SB-0051, As Passed Senate, May 29, 2013
HOUSE SUBSTITUTE FOR
SENATE BILL NO. 51
A bill to amend 1893 PA 206, entitled
"The general property tax act,"
by amending section 7jj (MCL 211.7jj[1]), as added by 2006 PA 378.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 7jj. (1) Except as otherwise limited in this subsection,
qualified forest 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.
Buildings, structures, or land improvements located on qualified
forest property are not eligible for the exemption under this
section. The amount of qualified forest property in this state that
is eligible for the exemption under this section is limited as
follows:
(a) In the fiscal year ending September 30, 2008, 300,000
acres.
(b) In the fiscal year ending September 30, 2009, 600,000
acres.
(c) In the fiscal year ending September 30, 2010, 900,000
acres.
(d) In the fiscal year ending September 30, 2011 and each
fiscal year thereafter, 1,200,000 acres. Beginning in the fiscal
year ending September 30, 2013 and each fiscal year thereafter,
real property eligible for exemption under this section as
qualified forest property as a result of the withdrawal of that
property from the operation of part 511 of the natural resources
and environmental protection act, 1994 PA 451, MCL 324.51101 to
324.51120, as provided in section 51108(5) of the natural resources
and environmental protection act, 1994 PA 451, MCL 324.51108, shall
not be credited against the 1,200,000 acres of property that are
eligible for exemption as qualified forest property under this
section.
(2) If a property owner is interested in obtaining an
exemption for qualified forest property under this section, the
property owner may contact the local conservation district or the
department, and the local conservation district or the department
shall advise the property owner on the exemption process. If
requested by the property owner, the local conservation district or
the department shall provide the property owner with a list of
qualified foresters to prepare a forest management plan. The
department shall maintain a list of qualified foresters throughout
the state and shall make the list available to the conservation
districts and to interested property owners. To claim an exemption
under subsection (1), a property owner shall obtain a forest
management plan from a qualified forester and submit a digital copy
of that forest management plan, an application for exemption as
qualified forest property, and a fee of $50.00 to the department on
a form created by the department by September 1 prior to the tax
year within which the exemption is requested. A forest management
plan is not subject to the freedom of information act, 1976 PA 442,
MCL 15.231 to 15.246. The department shall forward a copy of the
application to the local conservation district for review and to
the local tax collecting unit for notification of the application.
(3) A conservation district shall review the application to
determine if the applied-for property meets the minimum
requirements set forth in subsection (16)(i) for enrolling into the
qualified forest program. A conservation district shall respond
within 45 days of the date of its receipt of the application
indicating whether the property in the application is eligible for
enrollment. If the conservation district does not respond within 45
days of its receipt of the application, the property shall be
considered eligible for the exemption under this section.
(4) The department shall review the application, comments from
the conservation district, and the forest management plan to
determine if the property is eligible for the exemption under this
section. The department shall review the forest management plan to
determine if the elements required in subsection (16)(e) are in the
plan. Within 90 days of its receipt of the application, forest
management plan, and fee, the department shall review the
application and if the application and supporting documents are not
in compliance, the department shall notify the property owner of
denial. If the application and supporting documents are in
compliance with the requirements of this section, the department
shall approve the application and shall prepare a qualified forest
school tax affidavit, in recordable form, indicating all of the
following:
(a) The name of the property owner.
(b) The legal description of the property.
(c) The year the application was submitted for the exemption.
(d) A statement that the property owner is attesting that the
property for which the exemption is claimed is qualified forest
property and will be managed according to the approved forest
management plan.
(5) The department shall send a qualified forest school tax
affidavit prepared under subsection (4) to the property owner for
execution. The 90-day review period by the department may be
extended upon request of the property owner. The property owner
shall execute the qualified forest school tax affidavit and shall
have the executed qualified forest school tax affidavit recorded by
the register of deeds in the county in which the property is
located. The property owner shall provide a copy of the qualified
forest school tax affidavit to the department. The department shall
provide 1 copy of the qualified forest school tax affidavit to the
conservation district and 1 copy to the department of treasury.
