HOUSE BILL No. 4301 February 20, 2001, Introduced by Reps. Rich Brown, Spade, Adamini, Neumann, Zelenko, Lipsey, Plakas and Anderson and referred to the Committee on Tax Policy. A bill to amend 1893 PA 206, entitled "The general property tax act," by amending section 65 (MCL 211.65) and by adding section 70d. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 65. (1) The total cost of the advertising shall not 2 exceed the sum of $6.50 per column inch as measured in the ini- 3 tial publication and shall include the description of lands so 4 advertised and sold. The petition and court order, column head- 5 ings, and captions within the columns shall be paid for at the 6 same rate. THE ADVERTISING SHALL INCLUDE THE DESCRIPTION OF 7 LANDS TO BE SOLD AS PROVIDED BY THE COUNTY TREASURER, THE PARCEL 8 IDENTIFICATION NUMBER, AND THE STREET ADDRESS IF AVAILABLE. Copy 9 for the description of lands for the tax sale and for the 10 petition and court order shall be set on 6 point slugs in columns 11 at least 11 picas wide, except for captions and headings within 01071'01 FDD 2 1 the columns, the size of which shall be specified by the director 2 of the department of management and budget. Copy set on slugs 3 larger in size than 6 point shall be paid for on the basis of the 4 amount of space required if set on 6 point slugs. 5 (2) The additional notices referred to in section 63 shall 6 not exceed 2 columns in width and 5 inches in length and the inch 7 rate charged for those notices shall not exceed the designated 8 newspaper's published inch rate prices. 9 SEC. 70D. (1) PROPERTY THAT IS THE HOMESTEAD OF A QUALIFIED 10 PERSON AND THAT IS OTHERWISE ELIGIBLE FOR THE SALE PROVIDED FOR 11 IN SECTION 60, 70, OR 78M SHALL BE EXCLUDED FROM THE SALE BY THE 12 COUNTY TREASURER OR THE FORECLOSING GOVERNMENTAL UNIT, AS APPLI- 13 CABLE, AS PROVIDED IN THIS SECTION. IF PROPERTY THAT IS THE 14 HOMESTEAD OF A QUALIFIED PERSON IS SOLD AT THE SALE PROVIDED FOR 15 IN SECTION 60, 70, OR 78M, IT IS NOT SUBJECT TO SUBSEQUENT PRO- 16 CEEDINGS TO ENFORCE ANY INTEREST BID OFF IN THE NAME OF THE STATE 17 OR ANY TAX DEED OR CERTIFICATE OF SALE ACQUIRED BY ANY PERSON 18 UNDER THIS ACT, EXCEPT AS PROVIDED IN THIS SECTION. 19 (2) THE OWNER OF A HOMESTEAD WHO IS A QUALIFIED PERSON MAY 20 APPLY TO THE COUNTY TREASURER OR THE FORECLOSING GOVERNMENTAL 21 UNIT, AS APPLICABLE, TO WITHHOLD THE PROPERTY FROM THE SALE PRO- 22 VIDED FOR IN SECTION 60, 70, OR 78M. THE APPLICATION SHALL BE 23 MADE UPON AN AFFIDAVIT VERIFYING THAT THE APPLICANT IS THE OWNER 24 OF THE PROPERTY PRESCRIBED BY THE DEPARTMENT OF TREASURY AND MADE 25 AVAILABLE TO COUNTY TREASURERS THROUGHOUT THE STATE. THE AFFIDA- 26 VIT SHALL REQUIRE THE OWNER TO IDENTIFY ANY MORTGAGEE OF THE 27 PROPERTY. UPON RECEIPT OF AN AFFIDAVIT, THE COUNTY TREASURER 