HB-4119, As Passed House, November 29, 2006

SUBSTITUTE FOR

HOUSE BILL NO. 4119

     A bill to amend 1893 PA 206, entitled

"The general property tax act,"

by amending section 7dd (MCL 211.7dd), as amended by 2006 PA 114.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 7dd. As used in sections 7cc and 7ee:

     (a) "Owner" means any of the following:

     (i) A person who owns property or who is purchasing property

under a land contract.

     (ii) A person who is a partial owner of property.

     (iii) A person who owns property as a result of being a

beneficiary of a will or trust or as a result of intestate

succession.

     (iv) A person who owns or is purchasing a dwelling on leased

land.

     (v) A person holding a life lease in property previously sold

or transferred to another.

     (vi) A grantor who has placed the property in a revocable trust

or a qualified personal residence trust.

     (vii) The sole present beneficiary of a trust if the trust

purchased or acquired the property as a principal residence for the

sole present beneficiary of the trust, and the sole present

beneficiary of the trust is totally and permanently disabled. As

used in this subparagraph, "totally and permanently disabled" means

disability as defined in section 216 of title II of the social

security act, 42 USC 416, without regard as to whether the sole

present beneficiary of the trust has reached the age of retirement.

     (viii) A cooperative housing corporation.

     (ix) A facility registered under the living care disclosure

act, 1976 PA 440, MCL 554.801 to 554.844.

     (b) "Person", for purposes of defining owner as used in

section 7cc, means an individual and for purposes of defining owner

as used in section 7ee means an individual, partnership,

corporation, limited liability company, association, or other legal

entity.

     (c) "Principal residence" means the 1 place where an owner of

the property has his or her true, fixed, and permanent home to

which, whenever absent, he or she intends to return and that shall

continue as a principal residence until another principal residence

is established.  Principal  Except as otherwise provided in this

subdivision, principal residence includes only that portion of a

dwelling or unit in a multiple-unit dwelling that is subject to ad

valorem taxes and that is owned and occupied by an owner of the

dwelling or unit. Principal residence also includes all of an

owner's unoccupied property classified as residential that is

adjoining or contiguous to the dwelling subject to ad valorem taxes

and that is owned and occupied by the owner. Contiguity is not

broken by a road, a right-of-way, or property purchased or taken

under condemnation proceedings by a public utility for power

transmission lines if the 2 parcels separated by the purchased or

condemned property were a single parcel prior to the sale or

condemnation.  Principal  Except as otherwise provided in this

subdivision, principal residence also includes any portion of a

dwelling or unit of an owner that is rented or leased to another

person as a residence as long as that portion of the dwelling or

unit that is rented or leased is less than 50% of the total square

footage of living space in that dwelling or unit. Property that

qualified as a principal residence continues to qualify as a

principal residence if all or any portion of the dwelling or unit

included in or constituting the principal residence is rented or

leased to another person as a residence while the owner of the

dwelling or unit is absent while on active duty in the armed forces

of the United States, so long as the dwelling or unit would

otherwise qualify as the owner's principal residence. Principal

residence also includes a life care facility registered under the

living care disclosure act, 1976 PA 440, MCL 554.801 to 554.844.

Principal residence also includes property owned by a cooperative

housing corporation and occupied by tenant stockholders.

     (d) "Qualified agricultural property" means unoccupied

property and related buildings classified as agricultural, or other

unoccupied property and related buildings located on that property

devoted primarily to agricultural use as defined in section 36101

of the natural resources and environmental protection act, 1994 PA

451, MCL 324.36101. Related buildings include a residence occupied

by a person employed in or actively involved in the agricultural

use and who has not claimed a principal residence exemption on

other property. Property used for commercial storage, commercial

processing, commercial distribution, commercial marketing, or

commercial shipping operations or other commercial or industrial

purposes is not qualified agricultural property. A parcel of

property is devoted primarily to agricultural use only if more than

50% of the parcel's acreage is devoted to agricultural use. An

owner shall not receive an exemption for that portion of the total

state equalized valuation of the property that is used for a

commercial or industrial purpose or that is a residence that is not

a related building.