June 7, 2006, Introduced by Reps. Dillon, Waters, Acciavatti, Hunter, Adamini, Espinoza, Mayes, Farrah, Accavitti, Miller, Condino, Polidori, Sak, Lemmons, Jr., Gonzales, Leland and Lemmons, III and referred to the Committee on Tax Policy.
A bill to amend 1893 PA 206, entitled
"The general property tax act,"
by amending sections 27a and 34d (MCL 211.27a and 211.34d), section
27a as amended by 2005 PA 23 and section 34d as amended by 2005 PA
12.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 27a. (1) Except as otherwise provided in this section,
property shall be assessed at 50% of its true cash value under
section 3 of article IX of the state constitution of 1963.
(2) Except as otherwise provided in subsection (3), for taxes
levied in 1995 and for each year after 1995, the taxable value of
each parcel of property is the lesser of the following:
(a) The property's taxable value in the immediately preceding
year minus any losses, multiplied by the lesser of 1.05 or the
inflation rate, plus all additions. For taxes levied in 1995, the
property's taxable value in the immediately preceding year is the
property's state equalized valuation in 1994.
(b) The property's current state equalized valuation.
(3) Upon a transfer of ownership of property after 1994, the
property's taxable value for the calendar year following the year
of the transfer is the property's state equalized valuation for the
calendar year following the transfer.
(4) If the taxable value of property is adjusted under
subsection (3), a subsequent increase in the property's taxable
value is subject to the limitation set forth in subsection (2)
until a subsequent transfer of ownership occurs. If the taxable
value of property is adjusted under subsection (3) and the assessor
determines that there had not been a transfer of ownership, the
taxable value of the property shall be adjusted at the July or
December board of review. Notwithstanding the limitation provided
in section 53b(1) on the number of years for which a correction may
be made, the July or December board of review may adjust the
taxable value of property under this subsection for the current
year and for the 3 immediately preceding calendar years. A
corrected tax bill shall be issued for each tax year for which the
taxable value is adjusted by the local tax collecting unit if the
local tax collecting unit has possession of the tax roll or by the
county treasurer if the county has possession of the tax roll. For
purposes of section 53b, an adjustment under this subsection shall
be considered the correction of a clerical error.
(5) Assessment of property, as required in this section and
section 27, is inapplicable to the assessment of property subject
to the levy of ad valorem taxes within voted tax limitation
increases to pay principal and interest on limited tax bonds issued
by any governmental unit, including a county, township, community
college district, or school district, before January 1, 1964, if
the assessment required to be made under this act would be less
than the assessment as state equalized prevailing on the property
at the time of the issuance of the bonds. This inapplicability
shall continue until levy of taxes to pay principal and interest on
the bonds is no longer required. The assessment of property
required by this act shall be applicable for all other purposes.
(6) As used in this act, "transfer of ownership" means the
conveyance of title to or a present interest in property, including
the beneficial use of the property, the value of which is
substantially equal to the value of the fee interest. Transfer of
ownership of property includes, but is not limited to, the
following:
(a) A conveyance by deed.
(b) A conveyance by land contract. The taxable value of
property conveyed by a land contract executed after December 31,
1994 shall be adjusted under subsection (3) for the calendar year
following the year in which the contract is entered into and shall
not be subsequently adjusted under subsection (3) when the deed
conveying title to the property is recorded in the office of the
register of deeds in the county in which the property is located.
(c) A conveyance to a trust after December 31, 1994, except if
the settlor or the settlor's spouse, or both, conveys the property
to the trust and the sole present beneficiary or beneficiaries are
the settlor or the settlor's spouse, or both.
(d) A conveyance by distribution from a trust, except if the
distributee is the sole present beneficiary or the spouse of the
sole present beneficiary, or both.
(e) A change in the sole present beneficiary or beneficiaries
of a trust, except a change that adds or substitutes the spouse of
the sole present beneficiary.
(f) A conveyance by distribution under a will or by intestate
succession, except if the distributee is the decedent's spouse.