01071'01 3 1 SHALL IMMEDIATELY FORWARD THE AFFIDAVIT TO THE STATE TREASURER 2 WHO SHALL EXAMINE IT TO DETERMINE IF THE OWNER MEETS THE REQUIRE- 3 MENTS OF THIS ACT AND IS A QUALIFIED PERSON. IF THE STATE TREA- 4 SURER NOTIFIES THE COUNTY TREASURER OR THE FORECLOSING GOVERNMEN- 5 TAL UNIT, AS APPLICABLE, NOT LATER THAN THE TUESDAY BEFORE THE 6 SALE THAT AN OWNER IS A QUALIFIED PERSON AND DELIVERS THE PAYMENT 7 REQUIRED BY SUBSECTION (4)(E), THE COUNTY TREASURER OR THE FORE- 8 CLOSING GOVERNMENTAL UNIT, AS APPLICABLE, SHALL WITHHOLD THE 9 PROPERTY OF THE QUALIFIED PERSON FROM SALE. THE STATE TREASURER 10 SHALL NOTIFY ANY MORTGAGEE THAT AN OWNER IS A QUALIFIED PERSON 11 UNDER THIS SECTION. 12 (3) IF PROPERTY HAS BEEN SOLD OR BID OFF IN THE NAME OF THE 13 STATE AT A TAX SALE, AN OWNER MAY APPLY TO THE DEPARTMENT OF 14 TREASURY FOR A DETERMINATION THAT THE PROPERTY IS NOT SUBJECT TO 15 SUBSEQUENT PROCEEDINGS, AS PROVIDED IN SUBSECTION (1). THE 16 APPLICATION SHALL BE MADE ON THE AFFIDAVIT PROVIDED FOR IN 17 SUBSECTION (2). UPON A FINDING THAT THE OWNER MEETS THE REQUIRE- 18 MENTS OF THIS SECTION AND IS A QUALIFIED PERSON AND THAT THE 19 PROPERTY IS NOT SUBJECT TO THE SUBSEQUENT PROCEEDINGS AS PROVIDED 20 IN SUBSECTION (1), THE DEPARTMENT OF TREASURY SHALL NOTIFY THE 21 COUNTY TREASURER OR THE FORECLOSING GOVERNMENTAL UNIT, AS APPLI- 22 CABLE, AND ANY HOLDER OF A TAX SALE CERTIFICATE OR TAX DEED OF 23 ITS FINDING. 24 (4) UPON A FINDING THAT THE OWNER MEETS THE REQUIREMENTS OF 25 THIS SECTION, THE DEPARTMENT OF TREASURY SHALL DO THE FOLLOWING: 01071'01 4 1 (A) ON AN ANNUAL BASIS, VERIFY THAT THE QUALIFIED PERSON 2 CONTINUES TO RESIDE IN THE PROPERTY AND CONTINUES TO BE A 3 QUALIFIED PERSON. 4 (B) SECURE AN ASSIGNMENT TO THE STATE OF THE NEXT HOMESTEAD 5 PROPERTY TAX CREDIT AND ANY SUBSEQUENT CREDIT PAYABLE DURING THE 6 PERIOD IN WHICH TAXES ARE DEFERRED ON THE PROPERTY AND NECESSARY 7 TO PAY ANY LIEN ON THE PROPERTY UNDER THIS SECTION. 8 (C) SECURE AN ASSIGNMENT TO THE STATE OF ANY INCOME TAX 9 REFUND PAYABLE TO THE QUALIFIED PERSON UNDER THE INCOME TAX ACT 10 OF 1967, 1967 PA 281, MCL 206.1 TO 206.532, DURING THE PERIOD IN 11 WHICH TAXES ARE DEFERRED ON THE PROPERTY AND NECESSARY TO PAY ANY 12 LIEN ON THE PROPERTY UNDER THIS SECTION. 13 (D) SECURE AN ASSIGNMENT TO THE STATE OF THE PROCEEDS OF THE 14 QUALIFIED PERSON'S INTEREST IN ANY PROPERTY AND CASUALTY INSUR- 15 ANCE ON THE PROPERTY SUFFICIENT TO PAY THE AMOUNT OF THE LIEN ON 16 THE PROPERTY. IF THE QUALIFIED PERSON DOES NOT PAY FOR SUFFI- 17 CIENT PROPERTY AND CASUALTY INSURANCE, THE STATE SHALL PAY FOR IT 18 AND ADD THAT AMOUNT TO THE LIEN ON THE PROPERTY. 19 (E) DELIVER TO THE COUNTY TREASURER IN THE COUNTY IN WHICH 20 THE PROPERTY IS LOCATED OR THE FORECLOSING GOVERNMENTAL UNIT, AS 21 APPLICABLE, AN AMOUNT EQUAL TO THE AMOUNT OF TAXES, INTEREST, AND 22 PENALTIES THAT WOULD OTHERWISE BE COLLECTIBLE AT THE SALE FROM 23 WHICH THE PROPERTY IS TO BE EXCLUDED. 