February 7, 2007, Introduced by Reps. Robertson, Meekhof, Sheen, Stahl, Booher, Nitz and Garfield and referred to the Committee on Tax Policy.
A bill to provide for the establishment of alternative
agricultural production districts in local governmental units; to
provide for the exemption from certain taxes; to levy and collect a
specific tax upon the owners of agricultural property; to provide
for the disposition of the tax; to provide for the obtaining and
transferring of an exemption certificate and to prescribe the
contents of those certificates; to prescribe the powers and duties
of the state tax commission and certain officers of local
governmental units; and to provide penalties.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act shall be known and may be cited as the
"alternative agricultural production tax act".
Sec. 2. As used in this act:
(a) "Agricultural production district" or "district" means an
area designated by a local governmental unit under section 3.
(b) "Agricultural production exemption certificate" or
"certificate" means a certificate issued pursuant to sections 4, 5,
and 6.
(c) "Alternative agricultural production tax" means the
specific tax levied under section 10.
(d) "Agricultural property" means farmland as that term is
defined in section 36101 of the natural resources and environmental
protection act, 1994 PA 451, MCL 324.36101.
(e) "Agricultural use value" means 50% of the value of the
agricultural property based on all of the following:
(i) Quality of soil.
(ii) Existing use.
(iii) Present economic income of structures and farm structures.
(iv) Present economic income of real property.
(f) "Commission" means the state tax commission created by
1927 PA 360, MCL 209.101 to 209.107.
(g) "Local governmental unit" means a city, village, or
township.
Sec. 3. (1) A local governmental unit, by resolution of its
legislative body, may establish an agricultural production district
that consists of 1 or more parcels or tracts of agricultural
property.
(2) The legislative body of a local governmental unit may
establish an agricultural production district on its own initiative
or upon a written request filed by the owner or owners of 75% of
the state equalized value of the agricultural property located
within a proposed agricultural production district. This request
shall be filed with the clerk of the local governmental unit.
(3) Before adopting a resolution establishing an agricultural
production district, the legislative body shall give written notice
by certified mail to the owners of all real property within the
proposed agricultural production district and shall hold a public
hearing on the establishment of the agricultural production
district at which those owners and other residents or taxpayers of
the local governmental unit shall have a right to appear and be
heard.
(4) An agricultural production district established by a
township shall be only within the unincorporated territory of the
township and shall not be within a village.
Sec. 4. (1) After the establishment of an agricultural
production district, the owner of agricultural property may file an
application for an agricultural production exemption certificate
with the clerk of the local governmental unit that established an
agricultural production district. The application shall be filed in
the manner and form prescribed by the commission. The application
shall contain or be accompanied by a general description of the
agricultural property, a general description of the proposed use of
the agricultural property, and a legal description of the real
property of the agricultural property.
(2) Upon receipt of an application for an agricultural
production exemption certificate, the clerk of the local
governmental unit shall notify in writing the assessor of the
assessing unit in which the agricultural property is located and
the legislative body of each taxing unit that levies ad valorem
property taxes in the local governmental unit in which the
agricultural property is located. Before acting upon the
application, the legislative body of the local governmental unit
shall afford the applicant, the assessor, and a representative of
the affected taxing units an opportunity for a hearing.
Sec. 5. The legislative body of the local governmental unit,
not more than 60 days after receipt by its clerk of the
application, shall by resolution either approve or disapprove the
application for an agricultural production exemption certificate in
accordance with section 8 and the other provisions of this act. If
disapproved, the reasons shall be set forth in writing in the
resolution. If approved, the clerk shall forward the application to
the commission within 60 days of approval or before October 31 of
that year, whichever is first, in order to receive the agricultural
production exemption certificate effective for the following year.
If disapproved, the clerk shall return the application to the
applicant. The applicant may appeal the disapproval to the
commission within 10 days after the date of the disapproval.
Sec. 6. (1) Within 60 days after receipt of an approved
application or an appeal of a disapproved application that was
submitted to the commission before October 31 of that year, the
commission shall determine whether the agricultural property
complies with section 8 and with the other provisions of this act.
If the commission so finds, it shall issue an agricultural
production exemption certificate. Before issuing a certificate, the
commission shall notify the state treasurer of the application and
shall obtain the written concurrence of the department of labor and
economic growth that the application complies with the requirements
in section 8. The effective date of the certificate for
agricultural property is the immediately succeeding December 31
following the date the certificate is issued.
