April 13, 2011, Introduced by Senators PROOS and HILDENBRAND and referred to the Committee on Finance.
A bill to amend 1893 PA 206, entitled
"The general property tax act,"
by amending sections 34d, 35, and 37 (MCL 211.34d, 211.35, and
211.37), section 34d as amended by 2007 PA 31, section 35 as
amended by 2002 PA 620, and section 37 as amended by 2009 PA 49.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 34d. (1) As used in this section or section 27a, or
section 3 or 31 of article IX of the state constitution of 1963:
(a) For taxes levied before 1995, "additions" means all
increases in value caused by new construction or a physical
addition of equipment or furnishings, and the value of property
that was exempt from taxes or not included on the assessment unit's
immediately preceding year's assessment roll.
(b) For taxes levied after 1994, "additions" means, except as
provided in subdivision (c), all of the following:
(i) Omitted real property. As used in this subparagraph,
"omitted real property" means previously existing tangible real
property not included in the assessment. Omitted real property
shall not increase taxable value as an addition unless the
assessing jurisdiction has a property record card or other
documentation showing that the omitted real property was not
previously included in the assessment. The assessing jurisdiction
has the burden of proof in establishing whether the omitted real
property is included in the assessment. Omitted real property for
the current and the 2 immediately preceding years, discovered after
the assessment roll has been completed, shall be added to the tax
roll pursuant to the procedures established in section 154. For
purposes of determining the taxable value of real property under
section 27a, the value of omitted real property is based on the
value and the ratio of taxable value to true cash value the omitted
real property would have had if the property had not been omitted.
(ii) Omitted personal property. As used in this subparagraph,
"omitted personal property" means previously existing tangible
personal property not included in the assessment. Omitted personal
property shall be added to the tax roll pursuant to section 154.
(iii) New construction. As used in this subparagraph, "new
construction" means property not in existence on the immediately
preceding tax day and not replacement construction. New
construction includes the physical addition of equipment or
furnishings, subject to the provisions set forth in section
27(2)(a) to (o). For purposes of determining the taxable value of
property under section 27a, the value of new construction is the
true cash value of the new construction multiplied by 0.50.
(iv) Previously exempt property. As used in this subparagraph,
"previously exempt property" means property that was exempt from ad
valorem taxation under this act on the immediately preceding tax
day but is subject to ad valorem taxation on the current tax day
under this act. For purposes of determining the taxable value of
real property under section 27a:
(A) The value of property previously exempt under section 7u
is the taxable value the entire parcel of property would have had
if that property had not been exempt, minus the product of the
entire parcel's taxable value in the immediately preceding year and
the lesser of 1.05 or the inflation rate.
(B) The taxable value of property that is a facility as that
term is defined in section 2 of 1974 PA 198, MCL 207.552, that was
previously exempt under section 7k is the taxable value that
property would have had under this act if it had not been exempt.
(C) The value of property previously exempt under any other
section of law is the true cash value of the previously exempt
property multiplied by 0.50.
(v) Replacement construction. As used in this subparagraph,
"replacement construction" means construction that replaced
property damaged or destroyed by accident or act of God and that
occurred after the immediately preceding tax day to the extent the
construction's true cash value does not exceed the true cash value
of property that was damaged or destroyed by accident or act of God
in the immediately preceding 3 years. For purposes of determining
the taxable value of property under section 27a, the value of the
replacement construction is the true cash value of the replacement
construction multiplied by a fraction the numerator of which is the
taxable value of the property to which the construction was added
in the immediately preceding year and the denominator of which is
the true cash value of the property to which the construction was
added in the immediately preceding year, and then multiplied by the
lesser of 1.05 or the inflation rate.
(vi) An increase in taxable value attributable to the complete
or partial remediation of environmental contamination existing on
the immediately preceding tax day. The department of environmental
quality shall determine the degree of remediation based on
information available in existing department of environmental
quality records or information made available to the department of
environmental quality if the appropriate assessing officer for a
local tax collecting unit requests that determination. The increase
in taxable value attributable to the remediation is the increase in
true cash value attributable to the remediation multiplied by a
fraction the numerator of which is the taxable value of the
property had it not been contaminated and the denominator of which
is the true cash value of the property had it not been
contaminated.
(vii) An increase in the value attributable to the property's
occupancy rate if either a loss, as that term is defined in this
section, had been previously allowed because of a decrease in the
property's occupancy rate or if the value of new construction was
reduced because of a below-market occupancy rate. For purposes of
determining the taxable value of property under section 27a, the
value of an addition for the increased occupancy rate is the
product of the increase in the true cash value of the property
attributable to the increased occupancy rate multiplied by a
fraction the numerator of which is the taxable value of the
property in the immediately preceding year and the denominator of
which is the true cash value of the property in the immediately
preceding year, and then multiplied by the lesser of 1.05 or the
inflation rate.
