1999, and for taxes
levied after December 31, 1998, a county board of commissioners, by
resolution, may provide all of the following for taxes paid before
May 1 in the first year of delinquency for the homestead property
of a senior citizen, paraplegic, hemiplegic, quadriplegic, eligible
serviceman, eligible veteran, eligible widow, totally and
permanently disabled person, or blind person, as those persons are
defined in chapter 9 of the income tax act of 1967, 1967 PA 281,
MCL 206.501 to 206.532, if a claim is made before February 15 for
the credit provided by chapter 9 of the income tax act of 1967,
1967 PA 281, MCL 206.501 to 206.532, if that claimant presents a
copy of the form filed for that credit to the county treasurer, and
if that claimant has not received the credit before March 1:
(a) Any interest, fee, or penalty in excess of the interest,
fee, or penalty that would have been added if the tax had been paid
before February 15 is waived.
(b) Interest paid under subsection (1) or section 89(1)(a) is
waived unless the interest is pledged to the repayment of
delinquent
tax revolving fund notes or payable to
the county
a
delinquent tax revolving fund, in which case the interest shall be
refunded from the general fund of the county.
(c) The county property tax administration fee is waived.
(4) The treasurer of the local tax collecting unit shall
indicate on the delinquent tax roll if a 1% property tax
administration fee was added to taxes collected before February 15.
(5) The fees authorized and collected under this section and
credited to the delinquent property tax administration fund shall
be used by the department of treasury to pay expenses incurred in
the administration of this act.
(6)
The county property tax administration fee shall be used
by
the county to offset the costs incurred in and ancillary to
collecting
delinquent property taxes and for purposes authorized by
sections
87b and 87d.
Sec. 78. (1) The legislature finds that there exists in this
state a continuing need to strengthen and revitalize the economy of
this state and its municipalities by encouraging the efficient and
expeditious return to productive use of property returned for
delinquent taxes. Therefore, the powers granted in this act
relating to the return of property for delinquent taxes constitute
the performance by this state or a political subdivision of this
state of essential public purposes and functions.
(2) It is the intent of the legislature that the provisions of
this act relating to the return, forfeiture, and foreclosure of
property for delinquent taxes satisfy the minimum requirements of
due process required under the constitution of this state and the
constitution of the United States but that those provisions do not
create new rights beyond those required under the state
constitution of 1963 or the constitution of the United States. The
failure of this state or a political subdivision of this state to
follow a requirement of this act relating to the return,
forfeiture, or foreclosure of property for delinquent taxes shall
not be construed to create a claim or cause of action against this
state or a political subdivision of this state unless the minimum
requirements of due process accorded under the state constitution
of 1963 or the constitution of the United States are violated.
(3) Not later than December 1, 1999, the county board of
commissioners of a county, by a resolution adopted at a meeting
held pursuant to the open meetings act, 1976 PA 267, MCL 15.261 to
15.275, and with the written concurrence of the county treasurer
and the county executive, if any, may elect to have this state
foreclose property under this act forfeited to the county treasurer
under section 78g. At any time during December 2004, the county
board of commissioners of a county, by a resolution adopted at a
meeting held pursuant to the open meetings act, 1976 PA 267, MCL
15.261 to 15.275, and with the written concurrence of the county
treasurer and county executive, if any, may do either of the
following:
(a) Elect to have this state foreclose property under this act
forfeited to the county treasurer under section 78g.
(b) Rescind its prior resolution by which it elected to have
this state foreclose property under this act forfeited to the
county treasurer under section 78g.
(4) The foreclosure of forfeited property by a county is
voluntary and is not an activity or service required of units of
local government for purposes of section 29 of article IX of the
state constitution of 1963.
(5) A county and a local governmental unit within that county
may enter into an agreement for the collection of property taxes or
the enforcement and consolidation of tax liens within that local
governmental
unit. A local governmental unit shall not may
establish a delinquent tax revolving fund under section 87b.
(6) As used in this section and sections 78a through 157 for
purposes of the collection of taxes returned as delinquent:
(a) "Foreclosing governmental unit" means 1 of the following:
(i) The treasurer of a county.
(ii) This state if the county has elected under subsection (3)
to have this state foreclose property under this act forfeited to
the county treasurer under section 78g.