These copies may be sent electronically.
(6) If the application is denied, the property owner has 30
days from the date of notification of the denial by the department
to initiate an appeal of that denial. An appeal of the denial shall
be by certified letter to the director of the department.
(7) (2)
To claim an exemption under
subsection (1), the owner
of
qualified forest property shall file an affidavit claiming the
exemption
and an approved forest management plan or a certificate
provided
by a third-party certifying organization with the provide
a copy of the recorded qualified forest school tax affidavit
attesting that the land is qualified forest property to the local
tax collecting unit and assessor by December 31. An owner may claim
an
exemption under this section for not more than 320 acres 640
acres maximum or the equivalent of 16 survey units consisting of
1/4 of 1/4 of a section of qualified forest property in each local
tax collecting unit. If an exemption is granted under this section
for
less than 320 640 acres in a local tax collecting unit, an
owner of that property may subsequently claim an exemption for
additional property in that local tax collecting unit if that
additional property meets the requirements of this section.
(3)
The affidavit shall be on a form prescribed by the
department
of treasury and shall require the person submitting the
affidavit
to attest that the property for which the exemption is
claimed
is qualified forest property and will be managed according
to
the approved forest management plan.
(8) (4)
The If a copy of the recorded
qualified forest school
tax affidavit is provided to the assessor by the owner, the
assessor
shall determine if the property is qualified forest
property
based on a recommendation from the department of natural
resources
and confirmation that the acreage limitation set forth in
subsection
(1) has not been reached 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 forest property.
(9) Beginning in the year that qualified forest property is
first exempt under this section and each year thereafter, the local
tax collecting unit shall collect a fee on each parcel of qualified
forest property exempt under this section located in that local tax
collecting unit. The fee shall be determined by multiplying 2 mills
by the taxable value of that qualified forest property. The fee
shall be collected at the same time and in the same manner as taxes
collected under this act. Each local tax collecting unit shall
disburse the fee collected under this subsection to the department
of treasury for deposit in the private forestland enhancement fund
created in section 51305 of the natural resources and environmental
protection act, 1994 PA 451, MCL 324.51305. If property is no
longer exempt as qualified forest property under this section, the
fee under this subsection shall not be collected on that property.
The fee collected in this subsection shall be subject to the
property tax administration fee established by the local tax
collecting unit under section 44.
(10) (5)
Not more than 90 days after all or
a portion of the
exempted property is no longer qualified forest property, the owner
shall rescind the exemption for the applicable portion of the
property
by filing with the local tax collecting unit register of
deeds for the county in which the exempted property is located a
rescission
form prescribed by the department. of treasury. A copy
of the rescission form shall be provided to the assessor. The
rescission form shall include a legal description of the exempted
property. 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 $1,000.00. This penalty shall be collected under 1941 PA
122,
MCL 205.1 to 205.31, and shall be deposited in the general
fund
of this state.private
forestland enhancement fund.
(11) (6)
An owner of property that is
qualified forest
property on December 31 for which an exemption was not on the tax
roll may file an appeal with the July or December board of review
under section 53b in the year the exemption was claimed or the
immediately
succeeding year. An owner of property that is qualified
forest
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
under section 53b.
(7)
If the assessor of the local tax collecting unit believes
that
the property for which an exemption has been granted is not
qualified
forest property based on a recommendation from the
department
of natural resources, 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.
(12) (8)
If property for which an exemption
has been granted
under this section is not qualified forest property, 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 each 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.
