HOUSE BILL No. 4276 February 16, 1999, Introduced by Reps. Kelly, Hale, Wojno, DeHart, Woodward, Dennis, Rick Johnson, Schauer, Rivet, Schermesser and LaForge and referred to the Committee on Tax Policy. A bill to amend 1893 PA 206, entitled "The general property tax act," by amending section 7cc (MCL 211.7cc), as amended by 1996 PA 476. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 7cc. (1) A homestead is exempt from the tax levied by 2 a local school district for school operating purposes to the 3 extent provided under section 1211 of the revised school code, 4Act No. 451 of the Public Acts of 1976, being section 380.12115of the Michigan Compiled Laws1976 PA 451, MCL 380.1211, if an 6 owner of that homestead claims an exemption as provided in this 7 section. Notwithstanding the tax day provided in section 2, the 8 status of property as a homestead shall be determined on the date 9 an affidavit claiming an exemption is filed under subsection 10 (2). 02010'99 FDD 2 1 (2) An owner of property may claim an exemption under this 2 section by filing an affidavit on or before May 1 with the local 3 tax collecting unit in which the property is located. The affi- 4 davit shall state that the property is owned and occupied as a 5 homestead by that owner of the property on the date that the 6 affidavit is signed. The affidavit shall be on a form prescribed 7 by the department of treasury. Beginning in 1995, 1 copy of the 8 affidavit shall be retained by the owner, 1 copy shall be 9 retained by the local tax collecting unit until any appeal or 10 audit period under this act has expired, and 1 copy shall be for- 11 warded to the department of treasury pursuant to subsection (4), 12 together with all information submitted under subsection(22)13 (18) for a cooperative housing corporation. Beginning in 1995, 14 the affidavit shall require the owner claiming the exemption to 15 indicate if that owner has claimed another exemption on property 16 in this state that is not rescinded. If the affidavit requires 17 an owner to include a social security number, that owner's number 18 is subject to the disclosure restrictions inAct No. 122 of the19Public Acts of 1941, being sections 205.1 to 205.31 of the20Michigan Compiled Laws1941 PA 122, MCL 205.1 TO 205.31. 21 (3) A husband and wife who are required to file or who do 22 file a joint Michigan income tax return are entitled to not more 23 than 1 homestead exemption. 24 (4) Upon receipt of an affidavit filed under subsection (2) 25 and unless the claim is denied under subsection (6), the assessor 26 shall exempt the property from the collection of the tax levied 27 by a local school district for school operating purposes to the 02010'99 3 1 extent provided under section 1211 ofAct No. 451 of the Public2Acts of 1976THE REVISED SCHOOL CODE, 1976 PA 451, MCL 380.1211, 3 as provided in subsection (1) until December 31 of the year in 4 which the property is transferred or is no longer a homestead as 5 defined in section 7dd. The local tax collecting unit shall for- 6 ward copies of affidavits to the department of treasury according 7 to a schedule prescribed by the department of treasury. 8 (5) Not more than 90 days after exempted property is no 9 longer used as a homestead by the owner claiming an exemption, 10 that owner shall rescind the claim of exemption by filing with 11 the local tax collecting unit a rescission form prescribed by the 12 department of treasury. Beginning October 1, 1994, an owner who 13 fails to file a rescission as required by this subsection is 14 subject to a penalty of $5.00 per day for each separate failure 15 beginning after the 90 days have elapsed, up to a maximum of 16 $200.00. This penalty shall be collected underAct No. 122 of17the Public Acts of 19411941 PA 122, MCL 205.1 TO 205.31, and 18 shall be deposited in the state school aid fund established in 19 section 11 of article IX of the state constitution of 1963. This 20 penalty may be waived by the department of treasury. 21 (6) If the assessor of the local tax collecting unit 22 believes that the property for which an exemption is claimed is 23 not the homestead of the owner claiming the exemption, effective 24 for taxes levied after 1994 the assessor may deny a new or exist- 25 ing claim by notifying the owner and the department of treasury 26 in writing of the reason for the denial and advising the owner 27 that the denial may be appealed to the department of treasury 02010'99 4 1 within 35 days after the date of the notice. The denial shall be 2 made on a form prescribed by the department of treasury. If the 3 assessor of the local tax collecting unit believes that the prop- 4 erty for which the exemption is claimed is not the homestead of 5 the owner claiming the exemption, for taxes levied in 1994 the 6 assessor may send a recommendation for denial for any affidavit 7 that is forwarded to the department of treasury stating the rea- 8 sons for the recommendation. If the assessor of the local tax 9 collecting unit believes that the property for which the exemp- 10 tion is claimed is not the homestead of the owner claiming the 11 exemption and has not denied the claim, for taxes levied after 12 1994 the assessor shall include a recommendation for denial with 13 any affidavit that is forwarded to the department of treasury or, 14 for an existing claim, shall send a recommendation for denial to 15 the department of treasury, stating the reasons for the 16 recommendation. 