(g) A conveyance by lease if the total duration of the lease,
including the initial term and all options for renewal, is more
than 35 years or the lease grants the lessee a bargain purchase
option. As used in this subdivision, "bargain purchase option"
means the right to purchase the property at the termination of the
lease for not more than 80% of the property's projected true cash
value at the termination of the lease. After December 31, 1994, the
taxable value of property conveyed by a lease with a total duration
of more than 35 years or with a bargain purchase option shall be
adjusted under subsection (3) for the calendar year following the
year in which the lease is entered into. This subdivision does not
apply to personal property except buildings described in section
14(6) and personal property described in section 8(h), (i), and
(j). This subdivision does not apply to that portion of the
property not subject to the leasehold interest conveyed.
(h) A conveyance of an ownership interest in a corporation,
partnership, sole proprietorship, limited liability company,
limited liability partnership, or other legal entity if the
ownership interest conveyed is more than 50% of the corporation,
partnership, sole proprietorship, limited liability company,
limited liability partnership, or other legal entity. Unless
notification is provided under subsection (10), the corporation,
partnership, sole proprietorship, limited liability company,
limited liability partnership, or other legal entity shall notify
the assessing officer on a form provided by the state tax
commission not more than 45 days after a conveyance of an ownership
interest that constitutes a transfer of ownership under this
subdivision.
(i) A transfer of property held as a tenancy in common, except
that portion of the property not subject to the ownership interest
conveyed.
(j) A conveyance of an ownership interest in a cooperative
housing corporation, except that portion of the property not
subject to the ownership interest conveyed.
(7) Transfer of ownership does not include the following:
(a) The transfer of property from 1 spouse to the other spouse
or from a decedent to a surviving spouse.
(b) A transfer from a husband, a wife, or a husband and wife
creating or disjoining a tenancy by the entireties in the grantors
or the grantor and his or her spouse.
(c) A transfer of that portion of property subject to a life
estate or life lease retained by the transferor, until expiration
or termination of the life estate or life lease. That portion of
property transferred that is not subject to a life lease shall be
adjusted under subsection (3).
(d) A transfer through foreclosure or forfeiture of a recorded
instrument under chapter 31, 32, or 57 of the revised judicature
act of 1961, 1961 PA 236, MCL 600.3101 to 600.3280 and MCL 600.5701
to 600.5785
600.5759, or through deed or conveyance in lieu of a
foreclosure or forfeiture, until the mortgagee or land contract
vendor subsequently transfers the property. If a mortgagee does not
transfer the property within 1 year of the expiration of any
applicable redemption period, the property shall be adjusted under
subsection (3).
(e) A transfer by redemption by the person to whom taxes are
assessed of property previously sold for delinquent taxes.
(f) A conveyance to a trust if the settlor or the settlor's
spouse, or both, conveys the property to the trust and the sole
present beneficiary of the trust is the settlor or the settlor's
spouse, or both.
(g) A transfer pursuant to a judgment or order of a court of
record making or ordering a transfer, unless a specific monetary
consideration is specified or ordered by the court for the
transfer.
(h) A transfer creating or terminating a joint tenancy between
2 or more persons if at least 1 of the persons was an original
owner of the property before the joint tenancy was initially
created and, if the property is held as a joint tenancy at the time
of conveyance, at least 1 of the persons was a joint tenant when
the joint tenancy was initially created and that person has
remained a joint tenant since the joint tenancy was initially
created. A joint owner at the time of the last transfer of
ownership of the property is an original owner of the property. For
purposes of this subdivision, a person is an original owner of
property owned by that person's spouse.
(i) A transfer for security or an assignment or discharge of a
security interest.
(j) A transfer of real property or other ownership interests
among members of an affiliated group. As used in this subsection,
"affiliated group" means 1 or more corporations connected by stock
ownership to a common parent corporation. Upon request by the state
tax commission, a corporation shall furnish proof within 45 days
that a transfer meets the requirements of this subdivision. A
corporation that fails to comply with a request by the state tax
commission under this subdivision is subject to a fine of $200.00.
(k) Normal public trading of shares of stock or other
ownership interests that, over any period of time, cumulatively
represent more than 50% of the total ownership interest in a
corporation or other legal entity and are traded in multiple
transactions involving unrelated individuals, institutions, or
other legal entities.