(b) "Forfeited" or "forfeiture" means a foreclosing
governmental unit may seek a judgment of foreclosure under section
78k if the property is not redeemed as provided under this act, but
does not acquire a right to possession or any other interest in the
property.
Sec. 78m. (1) Not later than the first Tuesday in July,
immediately succeeding the entry of judgment under section 78k
vesting absolute title to tax delinquent property in the
foreclosing governmental unit, this state is granted the right of
first refusal to purchase property at the greater of the minimum
bid or its fair market value by paying that amount to the
foreclosing governmental unit if the foreclosing governmental unit
is not this state. If this state elects not to purchase the
property under its right of first refusal, a city, village, or
township may purchase for a public purpose any property located
within that city, village, or township set forth in the judgment
and subject to sale under this section by payment to the
foreclosing governmental unit of the minimum bid. If a city,
village, or township does not purchase that property, the county in
which that property is located may purchase that property under
this section by payment to the foreclosing governmental unit of the
minimum bid. If property is purchased by a city, village, township,
or county under this subsection, the foreclosing governmental unit
shall convey the property to the purchasing city, village,
township, or county within 30 days. If property purchased by a
city, village, township, or county under this subsection is
subsequently sold for an amount in excess of the minimum bid and
all costs incurred relating to demolition, renovation,
improvements, or infrastructure development, the excess amount
shall
be returned to the delinquent tax property sales
proceeds
account
for the year in which the property was purchased by the
city,
village, township, or county or, if this state is the
foreclosing
governmental unit within a county, to the land
reutilization
fund created under section 78n deposited
in the
general fund of the city, village, township, or county. Upon the
request of the foreclosing governmental unit, a city, village,
township, or county that purchased property under this subsection
shall provide to the foreclosing governmental unit without cost
information regarding any subsequent sale or transfer of the
property. This subsection applies to the purchase of property by
this state, a city, village, or township, or a county prior to a
sale held under subsection (2).
(2) Subject to subsection (1), beginning on the third Tuesday
in July immediately succeeding the entry of the judgment under
section 78k vesting absolute title to tax delinquent property in
the foreclosing governmental unit and ending on the immediately
succeeding first Tuesday in November, the foreclosing governmental
unit, or its authorized agent, at the option of the foreclosing
governmental unit, shall hold at least 2 property sales at 1 or
more convenient locations at which property foreclosed by the
judgment entered under section 78k shall be sold by auction sale,
which may include an auction sale conducted via an internet
website. Notice of the time and location of the sales shall be
published not less than 30 days before each sale in a newspaper
published and circulated in the county in which the property is
located, if there is one. If no newspaper is published in that
county, publication shall be made in a newspaper published and
circulated in an adjoining county. Each sale shall be completed
before the first Tuesday in November immediately succeeding the
entry of judgment under section 78k vesting absolute title to the
tax delinquent property in the foreclosing governmental unit.
Except as provided in subsection (5), property shall be sold to the
person bidding the highest amount above the minimum bid. The
foreclosing governmental unit may sell parcels individually or may
offer 2 or more parcels for sale as a group. The minimum bid for a
group of parcels shall equal the sum of the minimum bid for each
parcel included in the group. The foreclosing governmental unit may
adopt procedures governing the conduct of the sale and may cancel
the sale prior to the issuance of a deed under this subsection if
authorized under the procedures. The foreclosing governmental unit
may require full payment by cash, certified check, or money order
at the close of each day's bidding. Not more than 30 days after the
date of a sale under this subsection, the foreclosing governmental
unit shall convey the property by deed to the person bidding the
highest amount above the minimum bid. The deed shall vest fee
simple title to the property in the person bidding the highest
amount above the minimum bid, unless the foreclosing governmental
unit discovers a defect in the foreclosure of the property under
sections 78 to 78l. If this state is the foreclosing governmental
unit within a county, the department of natural resources shall
conduct the sale of property under this subsection and subsections
(4) and (5) on behalf of this state.
(3) For sales held under subsection (2), after the conclusion
of that sale, and prior to any additional sale held under
subsection (2), a city, village, or township may purchase any
property not previously sold under subsection (1) or (2) by paying
the minimum bid to the foreclosing governmental unit. If a city,
village, or township does not purchase that property, the county in
which that property is located may purchase that property under
this section by payment to the foreclosing governmental unit of the
minimum bid.
