HOUSE BILL No. 4025

January 22, 2007, Introduced by Rep. Hildenbrand and referred to the Committee on Agriculture.

A bill to amend 1893 PA 206, entitled

"The general property tax act,"

by amending sections 7dd, 7ee, 10, 24, 24c, 27a, 27b, 27c, 34, 34c,

and 34d (MCL 211.7dd, 211.7ee, 211.10, 211.24, 211.24c, 211.27a,

211.27b, 211.27c, 211.34, 211.34c, and 211.34d), section 7dd as

amended by 2006 PA 114, sections 7ee and 24c as amended by 2003 PA

247, section 10 as amended by 1994 PA 415, section 24 as amended by

2002 PA 620, section 27a as amended by 2006 PA 378, section 27b as

amended and section 27c as added by 1996 PA 476, section 34 as

amended by 1986 PA 105, section 34c as amended by 2006 PA 376, and

section 34d as amended by 2005 PA 12, and by adding section 27e;

and to repeal acts and parts of acts.

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.

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 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 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. 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 real

property, 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~~ 34c. 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.

Sec. 7ee. (1) Qualified agricultural property is exempt from

the tax levied by a local school district for school operating

purposes to the extent provided under section 1211 of the revised

school code, 1976 PA 451, MCL 380.1211, according to the provisions

of this section.

(2) Qualified agricultural property that is classified as

agricultural real property under section 34c is exempt under

subsection (1) and the owner is not required to file an affidavit

claiming an exemption with the local tax collecting unit unless

requested by the assessor to determine whether the property

includes structures that are not exempt under this section. To

claim an exemption under subsection (1) for qualified agricultural

property that is not classified as agricultural real property under

section 34c, the owner shall file an affidavit claiming the

exemption with the local tax collecting unit by May 1.

(3) The affidavit shall be on a form prescribed by the

department of treasury.

(4) For property classified as agricultural real property, and

upon receipt of an affidavit filed under subsection (2) for

property not classified as agricultural real property, the assessor

shall determine if the property is qualified agricultural property

and if so shall exempt the property from the collection of the tax

as provided in subsection (1) until December 31 of the year in

which the property is no longer qualified agricultural property as

defined in section 7dd. An owner is required to file a new claim

for exemption on the same property as requested by the assessor

under subsection (2).

(5) Not more than 90 days after all or a portion of the

exempted property is no longer qualified agricultural property, the

owner shall rescind the exemption for the applicable portion of the

property by filing with the local tax collecting unit a rescission

form prescribed by the department of treasury. An owner who fails

to file a rescission as required by this subsection is subject to a

penalty of $5.00 per day for each separate failure beginning after

the 90 days have elapsed, up to a maximum of $200.00. This penalty

shall be collected under 1941 PA 122, MCL 205.1 to 205.31, and

shall be deposited in the state school aid fund established in

section 11 of article IX of the state constitution of 1963. This

penalty may be waived by the department of treasury.

(6) An owner of property that is qualified agricultural

property on May 1 for which an exemption was not on the tax roll

may file an appeal with the July or December board of review in the

year the exemption was claimed or the immediately succeeding year.

An owner of property that is qualified agricultural property on May

1 for which an exemption was denied by the assessor in the year the

affidavit was filed, may file an appeal with the July board of

review for summer taxes or, if there is not a summer levy of school

operating taxes, with the December board of review.

(7) If the assessor of the local tax collecting unit believes

that the property for which an exemption has been granted is not

qualified agricultural property, the assessor may deny or modify an

existing exemption by notifying the owner in writing at the time

required for providing a notice under section 24c. A taxpayer may

appeal the assessor's determination to the board of review meeting

under section 30. A decision of the board of review may be appealed

to the residential and small claims division of the Michigan tax

tribunal.

(8) If an exemption under this section is erroneously granted,

an owner may request in writing that the local tax collecting unit

withdraw the exemption. If an owner requests that an exemption be

withdrawn, the local assessor shall notify the owner that the

exemption issued under this section has been denied based on that

owner's request. If an exemption is withdrawn, the property that

had been subject to that exemption shall be immediately placed on

the tax roll 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 as though

the exemption had not been granted. A corrected tax bill shall be

issued for the tax year being 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. If an owner requests that an exemption under this section

be withdrawn before that owner is contacted in writing by the local

assessor regarding that owner's eligibility for the exemption and

that owner pays the corrected tax bill issued under this subsection

within 30 days after the corrected tax bill is issued, that owner

is not liable for any penalty or interest on the additional tax. An

owner who pays a corrected tax bill issued under this subsection

more than 30 days after the corrected tax bill is issued is liable

for the penalties and interest that would have accrued if the

exemption had not been granted from the date the taxes were

originally levied.

Sec. 10. (1) An assessment of all the property in the state

liable to taxation shall be made annually in all townships,

villages, and cities by the ~~applicable~~ appropriate assessing

officer as provided in section 3 of article IX of the state

constitution of 1963 and section 27a.

