SB-0653, As Passed Senate, February 18, 2016

SUBSTITUTE FOR

SENATE BILL NO. 653

A bill to amend 1994 PA 451, entitled

"Natural resources and environmental protection act,"

by amending section 51108 (MCL 324.51108), as amended by 2014 PA

146.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 51108. (1) An owner of a commercial forest may withdraw

his or her forestland, in whole or in part, from the classification

as commercial forest under this part upon application to the

department and payment of the withdrawal application fee and

penalty, as provided in this section.

(2) Except as otherwise provided by this section, upon

application to the department to withdraw forestland from the

classification as commercial forest under this part, the applicant

shall forward to the department a withdrawal application fee in the

amount of $1.00 per acre with a minimum withdrawal application fee

of $200.00 per application and a maximum withdrawal application fee

of $1,000.00 per application.

(3) Except as otherwise provided in this section, an

application to withdraw forestland from the classification as

commercial forest under this part shall be granted upon the payment

of a penalty to the treasurer of the township in which the

forestland is located. The withdrawal penalty shall be calculated

in the following manner:

(a) Multiply the number of acres of forestland withdrawn from

the classification as commercial forest under this part by 1 of the

following:

(i) For 2007, 1/2 of the valuation per acre for the county in

which the forestland is located.

(ii) Beginning in 2008, and for each subsequent year, the

number described in subparagraph (i) adjusted annually by the

inflation rate for each year after 2007.

(b) Multiply the product of the calculation in subdivision (a)

by the average millage rate levied by all townships, excluding

villages, in the county in which the forestland is located.

by the number of years, to a maximum of 7 years, in which the

forestland withdrawn from the classification as commercial forest

under this part has been classified as commercial forest under this

part.

(d) Multiply the product of the calculation in subdivision (c)

by the following:

(i) 0.2, if the forestland is located in Luce ~~county.~~County.

(ii) 0.3, if the forestland is located in Grand Traverse,

Manistee, Ottawa, or Wexford ~~county.~~County.

(iii) 0.4, if the forestland is located in Charlevoix,

Chippewa, Emmet, Gladwin, Leelanau, Midland, Oscoda, or Tuscola

~~county.~~County.

(iv) 0.5, if the forestland is located in Cheboygan, Delta,

Mackinac, Oceana, Otsego, or Schoolcraft ~~county.~~County.

(v) 0.6, if the forestland is located in Alcona, Alger,

Allegan, Alpena, Arenac, Barry, Bay, Benzie, Berrien, Branch,

Calhoun, Cass, Clare, Clinton, Crawford, Dickinson, Eaton, Genesee,

Gogebic, Gratiot, Hillsdale, Houghton, Huron, Ingham, Ionia, Iosco,

Iron, Isabella, Jackson, Kalamazoo, Kalkaska, Kent, Lapeer,

Lenawee, Livingston, Macomb, Marquette, Mecosta, Monroe, Montcalm,

Montmorency, Muskegon, Newaygo, Oakland, Ogemaw, Osceola, Presque

Isle, Roscommon, Saginaw, St. Clair, St. Joseph, Sanilac,

Shiawassee, Van Buren, Washtenaw, or Wayne ~~county.~~County.

(vi) 0.7, if the forestland is located in Antrim, Baraga,

Mason, or Menominee ~~county.~~County.

(vii) 0.8, if the forestland is located in Keweenaw, Lake,

Missaukee, or Ontonagon ~~county.~~County.

(4) The department shall publish all of the following on its

website:

(a) The calculation described in subsection (3)(a)(i) for each

county.

(b) The adjusted value and the inflation rate described in

subsection (3)(a)(ii) for each county.

for each county.