(4) If property is purchased by a city, village, township, or
county under subsection (3), the foreclosing governmental unit
shall convey the property to the purchasing city, village, or
township within 30 days.
(5) All property subject to sale under subsection (2) shall be
offered for sale at not less than 2 sales conducted as required by
subsection (2). The final sale held under subsection (2) shall be
held not less than 28 days after the previous sale under subsection
(2). At the final sale held under subsection (2), the sale is
subject to the requirements of subsection (2), except that the
minimum bid shall not be required. However, the foreclosing
governmental unit may establish a reasonable opening bid at the
sale to recover the cost of the sale of the parcel or parcels.
(6) On or before December 1 immediately succeeding the date of
the sale under subsection (5), a list of all property not
previously sold by the foreclosing governmental unit under this
section shall be transferred to the clerk of the city, village, or
township in which the property is located. The city, village, or
township may object in writing to the transfer of 1 or more parcels
of property set forth on that list. On or before December 30
immediately succeeding the date of the sale under subsection (5),
all property not previously sold by the foreclosing governmental
unit under this section shall be transferred to the city, village,
or township in which the property is located, except those parcels
of property to which the city, village, or township has objected.
Property located in both a village and a township may be
transferred under this subsection only to a village. The city,
village, or township may make the property available under the
urban homestead act, 1999 PA 127, MCL 125.2701 to 125.2709, or for
any other lawful purpose.
(7) If property not previously sold is not transferred to the
city, village, or township in which the property is located under
subsection (6), the foreclosing governmental unit shall retain
possession of that property. If the foreclosing governmental unit
retains possession of the property and the foreclosing governmental
unit is this state, title to the property shall vest in the land
bank fast track authority created under section 15 of the land bank
fast track act, 2003 PA 258, MCL 124.765.
(8) A
If the foreclosing
governmental unit is this state,
the foreclosing governmental unit shall deposit the proceeds from
the sale of property under this section into a restricted account
designated as the "delinquent tax property sales proceeds for the
year ______". The foreclosing governmental unit shall direct the
investment of the account. The foreclosing governmental unit shall
credit to the account interest and earnings from account
investments. Proceeds in that account shall only be used by the
foreclosing governmental unit for the following purposes in the
following order of priority:
(a)
The delinquent tax revolving fund shall be reimbursed for
all
taxes, interest, and fees on all of the property, whether or
not
all of the property was sold.
(a) (b)
All costs of the sale of property for the year shall
be paid.
(b) (c)
Any costs of the foreclosure
proceedings for the
year, including, but not limited to, costs of mailing, publication,
personal service, and outside contractors shall be paid.
(c) (d)
Any costs for the sale of property or foreclosure
proceedings for any prior year that have not been paid or
reimbursed from that prior year's delinquent tax property sales
proceeds shall be paid.
(d) (e)
Any costs incurred by the foreclosing governmental
unit in maintaining property foreclosed under section 78k before
the sale under this section shall be paid, including costs of any
environmental remediation.
(f)
If the foreclosing governmental unit is not this state,
any
of the following:
(i) Any costs for the sale of property or foreclosure
proceedings
for any subsequent year that are not paid or reimbursed
from
that subsequent year's delinquent tax property sales proceeds
shall
be paid from any remaining balance in any prior year's
delinquent
tax property sales proceeds account.
(ii) Any costs for the defense of title actions.
(iii) Any costs incurred in administering the
foreclosure and
disposition
of property forfeited for delinquent taxes under this
act.
(e) (g)
If the foreclosing governmental unit is this state,
any
Any remaining balance shall be transferred to the land
reutilization fund created under section 78n.
(9) If the foreclosing governmental unit is not this state,
the foreclosing governmental unit shall deposit the proceeds from
the sale of property under this section into the general fund.
(10) (9)
Two or more county treasurers of adjacent counties
may elect to hold a joint sale of property as provided in this
section. If 2 or more county treasurers elect to hold a joint sale,
property may be sold under this section at a location outside of
the county in which the property is located. The sale may be
conducted by any county treasurer participating in the joint sale.
A joint sale held under this subsection may include or be an
auction sale conducted via an internet website.
