HB-4555, As Passed Senate, June 18, 2015

SENATE SUBSTITUTE FOR

HOUSE BILL NO. 4555

     A bill to amend 2014 PA 93, entitled

"Alternative state essential services assessment act,"

by amending sections 3, 5, and 7 (MCL 211.1073, 211.1075, and

211.1077).

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 3. As used in this act:

     (a) "Acquisition cost" means the fair market value of personal

property at the time of acquisition by the current first owner,

including the cost of freight, sales tax, and installation, and

other capitalized costs, except capitalized interest. There is a

rebuttable presumption that the acquisition price paid by the

current first owner for personal property, and any costs of

freight, sales tax, and installation, and other capitalized costs,

except capitalized interest, reflect the fair market value of the

personal property. acquisition cost. For personal property exempt

under section 9m or 9n of the general property tax act, 1893 PA

206, MCL 211.9m and 211.9n, that would otherwise be exempt under

section 7k of the general property tax act, 1893 PA 206, MCL

211.7k, under an industrial facilities exemption certificate issued

under 1974 PA 198, MCL 207.551 to 207.572, and effective before

January 1, 2013, and for personal property subject to an extended

industrial facilities exemption certificate under section 11a of

1974 PA 198, MCL 207.561a, that is exempt under an industrial

facilities exemption certificate issued under 1974 PA 198, MCL

207.551 to 207.572, and effective before January 1, 2013,

acquisition cost means 1/2 of the fair market value of that

personal property at the time of acquisition by the current first

owner, including the cost of freight, sales tax, and installation,

and other capitalized costs, except capitalized interest. The

acquisition cost for personal property exempt under the Michigan

renaissance zone act, 1996 PA 376, MCL 125.2681 to 125.2696, is

$0.00 except for the 3 years immediately preceding the expiration

of the exemption of that personal property under the Michigan

renaissance zone act, 1996 PA 376, MCL 125.2681 to 125.2696, during

which period of time the acquisition cost for that personal

property means the fair market value of that personal property at

the time of acquisition by the current first owner, including the

cost of freight, sales tax, and installation, and other capitalized

costs, except capitalized interest, multiplied by the percentage

reduction in the exemption as provided in section 9(3) of the

Michigan renaissance zone act, 1996 PA 376, MCL 125.2689. The state

tax commission may provide guidelines for circumstances in which

the actual acquisition price is not determinative of fair market

value acquisition cost and the basis of determining fair market

value acquisition cost in those circumstances. , including when

that property is idle, obsolete, or surplus.When the acquisition

cost, year of acquisition by the first owner, or both are unknown,

the state tax commission may provide guidelines for estimating the

acquisition cost and year of acquisition by the first owner. The

state tax commission may issue guidelines that allow for the

reduction of acquisition cost for property that is idle, is

obsolete or has material obsolescence, or is surplus.

     (b) "Assessment" means the alternative state essential

services assessment levied under section 5.

     (c) "Assessment year" means the year in which the alternative

state essential services assessment levied under section 5 is due.

     (d) "Eligible claimant" means a person that owns, leases, or

is in the possession of eligible personal property.

     (e) "Eligible personal property" means personal property

exempt from the tax levied under the state essential services

assessment act, 2014 PA 92, MCL 211.1051 to 211.1061, and

determined to be subject to the alternative state essential

services assessment as provided in section 9 of the state essential

services assessment act, 2014 PA 92, MCL 211.1059.

     Sec. 5. (1) Beginning January 1, 2016, the alternative state

essential services assessment is levied on all eligible personal

property as provided in this section.

     (2) The assessment under this section is a state tax on the

eligible personal property owned by, leased to, or in the

possession of an eligible claimant on December 31 of the year

immediately preceding the assessment year and shall be calculated

as follows:

     (a) For eligible personal property acquired by the eligible

claimant first owner in a year 1 to 5 years before the assessment

year, multiply the acquisition cost of the eligible personal

property by 50% of the mills levied under section 5(2)(a) of the

state essential services assessment act, 2014 PA 92, MCL 211.1055.

     (b) For eligible personal property acquired by the eligible

claimant first owner in a year 6 to 10 years before the assessment

year, multiply the acquisition cost of the eligible personal

property by 50% of the mills levied under section 5(2)(b) of the

state essential services assessment act, 2014 PA 92, MCL 211.1055.