(5) Until September 1, ~~2015,~~ 2021, the owner of forestland

~~that is withdrawn from the classification as commercial forest~~

~~under this part is not subject to a withdrawal penalty if all of~~

~~the following occur:~~located within a township and classified as

commercial forest under this part not later than June 1, 2016 may

withdraw not more than 160 acres of that forestland without a

withdrawal penalty, subject to the following:

~~(a) The owner of the forestland withdraws his or her~~

~~forestland from the classification as commercial forest under this~~

~~part as provided in this section.~~

~~(b) The former commercial forestland is placed on the~~

~~assessment roll in the local tax collecting unit in which the~~

~~former commercial forestland is located.~~

~~(c) The owner of the former commercial forestland claims and~~

~~is granted an exemption for that land from the tax levied by a~~

~~local school district for school operating purposes under section~~

~~7jj of the general property tax act, 1893 PA 206, MCL 211.7jj[1].~~

~~The owner shall submit to the department a copy of the recorded~~

~~qualified forest school tax affidavit by December 31 of the year in~~

~~which the land is withdrawn from this part.~~

(a) The former commercial forestland shall be made subject to

the transitional qualified forest property specific tax act, as

transitional qualified forest property under that act, as a result

of all of the following:

(i) The owner of the forestland withdraws his or her

forestland from the classification as commercial forest under this

part as provided in this section.

(ii) The former commercial forestland is exempt from the

collection of general ad valorem property taxes under section 7vv

of the general property tax act, 1893 PA 206, MCL 211.7vv.

(iii) The owner of the former commercial forestland submits,

and obtains approval of, an application for a determination that

the forestland is transitional qualified forest property under the

transitional qualified forest property specific tax act. The owner

shall submit to the department a copy of the executed transitional

qualified forest property affidavit by November 1 of the year in

which the land is withdrawn from this part.

(b) Any of the owner's remaining forestland within that

township that previously qualified as commercial forest under this

part must continue to qualify as commercial forest under this part

or, subject to the penalty provided under subsection (3), must be

withdrawn under this part.

(6) An application to withdraw forestland from the

classification as commercial forest under this part that meets 1 or

more of the following requirements shall be granted without payment

of the withdrawal application fee or penalty under this section:

(a) Forestland that has been donated to a public body for

public use prior to withdrawal.

(b) Forestland that has been exchanged for property belonging

to a public body if the property received is classified as a

commercial forest as determined by the department.

(7) An application to withdraw forestland from the

classification as commercial forest under this part that meets all

of the following requirements shall be granted without payment of

the withdrawal application fee or penalty under this section:

(a) Evidence is submitted to the department that the land met

the legal requirements to be exempt from ad valorem property tax on

tax day for the tax year in which the list application was

submitted and approved and that the land would have met the legal

requirements to be exempt from ad valorem property tax on tax day

for each year that the land was classified as commercial forest

under this part, if the land had not been classified as commercial

forest under this part. As used in this subdivision, "tax day"

means that term as provided in section 2 of the general property

tax act, 1893 PA 206, MCL 211.2.

(b) The application is submitted to the department by the same

landowner that owned the land on tax day for the tax year in which

the application was submitted and that submitted the application

for determination under section 51103.

specific tax that was paid by the state treasurer to the county

treasurer, as provided in section 51106(1), for each tax year the

land was classified as commercial forest under this part.

(8) The department may withdraw forestland from the

classification as commercial forest under this part if the

forestland has been acquired by a federally recognized Indian tribe

and the associated property taxes are subsequently preempted under

federal law. A withdrawal under this subsection is not subject to

the withdrawal application fee or penalty under this section.

(9) The department shall remit the withdrawal application fee

paid pursuant to subsection (2) to the state treasurer for deposit

into the fund. The penalty received by the township treasurer under

subsection (3) shall be distributed by the township treasurer in

the same proportions to the various funds as the ad valorem general

property tax is allocated in the township, except as provided by

section 51109(2).

(10) If an application to withdraw forestland from

classification as commercial forest under this part is granted, the

department shall immediately notify the applicant, the ~~supervisor~~

assessor of the township, and the register of deeds of the county

in which the lands are located of the action and shall file with

those officials a list of the lands withdrawn.

(11) Not later than 30 days after the effective date of the

amendatory act that added this sentence, the department of natural

resources and the department of agriculture and rural development

shall establish in writing a basis of interdepartmental cooperation

when an owner of forestland seeks to withdraw that forestland from

the classification as commercial forest without penalty under

subsection (5).

(12) ~~(11)~~ As used in this section:

(a) "Inflation rate" means the lesser of 1.05 or the inflation

rate as defined in section 34d of the general property tax act,

1893 PA 206, MCL 211.34d.

(b) "Valuation" means the market value as determined by the

state tax commission.