(13) (9)
If all or a portion of property
for which an
exemption has been granted under this section is converted by a
change
in use and is no longer qualified forest property, the
property
is subject to the qualified forest property recapture tax
levied
an owner shall immediately
notify the local tax collecting
unit, the assessor, the department, and the department of treasury
on a form created by the department. The form shall include a legal
description of the exempted property. A copy of the form shall be
filed with the register of deeds for the county in which the
exempted property is located. Upon notice that property is no
longer qualified forest property, the local tax collecting unit and
assessor shall immediately rescind the exemption under this section
and shall place the property on the tax roll as though the
exemption under this section had not been granted for the
immediately succeeding tax year and the department of treasury
shall immediately begin collection of any applicable tax and
penalty under this act or under the qualified forest property
recapture
tax act, 2006 PA 379, MCL
211.1031 to 211.1036. 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, if the qualified forest property is
converted
by a change in use.However,
beginning June 1, 2013 and
ending November 30, 2013, owners of property exempt as qualified
forest property prior to January 1, 2013 may execute a new
qualified forest school tax affidavit under this section. If an
owner of property exempt as qualified forest property elects to
execute a new qualified forest school tax affidavit under this
section, that owner is not required to pay the $50.00 fee required
under subsection (2). If an owner of qualified forest property
elects not to execute a new qualified forest school tax affidavit
under this section, the existing affidavit shall be rescinded
without penalty and the property shall be placed on the tax roll as
though the exemption under this section had not been granted. If a
property owner elects not to execute a qualified forest school tax
affidavit under this section, the property is not subject to the
recapture tax provided for under the qualified forest property
recapture tax act, 2006 PA 379, MCL 211.1031 to 211.1036.
(14) (10)
If qualified forest property is
exempt under this
section,
an owner of that qualified forest property shall annually
report
to the department of natural resources on a form prescribed
by
the department of natural resources the amount of timber
produced
on that qualified forest property and whether any
buildings
or structures have been constructed on the qualified
forest
property. when a forest
practice or timber harvest has
occurred on the qualified forest property during a calendar year.
The report shall indicate the forest practice completed or the
volume and value of timber harvested on that qualified forest
property. One copy of the form shall be forwarded to the
conservation district, and 1 copy shall be retained by the
department for 7 years. If it is determined by the department that
a forest practice or harvest has occurred in a calendar year and no
report was filed, a fine of $500.00 may be collected by the
department.
Beginning in 2008, December 31, 2013 and every 3 years
year
thereafter, the department of
natural resources shall provide
to the standing committees of the senate and house of
representatives with primary jurisdiction over forestry issues a
report that includes all of the following:
(a) The number of acres of qualified forest property in each
county.
(b) The amount of timber produced on qualified forest property
each year.
(c) The number of forest management plans completed by
conservation districts and the total number of forest management
plans submitted for approval each year.