17 (7) The department of treasury shall determine if the prop- 18 erty is the homestead of the owner claiming the exemption. The 19 department of treasury may review the validity of exemptions for 20 the current calendar year and for the 3 immediately preceding 21 calendar years. If the department of treasury determines that 22 the property is not the homestead of the owner claiming the 23 exemption, the department shall send a notice of that determina- 24 tion to the local tax collecting unit and to the owner of the 25 property claiming the exemption, indicating that the claim for 26 exemption is denied, stating the reason for the denial, and 27 advising the owner claiming the exemption of the right to appeal 02010'99 5 1 the determination to the department of treasury and what those 2 rights of appeal are. The department of treasury may issue a 3 notice denying a claim if an owner fails to respond within 30 4 days of receipt of a request for information from that 5 department. An owner may appeal the denial of a claim of exemp- 6 tion to the department of treasury within 35 days of receipt of 7 the notice of denial. An appeal to the department of treasury 8 shall be conducted according to the provisions for an informal 9 conference in section 21 ofAct No. 122 of the Public Acts of101941, being section 205.21 of the Michigan Compiled Laws1941 PA 11 122, MCL 205.21. Within 10 days after acknowledging an appeal of 12 a denial of a claim of exemption, the department of treasury 13 shall notify the assessor and the treasurer for the county in 14 which the property is located that an appeal has been filed. 15 Upon receipt of a notice that the department of treasury has 16 denied a claim for exemption, the assessor shall remove the 17 exemption of the property and, if the tax roll is in the local 18 tax collecting unit's possession, amend the tax roll to reflect 19 the denial and the local treasurer shall issue a corrected tax 20 bill for previously unpaid taxes with interest and penalties com- 21 puted based on the interest and penalties that would have accrued 22 from the date the taxes were originally levied if there had not 23 been an exemption. If the tax roll is in the county treasurer's 24 possession, the tax roll shall be amended to reflect the denial 25 and the county treasurer shall prepare and submit a supplemental 26 tax bill for any additional taxes, together with any interest and 27 penalties. For taxes levied in 1994 only, the county treasurer 02010'99 6 1 shall waive any interest and penalties due if the owner pays the 2 supplemental tax bill not more than 30 days after the owner 3 receives the supplemental tax bill. Interest and penalties shall 4 not be assessed for any period before February 14, 1995. 5 However, if the property has been transferred to a bona fide pur- 6 chaser before additional taxes were billed to the seller as a 7 result of the denial of a claim for exemption, the taxes, inter- 8 est, and penalties shall not be billed to the bona fide purchas- 9 er, and the local tax collecting unit if the local tax collecting 10 unit has possession of the tax roll or the county treasurer if 11 the county has possession of the tax roll shall notify the 12 department of treasury of the amount of tax due and interest 13 through the date of that notification. The department of trea- 14 sury shall then assess the owner who claimed the homestead prop- 15 erty tax exemption for the tax and interest plus penalty accruing 16 as a result of the denial of the claim for exemption, if any, as 17 for unpaid taxes provided underAct No. 122 of the Public Acts18of 19411941 PA 122, MCL 205.1 TO 205.31, and shall deposit any 19 tax, interest, or penalty collected into the state school aid 20 fund. 21 (8) An owner may appeal a final decision of the department 22 of treasury to the residential and small claims division of the 23 Michigan tax tribunal within 35 days of that decision. An asses- 24 sor may appeal a final decision of the department of treasury to 25 the residential and small claims division of the Michigan tax 26 tribunal within 35 days of that decision if the assessor denied 27 the exemption under subsection (6), or, for taxes levied in 1994 02010'99 7 1 only, the assessor forwarded a recommendation for denial to the 2 department of treasury under subsection (6). An owner is not 3 required to pay the amount of tax in dispute in order to appeal a 4 denial of a claim of exemption to the department of treasury or 5 to receive a final determination of the residential and small 6 claims division of the Michigan tax tribunal. However, interest 7 and penalties except as provided in subsection (7), if any, shall 8 accrue and be computed based on the interest and penalties that 9 would have accrued from the date the taxes were originally levied 10 as if there had not been an exemption. 