     (c) For eligible personal property acquired by the eligible

claimant first owner in a year more than 10 years before the

assessment year, multiply the acquisition cost of the eligible

personal property by 50% of the mills levied under section 5(2)(c)

of the state essential services assessment act, 2014 PA 92, MCL

211.1055.

     Sec. 7. (1) The department of treasury shall collect and

administer the alternative state essential services assessment as

provided in this section.

     (2) Not later than May 1 in each assessment year, the

department of treasury shall make available in electronic form to

each eligible claimant a statement for calculation of the

assessment as provided in section 5.

     (3) Not later than September August 15 in each assessment

year, each eligible claimant shall submit electronically to the

department of treasury the completed statement, in a form and

manner prescribed by the department of treasury, and full payment

of the assessment levied under section 5 for that assessment year

as calculated in section 5(2). The department of treasury may waive

or delay the electronic filing requirement at its discretion. The

department of treasury may accept a timely filed statement using

reporting software approved by the department of treasury, subject

to audit under subsection (6). A statement submitted by an eligible

claimant shall include all of the eligible claimant's eligible

personal property located in this state subject to the assessment

levied under section 5. and, beginning in 2019, specify the

location of that property on December 31 of the year immediately

preceding the assessment year.The completed statement required

under this subsection shall not be subject to disclosure under the

freedom of information act, 1976 PA 442, MCL 15.231 to 15.246.

     (4) If an eligible claimant does not submit the statement and

full payment of the assessment levied under section 5 by September

August 15, the department of treasury shall issue a notice to the

eligible claimant not later than October September 15. The notice

shall include a statement explaining the consequences of nonpayment

as set forth in subsection (5) and instructing the eligible

claimant of its potential responsibility under subsection (5)(e).

An eligible claimant shall submit payment in full by November 1

October 15 of the assessment year along with a penalty of 1% per

week on the unpaid balance for each week payment is not made in

full up to a maximum of 5% of the total amount due and unpaid. For

the eligible claimant's first assessment year, the penalty shall be

waived if the eligible claimant submits the statement and full

payment of the assessment levied under section 5 within 7 business

days of by September 15. An eligible claimant may amend a filed

statement for the current year up to September 15. Payments made

due to an amended statement are subject to the penalties as

described in this subsection. The department of treasury shall

issue refunds for overpayments due to an amended statement. All

refunds due to overpayment shall be remitted without interest

except as provided by section 37 of the tax tribunal act, 1973 PA

186, MCL 205.737.

     (5) If For any assessment year in which an eligible claimant

does not submit payment in full and any penalty due under

subsection (4) or (6) by November 1, October 15, or if the state

tax commission discovers that the property is not eligible under

section 9m or 9n of the general property tax act, 1893 PA 206, MCL

211.9m and 211.9n, all of the following shall apply:

     (a) The state tax commission shall direct the assessor to

rescind issue an order to rescind no later than the first Monday in

December for the assessment year any exemption described in section

9m or 9n of the general property tax act, 1893 PA 206, MCL 211.9m

and 211.9n, granted for the eligible personal property.any parcel

for which payment in full and any penalty due have not been

received or for which the state tax commission discovers that the

property is not eligible under section 9m or 9n of the general

property tax act, 1893 PA 206, MCL 211.9m and 211.9n.

     (b) The state tax commission shall issue an order to rescind

no later than the first Monday in December for the assessment year

any exemption under section 9f of the general property tax act,

1893 PA 206, MCL 211.9f, which exemption was approved under section

9f of the general property tax act, 1893 PA 206, MCL 211.9f, after

2013 for any parcel for which payment in full and any penalty due

have not been received or for which the state tax commission

discovers that the property is not eligible under section 9m or 9n

of the general property tax act, 1893 PA 206, MCL 211.9m and

211.9n.

     (c) The state tax commission shall issue an order to rescind

no later than the first Monday in December for the assessment year

any exemption for eligible personal property subject to an extended

industrial facilities exemption certificate under section 11a of

1974 PA 198, MCL 207.561a, for any parcel for which payment in full

and any penalty due have not been received or for which the state

tax commission discovers that the property is not eligible under

section 9m or 9n of the general property tax act, 1893 PA 206, MCL

211.9m and 211.9n.