(2) The commission shall send an agricultural property
exemption certificate, when issued, by certified mail to the
applicant, and a certified copy by certified mail to the assessor
of the assessing unit in which the agricultural property is located
and that copy shall be filed in his or her office. Notice of the
commission's refusal to issue a certificate shall be sent by
certified mail to the same persons.
Sec. 7. (1) Agricultural property for which an agriculture
production exemption certificate is in effect, for the period on
and after the effective date of the certificate and continuing so
long as the agricultural production exemption certificate is in
force, is exempt from ad valorem property taxes and the lessee,
occupant, user, or person in possession of that agricultural
property for the same period is exempt from ad valorem taxes
imposed under 1953 PA 189, MCL 211.181 to 211.182.
(2) Personal property that is exempt from the collection of ad
valorem property taxes under the general property tax act, 1893 PA
206, MCL 211.1 to 211.157, is exempt from the alternative
agricultural production tax imposed under section 10.
(3) If the agricultural production exemption certificate is
terminated or revoked, the agricultural property is subject to the
collection of taxes under the general property tax act, 1893 PA
206, MCL 211.1 to 211.157.
Sec. 8. The legislative body of the local governmental unit,
in its resolution approving an application, shall set forth a
finding and determination that the granting of the agricultural
production exemption certificate, considered together with the
aggregate amount of agricultural production exemption certificates
previously granted and currently in force, shall not have the
effect of substantially impeding the operation of the local
governmental unit or impairing the financial soundness of a taxing
unit that levies an ad valorem property tax in the local
governmental unit in which the agricultural property is located.
Sec. 9. (1) The assessor of each city or township in which
there is agricultural property with respect to which 1 or more
agricultural production exemption certificates have been issued and
are in force shall determine annually as of December 31 the value
and taxable value of each agricultural property separately, for
real property, having the benefit of a certificate.
(2) The assessor, upon receipt of notice of the filing of an
application for the issuance of a certificate, shall determine and
furnish to the local legislative body and the commission the value
of the property to which the application pertains and other
information as may be necessary to permit the local legislative
body and the commission to make the determinations required by
section 8.
Sec. 10. (1) Except as provided in subsection (5), there is
levied upon every owner of agricultural property to which an
agricultural production exemption certificate is issued a specific
tax to be known as the alternative agricultural production tax.
(2) The alternative agricultural production tax is an annual
tax, payable at the same times, in the same installments, and to
the same officer or officers as taxes collected under the general
property tax act, 1893 PA 206, MCL 211.1 to 211.157, are payable.
Except as otherwise provided in this section, the officer or
officers shall disburse the alternative agricultural production tax
payments received each year to and among this state and cities,
townships, villages, school districts, counties, and authorities,
at the same times and in the same proportions as required by law
for the disbursement of taxes collected under the general property
tax act, 1893 PA 206, MCL 211.1 to 211.157.
(3) Except as provided by subsection (4) for an intermediate
school district receiving state aid under section 56, 62, or 81 of
the state school aid act of 1979, 1979 PA 94, MCL 388.1656,
388.1662, and 388.1681, of the amount that would otherwise be
disbursed to or retained by the intermediate school district, all
or a portion, to be determined on the basis of the tax rates being
utilized to compute the amount of the state school aid, shall be
paid instead to the state treasury to the credit of the state
school aid fund established by section 11 of article IX of the
state constitution of 1963. This subsection does not apply to taxes
levied for either of the following:
(a) Mills allocated to an intermediate school district for
operating purposes as provided for under the property tax
limitation act, 1933 PA 62, MCL 211.201 to 211.217a.
(b) An intermediate school district that is not receiving
state aid under section 56 or 62 of the state school aid act of
1979, 1979 PA 94, MCL 388.1656 and 388.1662.
(4) The amount of alternative agricultural production taxes to
be disbursed to a local school district, except for that amount of
tax attributable to mills levied under section 1211(2) of the
revised school code, 1976 PA 451, MCL 380.1211, and mills that are
not included as mills levied for school operating purposes under
section 1211 of the revised school code, 1976 PA 451, MCL 380.1211,
shall be paid to the state treasury and credited to the state
school aid fund established by section 11 of article IX of the
state constitution of 1963.
