SB-0725, As Passed Senate, December 14, 2011

HOUSE SUBSTITUTE FOR

SENATE BILL NO. 725

     A bill to amend 1893 PA 206, entitled

"The general property tax act,"

by amending sections 7dd and 34c (MCL 211.7dd and 211.34c), section

7dd as amended by 2010 PA 17 and section 34c as amended by 2006 PA

646.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 7dd. As used in sections 7cc and 7ee:

     (a) "Owner" means any of the following:

     (i) A person who owns property or who is purchasing property

under a land contract.

     (ii) A person who is a partial owner of property.

     (iii) A person who owns property as a result of being a

beneficiary of a will or trust or as a result of intestate

succession.

     (iv) A person who owns or is purchasing a dwelling on leased

land.

     (v) A person holding a life lease in property previously sold

or transferred to another.

     (vi) A grantor who has placed the property in a revocable trust

or a qualified personal residence trust.

     (vii) The sole present beneficiary of a trust if the trust

purchased or acquired the property as a principal residence for the

sole present beneficiary of the trust, and the sole present

beneficiary of the trust is totally and permanently disabled. As

used in this subparagraph, "totally and permanently disabled" means

disability as defined in section 216 of title II of the social

security act, 42 USC 416, without regard as to whether the sole

present beneficiary of the trust has reached the age of retirement.

     (viii) A cooperative housing corporation.

     (ix) A facility registered under the living care disclosure

act, 1976 PA 440, MCL 554.801 to 554.844.

     (b) "Person", for purposes of defining owner as used in

section 7cc, means an individual and for purposes of defining owner

as used in section 7ee means an individual, partnership,

corporation, limited liability company, association, or other legal

entity.

     (c) "Principal residence" means the 1 place where an owner of

the property has his or her true, fixed, and permanent home to

which, whenever absent, he or she intends to return and that shall

continue as a principal residence until another principal residence

is established. Except as otherwise provided in this subdivision,

principal residence includes only that portion of a dwelling or

unit in a multiple-unit dwelling that is subject to ad valorem

taxes and that is owned and occupied by an owner of the dwelling or

unit. Principal residence also includes all of an owner's

unoccupied property classified as residential that is adjoining or

contiguous to the dwelling subject to ad valorem taxes and that is

owned and occupied by the owner. Beginning December 31, 2007,

principal residence also includes all of an owner's unoccupied

property classified as timber-cutover real property under section

34c that is adjoining or contiguous to the dwelling subject to ad

valorem taxes and that is owned and occupied by the owner.

Contiguity is not broken by a road, a right-of-way, or property

purchased or taken under condemnation proceedings by a public

utility for power transmission lines if the 2 parcels separated by

the purchased or condemned property were a single parcel prior to

the sale or condemnation. Except as otherwise provided in this

subdivision, principal residence also includes any portion of a

dwelling or unit of an owner that is rented or leased to another

person as a residence as long as that portion of the dwelling or

unit that is rented or leased is less than 50% of the total square

footage of living space in that dwelling or unit. Principal

residence also includes a life care facility registered under the

living care disclosure act, 1976 PA 440, MCL 554.801 to 554.844.

Principal residence also includes property owned by a cooperative

housing corporation and occupied by tenant stockholders. Property

that qualified as a principal residence shall continue to qualify

as a principal residence for 3 years after all or any portion of

the dwelling or unit included in or constituting the principal

residence is rented or leased to another person as a residence if

all of the following conditions are satisfied:

     (i) The owner of the dwelling or unit is absent while on active

duty in the armed forces of the United States.

     (ii) The dwelling or unit would otherwise qualify as the

owner's principal residence.

     (iii) Except as otherwise provided in this subparagraph, the

owner files an affidavit with the assessor of the local tax

collecting unit on or before May 1 attesting that it is his or her

intent to occupy the dwelling or unit as a principal residence upon

completion of active duty in the armed forces of the United States.

In 2008 only, the owner may file an affidavit under this

subparagraph on or before December 31. A copy of an affidavit filed

under this subparagraph shall be forwarded to the department of

treasury pursuant to a schedule prescribed by the department of

treasury.

