HOUSE BILL No. 5331


     October 23, 2001, Introduced by Reps. Richardville, Vear, Drolet, Wojno and Bob Brown and referred to the Committee on Tax Policy.


        A bill to amend 1967 PA 281, entitled

   "Income tax act of 1967,"

   by amending section 508 (MCL 206.508), as amended by 1990

   PA 283.

               THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

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           Sec. 508.  (1) "Gross rent" means the total rent contracted

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      to be paid by the renter or lessee of a homestead pursuant to

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      dealing at arms' length with the landlord of the homestead.

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       When  IF the landlord and tenant have not dealt with each other

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      at arms' length and the department believes that the gross rent

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      charged is excessive, the department may adjust the gross rent to

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      a reasonable amount for the purposes of this chapter.

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           (2) "Homestead" means a dwelling or unit in a multiple-unit

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      dwelling that is subject to ad valorem taxes, or a service charge

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      in lieu of taxes as provided by section 15a of  Act No. 346 of


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      the Public Acts of 1966, as amended, being section 125.1415a of

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      the Michigan Compiled Laws  THE STATE HOUSING DEVELOPMENT AUTHOR-

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      ITY ACT OF 1966, 1966 PA 346, MCL 125.1415A, owned and occupied

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      as a home by the owner of the dwelling or unit, or occupied as

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      the dwelling of the renter or lessee, including all unoccupied

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      real property not classified for ad valorem tax purposes as com-

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      mercial, industrial, residential, or timber-cut over, owned by

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      the owner of the homestead.  Beginning in the 1990 tax year, a

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      homestead does not include unoccupied real property that is

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      leased or rented by the owner to another person and that is not

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      adjacent and contiguous to the home of the owner.  Additionally,

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      the following apply:

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           (a) If a homestead is an integral part of a larger unit of

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      assessment such as commercial, industrial, residential,

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      timber-cut over, or a multipurpose or multidwelling building, the

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      tax on the homestead shall be the same proportion of the total

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      property tax as the proportion of the value of the homestead is

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      to the total value of the assessed property.

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           (b) If the gross receipts of the agricultural or horticul-

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      tural operations do not exceed the household income, or if there

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      are no gross receipts, the following apply:

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           (i) If the claimant has lived on the land 10 years or more,

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      all of the adjacent and contiguous agricultural or horticultural

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      lands shall be considered a homestead and the credit is allowed

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      for all the land.

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           (ii) If the claimant has lived on the land less than 10

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      years, not more than 5 acres of adjacent and contiguous



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      agricultural or horticultural land shall be considered a part of

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      the homestead and the credit is allowed for that part of the

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      land.

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           (c) A mobile home or trailer coach in a trailer coach park

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      is a homestead and the site rent for space is considered the rent

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      of a homestead.  The specific tax levied by section 41 of  Act

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      No. 243 of the Public Acts of 1959, being section 125.1041 of the

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      Michigan Compiled Laws  1959 PA 243, MCL 125.1041, is considered

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      a property tax.

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           (3) "Household" means a claimant and spouse.

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           (4) "Household income" means all income received by all per-

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      sons of a household in a tax year while members of a household,

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      EXCEPT THAT, FOR TAX YEARS THAT BEGIN AFTER DECEMBER 31, 2000

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      ONLY, HOUSEHOLD INCOME DOES NOT INCLUDE ANY AMOUNT PAID IN A YEAR

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      BY A TAXPAYER AS SUPPORT AS THAT TERM IS DEFINED IN SECTION 2 OF

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      THE SUPPORT AND PARENTING TIME ENFORCEMENT ACT, 1982 PA 295,

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      MCL 552.602.























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