24 (5) IF THE DEPARTMENT MAKES A DETERMINATION THAT AN OWNER 25 MEETS THE REQUIREMENTS OF THIS SECTION AND THE PROPERTY OF THE 26 OWNER HAS BEEN CONVEYED UNDER SECTION 67A OR 78M, THE STATE 27 TREASURER SHALL ISSUE A CERTIFICATE CANCELING THE DEED AND RECORD 01071'01 5 1 THE CERTIFICATE WITH THE REGISTER OF DEEDS IN THE COUNTY WHERE 2 THE PROPERTY IS LOCATED. TAXES AND SPECIAL ASSESSMENTS THAT OTH- 3 ERWISE WOULD BE CANCELED UNDER SECTION 67A OR 78K SHALL NOT BE 4 CANCELED, AND THE PROPERTY SHALL NOT BE OMITTED FROM THE TAX 5 ROLL. HOWEVER, IF THE PROPERTY HAS BEEN REMOVED FROM A PREVIOUS 6 TAX ROLL, IT MAY BE PLACED ON THE ROLL IN THE MANNER PROVIDED IN 7 SECTION 154. 8 (6) TAXES ON PROPERTY THAT HAS BEEN WITHHELD FROM SALE UNDER 9 SUBSECTION (2), OR TAXES ON PROPERTY FOR WHICH A SALE HAS 10 OCCURRED AND FOR WHICH A DETERMINATION IS MADE THAT THE OWNER IS 11 A QUALIFIED PERSON UNDER SUBSECTION (3) SHALL BE DEFERRED UNTIL 12 THE OWNER IS NO LONGER A QUALIFIED PERSON; UNTIL 1 YEAR AFTER THE 13 OWNER'S DEATH, SUBJECT TO FURTHER ORDER BY THE PROBATE COURT; OR 14 UNTIL ANY PART OF THE HOMESTEAD IS CONVEYED OR TRANSFERRED TO 15 ANOTHER PERSON OR THE OWNER ENTERS INTO A CONTRACT TO SELL THE 16 HOMESTEAD. THE DEATH OF A SPOUSE DOES NOT TERMINATE THE DEFER- 17 MENT OF TAXES ON THE HOMESTEAD OWNED BY THE HUSBAND AND WIFE 18 UNLESS THE SURVIVING SPOUSE REMARRIES. FAILURE TO PROVIDE THE 19 ASSIGNMENT REQUIRED BY SUBSECTION (4)(B) OR (C) TERMINATES THE 20 DEFERMENT. THE DEFERRED TAXES MAY BE PAID IN FULL BEFORE THE 21 TERMINATION OF THE DEFERMENT AT ANY TIME. TAXES ARE DEFERRED 22 UNDER THIS SECTION WITHOUT FURTHER PENALTY AND BEAR INTEREST AT 23 THE RATE OF 3/4 OF 1% PER MONTH OR FRACTION OF A MONTH. THE 24 DEPARTMENT OF TREASURY SHALL NOTIFY EACH OWNER WHOSE TAXES ARE 25 DEFERRED THAT IF LEGAL OR EQUITABLE TITLE TO THE HOMESTEAD OR ANY 26 PART OF THE HOMESTEAD IS CONVEYED OR TRANSFERRED, OR IF THE OWNER 27 ENTERS INTO A CONTRACT TO SELL THE HOMESTEAD, THE DEFERMENT IS 01071'01 6 1 TERMINATED AND THE AMOUNT DEFERRED IS IMMEDIATELY DUE AND PAYABLE 2 WITH INTEREST AS PROVIDED IN THIS SECTION, BUT WITHOUT PENALTY. 3 (7) PROPERTY SHALL NOT BE EXCLUDED FROM A SALE UNDER 4 SECTION 60, 70, OR 78M FOR NONPAYMENT OF TAXES AND A DEFERMENT 5 SHALL NOT BE GRANTED IN A YEAR IN WHICH, WITH THE INCLUSION OF 6 ADDITIONAL DEFERRED TAXES, THE TOTAL AMOUNT OF TAXES DEFERRED 7 EXCEEDS 80% OF THE OWNER'S EQUITY IN THE PROPERTY. IN MAKING 8 THIS DETERMINATION, THE DEPARTMENT OF TREASURY SHALL USE A MARKET 9 VALUE EQUAL TO THE STATE EQUALIZED VALUATION MULTIPLIED BY 2. 10 (8) TAXES DEFERRED IN A COUNTY FOR ANY YEAR SHALL NOT EXCEED 11 2% OF THE REAL PROPERTY TAXES RETURNED AS DELINQUENT FOR THAT 12 YEAR BY ALL TAXING UNITS IN THAT COUNTY. 