(2) Notwithstanding any provision to the contrary in the act

of incorporation or charter of a village, an assessment for village

taxes shall be identical to the assessment made by the ~~applicable~~

appropriate assessing officer of the township in which the village

is located, and tax statements shall set forth clearly the state

equalized ~~value~~ valuation or agricultural use value for qualified

agricultural property and the taxable value of the individual

properties in the village upon which authorized millages are

levied.

(3) If a nonresident of the taxing unit requests in writing

information regarding the assessment of his or her property, the

~~supervisor or~~ appropriate assessing officer shall reply to the

request within a reasonable length of time.

Sec. 24. (1) On or before the first Monday in March in each

year, the assessor shall make and complete an assessment roll, upon

which he or she shall set down all of the following:

(a) The name and address of every person liable to be taxed in

the local tax collecting unit with a full description of all the

real property liable to be taxed. If the name of the owner or

occupant of any tract or parcel of real property is known, the

assessor shall enter the name and address of the owner or occupant

opposite to the description of the property. If unknown, the real

property described upon the roll shall be assessed as "owner

unknown". All contiguous subdivisions of any section that are owned

by 1 person, firm, corporation, or other legal entity and all

unimproved lots in any block that are contiguous and owned by 1

person, firm, corporation, or other legal entity shall be assessed

as 1 parcel, unless demand in writing is made by the owner or

occupant to have each subdivision of the section or each lot

assessed separately. However, failure to assess contiguous parcels

as entireties does not invalidate the assessment as made. Each

description shall show as near as possible the number of acres

contained in it, as determined by the assessor. It is not necessary

for the assessment roll to specify the quantity of land comprised

in any town, city, or village lot.

(b) The assessor shall estimate, according to his or her best

information and judgment, the true cash value and agricultural use

value for qualified agricultural property and the true cash value

and assessed value of every parcel of real property that is not

qualified agricultural property and set the agricultural use value

or assessed value down opposite the parcel.

of every parcel of real property and set that value down opposite

the parcel.

(d) The assessor shall determine the percentage of value of

every parcel of real property that is exempt from the tax levied by

a local school district for school operating purposes to the extent

provided under section 1211 of the revised school code, 1976 PA

451, MCL 380.1211, and set that percentage of value down opposite

the parcel.

(e) The assessor shall determine the date of the last transfer

of ownership of every parcel of real property occurring after

December 31, 1994 and set that date down opposite the parcel.

(f) The assessor shall estimate the true cash value of all the

personal property of each person, and set the assessed value and

tentative taxable value down opposite the name of the person. In

determining the property to be assessed and in estimating the value

of that property, the assessor is not bound to follow the

statements of any person, but shall exercise his or her best

judgment. For taxes levied after December 31, 2003, the assessor

shall separately state the assessed value and tentative taxable

value of any leasehold improvements.

(g) Property assessed to a person other than the owner shall

be assessed separately from the owner's property and shall show in

what capacity it is assessed to that person, whether as agent,

guardian, or otherwise. Two or more persons not being copartners,

owning personal property in common, may each be assessed severally

for each person's portion. Undivided interests in lands owned by

tenants in common, or joint tenants not being copartners, may be

assessed to the owners.

(2) The state geologist, or his or her duly authorized deputy,

shall determine, according to his or her best information and

judgment, the true cash value of the metallic mining properties and

mineral rights consisting of metallic resources that are either

producing, developed, or have a known commercial mineral value,

including surface rights and personal property that may be used in

the operation or development of the property assessed, or any

stockpile of ore or mineral stored on the surface. For the purpose

of encouraging the exploration and development of metallic mineral

resources, metallic mineral ore newly discovered or proven in the

ground and not part of the property of an operating mine shall be

exempt from the taxes collected under this act for a maximum period

of 10 years or until the time it becomes part of the property of an

operating mine or it in itself becomes an operating mine. Metallic

mineral ore newly discovered or proven in the ground and part of

the property of an operating mine shall be exempt from taxes

collected under this act until it, in combination with previously

discovered metallic mineral ore of the operating mine, comes into a

10-year recovery period of the mine as determined by the average

normal annual rate of extraction of the mine.

(3) An operating mine shall be defined to be an operating mine

as of the date of starting of a shaft, stripping of overburden, or

rehabilitation, or an abandoned or idle mine closed for not less

than 2 years. Ore shall not enjoy more than 10 years' exemption

from taxation. This section does not exempt from the taxes

collected under this act ore reserves proven as of April 1, 1947.

