June 20, 2007, Introduced by Reps. Calley, Rick Jones and Marleau and referred to the Committee on Tax Policy.
A bill to amend 1976 PA 225, entitled
"An act to defer the collection of special assessments on homestead
properties; to provide for conditions of eligibility for such a
deferment; to prescribe the powers and duties of the department of
treasury, local assessing officers, and local collecting officers;
to provide for the advancement of moneys by the state to indemnify
special assessment districts for losses from deferment of
collections; to provide for the advancement of money by the state
to an owner for the repayment of loans used by the owner to pay
special assessments; to provide for the collection of deferred
special assessments and interest thereon, and the disposition of
these collections; to make an appropriation; and to prescribe
penalties,"
by amending the title and sections 1, 2, 3, 4, 5, 6, 7, 8, 8a, 9,
and 10 (MCL 211.761, 211.762, 211.763, 211.764, 211.765, 211.766,
211.767, 211.768, 211.768a, 211.769, and 211.770), the title and
sections 2, 3, 4, and 10 as amended by 1980 PA 403 and section 8a
as amended by 1981 PA 59, and by adding section 4a.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
TITLE
An act to defer the collection of special assessments and
property taxes on homestead properties; to provide for conditions
of eligibility for such a deferment; to prescribe the powers and
duties of the department of treasury, local assessing officers, and
local
collecting officers; to provide for the advancement of moneys
money by the state to indemnify special assessment districts and
local tax collecting units for losses from deferment of
collections; to provide for the advancement of money by the state
to an owner for the repayment of loans used by the owner to pay
special assessments and property taxes; to provide for the
collection of deferred special assessments and property taxes and
interest thereon, and the disposition of these collections; to make
an appropriation; and to prescribe penalties.
Sec. 1. As used in this act:
(a) "Department" means the department of treasury.
(b)
"Totally and permanently disabled" means a person as
defined
described in 42 U.S.C. section 416 section 416(i) of the
social security act, 42 USC 416.
(c) "Homestead" means a dwelling or a unit in a multiple-unit
dwelling,
owned and occupied as a home by the an owner, thereof,
including all contiguous unoccupied real property owned by the
person
owner. Homestead includes a dwelling and an outbuilding used
in
connection with a dwelling, situated on the lands property
of
another.
(d) "Owner" includes a person eligible for the exemption
specified in this act, who is purchasing a homestead under a
mortgage
or land contract, or who owns a dwelling situated on the
leased lands of another, or who is a tenant-stockholder of a
cooperative housing corporation.
(e) "Special assessment" means an assessment against real
property calculated on a benefit or ad valorem basis for curb and
gutter, sidewalk, sewer, water, or street paving; a drain; a
connection fee or similar charge for a sewer or water system; or
the land contract on a parcel of property acquired under the
circumstances
set forth in section 3(2) 3(3). Special assessment
does not include charges for current service.
Sec.
2. (1) The payment of special assessments assessed and
property taxes levied and due and payable on a homestead in any
year in which the owner meets all of the terms and conditions of
this act shall be deferred until 1 year after the owner's death,
subject to further order by the probate court or until the
homestead or any part of the homestead is conveyed or transferred
to another or a contract to sell the homestead is entered into. The
death
of a spouse shall does not terminate the deferment of special
assessments or property taxes for a homestead owned by husband and
wife under tenancy by the entireties as long as the surviving
spouse does not remarry. Special assessments and property taxes
deferred under this act may be paid in full at any time.
(2) If the collecting officer or the department determines
that legal or equitable title to a homestead or any part of a
homestead for which special assessments or property taxes are
deferred under this act is conveyed or transferred or a contract to
sell the homestead or part of a homestead is entered into, and the
deferment
is not terminated, the owner or owner's estate shall be
is subject to an interest rate of 1% per month or fraction of a
month, on the amount deferred, computed from the date of
conveyance, transfer, or contractual agreement. The amount of
interest shall be payable to the collecting officer and transmitted
by that office pursuant to section 9.
(3) The department shall notify each owner whose special
assessments or property taxes are authorized to be deferred under
this act that if legal or equitable title to the homestead or any
part of the homestead is conveyed or transferred or a contract to
sell the homestead or part of the homestead is entered into, the
deferment is terminated and the amount deferred is immediately due
and payable, plus interest as provided in subsection (2).