(11) (10)
The foreclosing governmental unit shall record a
deed for any property transferred under this section with the
county register of deeds. The foreclosing governmental unit may
charge a fee in excess of the minimum bid and any sale proceeds for
the cost of recording a deed under this subsection.
(12) (11)
As used in this section, "minimum bid" is
the
minimum amount established by the foreclosing governmental unit for
which property may be sold under this section. The minimum bid
shall include all of the following:
(a) All delinquent taxes, interest, penalties, and fees due on
the property. If a city, village, or township purchases the
property, the minimum bid shall not include any taxes levied by
that city, village, or township and any interest, penalties, or
fees due on those taxes.
(b) The expenses of administering the sale, including all
preparations for the sale. The foreclosing governmental unit shall
estimate the cost of preparing for and administering the annual
sale for purposes of prorating the cost for each property included
in the sale.
(13) (12)
For property transferred to this state under
subsection (1), a city, village, or township under subsection (6)
or retained by a foreclosing governmental unit under subsection
(7), all taxes due on the property as of the December 31 following
the transfer or retention of the property are canceled effective on
that December 31.
(14) (13)
For property sold under this section, transferred
to this state under subsection (1), a city, village, or township
under subsection (6), or retained by a foreclosing governmental
unit under subsection (7), all liens for costs of demolition,
safety repairs, debris removal, or sewer or water charges due on
the property as of the December 31 immediately succeeding the sale,
transfer, or retention of the property are canceled effective on
that December 31. This subsection does not apply to liens recorded
by the department of environmental quality under this act or the
land
bank fast track authority act, 2003 PA 258, MCL 124.751 to
124.774.
(15) (14)
If property foreclosed under section 78k and held
by or under the control of a foreclosing governmental unit is a
facility as defined under section 20101(1)(o) of the natural
resources and environmental protection act, 1994 PA 451, MCL
324.20101, prior to the sale or transfer of the property under this
section, the property is subject to all of the following:
(a) Upon reasonable written notice from the department of
environmental quality, the foreclosing governmental unit shall
provide access to the department of environmental quality, its
employees, contractors, and any other person expressly authorized
by the department of environmental quality to conduct response
activities at the foreclosed property. Reasonable written notice
under this subdivision may include, but is not limited to, notice
by electronic mail or facsimile, if the foreclosing governmental
unit consents to notice by electronic mail or facsimile prior to
the provision of notice by the department of environmental quality.
(b) If requested by the department of environmental quality to
protect public health, safety, and welfare or the environment, the
foreclosing governmental unit shall grant an easement for access to
conduct response activities on the foreclosed property as
authorized under chapter 7 of the natural resources and
environmental
protection act, 1994 PA 451, MCL 324.20101 to
324.20302
324.20519.
(c) If requested by the department of environmental quality to
protect public health, safety, and welfare or the environment, the
foreclosing governmental unit shall place and record deed
restrictions on the foreclosed property as authorized under chapter
7 of the natural resources and environmental protection act, 1994
PA
451, MCL 324.20101 to 324.20302 324.20519.
(d) The department of environmental quality may place an
environmental lien on the foreclosed property as authorized under
section 20138 of the natural resources and environmental protection
act, 1994 PA 451, MCL 324.20138.
(16) (15)
If property foreclosed under section 78k and held
by or under the control of a foreclosing governmental unit is a
facility as defined under section 20101(1)(o) of the natural
resources and environmental protection act, 1994 PA 451, MCL
324.20101, prior to the sale or transfer of the property under this
section, the department of environmental quality shall request and
the foreclosing governmental unit shall transfer the property to
the state land bank fast track authority created under section 15
of the land bank fast track act, 2003 PA 258, MCL 124.765, if all
of the following apply:
(a) The department of environmental quality determines that
conditions at a foreclosed property are an acute threat to the
public health, safety, and welfare, to the environment, or to other
property.
(b) The department of environmental quality proposes to
undertake or is undertaking state-funded response activities at the
property.
(c) The department of environmental quality determines that
the sale, retention, or transfer of the property other than under
this subsection would interfere with response activities by the
department of environmental quality.