11 (9) An affidavit filed by an owner for a homestead rescinds 12 all previous exemptions filed by that owner for any other 13 homestead. The department of treasury shall notify the assessor 14 of the local tax collecting unit in which the property for which 15 a previous exemption was claimed is located that the previous 16 exemption is rescinded by the subsequent affidavit. Upon receipt 17 of notice that an exemption is rescinded, the assessor of the 18 local tax collecting unit shall remove the exemption effective 19 December 31 of the year in which the property is transferred or 20 is no longer a homestead as defined in section 7dd. The assessor 21 of the local tax collecting unit in which that property is 22 located shall notify the treasurer in possession of the tax roll 23 for a year for which the exemption is rescinded. If the tax roll 24 is in the local tax collecting unit's possession, the tax roll 25 shall be amended to reflect the rescission and the local trea- 26 surer shall prepare and issue a corrected tax bill for previously 27 unpaid taxes with interest and penalties computed based on the 02010'99 8 1 interest and penalties that would have accrued from the date the 2 taxes were originally levied if there had not been an exemption 3 for that year. If the tax roll is in the county treasurer's pos- 4 session, the tax roll shall be amended to reflect the rescission 5 and the county treasurer shall prepare and submit a supplemental 6 tax bill for any additional taxes, together with any interest and 7 penalties. However, if the property has been transferred to a 8 bona fide purchaser, the taxes, interest, and penalties shall not 9 be billed to the bona fide purchaser, and the local tax collect- 10 ing unit if the local tax collecting unit has possession of the 11 tax roll or the county treasurer if the county has possession of 12 the tax roll shall notify the department of treasury of the 13 amount of tax due and interest through the date of that 14 notification. The department of treasury shall then assess the 15 owner who received the homestead property tax exemption when the 16 property was not a homestead as defined in section 7dd for the 17 tax and interest plus penalty accruing, if any, as for unpaid 18 taxes provided underAct No. 122 of the Public Acts of 194119 1941 PA 122, MCL 205.1 TO 205.31, and shall deposit any tax, 20 interest, or penalty collected into the state school aid fund. 21 (10) An owner of property for which a claim of exemption is 22 rescinded may appeal that rescission with either the July or 23 December board of review in either the year for which the exemp- 24 tion is rescinded or in the immediately succeeding year. If an 25 appeal of a rescission of a claim for exemption is received not 26 later than 5 days prior to the date of the December board of 27 review, the local tax collecting unit shall convene a December 02010'99 9 1 board of review and consider the appeal pursuant to this section 2 and section 53b. An owner of property for which a claim of 3 exemption is rescinded may appeal the decision of the board of 4 review to the residential and small claims division of the 5 Michigan tax tribunal within 35 days of that decision. 6 (11) If the homestead is part of a unit in a multiple-unit 7 dwelling or a dwelling unit in a multiple-purpose structure, an 8 owner shall claim an exemption for only that portion of the total 9 taxable value of the property used as the homestead of that owner 10 in a manner prescribed by the department of treasury. If a por- 11 tion of a parcel for which the owner claims an exemption is used 12 for a purpose other than as a homestead, the owner shall claim an 13 exemption for only that portion of the taxable value of the prop- 14 erty used as the homestead of that owner in a manner prescribed 15 by the department of treasury. 16 (12) When a county register of deeds records a transfer of 17 ownership of a property, he or she shall notify the local tax 18 collecting unit in which the property is located of the 19 transfer. 