It is the intent of this act that mineral properties shall be

valued and assessed in the future for ad valorem taxes according to

the formula used in the valuation of mineral properties before the

effective date of this act. It is the intent of this act that no

metallic mineral ore shall be exempt more than 10 years because of

the application of this act and if at any time it becomes evident

that such is the case, the state tax commission shall determine the

value of this untaxed ore and place this valuation on the proper

tax roll. The state geologist shall report his or her determination

of the true cash value of the mineral properties to the state tax

commission on or before February 10 of each year. The state tax

commission shall assess the mineral properties containing 20% or

more of natural iron per ton of ore in conformity and uniformity

with all other property within the assessing district. The state

tax commission shall assess all other metallic mineral properties

at the value certified by the state geologist. The state tax

commission, as early as is practicable before February 20, shall

certify the assessment of the property to the assessor of the

township or city in which the property is situated, who shall for

the mineral properties and mineral rights that are owned separate

from the surface rights on the property assess each to the owner at

the valuation certified to him or her. However, an adjustment to

the value certified by the state tax commission may be made by the

assessor of the township or city to reflect any general adjustment

of assessed valuation from the immediately preceding year not

included in the state tax commission computation. The assessor

shall determine the true cash value of the surface rights and

assess the value of the surface rights to the owner. The assessment

upon the metallic mining properties and mineral rights may be

altered from year to year regardless of whether any previous

assessment has been reviewed by the state tax commission. The

assessor or the owner of any interest in the property assessed may

appeal the assessment and valuation of the property as determined

by the board of review to the state tax commission which shall

review the assessment and valuation as provided in section 152.

Sec. 24c. (1) The assessor shall give to each owner or person

or persons listed on the assessment roll of the property a notice

by first-class mail of an increase in the tentative state equalized

valuation, the tentative agricultural use value, or the tentative

taxable value for the year. The notice shall specify each parcel of

property, the tentative taxable value for the current year, and the

taxable value for the immediately preceding year. The notice shall

also specify the time and place of the meeting of the board of

review. The notice shall also specify the difference between the

property's tentative taxable value in the current year and the

property's taxable value in the immediately preceding year.

(2) The notice shall include, in addition to the information

required by subsection (1), all of the following:

(a) The state equalized valuation for the immediately

preceding year.

(b) The tentative state equalized valuation for the current

year.

valuation for the current year and the state equalized valuation

for the immediately preceding year.

(d) For qualified agricultural property, all of the following:

(i) Beginning in 2007, the agricultural use value for the

immediately preceding year.

(ii) The tentative agricultural use value for the current year.

(iii) Beginning in 2009, the net change between the tentative

agricultural use value for the current year and the agricultural

use value for the immediately preceding year.

(e) ~~(d)~~ The classification of the property as ~~defined~~

described by section 34c and whether that property is qualified

agricultural property exempt from the tax levied by a local school

district for school operating purposes under section 7ee.

(f) ~~(e)~~ The inflation rate for the immediately preceding year

as defined in section 34d.

(g) ~~(f)~~ A statement provided by the state tax commission

explaining the relationship between state equalized valuation and

taxable value or, for qualified agricultural property, the

relationship between the agricultural use value and taxable value.

If the assessor believes that a transfer of ownership has occurred

in the immediately preceding year, the statement shall state that

the ownership was transferred and that the taxable value of that

property is the same as the state equalized valuation of that

property or, for qualified agricultural property, the same as the

property's taxable value in the immediately preceding year adjusted

as provided in section 27e(2).

(3) When required by the income tax act of 1967, 1967 PA 281,

MCL 206.1 to 206.532, the assessment notice shall include or be

accompanied by information or forms prescribed by the income tax

act of 1967, 1967 PA 281, MCL 206.1 to 206.532.

(4) The assessment notice shall be addressed to the owner

according to the records of the assessor and mailed not less than

10 days before the meeting of the board of review. The failure to

send or receive an assessment notice does not invalidate an

assessment roll or an assessment on that property.

(5) The tentative state equalized valuation shall be

calculated by multiplying the assessment by the tentative equalized

valuation multiplier. If the assessor has made assessment

adjustments that would have changed the tentative multiplier, the

assessor may recalculate the multiplier for use in the notice.

(6) The state tax commission shall prepare a model assessment

notice form that shall be made available to local units of

government.

(7) The assessment notice under subsection (1) shall include

the following statement:

"If you purchased your principal residence after May 1 last

year, to claim the principal residence exemption, if you have not

already done so, you are required to file an affidavit before May

1.".

(8) For taxes levied after December 31, 2003, the assessment

notice under subsection (1) shall separately state the state

equalized valuation and taxable value for any leasehold

improvements.

Sec. 27a. (1) Except as otherwise provided in this section and

section 27e, 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~~ Except as otherwise provided in section 27e(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

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.

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 600.5759, 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, 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) A transfer of qualified forest property, if the person to

whom the qualified forest property is transferred files an

affidavit with the assessor of the local tax collecting unit in

which the qualified forest property is located and with the

property is located attesting that the qualified forest property

shall remain qualified forest property. The affidavit under this

subdivision shall be in a form prescribed by the department of

treasury. An owner of qualified forest property shall inform a

prospective buyer of that qualified forest property that the

qualified forest property is subject to the recapture tax provided

in the qualified forest property recapture tax act, 2006 PA 379,

MCL 211.1031 to 211.1036, if the qualified forest property is

converted by a change in use. If property ceases to be qualified

forest 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 forest property.