Sec. 87b. (1) The county board of commissioners of any county
or the governing body of any local tax collecting unit may create a
delinquent tax revolving fund that, at the option of the county
treasurer or the treasurer of the local tax collecting unit, may be
designated as the "100% tax payment fund". Upon the establishment
of the fund, all delinquent taxes, except taxes on personal
property, due and payable to the taxing units in the county, except
those units that have created a delinquent tax revolving fund or
that collect their own delinquent taxes after March 1 by charter or
otherwise, are due and payable to the county. The primary
obligation to pay to the county the amount of taxes and the
interest on the taxes shall rest with the local taxing units and
the state for the state education tax under the state education tax
act, 1993 PA 331, MCL 211.901 to 211.906. If the delinquent taxes
that are due and payable to the county are not received by the
county for any reason, the county has full right of recourse
against the taxing unit or to the state for the state education tax
under the state education tax act, 1993 PA 331, MCL 211.901 to
211.906, to recover the amount of the delinquent taxes and interest
at the rate of 1% per month or fraction of a month until repaid to
the county by the taxing unit. However, if the county borrows to
provide funds for those payments, the interest rate shall not
exceed the highest interest rate paid on that borrowing. A
resolution or agreement previously executed or adopted to this
effect is validated and confirmed. For delinquent state education
taxes under the state education tax act, 1993 PA 331, MCL 211.901
to 211.906, the county may offset uncollectible delinquent taxes
against collections of the state education tax under the state
education tax act, 1993 PA 331, MCL 211.901 to 211.906, received by
the county and owed to this state under this act. The fund shall be
segregated into separate funds or accounts for each year's
delinquent taxes.
(2) If a delinquent tax revolving fund is established, the
county treasurer shall be the agent for the county and the
treasurer of the local tax collecting unit shall be the agent for
the local tax collecting unit, and without further action by the
county board of commissioners or the legislative body of the local
tax collecting unit, may enter into contracts with other
municipalities, this state, or private persons, firms, or
corporations in connection with any transaction relating to the
fund or any borrowing made by the county or the local tax
collecting unit pursuant to section 87c or 87d, including all
services necessary to complete this borrowing.
(3) The county treasurer or the treasurer of the local tax
collecting unit shall pay from the fund any or all delinquent taxes
that are due and payable to the county or the local tax collecting
unit and any school district, intermediate school district,
community college district, city, township, special assessment
district, this state, or any other political unit for which
delinquent tax payments are due within 20 days after sufficient
funds are deposited within the delinquent tax revolving fund or, if
the county treasurer is treasurer for a county with a population
greater than 1,500,000 persons, within 30 days after sufficient
funds are deposited within the delinquent tax revolving fund. In a
county with a delinquent tax revolving fund where the county does
not borrow pursuant to section 87c or 87d, if the county treasurer
does not make payment of the delinquent taxes to the local units
within 10 days after the completion of county settlement with all
local units under section 55, the county shall pay interest on the
unpaid delinquent taxes from the date of actual county settlement
at the rate of 12% per annum for the number of days involved.
(4) Except as provided in subsection (5), the county treasurer
or the treasurer of a local tax collecting unit shall pay from the
fund directly to a school district its share of the fund when a
single school district exists within a political unit.
(5) If a local taxing unit has borrowed money in anticipation
of collecting taxes for any school district or other municipality
and the county treasurer or the treasurer of a local tax collecting
unit has been so notified in writing, the county treasurer or the
treasurer of a local tax collecting unit shall pay to the local
taxing unit the shares of the fund for that school district or
municipality. For purposes of this subsection, "local taxing unit"
means a city, village, or township.
(6)
The interest charges, penalties, and
county any property
tax administration fee rates established under this act shall
remain
in effect and shall be payable to the
county delinquent
tax revolving fund.
(7) Any surplus in the fund may be transferred to the county
general fund or the general fund of the local tax collecting unit
by appropriate action of the county board of commissioners or the
governing body of the local tax collecting unit.
(8) A county board of commissioners or the governing body of
the local tax collecting unit may borrow money to create a
delinquent tax revolving fund as provided in section 87c or 87d, or
both.
(9) This section shall not supersede section 87 but is an
alternative
method for paying delinquent taxes.
to local units.
However, where this section is used by a county, section 87 shall
not be used.