20 (13) The department of treasury shall make available the 21 affidavit forms and the forms to rescind an exemption, which may 22 be on the same form, to all city and township assessors, county 23 equalization officers, county registers of deeds, and closing 24 agents. A person who prepares a closing statement for the sale 25 of property shall provide affidavit and rescission forms to the 26 buyer and seller at the closing and, if requested by the buyer or 27 seller after execution by the buyer or seller, shall file the 02010'99 10 1 forms with the local tax collecting unit in which the property is 2 located. If a closing statement preparer fails to provide home- 3 stead exemption affidavit and rescission forms to the buyer and 4 seller, or fails to file the affidavit and rescission forms with 5 the local tax collecting unit if requested by the buyer or 6 seller, the buyer may appeal to the department of treasury within 7 30 days of notice to the buyer that an exemption was not 8 recorded. If the department of treasury determines that the 9 buyer qualifies for the exemption, the department of treasury 10 shall notify the assessor of the local tax collecting unit that 11 the exemption is granted and the assessor of the local tax col- 12 lecting unit or, if the tax roll is in the possession of the 13 county treasurer, the county treasurer shall correct the tax roll 14 to reflect the exemption. This subsection does not create a 15 cause of action at law or in equity against a closing statement 16 preparer who fails to provide homestead exemption affidavit and 17 rescission forms to a buyer and seller or who fails to file the 18 affidavit and rescission forms with the local tax collecting unit 19 when requested to do so by the buyer or seller. 20 (14)AnFOR TAXES LEVIED AFTER DECEMBER 31, 1994, AN owner 21 who owned and occupied a homestead on May 1 IN ANY TAX YEAR for 22 which the exemption was not on the tax roll may file an appeal 23 with the July board of review THAT MEETS PURSUANT TO SECTION 53B 24 in the year for which the exemption was claimed orthe25immediatelyANY succeeding year or with the December board of 26 review THAT MEETS PURSUANT TO SECTION 53B in the year for which 27 the exemption was claimed orthe immediatelyANY succeeding 02010'99 11 1 year. If an appeal of a claim for exemption that was not on the 2 tax roll is received not later than 5 days prior to the date of 3 the December board of review, the local tax collecting unit shall 4 convene a December board of review and consider the appeal pursu- 5 ant to this section and section 53b. 6(15) In 1994 only, an owner who owns and occupies a home-7stead after May 1 and before October 3 for which an affidavit was8not filed in 1994 may file an affidavit as provided in subsection9(2) not later than October 3, 1994. Upon receipt, the assessor10shall exempt the property from 50% of the number of mills levied11in 1994 under section 1211 of Act No. 451 of the Public Acts of121976 from which homesteads are exempt, not to exceed 50% of the13total number of mills from which homesteads are exempt in 1994,14on the December tax roll. If there is not a December levy of the15tax under section 1211 of Act No. 451 of the Public Acts of 1976,16the owner may appear in person or by mail before the December17board of review and obtain a rebate as provided in section 53b of1850% of the number of mills levied in 1994 under section 1211 of19Act No. 451 of the Public Acts of 1976 from which homesteads are20exempt, not to exceed 50% of the total number of mills from which21homesteads are exempt in 1994. If an affidavit is not filed as22provided in this subsection, the owner may appear in person or by23mail before the July or December board of review in 1994 or the24July or December board of review in 1995 and obtain a rebate of2550% of the number of mills levied in 1994 under section 1211 of26Act No. 451 of the Public Acts of 1976 from which homesteads are27exempt, not to exceed 50% of the total number of mills from which02010'99 12 1homesteads are exempt in 1994. This subsection does not apply2unless the 1994 assessment of the property is based on the valua-3tion of a homestead or a portion of a structure that has become a4homestead. An affidavit filed under this subsection is subject5to all the provisions of this section.6(16) An owner who owns and occupies a homestead for which7the exemption was on the tax roll in 1995 and each year after81995 and for which an exemption was not on the tax roll in 19949may appeal to the department of treasury before December 31, 199710to have an exemption placed on the 1994 tax roll if all of the11following conditions are satisfied:12(a) The owner owned and occupied that homestead on May 1,131994 or the owner owned and occupied that homestead after May 1,141994 but before October 3, 1994.15(b) If a claim of exemption was denied in 1994, the owner16did not timely appeal that denial as provided in this section.17(c) The owner has owned and occupied that homestead since181994.19(17)If thedepartment of treasuryBOARD OF REVIEW grants 20 a claim of exemption,for 1994 under subsection (16),THE LOCAL 21 TAX COLLECTING UNIT IF THE LOCAL TAX COLLECTING UNIT HAS POSSES- 22 SION OF THE TAX ROLL BEING ADJUSTED OR the county treasurer 23withIF THE COUNTY TREASURER HAS possession of the tax roll 24 being adjusted shall amend the1994APPROPRIATE tax roll to 25 reflect the exemption and shall issue a corrected tax bill,as26follows:02010'99 13 1(a) If the owner owned and occupied that homestead on May 1,21994, that homestead is exemptEXEMPTING THAT HOMESTEAD from the 3 tax levied in1994THE TAX YEAR FOR WHICH THE EXEMPTION IS 4 CLAIMED for school operating purposes to the extent provided 5 under section 1211 ofAct No. 451 of the Public Acts of 19766 THE REVISED SCHOOL CODE, 1976 PA 451, MCL 380.1211, pursuant to 7 subsection (1). 