     (d) The state tax commission shall issue an order to rescind

no later than the first Monday in December for the assessment year

any extended exemption for eligible personal property under section

9f(8)(a) of the general property tax act, 1893 PA 206, MCL 211.9f,

for any parcel for which payment in full and any penalty due have

not been received or for which the state tax commission discovers

that the property is not eligible under section 9m or 9n of the

general property tax act, 1893 PA 206, MCL 211.9m and 211.9n.

     (e) The eligible claimant shall file not later than November

10 with the assessor of the township or city within 30 days of the

date of the state tax commission order to rescind issued under

subdivisions (a) to (d) a statement under section 19 of the general

property tax act, 1893 PA 206, MCL 211.19, for all property for

which the exemption has been rescinded under this section.

     (f) All taxes due as a result of a rescission by the

department of treasury or Within 60 days of an order of rescission

by the state tax commission under subdivisions (a) to (d), the

treasurer of the local tax collecting unit shall issue amended tax

bills for any taxes, including penalty and interest, that were not

billed under the general property tax act, 1893 PA 206, MCL 211.1

to 211.155, or under 1974 PA 198, MCL 207.551 to 207.572, on the

summer bill shall be billed under the general property tax act,

1893 PA 206, MCL 211.1 to 211.155, or under 1974 PA 198, MCL

207.551 to 207.572, on the winter tax bill.and that are owed as a

result of the order of rescission.

(6) (g) A person who files a statement under section 7 An

eligible claimant shall provide access to the books and records,

for audit purposes, relating to the location and description; the

date of purchase, lease, or acquisition; and the purchase price,

lease amount, or value of all industrial personal property and

commercial personal property owned by, leased by, or in the

possession of that person or a related entity if requested by the

assessor of the local tax collecting unit, township or city, county

equalization department, or department of treasury for the year in

which the statement is filed and the immediately preceding 3 years.

The department of treasury shall develop and implement an audit

program which includes, but is not limited to, the audit of

statements submitted under subsection (3) and amended statements

submitted under subsection (4) for the current calendar year and

the 3 calendar years immediately preceding the commencement of an

audit. An assessment as a result of an audit shall be paid in full

within 35 days of issuance and shall include penalties and interest

as described in section 154(3) of the general property tax act,

1893 PA 206, MCL 211.154. Refunds as a result of an audit under

this subsection shall be without interest. The exemption for

personal property for which an assessment has been issued as a

result of an audit under this subsection shall be subject to the

rescission provisions of subsection (5) for the years of the

assessment if full payment is not timely made as required by this

subsection.

(7) (6) An eligible claimant may appeal an assessment levied

under section 5 or a penalty or rescission under this section to

the state tax commission by filing a petition not later than

December 31 in that tax year. An eligible claimant may appeal an

assessment issued, including penalties, interest, or rescission, as

a result of an audit conducted under subsection (6) by filing a

petition with the state tax commission within 30 days of the date

of that assessment's issuance. The department of treasury may

appeal to the state tax commission by filing a petition for the

current calendar year and 3 immediately preceding calendar years.

The state tax commission shall decide any appeal based on the

written petition and the written recommendation of state tax

commission staff and any other relevant information. The department

of treasury or any eligible claimant may appeal the decision

determination of the state tax commission to the Michigan tax

tribunal within 35 days of the date of the determination.

     (8) For any year before 2023, the department of treasury may

require eligible claimants to file by February 20 of the year a

combined document that includes the affidavit under sections 9f(9),

9m, and 9n of the general property tax act, 1893 PA 206, MCL

211.9f, 211.9m, and 211.9n, the affidavit under section 11a of 1974

PA 198, MCL 207.561a, a statement under section 19 of the general

property tax act, 1893 PA 206, MCL 211.19, and a report of the

acquisition cost and year of acquisition by the first owner of

eligible personal property. The combined document shall be in a

form prescribed by the state tax commission. The combined document

shall be filed with the assessor of the township or city in which

the eligible personal property is located. The assessor shall

transmit the information contained in the combined document filed

under this subsection, and other parcel information required by the

department of treasury, to the department of treasury in the form

and in the manner prescribed by the department of treasury no later

than April 1.