Sec. 3. (1) An owner of a homestead who is 65 years of age or
older, or
who is totally and permanently disabled, who claims a
dependency exemption under section 30(2) of the income tax act of
1967, 1967 PA 281, MCL 206.30, for a child who is less than 18
years old, or who is an adult in need of protective services as
defined in section 11 of the social welfare act, 1939 PA 280, MCL
400.11, and who is a citizen of the United States, a resident of
this state for 5 or more years, and the sole owner of the homestead
for
5 3 or more years is eligible for the deferment of
special
assessments and property taxes levied on that homestead pursuant to
this act. The owner and the owner's spouse shall not have received
during the last calendar year household income as defined in
section
508 of Act No. 281 of the Public Acts of 1967, as amended,
being
section 206.508 of the Michigan Compiled Laws, the income tax
act
of 1967, 1967 PA 281, MCL 206.508, in
excess of $8,000.00; this
amount
shall be increased to $10,000.00. for
the determination of
eligibility
for a deferment after December 31, 1982. The gross
amount
of the a special assessment deferred under this act,
exclusive of interest, shall not be less than $300.00.
(2) The maximum dollar amount of household income required by
subsection (1) to be eligible for the deferment of special
assessments or property taxes under this act shall be adjusted each
year, beginning on January 1, 1984, pursuant to the annual average
percentage increase or decrease in the Detroit consumer price index
--all
items as defined and reported by
the United States department
of
labor, bureau of labor statistics. The adjustment shall be made
by
multiplying the annual average percentage increase or decrease
in
the Detroit consumer price index for the prior calendar year by
the
current maximum dollar amount of the household income
requirement
as adjusted by this subsection. The resultant product
shall
be added to the maximum dollar amount of the household income
requirement
as adjusted by this subsection and then rounded off to
the
nearest whole number, which shall be the new household income
requirement
for the current year.
(3)
After January 1, 1975, a A person 65 years of age or older
who
otherwise qualifies under this section for deferral of special
assessments or property taxes who fails failed to pay a prior
delinquent special assessment or property tax assessment and
thereby
lost the property his or her homestead to the local unit of
government
who purchased the property through tax forfeiture,
foreclosure, and sale may reacquire the property from the local
unit
of government through a land contract. The A land
contract for
a
parcel of property homestead reacquired under the circumstances
set
forth in this subsection shall be
treated as a special
assessment for purposes of this act.
(4)
The owner of a homestead who is 65 years of age or older
or
is totally and permanently disabled, a citizen of the United
States,
a resident of this state for 5 or more years, and the sole
owner
of the homestead for 5 or more years, in the year the special
assessment
was levied, and A person who
qualifies under this
section for deferral of special assessments or property taxes who
has borrowed money from a lending institution to pay a special
assessment or property taxes before the effective date of this
subsection,
shall be January 8, 1981 is eligible to receive money
from the special revolving fund created in section 10, to be used
for
the purpose of repaying to
repay the lending institution the
principal amount used by the person to pay the special assessment
or property taxes. The department shall cause a lien on the
homestead in favor of the state to be recorded with the appropriate
register of deeds, indicating the amount of the money paid and
identifying the homestead. Money paid from the fund under this
subsection shall be treated as if the money had been paid as
deferred property taxes or special assessment.
Sec. 4. An owner may apply to the local assessing officer for
deferment of the payment of special assessments on the owner's
homestead. An owner may apply to the department for deferment of
the payment of property taxes levied on the owner's homestead. The
application shall be made upon an affidavit form to be furnished
and made available by the department at convenient locations
throughout the state. The affidavit form shall contain the
following
statement in 10-point boldface boldfaced type located
immediately above the affiant's signature: "If this deferment is
authorized the state will place a lien on your property." The
affidavit shall contain a statement that the owner applying for the
deferment of special assessments or property taxes under this act
has received or has applied for all credits available to that owner
under sections 520 and 522 of the income tax act of 1967, 1967 PA
281, MCL 206.520 and 206.522. A person making a false affidavit for
the purpose of obtaining deferment of special assessments or
property taxes under this act is guilty of perjury. If the
homestead is owned jointly by husband and wife, each spouse shall
sign and file the affidavit. If the homestead is encumbered by a
mortgage or an unpaid balance on a land contract, a deferment of
special assessments or property taxes shall not be made without the
written consent of the mortgagee or the land contract vendor, which
shall be filed with the affidavit. The affidavit shall be filed
with the local assessing officer for the deferment of special
assessments and with the department for the deferment of property
taxes at least 30 days after before
the due date of a special
assessment or installment of a special assessment or property tax
bill for which deferment is requested.