(viii) Public services. As used in this subparagraph, "public
services" means water service, sewer service, a primary access
road, natural gas service, electrical service, telephone service,
sidewalks, or street lighting. For purposes of determining the
taxable value of real property under section 27a, the value of
public services is the amount of increase in true cash value of the
property attributable to the available public services multiplied
by 0.50 and shall be added in the calendar year following the
calendar year when those public services are initially available.
(c) For taxes levied after 1994, additions do not include
increased value attributable to any of the following:
(i) Platting, splits, or combinations of property.
(ii) A change in the zoning of property.
(iii) For the purposes of the calculation of the millage
reduction fraction under subsection (7) only, increased taxable
value under section 27a(3) after a transfer of ownership of
property.
(d) "Assessed valuation of property as finally equalized"
means taxable value under section 27a.
(e) "Financial officer" means the officer responsible for
preparing the budget of a unit of local government.
(f) "General price level" means the annual average of the 12
monthly values for the United States consumer price index for all
urban consumers as defined and officially reported by the United
States department of labor, bureau of labor statistics.
(g) For taxes levied before 1995, "losses" means a decrease in
value caused by the removal or destruction of real or personal
property and the value of property taxed in the immediately
preceding year that has been exempted or removed from the
assessment unit's assessment roll.
(h) For taxes levied after 1994, "losses" means, except as
provided in subdivision (i), all of the following:
(i) Property that has been destroyed or removed. For purposes
of determining the taxable value of property under section 27a, the
value of property destroyed or removed is the product of the true
cash value of that property multiplied by a fraction the numerator
of which is the taxable value of that property in the immediately
preceding year and the denominator of which is the true cash value
of that property in the immediately preceding year.
(ii) Property that was subject to ad valorem taxation under
this act in the immediately preceding year that is now exempt from
ad valorem taxation under this act. For purposes of determining the
taxable value of property under section 27a, the value of property
exempted from ad valorem taxation under this act is the amount
exempted.
(iii) An adjustment in value, if any, because of a decrease in
the property's occupancy rate, to the extent provided by law. For
purposes of determining the taxable value of real property under
section 27a, the value of a loss for a decrease in the property's
occupancy rate is the product of the decrease in the true cash
value of the property attributable to the decreased occupancy rate
multiplied by a fraction the numerator of which is the taxable
value of the property in the immediately preceding year and the
denominator of which is the true cash value of the property in the
immediately preceding year.
(iv) A decrease in taxable value attributable to environmental
contamination existing on the immediately preceding tax day. The
department of environmental quality shall determine the degree to
which environmental contamination limits the use of property based
on information available in existing department of environmental
quality records or information made available to the department of
environmental quality if the appropriate assessing officer for a
local tax collecting unit requests that determination. The
department of environmental quality's determination of the degree
to which environmental contamination limits the use of property
shall be based on the criteria established for the categories set
forth in section 20120a(1) of the natural resources and
environmental protection act, 1994 PA 451, MCL 324.20120a. The
decrease in taxable value attributable to the contamination is the
decrease in true cash value attributable to the contamination
multiplied by a fraction the numerator of which is the taxable
value of the property had it not been contaminated and the
denominator of which is the true cash value of the property had it
not been contaminated.
(i) For taxes levied after 1994, losses do not include
decreased value attributable to either of the following:
(i) Platting, splits, or combinations of property.
(ii) A change in the zoning of property.
(j) "New construction and improvements" means additions less
losses.
(k) "Current year" means the year for which the millage
limitation is being calculated.
(l) "Inflation rate" means the ratio of the general price level
for the state fiscal year ending in the calendar year immediately
preceding the current year divided by the general price level for
the state fiscal year ending in the calendar year before the year
immediately preceding the current year.
(2) On or before the first Monday in May of each year, the
assessing officer of each township or city shall tabulate the
tentative taxable value as approved by the local board of review
and as modified by county equalization for each classification of
property that is separately equalized for each unit of local
government and provide the tabulated tentative taxable values to
the county equalization director. The tabulation by the assessing
officer shall contain additions and losses for each classification
of property that is separately equalized for each unit of local
government or part of a unit of local government in the township or
city. If as a result of state equalization the taxable value of
property changes, the assessing officer of each township or city
shall revise the calculations required by this subsection on or
before the Friday following the fourth Monday in May. The county
equalization director shall compute these amounts and the current
and immediately preceding year's taxable values for each
classification of property that is separately equalized for each
unit of local government that levies taxes under this act within
the boundary of the county. The county equalization director shall
cooperate with equalization directors of neighboring counties, as
necessary, to make the computation for units of local government
located in more than 1 county. The county equalization director
shall calculate the millage reduction fraction for each unit of
local government in the county for the current year. The financial
officer for each taxing jurisdiction shall calculate the compounded
millage reduction fractions beginning in 1980 resulting from the
multiplication of successive millage reduction fractions and shall
recognize a local voter action to increase the compounded millage
reduction fraction to a maximum of 1 as a new beginning fraction.