(15) While qualified forest property is exempt under this
section, the owner shall retain the current management plan, most
recent harvest records, recorded copy of a receipt of the tax
exemption, and a map that shows the location and size of any
buildings and structures on the property. The owner shall make the
documents available to the department upon request. The department
shall maintain a database listing all qualified forest properties,
including the dates indicated for forest practices and harvests in
the forest management plan, and shall notify the property owner and
the conservation district in any year that forest practices or
harvests are to occur. If an owner does not accomplish forest
practices and harvests within 3 years after the time specified in
the current forest management plan, and the plan has not been
amended to extend the date of forest practices and harvests, the
property is not eligible for the exemption under this section and
the property shall be placed on the tax roll as though the
exemption under this section had not been granted as provided in
this section and shall be subject to repayment as indicated in the
qualified forest property recapture tax act, 2006 PA 379, MCL
211.1031 to 211.1036. Information in the database specific to an
individual property owner's forest management plan is exempt from
disclosure under the freedom of information act, 1976 PA 442, MCL
15.231 to 15.246. However, information in the database in the
aggregate, including, but not limited to, how much timber would be
expected to be on the market each year as a result of enrollees, is
not exempt from disclosure under the freedom of information act,
1976 PA 442, MCL 15.231 to 15.246.
(16) (11)
As used in this section:
(a)
"Approved forest management plan" means 1 of the
following:
(i) A a
forest management plan approved by
the department of
natural
resources. developed by a
qualified forester. An owner of
property
may shall submit a proposed forest management plan to
the
department
of natural resources for approval as prescribed in
subsection
(2). The proposed forest
management plan shall include a
statement signed by the owner that he or she agrees to comply with
all terms and conditions contained in the approved forest
management
plan. The department of natural resources may charge a
fee
of not more than $200.00 for the consideration of each proposed
forest
management plan submitted. The department of natural
resources
shall review and either approve or disapprove each
proposed
forest management plan submitted. If
a forest management
plan and application are submitted to the department, the
department shall review and either approve or disapprove the
owner's application within 90 days of submission. Approval of the
plan shall be based solely on compliance with the elements required
in subdivision (e). Denial of the plan shall be based solely on
noncompliance with the requirements listed in subdivision (e). If
the
department of natural resources disapproves a proposed forest
management
plan, the department of natural resources shall indicate
the
changes necessary to qualify the proposed forest management
plan
for approval on subsequent review. At the request of the owner
submitting
a proposed forest management plan, the department of
natural
resources may agree to complete a proposed forest
management
plan. An owner and the department of natural resources
may
mutually agree to amend a proposed forest management plan or an
approved
forest management plan. An
owner may submit amendments to
his or her forestry plan to the department. The department may
reject amendments that delay a harvest date repeatedly or
indefinitely.
A forest management plan submitted to
the department
of
natural resources for approval
shall not extend beyond a period
of
20 years. An be for a maximum
of 20 years. To continue
receiving
an
exemption under this section, an owner of property may shall
submit a digital copy of any succeeding proposed forest management
plan
to the department of natural resources for approval together
with a fee of $50.00. The first amendment to the plan shall not be
subject to a fee. Additional amendments may be subject to a fee of
$50.00.
(ii) A forest management plan certified by a
third-party
certifying
organization.
(b) "Conservation district" means a conservation district
organized under part 93 of the natural resources and environmental
protection act, 1994 PA 451, MCL 324.9301 to 324.9313.
(c) (b)
"Converted by a change in
use" means that term as
defined in section 2 of the qualified forest property recapture tax
act, 2006 PA 379, MCL 211.1032.
(d) "Department" means the department of agriculture and rural
development.
(e) "Forest management plan" means a written plan prepared and
signed by a qualified forester that prescribes measures to optimize
production, utilization, and regeneration of forest resources. The
forest management plan shall include a schedule and timetables for
the various silvicultural practices used on forestlands, which
shall be a maximum of 20 years in length. A forest management plan
shall include all of the following:
(i) The name and address of each owner of the property.
(ii) The legal description and parcel identification number of
the property or of the parcel on which the property is located.
(iii) A statement of the owner's forest management objectives.
(iv) A map, diagram, or aerial photograph that identifies both
forested and unforested areas of the property, using conventional
map symbols indicating the species, size, and stocking rate and
other major features of the property, including the location of any
buildings. The location and use of any buildings can be established
on a map created by a qualified forester and does not require a
survey by a registered surveyor.
(v) A description of forest practice, including harvesting,
thinning, and reforestation, that will be undertaken, specifying
the approximate period of time before each is completed.
(vi) A description of soil conservation practices that may be
necessary to control any soil erosion that may result from the
forest practice described pursuant to subparagraph (v).
(vii) A description of activities that may be undertaken for
the management of forest resources other than trees, including
wildlife habitat, watersheds, and aesthetic features.
(f) "Forest practice" means any action intended to improve
forestland or forest resources and includes, but is not limited to,
any of the following:
(i) The preparation of forest management plans for forestland.
(ii) The improvement of species of forest trees.
(iii) Reforestation.
(iv) The harvesting of species of forest trees.
(v) Road construction associated with the improvement or
harvesting of forest tree species or reforestation.
(vi) Use of chemicals or fertilizers for the purpose of growing
or managing species of forest trees.