     (d) "Qualified agricultural property" means unoccupied

property and related buildings classified as agricultural, or other

unoccupied property and related buildings located on that property

devoted primarily to agricultural use as defined in section 36101

of the natural resources and environmental protection act, 1994 PA

451, MCL 324.36101. Related buildings include a residence occupied

by a person employed in or actively involved in the agricultural

use and who has not claimed a principal residence exemption on

other property. For taxes levied after December 31, 2008, property

shall not lose its status as qualified agricultural property as a

result of an owner or lessee of that property implementing a

wildlife risk mitigation action plan. Notwithstanding any other

provision of this act to the contrary, if after December 31, 2008

the classification of property was changed as a result of the

implementation of a wildlife risk mitigation action plan, the owner

of that property may appeal that change in classification to the

board of review under section 30 in the year in which the

amendatory act that added this sentence takes effect or in the 3

immediately succeeding years. Within 30 days of the effective date

of the amendatory act that added the immediately preceding

sentence, the department of treasury shall update its publication

entitled "Qualified Agricultural Property Exemption Guidelines" and

shall post that updated publication on the department of treasury

website. Property used for commercial storage, commercial

processing, commercial distribution, commercial marketing, or

commercial shipping operations or other commercial or industrial

purposes is not qualified agricultural property. A parcel of

property is devoted primarily to agricultural use only if more than

50% of the parcel's acreage is devoted to agricultural use. An

owner shall not receive an exemption for that portion of the total

state equalized valuation of the property that is used for a

commercial or industrial purpose or that is a residence that is not

a related building. As used in this subdivision:

     (i) "Project" means certain risk mitigating measures, which may

include, but are not limited to, the following:

     (A) Making it difficult for wildlife to access feed by storing

livestock feed securely, restricting wildlife access to feeding and

watering areas, and deterring or reducing wildlife presence around

livestock feed by storing feed in an enclosed barn, wrapping bales

or covering stacks with tarps, closing ends of bags, storing grains

in animal-proof containers or bins, maintaining fences, practicing

small mammal and rodent control, or feeding away from wildlife

cover.

     (B) Minimizing wildlife access to livestock feed and water by

feeding livestock in an enclosed area, feeding in open areas near

buildings and human activity, removing extra or waste feed when

livestock are moved, using hay feeders to reduce waste, using

artificial water systems to help keep livestock from sharing water

sources with wildlife, fencing off stagnant ponds, wetlands, or

areas of wildlife habitats that pose a disease risk, and keeping

mineral feeders near buildings and human activity or using devices

that restrict wildlife usage.

     (ii) "Wildlife risk mitigation action plan" means a written

plan consisting of 1 or more projects to help reduce the risks of a

communicable disease spreading between wildlife and livestock that

is approved by the department of agriculture under the animal

industry act, 1988 PA 466, MCL 287.701 to 287.745.

     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. Property shall not lose its classification as

agricultural real property as a result of an owner or lessee of

that property implementing a wildlife risk mitigation action plan.

As used in this subdivision:, "agricultural

     (i) "Agricultural operations" means the following:

(A) (i) Farming in all its branches, including cultivating

soil.

(B) (ii) Growing and harvesting any agricultural,

horticultural, or floricultural commodity.

(C) (iii) Dairying.

(D) (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.

(E) (v) Raising, breeding, training, leasing, or boarding

horses.

(F) (vi) Turf and tree farming.

(G) (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.

     (ii) "Project" means certain risk mitigating measures, which

may include, but are not limited to, the following:

     (A) Making it difficult for wildlife to access feed by storing

livestock feed securely, restricting wildlife access to feeding and

watering areas, and deterring or reducing wildlife presence around

livestock feed by storing feed in an enclosed barn, wrapping bales

or covering stacks with tarps, closing ends of bags, storing grains

in animal-proof containers or bins, maintaining fences, practicing

small mammal and rodent control, or feeding away from wildlife

cover.

     (B) Minimizing wildlife access to livestock feed and water by

feeding livestock in an enclosed area, feeding in open areas near

buildings and human activity, removing extra or waste feed when

livestock are moved, using hay feeders to reduce waste, using

artificial water systems to help keep livestock from sharing water

sources with wildlife, fencing off stagnant ponds, wetlands, or

areas of wildlife habitats that pose a disease risk, and keeping

mineral feeders near buildings and human activity or using devices

that restrict wildlife usage.

     (iii) "Wildlife risk mitigation action plan" means a written

plan consisting of 1 or more projects to help reduce the risks of a

communicable disease spreading between wildlife and livestock that

is approved by the department of agriculture and rural development

under the animal industry act, 1988 PA 466, MCL 287.701 to 287.745.

     (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.

     (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 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.