SB-0562, As Passed House, May 6, 2014

HOUSE SUBSTITUTE FOR

SENATE BILL NO. 562

A bill to amend 1893 PA 206, entitled

"The general property tax act,"

by amending section 87b (MCL 211.87b), as amended by 2014 PA 33.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 87b. (1) The county board of commissioners of any county

may create a delinquent tax revolving fund that, at the option of

the county treasurer, 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 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 ~~up to~~ 1% per month or

fraction of a month or a lower rate as established by resolution of

the board of commissioners 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. If the board of commissioners reduces

the interest rate on the recovery of uncollected delinquent taxes

as provided in this subsection, that decrease shall not apply to

any year's delinquent taxes when borrowing against that year's

delinquent taxes occurred before the board of commissioners adopted

a resolution to reduce the interest rate on the recovery of

uncollected delinquent taxes. Any amount that is due from a local

taxing unit or the state for a prior year's uncollected delinquent

tax is a lien against any future delinquent tax payments that may

be payable to a local taxing unit or the state and the lien shall

be satisfied by offsetting the amount due to the county from the

local taxing unit or the state when distributions from the

delinquent tax revolving fund are made by the county to the local

taxing unit or the state in a subsequent year. 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, without

further action by the county board of commissioners, 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 pursuant

to section 87c or 87d, including all services necessary to complete

this borrowing.

(3) The county treasurer shall pay from the fund any or all

delinquent taxes that are due and payable to the county 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

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 has been so notified in writing, the

county treasurer 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 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 by appropriate action of the county board of

commissioners.

(8) A county board of commissioners may borrow money to create

a delinquent tax revolving fund as provided in section 87c or 87d,

or both.