Sec. 87c. (1) A county or local tax collecting unit that has
created a fund pursuant to section 87b by resolution of its board
of commissioners or governing body and without a vote of its
electors may borrow money and issue its revolving fund notes to
establish or continue, in whole or in part, the delinquent tax
revolving fund and to pay the expenses of the borrowing.
(2) If a fund is created and a county or local tax collecting
unit determines to borrow pursuant to this section, the county
treasurer or the treasurer of the local tax collecting unit shall
be
the agent for the county in connection with all
transactions
relative to the fund.
(3)
If provided by separate resolution,
of the county board
of
commissioners for any year in which a county or local tax
collecting unit determines to borrow for the purposes provided in
this section and subject to subsection (15), there shall be payable
from the surplus in the fund an amount equal to 20% of the
following amount to the county treasurer or the treasurer of the
local
tax collecting unit for services as
agent for the county
and
the remainder of the following amount to the county
treasurer's office for delinquent tax administration expenses:
(a) For any delinquent tax on which the interest rate before
sale exceeds 1% per month, 1/27 of the interest collected per
month.
(b) For any delinquent tax on which the interest rate before
sale is 1% per month or less, 3/64 of the interest collected each
month.
(4) The amount payable under subsection (3) to the county
treasurer or the treasurer of the local tax collecting unit for
services as agent for the county or the local tax collecting unit
shall
not exceed 20% of the county treasurer's annual salary, and
any
excess over this limitation shall be payable to the county
treasurer's office for delinquent tax administration expenses. In
addition, the total sum payable under subsection (3) shall not
exceed 5% of the total budget of the treasurer's office for that
year.
(5) In the resolution authorizing the borrowing and issuance
of notes, the delinquent taxes from which the borrowing is to be
repaid shall be pledged to the payment of the principal and
interest of the notes, and the proceeds of the collection of the
delinquent taxes pledged and the interest on the proceeds shall be
placed in a segregated fund or account and shall not be used for
any other purpose until the notes are paid in full, including
interest. The segregated fund or account shall be established as a
part of the delinquent tax revolving fund and shall be accounted
for separately on the books of the county treasurer or the
treasurer of the local tax collecting unit.
(6) The proceeds of the notes shall be placed in and used as
the whole or part of the fund established pursuant to section 87b,
after the expenses of borrowing have been deducted.
(7) The notes issued pursuant to this section shall comply
with all of the following:
(a) Be in an aggregate principal amount not exceeding the
aggregate amount of the delinquent taxes pledged, exclusive of
interest.
(b) Bear interest not exceeding 14.5% per annum.
(c) Be in those denominations, and mature on the date not
exceeding
6 years after their date of issue, as
the board of
commissioners
by its resolution determines determined
by the
authorizing resolution.
(d) May be issued at an original issue discount not to exceed
2% of the face value of the note issued.
(8) The resolution authorizing issuance of the notes may
provide that all or part of the notes shall be subject to
prepayment and, if subject to prepayment, shall provide the amount
of call premium payable, if any, the number of days' notice of
prepayment that shall be given, and whether the notice shall be
written or published, or both. Otherwise, the notes shall not be
subject to prepayment.
(9) The sale and award of notes shall be conducted and made by
the
treasurer of the county issuing them at a public or
private
sale. If a public sale is held, the notes shall be advertised for
sale once not less than 5 days before sale in a publication printed
in the English language and circulated in this state that carries
as a part of its regular service notices of the sales of municipal
bonds and that has been designated in the resolution as a
publication complying with these qualifications. The notice of sale
shall
be in the form designated by the county treasurer. The
notes
may be sold subject to the option of the county treasurer,
and
the county treasurer may withhold a part of the issue from
delivery if, in his or her opinion, sufficient funds are available
before delivery of the notes to make full delivery unnecessary to
the purposes of the borrowing.
(10) The notes are full faith and credit obligations of the
county or local tax collecting unit issuing them and, subject to
section 87d, if the proceeds of the taxes pledged are not
sufficient to pay the principal and interest of the notes when due,
the county or local tax collecting unit shall impose a general ad
valorem tax without limitation as to rate or amount on all taxable
property in the county or local tax collecting unit to pay the
principal and interest and may reimburse itself from delinquent
taxes collected.
