March 17, 2010, Introduced by Senator GILBERT and referred to the Committee on Finance.
A bill to amend 1893 PA 206, entitled
"The general property tax act,"
by amending sections 8 and 34c (MCL 211.8 and 211.34c), section 8
as amended by 2006 PA 633 and section 34c as amended by 2006 PA
646.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 8. For the purposes of taxation, personal property
includes all of the following:
(a) All goods, chattels, and effects within this state.
(b) All goods, chattels, and effects belonging to inhabitants
of this state, located without this state, except that property
actually and permanently invested in business in another state
shall not be included.
(c) All interests owned by individuals in real property, the
fee title to which is in this state or the United States, except as
otherwise provided in this act.
(d) For taxes levied before January 1, 2003, buildings and
improvements located upon leased real property, except if the value
of the real property is also assessed to the lessee or owner of
those buildings and improvements. For taxes levied after December
31, 2002, buildings and improvements located upon leased real
property, except buildings and improvements exempt under section 9f
or improvements assessable under subdivision (h), shall be assessed
as real property under section 2 to the owner of the buildings or
improvements in the local tax collecting unit in which the
buildings or improvements are located if the value of the buildings
or improvements is not otherwise included in the assessment of the
real property. For taxes levied after December 31, 2001, buildings
and improvements exempt under section 9f or improvements assessable
under subdivision (h) and located on leased real property shall be
assessed as personal property.
(e) Tombs or vaults built within any burial grounds and kept
for hire or rent, in whole or in part, and the stock of a
corporation or association owning the tombs, vaults, or burial
grounds.
(f) All other personal property not enumerated in this section
and not especially exempted by law.
(g) The personal property of gas and coke companies, natural
gas companies, electric light companies, waterworks companies,
hydraulic companies, and pipe line companies transporting oil or
gas as public or common carriers, to be assessed in the local tax
collecting unit in which the personal property is located. The
mains, pipes, supports, and wires of these companies, including the
supports and wire or other line used for communication purposes in
the operation of those facilities, and the rights of way and the
easements or other interests in real property by virtue of which
the mains, pipes, supports, and wires are erected and maintained,
shall be assessed as personal property in the local tax collecting
unit where laid, placed, or located. Interests in underground rock
strata used for gas storage purposes, whether by lease or ownership
separate from the surface of real property, shall be separately
valued and assessed as personal property in the local tax
collecting unit in which it is located to the person who holds the
interest. Interests in underground rock strata shall be reported as
personal property to the appropriate assessing officer for all
property descriptions included in the storage field in the local
tax collecting unit and a separate valuation shall be assessed for
each school district. The personal property of street railroad,
plank road, cable or electric railroad or transportation companies,
bridge companies, and all other companies not required to pay a
specific tax to this state in lieu of all other taxes, shall,
except as otherwise provided in this section, be assessed in the
local tax collecting unit in which the property is located, used,
or laid, and the track, road, or bridge of a company is considered
personal property. None of the property assessable as personal
property under this subdivision shall be affected by any assessment
or tax levied on the real property through or over which the
personal property is laid, placed, or located, nor shall any right
of way, easement, or other interest in real property, assessable as
personal property under this subdivision, be extinguished or
otherwise affected in case the real property subject to assessment
is sold in the exercise of the taxing power.
(h) During the tenancy of a lessee, leasehold improvements and
structures installed and constructed on real property by the
lessee, provided and to the extent the improvements or structures
add to the true cash taxable value of the real property
notwithstanding that the real property is encumbered by a lease
agreement, and the value added by the improvements or structures is
not otherwise included in the assessment of the real property or
not otherwise assessable under subdivision (j). The cost of
leasehold improvements and structures on real property shall not be
the sole indicator of value. Leasehold improvements and structures
assessed under this subdivision shall be assessed to the lessee.
(i) A leasehold estate received by a sublessor from which the
sublessor receives net rentals in excess of net rentals required to
be paid by the sublessor except to the extent that the excess
rentals are attributable to the installation and construction of
improvements and structures assessed under subdivision (h) or (j)
or included in the assessment of the real property. For purposes of
this act, a leasehold estate is considered to be owned by the
lessee receiving additional net rentals. A lessee in possession is
required to provide the assessor with the name and address of its
lessor. Taxes collected under this act on leasehold estates shall
become a lien against the rentals paid by the sublessee to the
sublessor.