(l) A transfer of real property or other ownership interests
among corporations, partnerships, limited liability companies,
limited liability partnerships, or other legal entities if the
entities involved are commonly controlled. Upon request by the
state tax commission, a corporation, partnership, limited liability
company, limited liability partnership, or other legal entity shall
furnish proof within 45 days that a transfer meets the requirements
of this subdivision. A corporation, partnership, limited liability
company, limited liability partnership, or other legal entity that
fails to comply with a request by the state tax commission under
this subdivision is subject to a fine of $200.00.
(m) A direct or indirect transfer of real property or other
ownership interests resulting from a transaction that qualifies as
a tax-free reorganization under section 368 of the internal revenue
code, of
1986 26 USC 368. Upon request by the state tax
commission, a property owner shall furnish proof within 45 days
that a transfer meets the requirements of this subdivision. A
property owner who fails to comply with a request by the state tax
commission under this subdivision is subject to a fine of $200.00.
(n) A transfer of qualified agricultural property, if the
person to whom the qualified agricultural property is transferred
files an affidavit with the assessor of the local tax collecting
unit in which the qualified agricultural property is located and
with the register of deeds for the county in which the qualified
agricultural property is located attesting that the qualified
agricultural property shall remain qualified agricultural property.
The affidavit under this subdivision shall be in a form prescribed
by the department of treasury. An owner of qualified agricultural
property shall inform a prospective buyer of that qualified
agricultural property that the qualified agricultural property is
subject to the recapture tax provided in the agricultural property
recapture act, 2000 PA 261, MCL 211.1001 to 211.1007, if the
qualified agricultural property is converted by a change in use. If
property ceases to be qualified agricultural property at any time
after being transferred, all of the following shall occur:
(i) The taxable value of that property shall be adjusted under
subsection (3) as of the December 31 in the year that the property
ceases to be qualified agricultural property.
(ii) The property is subject to the recapture tax provided for
under the agricultural property recapture act, 2000 PA 261, MCL
211.1001 to 211.1007.
(o) After April 30, 2006 and before January 1, 2008, the
transfer of property exempt under section 7cc as a principal
residence if the person to whom the property is transferred claims
an exemption for the property under section 7cc as a principal
residence.
(8) If all of the following conditions are satisfied, the
local tax collecting unit shall revise the taxable value of
qualified agricultural property taxable on the tax roll in the
possession of that local tax collecting unit to the taxable value
that qualified agricultural property would have had if there had
been no transfer of ownership of that qualified agricultural
property since December 31, 1999 and there had been no adjustment
of that qualified agricultural property's taxable value under
subsection (3) since December 31, 1999:
(a) The qualified agricultural property was qualified
agricultural property for taxes levied in 1999 and each year after
1999.
(b) The owner of the qualified agricultural property files an
affidavit with the assessor of the local tax collecting unit under
subsection (7)(n).
(9) If the taxable value of qualified agricultural property is
adjusted under subsection (8), the owner of that qualified
agricultural property shall not be entitled to a refund for any
property taxes collected under this act on that qualified
agricultural property before the adjustment under subsection (8).
(10) The register of deeds of the county where deeds or other
title documents are recorded shall notify the assessing officer of
the appropriate local taxing unit not less than once each month of
any recorded transaction involving the ownership of property and
shall make any recorded deeds or other title documents available to
that county's tax or equalization department. Unless notification
is provided under subsection (6), the buyer, grantee, or other
transferee of the property shall notify the appropriate assessing
office in the local unit of government in which the property is
located of the transfer of ownership of the property within 45 days
of the transfer of ownership, on a form prescribed by the state tax
commission that states the parties to the transfer, the date of the
transfer, the actual consideration for the transfer, and the
property's parcel identification number or legal description. Forms
filed in the assessing office of a local unit of government under
this subsection shall be made available to the county tax or
equalization department for the county in which that local unit of
government is located. This subsection does not apply to personal
property except buildings described in section 14(6) and personal
property described in section 8(h), (i), and (j).
(11) As used in this section:
(a) "Additions" means that term as defined in section 34d.
(b) "Beneficial use" means the right to possession, use, and
enjoyment of property, limited only by encumbrances, easements, and
restrictions of record.