8(b) If the owner owned and occupied that homestead after9May 1, 1994 but before October 3, 1994, that homestead is exempt10from 50% of the number of mills levied in 1994 under section 121111of Act No. 451 of the Public Acts of 1976 pursuant to12subsection (14).13(18) If the department of treasury denies a claim of exemp-14tion for 1994 under subsection (16), an owner may appeal that15denial to the residential and small claims division of the16Michigan tax tribunal within 35 days of that denial.17 (15)(19)If the assessor or treasurer of the local tax 18 collecting unit believes that the department of treasury errone- 19 ously denied a claim for exemption, the assessor or treasurer may 20 submit written information supporting the owner's claim for 21 exemption to the department of treasury within 35 days of the 22 owner's receipt of the notice denying the claim for exemption. 23 If, after reviewing the information provided, the department of 24 treasury determines that the claim for exemption was erroneously 25 denied, the department of treasury shall grant the exemption and 26 the tax roll shall be amended to reflect the exemption. 02010'99 14 1 (16)(20)If granting the exemption under this section 2 results in an overpayment of the tax, a rebate, including any 3 interest paid, shall be made to the taxpayer by the local tax 4 collecting unit if the local tax collecting unit has possession 5 of the tax roll or by the county treasurer if the county has pos- 6 session of the tax roll within 30 days of the date the exemption 7 is granted. The rebate shall be without interest. 8 (17)(21)If an exemption under this section is errone- 9 ously granted, an owner may request in writing that the depart- 10 ment of treasury withdraw the exemption. If an owner requests 11 that an exemption be withdrawn, the department of treasury shall 12 issue an order notifying the local assessor that the exemption 13 issued under this section has been denied based on the owner's 14 request. If an exemption is withdrawn, the property that had 15 been subject to that exemption shall be immediately placed on the 16 tax roll by the local tax collecting unit if the local tax col- 17 lecting unit has possession of the tax roll or by the county 18 treasurer if the county has possession of the tax roll as though 19 the exemption had not been granted. A corrected tax bill shall 20 be issued for the tax year being adjusted by the local tax col- 21 lecting unit if the local tax collecting unit has possession of 22 the tax roll or by the county treasurer if the county has posses- 23 sion of the tax roll. If an owner requests that an exemption 24 under this section be withdrawn before that owner is contacted in 25 writing by either the local assessor or the department of trea- 26 sury regarding that owner's eligibility for the exemption and 27 that owner pays the corrected tax bill issued under this 02010'99 15 1 subsection within 30 days after the corrected tax bill is issued, 2 that owner is not liable for any penalty or interest on the addi- 3 tional tax. An owner who pays a corrected tax bill issued under 4 this subsection more than 30 days after the corrected tax bill is 5 issued is liable for the penalties and interest that would have 6 accrued if the exemption had not been granted from the date the 7 taxes were originally levied. 8 (18)(22)For tax years beginning on and after January 1, 9 1994, a cooperative housing corporation is entitled to a full or 10 partial exemption under this section for the tax year in which 11 the cooperative housing corporation files all of the following 12 with the local tax collecting unit in which the cooperative hous- 13 ing corporation is located if filed on or before May 1 of the tax 14 year, or for the tax year following the year in which all of the 15 following are filed if filed after May 1 of the tax year: 16 (a) An affidavit form. 17 (b) A statement of the total number of units owned by the 18 cooperative housing corporation and occupied as the principal 19 residence of a tenant stockholder as of the date of the filing 20 under this subsection. 21 (c) A list that includes the name, address, and social 22 security number of each tenant stockholder of the cooperative 23 housing corporation occupying a unit in the cooperative housing 24 corporation as his or her principal residence as of the date of 25 the filing under this subsection. 26 (d) A statement of the total number of units of the 27 cooperative housing corporation on which an exemption under this 02010'99 16 1 section was claimed and that were transferred in the tax year 2 immediately preceding the tax year in which the filing under this 3 section was made. 02010'99 Final page. 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