13 (9) UPON TERMINATION OF THE DEFERMENT OF PROPERTY TAXES 14 UNDER THIS SECTION, THE PROCEDURES OF THIS ACT FOR THE COLLECTION 15 AND ENFORCEMENT OF TAX LIENS SUSPENDED BY THE TERMS OF THIS SEC- 16 TION AGAIN APPLY TO THE DEFERRED TAXES IN THE SAME MANNER THEY 17 WOULD HAVE APPLIED IF A DEFERMENT HAD NOT BEEN AUTHORIZED AND IF 18 ALL OF THE TAXES, INCLUDING ANY TAXES PURCHASED BY A PRIVATE PUR- 19 CHASER, HAD BEEN LEVIED IN THE THIRD YEAR PRECEDING THE CALENDAR 20 YEAR IN WHICH THE DEFERMENT WAS TERMINATED. HOWEVER, THE PROVI- 21 SIONS OF THIS ACT WITH RESPECT TO FEES, INTEREST, AND PENALTIES, 22 EXCEPT AS PROVIDED IN THIS SECTION, DO NOT APPLY TO THE PERIOD 23 DURING WHICH THE TAXES ARE DEFERRED. 24 (10) TAXES DEFERRED UNDER THIS SECTION ARE A LIEN AGAINST 25 THE PROPERTY AND TAKE PRECEDENCE OVER OTHER LIENS AGAINST THE 26 PROPERTY TO THE SAME EXTENT AS IF THE TAXES WERE NOT DEFERRED. 01071'01 7 1 (11) A PURCHASE UNDER SECTION 70 OR ANY PURCHASE OF A 2 CERTIFICATE OF TAX SALE OR TAX DEED IS SUBJECT TO THE PROVISIONS 3 OF THIS SECTION AND THE PURCHASER IS CONCLUSIVELY PRESUMED TO 4 KNOW WITHOUT NOTICE THAT SUCH A PURCHASE IS MADE SUBJECT TO THE 5 PROVISIONS OF THIS SECTION. HOWEVER, IF TAXES ARE DEFERRED UNDER 6 THIS SECTION THE PURCHASER MAY REDEEM THE TAX SALE CERTIFICATE OR 7 TAX DEED FROM THE STATE TREASURER FOR THE PURCHASE PRICE. 8 (12) AS USED IN THIS SECTION: 9 (A) "QUALIFIED PERSON" MEANS A SENIOR CITIZEN WITH A HOUSE- 10 HOLD INCOME IN THE IMMEDIATELY PRECEDING CALENDAR YEAR THAT IS 11 LESS THAN 187.5% OF THE FEDERAL POVERTY LEVEL FOR 2 PERSONS OR 12 THE NUMBER OF PERSONS IN THE HOUSEHOLD, WHICHEVER IS GREATER, OR 13 AN ADULT IN NEED OF PROTECTIVE SERVICES AS THAT TERM IS DEFINED 14 IN SECTION 11 OF THE SOCIAL WELFARE ACT, 1939 PA 280, MCL 400.11, 15 WHO HAS APPLIED FOR AND ASSIGNED ALL HOMESTEAD PROPERTY TAX CRED- 16 ITS THAT MAY BE CLAIMED DURING THE PERIOD IN WHICH TAXES ARE 17 DEFERRED. 18 (B) "SENIOR CITIZEN" MEANS A PERSON WHO IS 65 YEARS OF AGE 19 OR OLDER AND INCLUDES THE UNREMARRIED SURVIVING SPOUSE OF A 20 PERSON WHO WAS 65 YEARS OF AGE OR OLDER AT THE TIME OF DEATH. 21 (C) "HOMESTEAD" MEANS THAT TERM AS DEFINED IN SECTION 7DD. 22 (D) "HOUSEHOLD INCOME" MEANS THAT TERM AS DEFINED IN SECTION 23 508 OF THE INCOME TAX ACT OF 1967, 1967 PA 281, MCL 206.508. 24 (14) THIS SECTION DOES NOT APPLY TO TAXES RETURNED DELIN- 25 QUENT BEFORE MARCH 1, 1992 OR AFTER FEBRUARY 28, 1996. HOWEVER, 26 FOR TAXES RETURNED DELINQUENT BEFORE MARCH 1, 1993, AN 27 APPLICATION SHALL NOT BE MADE UNDER THIS SECTION UNLESS EITHER 01071'01 8 1 THE REDEMPTION PERIOD UNDER SECTION 74 HAS EXPIRED OR THE TAXES 2 HAVE BEEN PAID THROUGH THE ISSUANCE OF A CERTIFICATE OF SALE OR A 3 TAX DEED. 01071'01 Final page. FDD