(c) "Converted by a change in use" means that term as defined
in the agricultural property recapture act, 2000 PA 261, MCL
211.1001 to 211.1007.
(d) "Inflation rate" means that term as defined in section
34d.
(e) "Losses" means that term as defined in section 34d.
(f) "Qualified agricultural property" means that term as
defined in section 7dd.
Sec. 34d. (1) As used in this section or section 27a, or
section 3 or 31 of article IX of the state constitution of 1963:
(a) For taxes levied before 1995, "additions" means all
increases in value caused by new construction or a physical
addition of equipment or furnishings, and the value of property
that was exempt from taxes or not included on the assessment unit's
immediately preceding year's assessment roll.
(b) For taxes levied after 1994, "additions" means, except as
provided in subdivision (c), all of the following:
(i) Omitted real property. As used in this subparagraph,
"omitted real property" means previously existing tangible real
property not included in the assessment. Omitted real property
shall not increase taxable value as an addition unless the
assessing jurisdiction has a property record card or other
documentation showing that the omitted real property was not
previously included in the assessment. The assessing jurisdiction
has the burden of proof in establishing whether the omitted real
property is included in the assessment. Omitted real property for
the current and the 2 immediately preceding years, discovered after
the assessment roll has been completed, shall be added to the tax
roll pursuant to the procedures established in section 154. For
purposes of determining the taxable value of real property under
section 27a, the value of omitted real property is based on the
value and the ratio of taxable value to true cash value the omitted
real property would have had if the property had not been omitted.
(ii) Omitted personal property. As used in this subparagraph,
"omitted personal property" means previously existing tangible
personal property not included in the assessment. Omitted personal
property shall be added to the tax roll pursuant to section 154.
(iii) New construction. As used in this subparagraph, "new
construction" means property not in existence on the immediately
preceding tax day and not replacement construction. New
construction includes the physical addition of equipment or
furnishings, subject to the provisions set forth in section
27(2)(a) to (o). For purposes of determining the taxable value of
property under section 27a, the value of new construction is the
true cash value of the new construction multiplied by 0.50.
(iv) Previously exempt property. As used in this subparagraph,
"previously exempt property" means property that was exempt from ad
valorem taxation under this act on the immediately preceding tax
day but is subject to ad valorem taxation on the current tax day
under this act. For purposes of determining the taxable value of
real property under section 27a:
(A) The value of property previously exempt under section 7u
is the taxable value the entire parcel of property would have had
if that property had not been exempt, minus the product of the
entire parcel's taxable value in the immediately preceding year and
the lesser of 1.05 or the inflation rate.
(B) The taxable value of property that is a facility as that
term is defined in section 2 of 1974 PA 198, MCL 207.552, that was
previously exempt under section 7k is the taxable value that
property would have had under this act if it had not been exempt.
(C) The value of property previously exempt under any other
section of law is the true cash value of the previously exempt
property multiplied by 0.50.
(v) Replacement construction. As used in this subparagraph,
"replacement construction" means construction that replaced
property damaged or destroyed by accident or act of God and that
occurred after the immediately preceding tax day to the extent the
construction's true cash value does not exceed the true cash value
of property that was damaged or destroyed by accident or act of God
in the immediately preceding 3 years. For purposes of determining
the taxable value of property under section 27a, the value of the
replacement construction is the true cash value of the replacement
construction multiplied by a fraction the numerator of which is the
taxable value of the property to which the construction was added
in the immediately preceding year and the denominator of which is
the true cash value of the property to which the construction was
added in the immediately preceding year, and then multiplied by the
lesser of 1.05 or the inflation rate.
(vi) An increase in taxable value attributable to the complete
or partial remediation of environmental contamination existing on
the immediately preceding tax day. The department of environmental
quality shall determine the degree of remediation based on
information available in existing department of environmental
quality records or information made available to the department of
environmental quality if the appropriate assessing officer for a
local tax collecting unit requests that determination. The increase
in taxable value attributable to the remediation is the increase in
true cash value attributable to the remediation multiplied by a
fraction the numerator of which is the taxable value of the
property had it not been contaminated and the denominator of which
is the true cash value of the property had it not been
contaminated.