(ii) The property is subject to the recapture tax provided for

under the qualified forest property recapture tax act, 2006 PA 379,

MCL 211.1031 to 211.1036.

(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.

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.

(g) "Qualified forest property" means that term as defined in

section ~~7jj~~ 7jj[1].

Sec. 27b. (1) If the buyer, grantee, or other transferee in

the immediately preceding transfer of ownership of property does

not notify the ~~appropriate assessing office~~ assessor as required by

under section ~~27a(8)~~ 27a(10) or, for qualified agricultural

property, under section 27e, the property's taxable value shall be

adjusted under section 27a(3) or, for qualified agricultural

property, under section 27e(3) and all of the following shall be

levied:

(a) Any additional taxes that would have been levied if the

transfer of ownership had been recorded as required under this act

from the date of transfer.

(b) Interest and penalty from the date the tax would have been

originally levied.

beginning after the 45 days have elapsed, up to a maximum of

$200.00.

(2) The ~~appropriate assessing officer~~ assessor shall certify

for collection to the treasurer of the local tax collecting unit if

the local tax collecting unit has possession of the tax roll or the

county treasurer if the county has possession of the tax roll any

additional taxes due under subsection (1)(a) and any penalty due

under subsection (1)(c).

(3) The treasurer of the local tax collecting unit if the

local tax collecting unit has possession of the tax roll or the

county treasurer if the county has possession of the tax roll shall

collect any taxes, interest, and penalty due pursuant to this

section, and shall immediately prepare and submit a corrected tax

bill for any additional taxes due under subsection (1)(a) and any

interest and penalty due under subsection (1)(b). A penalty due

under subsection (1)(c) may be collected with the immediately

succeeding regular tax bill.

(4) Any taxes, interest, and penalty collected pursuant to

subsection (1)(a) and (b) shall be distributed in the same manner

as other delinquent taxes, interest, and penalties are distributed

under this act. Any penalty collected under subsection (1)(c) shall

be distributed to the local tax collecting unit.

(5) The governing body of a local tax collecting unit may

waive, by resolution, the penalty levied under subsection (1)(c).

(6) If the taxable value of property is increased under this

section, the ~~appropriate assessing officer~~ assessor shall

immediately notify by first-class mail the owner of that property

of that increase in taxable value. A buyer, grantee, or other

transferee may appeal any increase in taxable value or the levy of

any additional taxes, interest, and penalties under subsection (1)

to the Michigan tax tribunal within 35 days of receiving the notice

of the increase in the property's taxable value. An appeal under

this subsection is limited to the issues of whether a transfer of

ownership has occurred and correcting arithmetic errors. A dispute

regarding the valuation of the property is not a basis for appeal

under this subsection.

(7) If the taxable value of property is adjusted under

subsection (1), the ~~assessing officer~~ assessor making the

adjustment shall file an affidavit with all officials responsible

for determining assessment figures, rate of taxation, or

mathematical calculations for that property within 30 days of the

date the adjustment is made. The affidavit shall state the amount

of the adjustment and the amount of additional taxes levied. The

officials with whom the affidavit is filed shall correct all

official records for which they are responsible to reflect the

adjustment and levy.

Sec. 27c. If the buyer, grantee, or other transferee in any

preceding transfer of ownership of property does not notify the

~~appropriate assessing office~~ assessor as required by section ~~27a(8)~~

27a(10) or, for qualified agricultural property, under section

27e(5), a taxing unit may sue that buyer, grantee, or other

transferee as provided in section 47 for all of the following:

(a) Any additional taxes that would have been levied if the

transfer of ownership had been recorded as required under this act

from the date of transfer.

(b) Interest and penalty from the date the tax would have been

originally levied.

beginning after the 45 days have elapsed, up to a maximum of

$200.00.

Sec. 27e. (1) Except as otherwise provided in this section,

beginning December 31, 2006, property that is qualified

agricultural property shall be assessed at 50% of its agricultural

use 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 2007 and for each year after 2007, the taxable value of

each parcel of qualified agricultural property is the lesser of the

following:

(a) The qualified agricultural 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.

(b) The qualified agricultural property's current agricultural

use value.

property's taxable value had been determined under section 27a.

(3) Upon a transfer of ownership of qualified agricultural

property and if the property remains qualified agricultural

property, the qualified agricultural property's taxable value for

the calendar year following the year of the transfer is the

property's taxable value for the calendar year immediately

preceding the transfer adjusted as follows:

(a) For taxes levied after December 31, 2003 and before

January 1, 2007, as provided in section 27a(2).

(b) For taxes levied after December 31, 2006, as provided in

subsection (2).

(4) Upon a transfer of ownership of qualified agricultural

property and if the property does not remain qualified agricultural

property, the taxable value of the property shall be adjusted under

section 27a(3).

(5) The register of deeds of the county where deeds or other

title documents are recorded shall notify the assessor not less

than once each month of any recorded transaction involving the

ownership of qualified agricultural property and shall make any

recorded deeds or other title documents available to the assessor.