Sec. 4a. The application provided for in section 4 shall
contain both of the following:
(a) A statement that the owner applying for the deferment has
property and casualty insurance on that owner's homestead in an
amount not less than the amount of all special assessments and
property taxes deferred.
(b) An assignment to the state of the owner's interest in the
property and casualty insurance on that owner's homestead in an
amount equal to the total amount of all special assessments and
property taxes deferred.
Sec. 5. (1) Upon receipt of the affidavit, the local assessing
officer for the deferment of a special assessment and the
department for the deferment of property taxes shall promptly
examine it to determine if the applicant meets the requirements of
this act and shall make an inspection of the property and property
records
and conduct an investigation and survey as it deems
necessary. An applicant shall not be compelled to supply
information not reasonably essential to a proper determination of
the eligibility of the owner and the homestead for the relief
provided under this act. The local assessing officer for the
deferment of a special assessment and the department for the
deferment
of property taxes shall promptly make its
a decision with
respect to an application under this section and shall notify the
applicant
of its that decision not later than the due date for a
special assessment or for the property taxes involved in the
application.
A decision of the local assessing officer shall be is
final
except as otherwise provided pursuant to under the state
constitution of 1963.
(2) The department shall annually do all of the following for
the deferment of property taxes under this act:
(a) Determine that the person on whose behalf property taxes
are deferred is eligible for the deferral of property taxes under
section 3.
(b) Secure an assignment to this state of any credit allowed
under sections 520 or 522 of the income tax act of 1967, 1967 PA
281, MCL 206.520 and 206.522, payable to the person on whose behalf
the property taxes are deferred during the period in which property
taxes are deferred on that person's homestead, which credit shall
be applied to any lien imposed on that homestead under this act.
(c) Determine that the person on whose behalf property taxes
are deferred has property and casualty insurance on his or her
homestead in an amount not less than the amount of all special
assessments and property taxes deferred and that the person on
whose behalf property taxes are deferred has assigned to the state
his or her interest in that property and casualty insurance in an
amount equal to the total amount of all special assessments and
property taxes deferred.
Sec. 6. The department shall pay the entire balance owing,
including delinquent amounts, of the special assessment or property
tax of an applicant who qualifies under this act. The department
shall transmit to the collecting officer the sum of money required
to indemnify the local special assessment district or local tax
collecting unit for a revenue loss resulting from the deferment of
the special assessment or property tax. At the same time, the
department
shall cause the recording of record a lien in favor of
the state with the register of deeds of the county in which the
homestead is located and notify the county treasurer of the county
in which the homestead is located of the special assessment or
property taxes deferred, indicating the amount deferred for
property taxes and for each special assessment and identifying the
homestead.
The If payment is made as
required by this section, the
county treasurer shall keep a record of the notice and shall
require that the homestead be included in the subsequent return of
delinquent taxes by each collecting officer, that the property is
identified on the delinquent roll as provided in this act, and that
the amount of special assessment or property taxes shown on the
roll as due and unpaid are the same as the amount approved by the
department for deferment. The sum received by the collecting
officer
from the department shall be distributed to the several
special
assessment districts in direct proportion to their
respective
shares of the total of special assessments deferred in
the same manner that distribution would be made had the same amount
been received from the payment of the special assessments or
property
taxes. The If payment is made as required by this
section,
the collecting officer shall enter on the current tax roll opposite
each homestead for which deferment is allowed a notation that
payment is deferred pursuant to this act.
Sec.
7. The treasurer of any a city, township, or village,
required
by Act No. 206 of the Public Acts of 1893, as amended,
being
sections 211.1 to 211.157 of the Michigan Compiled Laws the
general property tax act, 1893 PA 206, MCL 211.1 to 211.157, to
make a return of delinquent taxes to the county treasurer, shall
include in the delinquent tax roll all homesteads for which
deferment
of special assessments are or
property taxes is approved,
and
shall enter on the delinquent tax roll opposite each such item
special assessment or property tax levy a notation that payment is
deferred
pursuant to under this act. In a city collecting its own
delinquent
taxes, the treasurer similarly shall note on the city
tax
record of each such property
for which special assessments or
property
taxes are deferred that payment is
deferred pursuant to
under this act. The collection of special assessments or property
taxes deferred for all such homesteads under this act shall be made
thereafter
only in accordance with this act,
any law, ordinance, or
charter to the contrary notwithstanding.