(vii) An increase in the value attributable to the property's
occupancy rate if either a loss, as that term is defined in this
section, had been previously allowed because of a decrease in the
property's occupancy rate or if the value of new construction was
reduced because of a below-market occupancy rate. For purposes of
determining the taxable value of property under section 27a, the
value of an addition for the increased occupancy rate is the
product of the increase in the true cash value of the property
attributable to the increased occupancy rate multiplied by a
fraction the numerator of which is the taxable value of the
property in the immediately preceding year and the denominator of
which is the true cash value of the property in the immediately
preceding year, and then multiplied by the lesser of 1.05 or the
inflation rate.
(viii) Public services. As used in this subparagraph, "public
services" means water service, sewer service, a primary access
road, natural gas service, electrical service, telephone service,
sidewalks, or street lighting. For purposes of determining the
taxable value of real property under section 27a, the value of
public services is the amount of increase in true cash value of the
property attributable to the available public services multiplied
by 0.50 and shall be added in the calendar year following the
calendar year when those public services are initially available.
(c) For taxes levied after 1994, additions do not include
increased value attributable to any of the following:
(i) Platting, splits, or combinations of property.
(ii) A change in the zoning of property.
(iii) For the purposes of the calculation of the millage
reduction fraction under subsection (7) only, increased taxable
value under section 27a(3) after a transfer of ownership of
property.
(d) "Assessed valuation of property as finally equalized"
means taxable value under section 27a.
(e) "Financial officer" means the officer responsible for
preparing the budget of a unit of local government.
(f) "General price level" means the annual average of the 12
monthly values for the United States consumer price index for all
urban consumers as defined and officially reported by the United
States department of labor, bureau of labor statistics.
(g) For taxes levied before 1995, "losses" means a decrease in
value caused by the removal or destruction of real or personal
property and the value of property taxed in the immediately
preceding year that has been exempted or removed from the
assessment unit's assessment roll.
(h) For taxes levied after 1994, "losses" means, except as
provided in subdivision (i), all of the following:
(i) Property that has been destroyed or removed. For purposes
of determining the taxable value of property under section 27a, the
value of property destroyed or removed is the product of the true
cash value of that property multiplied by a fraction the numerator
of which is the taxable value of that property in the immediately
preceding year and the denominator of which is the true cash value
of that property in the immediately preceding year.
(ii) Property that was subject to ad valorem taxation under
this act in the immediately preceding year that is now exempt from
ad valorem taxation under this act. For purposes of determining the
taxable value of property under section 27a, the value of property
exempted from ad valorem taxation under this act is the amount
exempted.
(iii) An adjustment in value, if any, because of a decrease in
the property's occupancy rate, to the extent provided by law. For
purposes of determining the taxable value of real property under
section 27a, the value of a loss for a decrease in the property's
occupancy rate is the product of the decrease in the true cash
value of the property attributable to the decreased occupancy rate
multiplied by a fraction the numerator of which is the taxable
value of the property in the immediately preceding year and the
denominator of which is the true cash value of the property in the
immediately preceding year.
(iv) A decrease in taxable value attributable to environmental
contamination existing on the immediately preceding tax day. The
department of environmental quality shall determine the degree to
which environmental contamination limits the use of property based
on information available in existing department of environmental
quality records or information made available to the department of
environmental quality if the appropriate assessing officer for a
local tax collecting unit requests that determination. The
department of environmental quality's determination of the degree
to which environmental contamination limits the use of property
shall be based on the criteria established for the categories set
forth in section 20120a(1) of the natural resources and
environmental protection act, 1994 PA 451, MCL 324.20120a. The
decrease in taxable value attributable to the contamination is the
decrease in true cash value attributable to the contamination
multiplied by a fraction the numerator of which is the taxable
value of the property had it not been contaminated and the
denominator of which is the true cash value of the property had it
not been contaminated.
(i) For taxes levied after 1994, losses do not include
decreased value attributable to either of the following:
(i) Platting, splits, or combinations of property.
(ii) A change in the zoning of property.
(j) "New construction and improvements" means additions less
losses.
(k) "Current year" means the year for which the millage
limitation is being calculated.