The buyer, grantee, or other transferee of the qualified

agricultural property shall notify the assessor of the local tax

collecting unit in which the qualified agricultural property is

located of the transfer of ownership of the qualified agricultural

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 qualified agricultural property's parcel

identification number or legal description. Forms filed in the

assessing office of a local tax collecting unit under this

subsection shall be made available to the county tax or

equalization department for that county. This subsection does not

apply to personal property.

(6) The owner of qualified agricultural property shall rescind

the exemption pursuant to section 7ee(5) if property exempt as

qualified agricultural property is no longer qualified agricultural

property. If an exemption for property exempt as qualified

agricultural property is rescinded and that property had been

assessed based on its agricultural use value under this section,

the property's taxable value shall be adjusted as of December 31 in

the year in which the qualified agricultural property's exemption

is rescinded as follows:

(a) If there was not a transfer of ownership of the property

after the effective date of the amendatory act that added this

section, the property's taxable value shall be adjusted to the

taxable value the property would have had as determined under

section 27a(2) if the property had not been subject to assessment

under this section.

(b) If there was a transfer of ownership of the property after

the effective date of the amendatory act that added this section,

the property's taxable value shall be adjusted as provided in

section 27a(3).

(7) As used in this section:

(a) "Additions" means that term as defined in section 34d.

(b) "Agricultural use" means that term as defined in section

34c(2)(a).

agricultural use and not the property's highest and best use.

(d) "Beneficial use" means the right to possession, use, and

enjoyment of property, limited only by encumbrances, easements, and

restrictions of record.

(e) "Inflation rate" means that term as defined in section

34d.

(f) "Losses" means that term as defined in section 34d.

(g) "Qualified agricultural property" means property exempt

from the tax levied by a local school district for school operating

purposes under section 7ee.

(h) "Transfer of ownership" means that term as defined in

section 27a.

Sec. 34. (1) The county board of commissioners in each county

shall meet in April each year to determine the county equalized

value, which ~~equalization~~ shall be completed and submitted along

with the tabular statement required by section 5 of ~~Act No. 44 of~~

~~the Public Acts of 1911, being section 209.5 of the Michigan~~

~~Compiled Laws~~ 1911 PA 44, MCL 209.5, to the state tax commission

before the first Monday in May. The business ~~which~~ that the county

board of commissioners may perform shall be conducted at a public

meeting of the county board of commissioners held in compliance

with the open meetings act, ~~Act No. 267 of the Public Acts of 1976,~~

~~as amended, being sections 15.261 to 15.275 of the Michigan~~

~~Compiled Laws~~ 1976 PA 267, MCL 15.261 to 15.275. Public notice of

the time, date, and place of the meeting shall be given in the

manner required by ~~Act No. 267 of the Public Acts of 1976, as~~

~~amended~~ the open meetings act, 1976 PA 267, MCL 15.261 to 15.275.

Each year the county board of commissioners shall advise the local

taxing units ~~when~~ if the state tax commission increases the

equalized value of the county as established by the ~~board of~~ county

board of commissioners and each taxing unit other than a city,

township, school district, intermediate school district, or

community college district, shall immediately reduce its maximum

authorized millage rate, as determined after any reduction ~~caused~~

by pursuant to section 34d, so that ~~subsequent to~~ after the

increase ordered by the state tax commission pursuant to ~~Act No. 44~~

~~of the Public Acts of 1911, as amended, being sections 209.1 to~~

~~209.8 of the Michigan Compiled Laws~~ 1911 PA 44, MCL 209.1 to 209.8,

total property taxes levied for that unit shall not exceed that

which would have been levied for that unit at its maximum

authorized millage rate, as determined after any reduction ~~caused~~

by pursuant to section 34d, if there had not been an increase in

valuation by the state tax commission. If its state equalized

valuation exceeds its assessed valuation by 5.0% or more in 1982 or

by any amount in 1983 or any year ~~thereafter~~ after 1983, a city or

township shall reduce its maximum authorized millage rate, as

determined after any reduction ~~caused by~~ pursuant to section 34d,

so that total property taxes levied for that unit do not exceed

that which would have been levied based on its assessed valuation.

(2) The county board of commissioners shall examine the

assessment rolls of the townships or cities and ascertain whether

the real and personal property in the respective townships or

cities has been equally and uniformly assessed ~~at true cash value~~

as required under this act. If, on the examination, the county

board of commissioners considers the assessments to be relatively

unequal, it shall equalize the assessments by adding to or

deducting from the valuation of the taxable property ~~in a township~~

~~or city~~ an amount ~~which~~ that in the judgment of the county board of

commissioners will produce a sum ~~which~~ that represents the true

cash value of that property and, for qualified agricultural

property, the agricultural use value, and the amount added to or

deducted from the valuations ~~in a township or city~~ shall be entered

upon the records. The county board of commissioners and the state

tax commission shall equalize real and personal property separately

by adding to or deducting from the valuation of taxable real

property, and by adding to or deducting from the valuation of

taxable personal property in a township, city, or county, an amount

~~which~~ that will produce a sum ~~which~~ that represents the proportion

of true cash value established by the legislature and, for

qualified agricultural property, the agricultural use value.

