SENATE BILL NO. 784

December 08, 2021, Introduced by Senators BUMSTEAD, DALEY, MCBROOM, HOLLIER, WOZNIAK, MOSS, OUTMAN, BAYER, ZORN, JOHNSON, VANDERWALL and SCHMIDT and referred to the Committee on Finance.

A bill to amend 1893 PA 206, entitled

"The general property tax act,"

by amending section 7b (MCL 211.7b), as amended by 2013 PA 161.

the people of the state of michigan enact:

Sec. 7b. (1) Real property used and owned as a homestead by a disabled veteran who was discharged from the armed forces of the United States under honorable conditions or by an individual described in subsection (2) is exempt from the collection of taxes under this act. To obtain the exemption, an affidavit showing the facts required by this section and a description of the real property shall be filed by the property owner or his or her legal designee with the supervisor or other assessing officer during the period beginning with the tax day for each year and ending at the time of the final adjournment of the local board of review. The affidavit when filed shall be open to inspection. The county treasurer shall cancel taxes subject to collection under this act for any year in which a disabled veteran eligible for the exemption under this section has acquired title to real property exempt under this section. Upon granting the exemption under this section, each local taxing unit shall bear the loss of its portion of the taxes upon which the exemption has been granted.

(2) If a disabled veteran who is otherwise eligible for the exemption under this section dies, either before or after the exemption under this section is granted, the exemption shall remain available to or shall continue for his or her unremarried surviving spouse. The surviving spouse shall comply with the requirements of subsection (1) and shall indicate on the affidavit that he or she is the surviving spouse of a disabled veteran entitled to the exemption under this section. The exemption shall continue as long as the surviving spouse remains unremarried.

(3) As used in this section, "disabled veteran" means a person who is a resident of this state and who meets 1 of the following criteria:

(a) Has been determined by the United States department of veterans affairs to be permanently and totally disabled as a result of military service and entitled to veterans' benefits at the 100% rate.

(b) Has a certificate from the United States veterans' administration, or its successors, certifying that he or she is receiving or has received pecuniary assistance due to disability for specially adapted housing.

(c) Has been rated by the United States department of veterans affairs as individually unemployable.

(1) If a disabled veteran or the widow or widower of a disabled veteran intends to claim the homestead credit provided for in section 521 of the income tax act of 1967, 1967 PA 281, MCL 206.521, he or she shall, as required by section 521 of the income tax act of 1967, 1967 PA 281, MCL 206.521, file an affidavit with the local tax collecting unit stating that intention and describing the homestead for which the credit will be claimed. The affidavit may be filed anytime in the calendar year during which the property taxes subject to the credit under section 521 of the income tax act of 1967, 1967 PA 281, MCL 206.521, are levied. The department of treasury shall provide local tax collecting units with both of the following:

(a) A form to be used for an affidavit filed under this subsection.

(b) Informational materials that a local tax collecting unit shall distribute to individuals who submit affidavits under this subsection. The informational materials must explain how a claimant's affidavit will be processed and how the claimant's tax liability will be handled under subsections (2) to (5).

(2) A local tax collecting unit that receives an affidavit filed under subsection (1) shall do both of the following:

(a) Defer collecting any property taxes levied on the homestead during the calendar year in which the affidavit was filed until 1 of the following:

(i) This state pays those property taxes under section 521 of the income tax act of 1967, 1967 PA 281, MCL 206.521.

(ii) This state rejects the claim for the credit under section 521 of the income tax act of 1967, 1967 PA 281, MCL 206.521.

(b) Before February 1 of the year immediately succeeding the calendar year in which the affidavit was filed, provide the department of treasury with a copy of the affidavit and inform the department in a form and manner prescribed by the department of the amount of the property taxes deferred for the calendar year for which the affidavit was filed.

(3) Except as otherwise provided in this subsection, property taxes deferred under subsection (2)(a) are not subject to penalties or interest for the period of deferment. If this state rejects the claim for the credit under subsection (2)(a)(ii), any unpaid balance becomes due and payable on the date of the rejection, and 90 days after the rejection any remaining unpaid balance is subject to penalties and interest consistent with this act.

(4) Upon this state's payment of property taxes, or rejection of a claim for the credit, as described in subsection (2)(a), the local tax collecting unit shall provide written notification to the individual who filed the affidavit for the credit under subsection (1) of that payment or rejection, the amount of any unpaid balance due and payable under subsection (3), and the date by which that unpaid balance must be paid before it is subject to the penalties and interest described in subsection (3).

(5) Payments made by this state under section 521 of the income tax act of 1967, 1967 PA 281, MCL 206.521, for property taxes collected under this act are considered taxes paid by the disabled veteran or the widow or widower of a disabled veteran.

(6) As used in this section, "disabled veteran" means that term as defined in section 505 of the income tax act of 1967, 1967 PA 281, MCL 206.505.

Enacting section 1. This amendatory act takes effect December 31, 2022.

Enacting section 2. This amendatory act does not take effect unless Senate Bill No. 783 of the 101st Legislature is enacted into law.