(l) "Inflation rate" means the ratio of the general price level
for the state fiscal year ending in the calendar year immediately
preceding the current year divided by the general price level for
the state fiscal year ending in the calendar year before the year
immediately preceding the current year.
(2) On or before the first Monday in May of each year, the
assessing officer of each township or city shall tabulate the
tentative taxable value as approved by the local board of review
and as modified by county equalization for each classification of
property that is separately equalized for each unit of local
government and provide the tabulated tentative taxable values to
the county equalization director. The tabulation by the assessing
officer shall contain additions and losses for each classification
of property that is separately equalized for each unit of local
government or part of a unit of local government in the township or
city. If as a result of state equalization the taxable value of
property changes, the assessing officer of each township or city
shall revise the calculations required by this subsection on or
before the Friday following the fourth Monday in May. The county
equalization director shall compute these amounts and the current
and immediately preceding year's taxable values for each
classification of property that is separately equalized for each
unit of local government that levies taxes under this act within
the boundary of the county. The county equalization director shall
cooperate with equalization directors of neighboring counties, as
necessary, to make the computation for units of local government
located in more than 1 county. The county equalization director
shall calculate the millage reduction fraction for each unit of
local government in the county for the current year. The financial
officer for each taxing jurisdiction shall calculate the compounded
millage reduction fractions beginning in 1980 resulting from the
multiplication of successive millage reduction fractions and shall
recognize a local voter action to increase the compounded millage
reduction fraction to a maximum of 1 as a new beginning fraction.
Upon request of the superintendent of the intermediate school
district, the county equalization director shall transmit the
complete computations of the taxable values to the superintendent
of the intermediate school district within that county. At the
request of the presidents of community colleges, the county
equalization director shall transmit the complete computations of
the taxable values to the presidents of community colleges within
the county.
(3) On or before the first Monday in June of each year, the
county equalization director shall deliver the statement of the
computations signed by the county equalization director to the
county treasurer.
(4) On or before the second Monday in June of each year, the
treasurer of each county shall certify the immediately preceding
year's taxable values, the current year's taxable values, the
amount of additions and losses for the current year, and the
current year's millage reduction fraction for each unit of local
government that levies a property tax in the county.
(5) The financial officer of each unit of local government
shall make the computation of the tax rate using the data certified
by the county treasurer and the state tax commission. At the annual
session in October, the county board of commissioners shall not
authorize the levy of a tax unless the governing body of the taxing
jurisdiction has certified that the requested millage has been
reduced, if necessary, in compliance with section 31 of article IX
of the state constitution of 1963.
(6) The number of mills permitted to be levied in a tax year
is limited as provided in this section pursuant to section 31 of
article IX of the state constitution of 1963. A unit of local
government shall not levy a tax rate greater than the rate
determined by
reducing to be its maximum rate or rates authorized
by law or charter by a millage reduction fraction as provided in
this section without voter approval.
(7) A millage reduction fraction shall be determined for each
year for each local unit of government. For ad valorem property
taxes that became a lien before January 1, 1983, the numerator of
the fraction shall be the total state equalized valuation for the
immediately preceding year multiplied by the inflation rate and the
denominator of the fraction shall be the total state equalized
valuation for the current year minus new construction and
improvements. For ad valorem property taxes that become a lien
after December 31, 1982 and through December 31, 1994, the
numerator of the fraction shall be the product of the difference
between the total state equalized valuation for the immediately
preceding year minus losses multiplied by the inflation rate and
the denominator of the fraction shall be the total state equalized
valuation for the current year minus additions. For ad valorem
property taxes that are levied after December 31, 1994, the
numerator of the fraction shall be the product of the difference
between the total taxable value for the immediately preceding year
minus losses multiplied by the inflation rate and the denominator
of the fraction shall be the total taxable value for the current
year minus additions. For each year after 1993 through 1996, a
millage reduction fraction shall not exceed 1. For each year after
1996, a millage reduction fraction may exceed 1.