Sec. 8. Upon termination of the deferment of special
assessments or property taxes under this act, the collection
procedures
of Act No. 206 of the Public Acts of 1893, as amended
the general property tax act, 1893 PA 206, MCL 211.1 to 211.157,
and any provisions of any law, ordinance, or charter applicable to
the collection of delinquent taxes in a city collecting its own
delinquent
taxes, suspended by the terms of under this act during
the period of deferment, shall again apply to the deferred special
assessments
the same as they would have applied had no or property
taxes as if a deferment had not been authorized and all of the
special assessments or property taxes had been levied initially in
the
third year preceding the calendar year in which the deferment
was terminated, except that the provisions of those laws,
ordinances, and charters with respect to collection fees, interest,
penalties, and other charges shall not be applicable to the
collection of, or foreclosure of the lien for special assessments
or
property taxes deferred. hereunder.
The lien for deferred
special assessments or property taxes shall be for the amount of
the special assessments or property taxes only and shall not have
any additional fee, penalty, or interest added except as provided
in this act.
Sec. 8a. (1) Except for an owner or owner's estate qualifying
for deferment of special assessments under this act before January
8, 1981, the payment of special assessments or property taxes
deferred under this act made by the owner or owner's estate shall
include interest computed for periods after January 8, 1981, at a
rate of 1/2 of 1% per month or fraction of a month.
(2) The department shall notify each owner whose special
assessments or property taxes are authorized to be deferred under
this act of the interest rate provided in this section.
(3) The lien created in section 6 for special assessments or
property
taxes deferred under this act shall
include an amount of
interest as provided in this section.
(4) The department of treasury shall refund to each owner who,
before
the effective date of this subsection January 8, 1981, paid
their special assessment or property taxes and was subject to the
interest payment of subsection (1), an amount equal to the
difference
between the interest paid and the interest which that
would have been due at a rate of 1/2 of 1% per month or fraction of
a month.
(5) If a deferment of a special assessment was terminated by
an owner solely by payment of the deferred special assessment after
January
8, 1981, and before the effective date of this subsection
June 4, 1981, the owner may reapply within 60 days of the effective
date of this subsection to the local assessing officer for
reinstitution of the previously deferred special assessment and the
department of treasury shall refund the amount of the special
assessment paid and redeferred to the owner.
Sec. 9. Upon receipt of payment of special assessments or
property taxes deferred under this act, the collecting officer
shall
forthwith transmit the amount received to the department as
reimbursement
for the sums theretofore advanced , to indemnify the
local special assessment districts or local tax collecting unit.
Sec. 10. (1) There is created a special revolving fund within
the department to pay special assessments and property taxes under
this act and the sum of $3,000,000.00 of the principal of the
Michigan veterans' trust fund shall be used for this investment
purpose.
(2)
An amount which that is paid by the department to a local
assessment district or local tax collecting unit for a deferred
special assessment or deferred property taxes shall be paid from
the special revolving fund created in subsection (1).
(3) From the amounts received by the department as payment for
deferred special assessments or property taxes under this act, the
department shall credit, on a quarterly basis, 1/2 of the total
amount received to the special revolving fund created in this
section, and shall transmit the remainder of this quarterly payment
to the Michigan veterans' trust fund until the initial
$3,000,000.00 set forth in subsection (1) is repaid to the Michigan
veterans' trust fund.
(4) After the initial $3,000,000.00 set forth in subsection
(1) is repaid to the Michigan veterans' trust fund, the department
shall credit, on a quarterly basis, the total amount received to
the special revolving fund created in this section.
(5) (4)
Interest received pursuant to section 8a, and civil
penalties received pursuant to section 2, shall be credited in full
to the special revolving fund created in this section.
(6) (5)
Amounts required to be transmitted to the Michigan
veterans' trust fund under subsection (3) shall be reduced by the
amount
of principal and earnings which was returned to the Michigan
veterans'
trust fund before the effective date of this subsection
January 8, 1981.