(vii) Applicable silvicultural practices.
(g) (c)
"Forest products"
includes, but is not limited to,
timber and pulpwood-related products.
(h) "Harvest" means the point at which timber that has been
cut, severed, or removed for purposes of sale or use is first
measured in the ordinary course of business as determined by
reference to common practice in the timber industry.
(d)
"Natural resources professional" and "registered forester"
mean
those terms as defined in section 51101 of the natural
resources
and environmental protection act, 1994 PA 451, MCL
324.51101.
(e)
"Proposed forest management plan" means a proposed plan
for
sustainable forest management that includes, but is not limited
to,
harvesting, planting, and regeneration of forest products on a
parcel
of property that is prepared by a qualified forester. A
proposed
forest management plan shall include all of the following:
(i) The name and address of each owner of the
property.
(ii) The legal description and parcel identification
number of
the
property or of the parcel on which the property is located.
(iii) A statement of the owner's forest management
objectives.
(iv) A map, diagram, or aerial photograph that
identified both
forested
and unforested areas of the property, using conventional
map
symbols indicating the species, size, and density of vegetation
and
other major features of the property.
(v) A description of the forestry practices, including
harvesting,
thinning, and reforestation, that will be undertaken,
specifying
the approximate period of time before each is completed.
(vi) A description of soil conservation practices that
may be
necessary
to control any soil erosion that may result from the
forestry
practices described pursuant to subparagraph (v).
(vii) A proposed forest management plan shall also
include a
description
of activities that may be undertaken for the management
of
forest resources other than trees, including wildlife habitat,
watersheds,
and aesthetic features.
(i) (f)
"Qualified forest
property" means a parcel of real
property that meets all of the following conditions as determined
by
the department of natural resources:agriculture and rural
development:
(i) Is not less than 20 contiguous acres in size. ,
of which
not
less than 80% is productive forest capable of producing wood
products.
For parcels less than 40 acres,
not less than 80% shall
be stocked with productive forest capable of producing forest
products. For parcels 40 acres or more, not less than 50% shall be
stocked with productive forest capable of producing forest
products. 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. As used in this
subparagraph, "productive forest" means real property capable of
growing not less than 20 cubic feet of wood per acre per year.
However, if property has been considered productive forest, an act
of God that negatively affects that property shall not result in
that property not being considered productive forest.
(ii) Is stocked with forest products.
(iii) Has no buildings or structures located on the real
property.
(ii) (iv) Is
subject to an approved forest management plan.
(iii) For a parcel exempt as qualified agricultural property
under section 7ee, the qualified forest portion of the parcel shall
be not less than 20 contiguous acres. If the qualified forest
portion of the parcel is less than 40 acres, not less than 80%
shall be stocked with productive forest capable of producing forest
products. If the qualified forest portion of the parcel is 40 acres
or more, not less than 50% shall be stocked with productive forest
capable of producing forest products.
(j) (g)
"Qualified forester"
means natural resources
professional,
a registered forester, or a conservation district
forester.an individual who meets 1 or more of the
following
requirements and has registered with the department of agriculture
and rural development under section 51306 of the natural resources
and environmental protection act, 1994 PA 451, MCL 324.51306:
(i) Is a forester certified by the society of American
foresters.
(ii) Is a forest stewardship plan writer.
(iii) Is a technical service provider as registered by the
United States department of agriculture for forest management plan
development.
(iv) Is a registered forester.
(h)
"Third-party certifying organization" means an independent
third-party
organization that assesses and evaluates forest
management
practices according to the standards of a certification
program
that measures whether forest management practices are
consistent
with principles of sustainable forestry. Third-party
certifying
organization includes, but is not limited to, the forest
stewardship
council and the sustainable forest initiative.
(k) "Registered forester" means a person registered under
article 21 of the occupational code, 1980 PA 299, MCL 339.2101 to
339.2108.
Enacting section 1. This amendatory act takes effect June 1,
2013.