(8) The compounded millage reduction fraction for each year
after 1980 shall be calculated by multiplying the local unit's
previous year's compounded millage reduction fraction by the
current year's millage reduction fraction. Beginning with 1980 tax
levies, the compounded millage reduction fraction for the year
shall be multiplied by the maximum millage rate authorized by law
or charter for the unit of local government for the year, except as
provided
by subsection (9). A For
each year after 1980 through
1996, a compounded millage reduction fraction shall not exceed 1.
For each year after 1996, a compounded millage reduction fraction
may exceed 1.
(9) The millage reduction shall be determined separately for
authorized millage approved by the voters. The limitation on
millage authorized by the voters on or before April 30 of a year
shall be calculated beginning with the millage reduction fraction
for that year. Millage authorized by the voters after April 30
shall not be subject to a millage reduction until the year
following the voter authorization which shall be calculated
beginning with the millage reduction fraction for the year
following the authorization. The first millage reduction fraction
used in calculating the limitation on millage approved by the
voters after January 1, 1979 shall not exceed 1. In 2007 and each
year after 2007, application of the millage reduction fraction
shall not increase the maximum millage rate previously approved by
voter authorization.
(10) A millage reduction fraction shall be applied separately
to the aggregate maximum millage rate authorized by a charter and
to each maximum millage rate authorized by state law for a specific
purpose. In 2007 and each year after 2007, application of the
millage reduction fraction shall not increase the maximum millage
rate authorized by charter or the maximum millage rate authorized
by state law for a specific purpose.
(11) A unit of local government may submit to the voters for
their approval the levy in that year of a tax rate in excess of the
limit set by this section. The ballot question shall ask the voters
to approve the levy of a specific number of mills in excess of the
limit. The provisions of this section do not allow the levy of a
millage rate in excess of the maximum rate authorized by law or
charter. If the authorization to levy millage expires after 1993
and a local governmental unit is asking voters to renew the
authorization to levy the millage, the ballot question shall ask
for renewed authorization for the number of expiring mills as
reduced
determined by the millage reduction required by this
section. If the election occurs before June 1 of a year, the
millage reduction is based on the immediately preceding year's
millage reduction applicable to that millage. If the election
occurs after May 31 of a year, the millage reduction shall be based
on that year's millage reduction applicable to that millage had it
not expired.
(12) A reduction or limitation under this section shall not be
applied to taxes imposed for the payment of principal and interest
on bonds or other evidence of indebtedness or for the payment of
assessments or contract obligations in anticipation of which bonds
are issued that were authorized before December 23, 1978, as
provided by section 4 of chapter I of former 1943 PA 202, or to
taxes imposed for the payment of principal and interest on bonds or
other evidence of indebtedness or for the payment of assessments or
contract obligations in anticipation of which bonds are issued that
are approved by the voters after December 22, 1978.
(13) If it is determined subsequent to the levy of a tax that
an incorrect millage reduction fraction has been applied, the
amount of additional tax revenue or the shortage of tax revenue
shall be deducted from or added to the next regular tax levy for
that unit of local government after the determination of the
authorized rate pursuant to this section.
(14) If as a result of an appeal of county equalization or
state equalization the taxable value of a unit of local government
changes, the millage reduction fraction for the year shall be
recalculated. The financial officer shall effectuate an addition or
reduction of tax revenue in the same manner as prescribed in
subsection (13).
(15) The fractions calculated pursuant to this section shall
be rounded to 4 decimal places, except that the inflation rate
shall be computed by the state tax commission and shall be rounded
to 3 decimal places. The state tax commission shall publish the
inflation rate before March 1 of each year.
(16) Beginning with taxes levied in 1994, the millage
reduction required by section 31 of article IX of the state
constitution of 1963 shall permanently reduce the maximum rate or
rates authorized by law or charter. The reduced maximum authorized
rate or rates for 1994 shall equal the product of the maximum rate
or rates authorized by law or charter before application of this
section multiplied by the compounded millage reduction applicable
to that millage in 1994 pursuant to subsections (8) to (12). The
reduced
maximum authorized rate or rates for 1995 and each
year
after 1995 shall equal the product of the immediately preceding
year's reduced
maximum authorized rate or rates multiplied by the
current year's millage reduction fraction and shall be adjusted for
millage for which authorization has expired and new authorized
millage approved by the voters pursuant to subsections (8) to (12).