(5) Agricultural property located in a renaissance zone under
the Michigan renaissance zone act, 1996 PA 376, MCL 125.2681 to
125.2696, is exempt from the alternative agricultural production
tax levied under this act to the extent and for the duration
provided pursuant to the Michigan renaissance zone act, 1996 PA
376, MCL 125.2681 to 125.2696, except for that portion of the
alternative agricultural production tax attributable to a special
assessment or a tax described in section 7ff(2) of the general
property tax act, 1893 PA 206, MCL 211.7ff. The alternative
agricultural production tax calculated under this subsection shall
be disbursed proportionately to the local taxing unit or units that
levied the special assessment or the tax described in section
7ff(2) of the general property tax act, 1893 PA 206, MCL 211.7ff.
Sec. 11. (1) The amount of the alternative agricultural
production tax applicable to real property, until paid, shall be a
lien upon the real property to which the certificate is applicable.
Upon the filing by the officer of a certificate of nonpayment of
the alternative agricultural production tax applicable to real
property, together with an affidavit of proof of service of the
certificate of nonpayment upon the owner of the agricultural
property by certified mail, with the register of deeds of the
county in which the real property is situated, the lien may be
enforced in the same manner as provided by law for the foreclosure
of mortgage liens upon real property.
(2) On or after the December 31 immediately succeeding the
expiration of 60 days after the service upon the owner of a
certificate of nonpayment and the filing of the certificate of
nonpayment, if payment has not been made within the intervening 60
days, provided for by subsection (1), the agricultural production
exemption certificate is automatically terminated.
Sec. 12. The amount of the alternative agricultural production
tax in each year for agricultural property for which an
agricultural production exemption certificate is in effect shall be
determined by multiplying the agricultural use value of the
agricultural property by the total mills levied as ad valorem taxes
for that year by all taxing units within which the agricultural
property is located.
Sec. 13. Upon receipt of a request by certified mail to the
commission by the holder of an agricultural production exemption
certificate requesting revocation of the certificate, the
commission shall by order revoke the certificate.
Sec. 14. (1) The agricultural use value shall not increase
each year by more than the increase in the immediately preceding
year in the general price level or 5%, whichever is less, minus any
losses and plus all additions. As used in this section:
(a) "Additions" and "losses" mean those terms as defined in
section 34d of the general property tax act, 1893 PA 206, MCL
211.34d.
(b) "General price level" means that term as defined in
section 33 of article IX of the state constitution of 1963.
(2) If an agricultural production exemption certificate is
terminated or revoked or if the property no longer qualifies as
agricultural property, the owner of that property is liable to the
local unit of government in which that property is located in an
amount equal to the difference between the agricultural production
tax paid on that property and the amount that would have been
assessed against that property if that property were subject to ad
valorem property taxes collected under the general property tax
act, 1893 PA 206, MCL 211.1 to 211.157, for each year in which the
most recent agricultural production exemption certificate was in
effect, not to exceed 10 years.
Sec. 15. (1) The assessor of each city or township in which is
located agricultural property with respect to which an agricultural
production exemption certificate is in force shall annually
determine, with respect to each such agricultural property, an
assessment of the real and personal property comprising the
agricultural property having the benefit of an agricultural
production exemption certificate that would have been made under
the general property tax act, 1893 PA 206, MCL 211.1 to 211.157, if
the certificate had not been in force. A holder of an agricultural
production exemption certificate shall furnish to the assessor the
information necessary for the determination.
(2) The assessor, having made the determination, shall
annually notify the commission, the legislative body of each unit
of local government that levies taxes upon property in the city or
township in which the agricultural property is located, and the
holder of the agricultural property exemption certificate of the
determination, separately stating the determinations for real
property and personal property, by certified mail not later than
October 15 based upon valuations as of the preceding December 31.
Sec. 16. The commission may promulgate rules as it deems
necessary for the administration of this act pursuant to the
administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to
24.328.
Sec. 17. An agricultural production exemption certificate
shall be in the form the commission determines but shall contain:
(a) A legal description of the real property of the
agricultural property.
(b) A statement that, unless revoked or terminated as provided
in this act, the agricultural production exemption certificate
shall remain in force in perpetuity.
Sec. 18. A party aggrieved by the issuance or refusal to
issue, revocation, transfer, or modification of an agricultural
production exemption certificate may appeal from the finding and
order of the commission in the manner and form and within the time
provided by the administrative procedures act of 1969, 1969 PA 306,
MCL 24.201 to 24.328.
Sec. 19. An agricultural production exemption certificate
shall be transferred and assigned by the holder of the certificate
to a new owner or lessee of the agricultural property as long as
the property is maintained as agricultural property.