(j) To the extent not assessed as real property, a leasehold
estate of a lessee created by the difference between the income
that would be received by the lessor from the lessee on the basis
of the present economic income of the property as defined and
allowed by section 27(4), minus the actual value to the lessor
under the lease. This subdivision does not apply to property if
subject to a lease entered into before January 1, 1984 for which
the terms of the lease governing the rental rate or the tax
liability have not been renegotiated after December 31, 1983. This
subdivision does not apply to a nonprofit housing cooperative. As
used in this subdivision, "nonprofit cooperative housing
corporation" means a nonprofit cooperative housing corporation that
is engaged in providing housing services to its stockholders and
members and that does not pay dividends or interest upon stock or
membership investment but that does distribute all earnings to its
stockholders or members.
(k) For taxes levied after December 31, 2002, a trade fixture.
(l) For taxes levied after December 31, 2005, a wind energy
system.
As used in this subdivision, "wind energy system" means
an
integrated
unit consisting of a wind turbine composed of a rotor,
an
electrical generator, a control system, an inverter or other
power
conditioning unit, and a tower, which uses moving air to
produce
power. includes the following
when used primarily in
connection with collecting, converting, using, transferring, or
storing for future use wind energy for generating electricity:
(i) Wind energy conversion devices, including, but not limited
to, turbines, rotors, electrical generators, control systems,
inverters or other power conditioning units, blades, and towers.
(ii) Related improvements, including, but not limited to,
foundations, concrete pads, footings, support fixtures, anchors,
fences, temporary and permanent roads, signage, monuments, and
markers.
(iii) Electric storage systems and devices, transformers,
substation equipment, communication lines and facilities,
installation and maintenance equipment, and spare parts.
(iv) Weather monitoring equipment.
(v) Other related personal property.
(vi) Underground and overhead lines and towers until the point
at which they connect with the electricity grid.
Sec. 34c. (1) Not later than the first Monday in March in each
year, the assessor shall classify every item of assessable property
according to the definitions contained in this section. Following
the March board of review, the assessor shall tabulate the total
number of items and the valuations as approved by the board of
review for each classification and for the totals of real and
personal property in the local tax collecting unit. The assessor
shall transmit to the county equalization department and to the
state tax commission the tabulation of assessed valuations and
other statistical information the state tax commission considers
necessary to meet the requirements of this act and 1911 PA 44, MCL
209.1 to 209.8.
(2) The classifications of assessable real property are
described as follows:
(a) Agricultural real property includes parcels used partially
or wholly for agricultural operations, with or without buildings.
For taxes levied after December 31, 2002, agricultural real
property includes buildings on leased land used for agricultural
operations. As used in this subdivision, "agricultural operations"
means the following:
(i) Farming in all its branches, including cultivating soil.
(ii) Growing and harvesting any agricultural, horticultural, or
floricultural commodity.
(iii) Dairying.
(iv) Raising livestock, bees, fish, fur-bearing animals, or
poultry, including operating a game bird hunting preserve licensed
under part 417 of the natural resources and environmental
protection act, 1994 PA 451, MCL 324.41701 to 324.41712, and also
including farming operations that harvest cervidae on site where
not less than 60% of the cervidae were born as part of the farming
operation. As used in this subparagraph, "livestock" includes, but
is not limited to, cattle, sheep, new world camelids, goats, bison,
privately owned cervids, ratites, swine, equine, poultry,
aquaculture, and rabbits. Livestock does not include dogs and cats.
(v) Raising, breeding, training, leasing, or boarding horses.
(vi) Turf and tree farming.
(vii) Performing any practices on a farm incident to, or in
conjunction with, farming operations. A commercial storage,
processing, distribution, marketing, or shipping operation is not
part of agricultural operations.
(b) Commercial real property includes the following:
(i) Platted or unplatted parcels used for commercial purposes,
whether wholesale, retail, or service, with or without buildings.
(ii) Parcels used by fraternal societies.
(iii) Parcels used as golf courses, boat clubs, ski areas, or
apartment buildings with more than 4 units.
(iv) For taxes levied after December 31, 2002, buildings on
leased land used for commercial purposes.
(c) Developmental real property includes parcels containing
more than 5 acres without buildings, or more than 15 acres with a
market value in excess of its value in use. Developmental real
property may include farm land or open space land adjacent to a
population center, or farm land subject to several competing
valuation influences.
(d) Industrial real property includes the following:
(i) Platted or unplatted parcels used for manufacturing and
processing purposes, with or without buildings.
(ii) Parcels used for utilities sites for generating plants,
pumping stations, switches, substations, compressing stations,
warehouses, rights-of-way, flowage land, and storage areas.
(iii) Parcels used for removal or processing of gravel, stone,
or mineral ores, whether valued by the local assessor or by the
state geologist.