Beginning December 31, 1980, the county board of commissioners and

the state tax commission shall equalize separately the following

classes of real property by adding to or deducting from the

valuation of agricultural, ~~developmental,~~ residential, commercial,

industrial, and timber cutover taxable real property, and by adding

to or deducting from the valuation of taxable personal property in

a township, city, or county, an amount as that will produce a sum

~~which~~ that represents the proportion of true cash value established

by the legislature and, for qualified agricultural property, the

agricultural use value. The tax roll and the tax statement shall

clearly set forth the latest state equalized valuation for each

item or property, which shall be determined by using a separate

factor for personal property and a separate factor for real

property as equalized. Beginning December 31, 1980, the tax roll

and the tax statement shall clearly set forth the latest state

equalized valuation for each item or property, which shall be

determined by using a separate factor for personal property and a

separate factor for each classification for real property as

equalized. Factors used in determining the state equalized

valuation for real and personal property on the tax roll shall be

rounded up to not less than 4 decimal places. Equalized values for

both real and personal property shall be equalized uniformly at the

same proportion of true cash value in the county. The county board

of commissioners shall also cause to be entered upon its records

the aggregate valuation of the taxable real and personal property

of each township or city in its county as determined by the county

board of commissioners. The county board of commissioners shall

also make alterations in the description of any ~~land~~ property on

the rolls ~~as is~~ necessary to render the descriptions conformable to

the requirements of this act. After the rolls are equalized, each

shall be certified to by the chairperson and the clerk of the

county board of commissioners and be delivered to the supervisor of

the proper township or city, who shall file and keep the roll in

his or her office.

(3) The county board of commissioners of a county shall

establish and maintain a department to survey assessments and

assist the board of commissioners in the matter of equalization of

assessments, and may employ in that department necessary technical

and clerical personnel. ~~which in its judgment are considered~~

~~necessary.~~ The personnel of the department shall be under the

direct supervision and control of a director of the tax or

equalization department who may designate an employee of the

department as his or her deputy. The director of the county tax or

equalization department shall be appointed by the county board of

commissioners. The county board of commissioners, through the

department, may furnish assistance to local assessing officers in

the performance of duties imposed upon those officers by under this

act, including the development and maintenance of accurate property

descriptions, the discovery, listing, and valuation of properties

for tax purposes, and the development and use of uniform valuation

standards and techniques for the assessment of property.