Upon request of the superintendent of the intermediate school
district, the county equalization director shall transmit the
complete computations of the taxable values to the superintendent
of the intermediate school district within that county. At the
request of the presidents of community colleges, the county
equalization director shall transmit the complete computations of
the taxable values to the presidents of community colleges within
the county.
(3) On or before the first Monday in June of each year, the
county equalization director shall deliver the statement of the
computations signed by the county equalization director to the
county treasurer.
(4) On or before the second Monday in June of each year, the
treasurer of each county shall certify the immediately preceding
year's taxable values, the current year's taxable values, the
amount of additions and losses for the current year, and the
current year's millage reduction fraction for each unit of local
government that levies a property tax in the county.
(5) The financial officer of each unit of local government
shall make the computation of the tax rate using the data certified
by the county treasurer and the state tax commission. At the annual
session in October, or, for a county or local tax collecting unit
that approves the levies as allowed in section 44a, before a
special meeting held before the annual levy on July 1, 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 shall be
calculated by multiplying the local unit's previous year's
compounded millage reduction fraction by the current year's millage
reduction fraction. 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).
Sec.
35. On or before the first day of September in each year,
the
The state treasurer shall make and record in his or her
office
a statement showing the taxes to be raised for state purposes that
year, referring to the law on which each tax is based, and the
total amount of the taxes. The state tax he or she shall apportion
among the several counties in proportion to the valuation of the
taxable property in each county as determined by the last preceding
state
board of equalization. , and shall before Before the
October
session of the board of supervisors or, for a county or local tax
collecting unit that approves the levies as allowed in section 44a,
before a special meeting held before the annual levy on July 1, the
state treasurer shall in each year make out and transmit to the
clerk of each county a statement of the amount of the taxes
apportioned to that county. The state treasurer shall also, in a
separate item of the statement, set forth the amount of
indebtedness of the county to the state remaining unpaid at the
time the statement is made, as shown by the statement of the
account
between the county and this state. made by the state
treasurer
on the first day of July after the apportionment, which
amount
A county's remaining
indebtedness to this state shall be
apportioned by the board of supervisors of the proper county at the
same time as state taxes contained in the apportionment of the
state treasurer, and shall be levied in the same manner as and
become a portion of the county taxes for the same year, unless the
indebtedness
is paid to the state before October first 1, or for a
county or local tax collecting unit that approves the levies as
allowed in section 44a, before the annual levy on July 1. The
portion of the taxes, if any, that should be assessed to a
particular township, shall be apportioned to and assessed upon the
township, ward, or city.
Sec. 37. The county board of commissioners, either at a
session held not later than October 31 in each year or at a special
meeting held for a local tax collecting unit that requests an
annual levy in July, shall ascertain and determine the amount of
money to be raised for county purposes, and shall apportion the
amount and also the amount of the state tax and indebtedness of the
county to the state among the several townships in the county in
proportion to the valuation of the taxable real and personal
property as determined by the board, or as determined by the state
tax commission upon appeal in the manner provided by law for that
year, which determination and apportionment shall be entered at
large on county records. The board, at a session held not later
than October 31 in each year, shall also examine all certificates,
statements, papers, and records submitted to it, showing the money
to be raised in the several townships for school, highway, drain,
township, and other purposes. It shall hear and consider all
objections made to raising that money by any taxpayer affected. If
it appears to the board that any certificate, statement, paper, or
record is not properly certified or is in any way defective, or
that any proceeding to authorize the raising of the money has not
been had or is in any way imperfect, the board shall verify the
same, and if the certificate, statement, paper, record, or
proceeding can then be corrected, supplied, or had, the board shall
authorize and require the defects or omissions of proceedings to be
corrected, supplied, or had. The board may refer any or all the
certificates, statements, papers, records, and proceedings to the
prosecuting attorney, who shall investigate and without delay
report in writing his or her opinion to the board. The board shall
direct that the money proposed to be raised for township, school,
highway, drain, and all other purposes authorized by law shall be
spread upon the assessment roll of the proper townships, wards, and
cities. This action and direction shall be entered in full upon the
records of the proceedings of the board and shall be final as to
the levy and assessment of all the taxes, except if there is a
change made in the equalization of any county by the state tax
commission upon appeal in the manner provided by law. The direction
for spread of taxes shall be expressed in terms of millages to be
spread against the taxable values of properties and shall not
direct the raising of any specific amount of money. This section
does not apply when section 36(2) applies and shall not prevent the
township clerk from providing a certification to the county clerk
pursuant to section 36(1). If a certification is provided pursuant
to section 36(1), the county board of commissioners shall meet and
direct or amend its direction for the spread of millages by local
units in the county pursuant to the certification.
Enacting section 1. This amendatory act does not take effect
unless Senate Bill No. 322
of the 96th Legislature is enacted into law.