(iv) For taxes levied after December 31, 2002, buildings on
leased land used for industrial purposes.
(v) For taxes levied after December 31, 2002, buildings on
leased land for utility purposes.
(e) Residential real property includes the following:
(i) Platted or unplatted parcels, with or without buildings,
and condominium apartments located within or outside a village or
city, which are used for, or probably will be used for, residential
purposes.
(ii) Parcels that are used for, or probably will be used for,
recreational purposes, such as lake lots and hunting lands, located
in an area used predominantly for recreational purposes.
(iii) For taxes levied after December 31, 2002, a home, cottage,
or cabin on leased land, and a mobile home that would be assessable
as real property under section 2a except that the land on which it
is located is not assessable because the land is exempt.
(f) Timber-cutover real property includes parcels that are
stocked with forest products of merchantable type and size, cutover
forest land with little or no merchantable products, and marsh
lands or other barren land. However, when a typical purchase of
this type of land is for residential or recreational uses, the
classification shall be changed to residential.
(3) The classifications of assessable personal property are
described as follows:
(a) Agricultural personal property includes any agricultural
equipment and produce not exempt by law.
(b) Commercial personal property includes the following:
(i) All equipment, furniture, and fixtures on commercial
parcels, and inventories not exempt by law.
(ii) All outdoor advertising signs and billboards.
(iii) Well drilling rigs and other equipment attached to a
transporting vehicle but not designed for operation while the
vehicle is moving on the highway.
(iv) Unlicensed commercial vehicles or commercial vehicles
licensed as special mobile equipment or by temporary permits.
(c) Industrial personal property includes the following:
(i) All machinery and equipment, furniture and fixtures, and
dies on industrial parcels, and inventories not exempt by law.
(ii) Personal property of mining companies valued by the state
geologist.
(iii) A wind energy system as that term is defined in section 8,
notwithstanding the classification of the real property on which
the personal property is located.
(d) For taxes levied before January 1, 2003, residential
personal property includes a home, cottage, or cabin on leased
land, and a mobile home that would be assessable as real property
under section 2a except that the land on which it is located is not
assessable because the land is exempt.
(e) Utility personal property does not include wind energy
systems. Utility personal property includes the following:
(i) Electric transmission and distribution systems, substation
equipment, spare parts, gas distribution systems, and water
transmission and distribution systems.
(ii) Oil wells and allied equipment such as tanks, gathering
lines, field pump units, and buildings.
(iii) Inventories not exempt by law.
(iv) Gas wells with allied equipment and gathering lines.
(v) Oil or gas field equipment stored in the open or in
warehouses such as drilling rigs, motors, pipes, and parts.
(vi) Gas storage equipment.
(vii) Transmission lines of gas or oil transporting companies.
(4) For taxes levied before January 1, 2003, buildings on
leased land of any classification are improvements where the owner
of the improvement is not the owner of the land or fee, the value
of the land is not assessed to the owner of the building, and the
improvement has been assessed as personal property pursuant to
section 14(6).
(5) If the total usage of a parcel includes more than 1
classification, the assessor shall determine the classification
that most significantly influences the total valuation of the
parcel.
(6) An owner of any assessable property who disputes the
classification of that parcel shall notify the assessor and may
protest the assigned classification to the March board of review.
An owner or assessor may appeal the decision of the March board of
review by filing a petition with the state tax commission not later
than June 30 in that tax year. The state tax commission shall
arbitrate the petition based on the written petition and the
written recommendations of the assessor and the state tax
commission staff. An appeal may not be taken from the decision of
the state tax commission regarding classification complaint
petitions and the state tax commission's determination is final and
binding for the year of the petition.
(7) The department of treasury may appeal the classification
of any assessable property to the residential and small claims
division of the Michigan tax tribunal not later than December 31 in
the tax year for which the classification is appealed.
(8) This section shall not be construed to encourage the
assessment of property at other than the uniform percentage of true
cash value prescribed by this act.
(9) The assessor of each city or township in which is located
property that is subject to payment in lieu of taxes under subpart
14 of part 21 of the natural resources and environmental protection
act, 1994 PA 451, MCL 324.2152 to 324.2154, shall place that
property on an assessment roll that is separate from the assessment
roll prepared under section 24. For purposes of calculating the
debt limitation imposed by section 11 of article VII of the state
constitution of 1963, the separate assessment roll for property
that is subject to payment in lieu of taxes under subpart 14 of
part 21 of the natural resources and environmental protection act,
1994 PA 451, MCL 324.2152 to 324.2154, required by this subsection
shall be combined with the assessment roll prepared under section
24.