(4) The supervisor of a township or, with the approval of the

governing body, the certified assessor of a township or city, or

the intermediate district board of education, or the board of

education of an incorporated city or village aggrieved by the

action of the county board of commissioners , in equalizing the

valuations of the townships or cities of the county , may appeal

from the determination to the ~~state~~ tax tribunal in the manner

provided by law. An appeal from the determination by the county

board of commissioners shall be filed with the clerk of the

tribunal by a written or printed petition ~~which~~ that shall set

forth in detail the reasons for taking the appeal. The petition

shall be signed and sworn to by the supervisor, the certified

assessor, or a majority of the members of the board of education

taking the appeal, shall show that a certain township, city, or

school district has been discriminated against in the equalization,

and shall ~~pray~~ request that the ~~state~~ tax tribunal proceed at its

earliest convenience to review the action from which the appeal is

taken. The ~~state~~ tax tribunal shall ~~, upon hearing,~~ determine if in

~~its judgment there is a showing that~~ the equalization complained of

is unfair, unjust, inequitable, or discriminatory. The ~~state~~ tax

tribunal ~~shall have~~ has the same authority to consider and pass

upon the action and determination of the county board of

commissioners in equalizing valuations as it has to consider

complaints relative to the assessment and taxation of property. The

~~state~~ tax tribunal may order the county board of commissioners to

reconvene and to cause the assessment rolls of the county to be

brought before it, may summon the commissioners of the county to

give evidence in relation to the equalization, and may take further

action and may make further investigation ~~in the premises~~ as it

considers necessary. The ~~state~~ tax tribunal shall fix a valuation

on all property of the county. If the ~~state~~ tax tribunal decides

that the determination and equalization made by the county board of

commissioners is correct, further action shall not be taken. If the

~~state~~ tax tribunal, after the hearing, decides that the valuations

of the county were improperly equalized, it shall proceed to make

deductions from, or additions to, the valuations of the respective

townships, cities, or school districts as ~~may be considered proper~~

necessary, ~~and in so doing the tribunal shall have~~ with the same

powers as that the county board of commissioners had in the first

instance. The deductions or additions shall decrease or increase

the state equalized valuation of the local unit affected but shall

not increase or decrease the total state equalized valuation of the

county in the case of an appeal under this section to the ~~state~~ tax

tribunal. If the tax tribunal finds that the valuations of a class

of property in a county were improperly equalized by that county

and determines that the total value of that class of property in

the county may not be at the level required by law, prior to entry

of a final order , the tax tribunal shall forward its findings and

determination to the state tax commission. Within 90 days after

receiving the findings and determination of the tax tribunal, the

state tax commission shall determine whether the state equalized

valuation of that class of property in the county was set at the

level prescribed by law or should be revised to provide uniformity

among the counties and shall enter an order consistent with the

state tax commission's findings. The tax tribunal shall enter a

final order based upon the revised state equalized valuation, if

any, ~~which~~ that is adopted by the state tax commission. The ~~state~~

tax tribunal immediately after completing its revision of the

equalization of the valuation of the several assessment districts

shall report its action to the county board of commissioners and

board of education if the board has instituted the appeal by filing

its report with the clerk of the county board of commissioners. The

action of the ~~state~~ tax tribunal ~~in the premises~~ shall constitute

the equalization of the county for the tax year.

~~(5) For purposes of appeals pursuant to subsection (4) in 1981~~

~~only, an agent of a supervisor, including an assessor, shall be~~

~~considered to have the authority to file and sign a petition for an~~

~~appeal, and any otherwise timely submitted petition in 1981 by an~~

~~agent of a supervisor shall be reviewed by the tribunal as if~~

~~submitted by the supervisor.~~

Sec. 34c. (1) Not later than the first Monday in March in each

year, the assessor shall classify every item of assessable property

according to the definitions contained in this section. Following

the March board of review, the assessor shall tabulate the total

number of items and the valuations as approved by the board of

review for each classification and for the totals of real and

personal property in the local tax collecting unit. The assessor

shall transmit to the county equalization department and to the

state tax commission the tabulation of assessed valuations and

other statistical information the state tax commission considers

necessary to meet the requirements of this act and 1911 PA 44, MCL

209.1 to 209.8.

(2) The classifications of assessable real property are

described as follows:

(a) Agricultural real property includes parcels used partially

or wholly for agricultural ~~operations~~ use, with or without

buildings, and parcels assessed to the department of natural

resources and valued by the state tax commission. For taxes levied

after December 31, 2002, agricultural real property includes

buildings on leased land used for agricultural ~~operations~~ use. As

used in this subdivision, "agricultural ~~operations" means the~~

~~following:~~

(i~~) Farming in all its branches, including cultivating soil.~~

(ii~~) Growing and harvesting any agricultural, horticultural, or~~

~~floricultural commodity.~~

(~~iii~~~~) Dairying.~~

(iv~~) Raising livestock, bees, fish, fur-bearing animals, or~~

~~poultry, including operating a game bird hunting preserve licensed~~

~~under part 417 of the natural resources and environmental~~

~~protection act, 1994 PA 451, MCL 324.41701 to 324.41712, and also~~

~~including farming operations that harvest cervidae on site where~~

~~not less than 60% of the cervidae were born as part of the farming~~

~~operation. As used in this subparagraph, "livestock" includes, but~~

~~is not limited to, cattle, sheep, new world camelids, goats, bison,~~

~~privately owned cervids, ratites, swine, equine, poultry,~~

~~aquaculture, and rabbits. Livestock does not include dogs and cats.~~

(v~~) Raising, breeding, training, leasing, or boarding horses.~~

(vi~~) Turf and tree farming.~~

(~~vii~~~~) Performing any practices on a farm incident to, or in~~

~~conjunction with, farming operations. A~~ use" means the production

of plants and animals useful to humans, including forages and sod

crops; grains, feed crops, and field crops; dairy and dairy

products; poultry and poultry products, including operating a game

bird hunting preserve licensed under part 417 of the natural

resources and environmental protection act, 1994 PA 451, MCL

324.41701 to 324.41712; livestock, including breeding and grazing

of cattle, swine, captive cervidae, and similar animals and farming

operations that harvest cervidae on site where not less than 60% of

the cervidae were born as part of the farming operation; berries;

herbs; flowers; seeds; grasses; nursery stock; fruits; vegetables;

Christmas trees; and other similar uses and activities.

Agricultural use includes property enrolled in a federal acreage

set-aside program or a federal conservation program. Agricultural

use does not include the management and harvesting of a woodlot, or

a commercial storage, processing, distribution, marketing, or

shipping operation is not part of agricultural operations.

(b) Commercial real property includes the following:

(i) Platted or unplatted parcels used for commercial purposes,

whether wholesale, retail, or service, with or without buildings.

(ii) Parcels used by fraternal societies.

(iii) Parcels used as golf courses, boat clubs, ski areas, or

apartment buildings with more than 4 units.

(iv) For taxes levied after December 31, 2002, buildings on

leased land used for commercial purposes.

~~(c) Developmental real property includes parcels containing~~

~~more than 5 acres without buildings, or more than 15 acres with a~~

~~market value in excess of its value in use. Developmental real~~

~~property may include farm land or open space land adjacent to a~~

~~population center, or farm land subject to several competing~~

~~valuation influences.~~

(i) Platted or unplatted parcels used for manufacturing and

processing purposes, with or without buildings.