(11) If the resolution provides and subject to section 87d,
the notes may be designated general obligation tax notes.
(12) Notwithstanding any other provisions of this section and
section 87d, all the following apply:
(a) Interest on the notes may be payable at any time provided
in the resolution, and may be set, reset, or calculated as provided
in the resolution.
(b) Notes issued under this section may have 1 or more of the
following attributes:
(i) Made the subject of a put or agreement to repurchase by the
county
treasurer.
(ii) Secured by a letter of credit issued by a bank under an
agreement
entered into by the county treasurer or by any other
collateral that the resolution may authorize.
(iii) Callable as set forth in the resolution.
(iv) Reissued by the county treasurer
once reacquired by the
county
treasurer under any put or repurchase agreement.
(c)
The county treasurer may by order do 1 or more of the
following:
(i) Authorize the issuance of renewal notes.
(ii) Refund or refund in advance notes by the issuance of new
notes, whether the notes to be refunded have or have not matured.
(iii) Issue notes partly to refund notes and partly for any
other purposes authorized by this act.
(iv) Buy and sell any notes issued under this section.
(d) Renewal, refunding, or advance refunding notes shall
comply with all of the following:
(i) Shall be sold and the proceeds applied to the purchase
redemption or payment of the notes to be renewed or refunded.
(ii) Shall not be subject to the revised municipal finance act,
2001 PA 34, MCL 141.2101 to 141.2821.
(iii) May be sold or resold at a public or private sale.
(iv) May pledge the delinquent taxes pledged in the issue to be
refunded in advance after the original issue is defeased by the
advance refunding issue.
(e) Notes may be issued secured by a second lien on delinquent
taxes,
interest, and county property tax administration fees
already the subject of a first lien because of the issuance of a
prior note issue.
(f) Any notes issued may be secured in whole or in part under
a trust or escrow agreement, which agreement may also govern the
issuance of renewal notes, refunding notes, and advance refunding
notes. The agreement may authorize the trustee or escrow agent to
make investments of any type authorized in the agreement.
(13) The notes issued under this section and interest on the
notes shall be payable in lawful money of the United States of
America and shall be exempt from all taxation by this state or a
taxing authority in this state.
(14) The notes issued under this section may be made payable
at a bank or trust company, or may be made registrable as to
principal or as to principal and interest under the terms and
conditions
specified in the authorizing resolution or by the
county
treasurer when awarding the notes.
(15)
A county treasurer elected or appointed to office after
October 1, 1999 is not eligible for the payment under subsection
(3)
for services as agent for the county unless that county
treasurer held office on October 1, 1999 and has not vacated that
office after October 1, 1999.
(16) Notwithstanding the home rule city act, 1909 PA 279, MCL
117.1 to 117.38, the charter township act, 1947 PA 359, MCL 42.1 to
42.34, or 1966 PA 293, MCL 45.501 to 45.521, a city, township, or
county operating under a home rule charter shall not be restricted
by the provisions of the home rule charter in connection with the
powers
granted to the county to issue notes by sections
87b and
87d and this section. The treasurer of a county or local tax
collecting unit described in this subsection, notwithstanding any
charter provisions to the contrary, shall have all of the powers
granted
to county treasurers by sections 87b and 87d and this
section.
(17) Notwithstanding the provisions of 1947 PA 261, MCL 45.451
to 45.457, the provisions of this section shall control the
entitlement of the county treasurer to the fee provided for in this
section.
(18) If the treasurer authorizes on the order authorizing the
notes, any notes issued may be secured in whole or in part under a
trust or escrow agreement. That agreement may authorize the trustee
or escrow agent to make investments of any type authorized in the
agreement.
(19) Notes issued under this act are exempt from the revised
municipal finance act, 2001 PA 34, MCL 141.2101 to 141.2821.
Sec.
87d. (1) Notwithstanding section 87c(10), a county which
or local tax collecting unit that determines to borrow pursuant to
section 87c may submit to its voters the question of issuing
revolving fund notes at any general or special election, which
question shall provide for the establishment of the revolving fund
for not to exceed 10 years and shall be in substantially the
following form:
"Shall
the county ______________ (city, township, or county)
of __________ establish or continue for __________ years a
delinquent tax revolving fund and, in connection with that fund,
borrow an amount not to exceed the delinquent taxes pledged for
repayment of the borrowing or borrowings, as may be made each year,
and
issue its general obligation unlimited tax notes, pledging the
county's
its full faith and credit for the purpose of providing
money for the delinquent tax revolving fund?"
(2) If a majority of the electors voting on the question vote
in favor of the question, the county or the local tax collecting
unit may proceed to issue the notes as provided for in this act,
which notes may be designated general obligation unlimited tax
notes.
(3) If a majority of the electors voting on the question vote
against the question, or if the question is not submitted, the
county or the local tax collecting unit may also issue the notes
but only in accordance with subsection (6).
(4) In addition, this section shall validate a question
submitted to the electors before the effective date of this section
in which the electors were asked to approve the issuance of general
obligation tax notes secured by delinquent taxes, regardless of how
the question may have been phrased. The defeat of the question
shall require that the notes be issued as nonvoted until a future
question is approved by the electors.
(5) A
county may submit to its electors the The question
authorized by this section shall only be submitted once each
calendar year.
(6) If nonvoted notes are issued pursuant to section 87c:
(a) The resolution authorizing the borrowing and issuance of
the notes shall establish the pledged delinquent taxes, the
interest thereon, and any amounts received in the future from
taxing
units in the county because of the
uncollectibility of any
delinquent taxes as funds pledged to note repayment, which amounts
shall be placed in a segregated fund and used for no other purpose
except to repay the notes and the interest thereon. The resolution
shall provide that the expenses of borrowing shall be repaid from
the
county any property tax administration fees on the pledged
delinquent
taxes and the balance of the county any property tax
administration fees may be added to the funds pledged to note
repayment, if the resolution provides.
(b) The notes shall be designated general obligation limited
tax notes.
(c) The resolution may establish a special fund to secure the
notes referred to as a note reserve fund and shall pay into the
note reserve fund any proceeds of sale of the notes to the extent
provided in the resolution authorizing issuance of the notes. All
money in the note reserve fund, except as hereafter provided, shall
be added to the funds pledged to note repayment and shall be used
solely for payment of principal and interest on the notes for which
the fund was established, or the purchase of notes for which the
fund was established. Money in the note reserve fund shall first be
withdrawn for payment of principal and interest on notes before
other county
general funds are used to make the payments. All
income or interest earned by, or increment to, the note reserve
fund due to its investment or reinvestment shall be deposited in
the delinquent tax revolving fund, when the notes for which the
fund was established are retired. The resolution shall provide that
when the note reserve fund is sufficient to retire the notes and
accrued interest thereon, it may be so used.
(d)
A resolution which that
establishes a note reserve fund
may provide for an additional borrowing of an amount not to exceed
the amount of the reserve, and the county or the local tax
collecting unit shall have the power to borrow that additional
amount.
(e) The notes shall be the full faith and credit obligations
of the county or the local tax collecting unit issuing them. If the
proceeds
of the taxes and interest and, when pledged, county any
property tax administration fees, or note reserve fund are not
sufficient to pay the principal and interest, when due, the county
or the local tax collecting unit shall pay the same from its
general
funds or any additional tax which that
may be levied
within its constitutional and statutory debt limits, and the county
or the local tax collecting unit may thereafter reimburse itself
from
delinquent taxes collected. The county's obligation to pay
from its
the county or the local tax
collecting unit general
funds shall be its first budget obligation and shall be provided
for in the borrowing resolution in the following language:
"This note issue, in addition, shall be a general obligation
of
the county ___________
(city, township, or county) of
__________, secured by its full faith and credit, which shall
include
this county's limited
tax obligation, within applicable
constitutional and statutory limits, and its general funds. The
county
budget shall provide that if the pledged delinquent
taxes
and any other pledged amounts are not collected in sufficient
amounts to meet the payments of principal and interest due on these
notes,
the county ____________
(city, township, or county),
before paying any other budgeted amounts, will promptly advance
from its general funds sufficient money to pay that principal and
interest."
(7) If coupon notes are issued, pursuant to section 87c or
this section:
(a) Interest shall be payable semiannually or annually.
(b) The coupons shall specify the source from which the notes
shall be payable, which may be by reference to the note itself.
(c) The coupons shall contain the facsimile signature of the
county
treasurer.