(ii) Parcels used for utilities sites for generating plants,

pumping stations, switches, substations, compressing stations,

warehouses, rights-of-way, flowage land, and storage areas.

(iii) Parcels used for removal or processing of gravel, stone,

or mineral ores, whether valued by the local assessor or by the

state geologist.

(iv) For taxes levied after December 31, 2002, buildings on

leased land used for industrial purposes.

(v) For taxes levied after December 31, 2002, buildings on

leased land for utility purposes.

(d) ~~(e)~~ Residential real property includes the following:

(i) Platted or unplatted parcels, with or without buildings,

and condominium apartments located within or outside a village or

city, which are used for, or probably will be used for, residential

purposes.

(ii) Parcels that are used for, or probably will be used for,

recreational purposes, such as lake lots and hunting lands, located

in an area used predominantly for recreational purposes.

(iii) For taxes levied after December 31, 2002, a home, cottage,

or cabin on leased land, and a mobile home that would be assessable

as real property under section 2a except that the land on which it

is located is not assessable because the land is exempt.

(e) ~~(f)~~ Timber-cutover real property includes parcels that are

stocked with forest products of merchantable type and size, cutover

forest land with little or no merchantable products, and marsh

lands or other barren land. However, when a typical purchase of

this type of land is for residential or recreational uses, the

classification shall be changed to residential.

(3) The classifications of assessable personal property are

described as follows:

(a) Agricultural personal property includes any agricultural

equipment and produce not exempt by law.

(b) Commercial personal property includes the following:

(i) All equipment, furniture, and fixtures on commercial

parcels, and inventories not exempt by law.

(ii) All outdoor advertising signs and billboards.

(iii) Well drilling rigs and other equipment attached to a

transporting vehicle but not designed for operation while the

vehicle is moving on the highway.

(iv) Unlicensed commercial vehicles or commercial vehicles

licensed as special mobile equipment or by temporary permits.

(i) All machinery and equipment, furniture and fixtures, and

dies on industrial parcels, and inventories not exempt by law.

(ii) Personal property of mining companies valued by the state

geologist.

(d) For taxes levied before January 1, 2003, residential

personal property includes a home, cottage, or cabin on leased

land, and a mobile home that would be assessable as real property

under section 2a except that the land on which it is located is not

assessable because the land is exempt.

(e) Utility personal property includes the following:

(i) Electric transmission and distribution systems, substation

equipment, spare parts, gas distribution systems, and water

transmission and distribution systems.

(ii) Oil wells and allied equipment such as tanks, gathering

lines, field pump units, and buildings.

(iii) Inventories not exempt by law.

(iv) Gas wells with allied equipment and gathering lines.

(v) Oil or gas field equipment stored in the open or in

warehouses such as drilling rigs, motors, pipes, and parts.

(vi) Gas storage equipment.

(vii) Transmission lines of gas or oil transporting companies.

(4) For taxes levied before January 1, 2003, buildings on

leased land of any classification are improvements where the owner

of the improvement is not the owner of the land or fee, the value

of the land is not assessed to the owner of the building, and the

improvement has been assessed as personal property pursuant to

section 14(6).

(5) If the total usage of a parcel includes more than 1

classification, the assessor shall determine the classification

that most significantly influences the total valuation of the

parcel.

(6) An owner of any assessable property who disputes the

classification of that parcel shall notify the assessor and may

protest the assigned classification to the March board of review.

An owner or assessor may appeal the decision of the March board of

review by filing a petition with the state tax commission not later

than June 30 in that tax year. The state tax commission shall

arbitrate the petition based on the written petition and the

written recommendations of the assessor and the state tax

commission staff. An appeal may not be taken from the decision of

the state tax commission regarding classification complaint

petitions and the state tax commission's determination is final and

binding for the year of the petition.

(7) The department of treasury may appeal the classification

of any assessable property to the residential and small claims

division of the Michigan tax tribunal not later than December 31 in

the tax year for which the classification is appealed.

(8) This section shall not be construed to encourage the

assessment of property at other than the uniform percentage of true

cash value prescribed by this act.

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.

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~~ assessor

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.

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) or, for qualified agricultural property,

under section 27e(3) after a transfer of ownership of property.

(d) "Assessed valuation of property as finally equalized"

means taxable value as determined 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~~ assessor

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~~ assessor 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~~ assessor 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~~ assessor 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 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, a millage reduction

fraction shall not 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 compounded millage reduction fraction

shall not 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.

(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.

(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 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).

Enacting section 1. Section 7a of the general property tax

act, 1893 PA 206, MCL 211.7a, is repealed.

Enacting section 2. This amendatory act does not take effect

unless Senate Joint Resolution _____ or House Joint Resolution D

(request no. 00262'07) of the 94th Legislature becomes a part

of the state constitution of 1963 as provided in section 1 of

article XII of the state constitution of 1963.