March 25, 2008, Introduced by Senators JACOBS and SCOTT and referred to the Committee on Finance.
A bill to amend 1893 PA 206, entitled
"The general property tax act,"
(MCL 211.1 to 211.155) by adding section 7oo.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 7oo. (1) Beginning December 31, 2009, if the ownership of
an eligible principal residence is transferred to a qualified
purchaser and the taxable value of the eligible principal residence
is adjusted under section 27a(3), the increase in the eligible
principal residence's taxable value in excess of the adjusted
taxable value of the qualified purchaser's current principal
residence is exempt from the collection of taxes under this act
until there is a subsequent transfer of ownership of the eligible
principal residence.
(2) Upon the transfer of ownership of an eligible principal
residence subject to the exemption under subsection (1), the
taxable value of the eligible principal residence shall be adjusted
pursuant to section 27a(3).
(3) To claim an exemption under subsection (1) for an eligible
principal residence, an owner shall file an affidavit claiming the
exemption with the local tax collecting unit by May 1. The
affidavit shall be in a form prescribed by the department of
treasury.
(4) Upon receipt of an affidavit filed under subsection (3),
the assessor of the local tax collecting unit shall determine if
the property is an eligible principal residence. If the assessor
determines that the property is an eligible principal residence,
the assessor shall exempt the property as provided in subsection
(1) until December 31 of the year in which the property is no
longer an eligible principal residence.
(5) Not more than 90 days after all or any portion of property
exempt under subsection (1) is no longer an eligible principal
residence, the person claiming the exemption shall rescind the
exemption of the property under subsection (1) by filing with the
local tax collecting unit a rescission form prescribed by the
department of treasury. An owner who fails to rescind an exemption
as required under this subsection is subject to a penalty of $5.00
per day for each separate failure beginning 90 days after all or
any portion of property exempt under subsection (1) is no longer an
eligible principal residence, up to a maximum of $200.00.
(6) An owner of property that is an eligible principal
residence 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 an eligible principal residence on May
1 for which an exemption was denied by the assessor in the year the
affidavit was filed may appeal that denial to the July board of
review for summer taxes or, if there is not a summer levy, to the
December board of review.
(7) If the assessor of the local tax collecting unit believes
that property for which an exemption has been granted is not an
eligible principal residence, the assessor may deny or modify an
existing exemption by notifying the person claiming the exemption
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.
(9) A husband and wife who are required to file or who do file
a joint Michigan income tax return are entitled to not more than 1
exemption under this section. However, only 1 spouse is required to
be a qualified purchaser.
(10) As used in this section:
(a) "Adjusted taxable value" means the taxable value of a
qualified purchaser's current principal residence in the year in
which ownership of an eligible principal residence is transferred
to the qualified purchaser, adjusted as provided in section 27a(3).
(b) "Current principal residence" means the principal
residence of a qualified purchaser for which an exemption was
rescinded by the qualified purchaser under section 7cc(5) in the
year in which ownership of an eligible principal residence was
transferred to the qualified purchaser.
(c) "Eligible principal residence" means a parcel for which a
principal residence exemption is claimed by a qualified purchaser
for which the state equalized valuation for the year in which
ownership was transferred to the qualified purchaser is less than
the state equalized valuation of the qualified purchaser's current
principal residence.
(d) "Principal residence exemption" means the exemption from
the collection of taxes levied under section 1211 of the revised
school code, 1976 PA 451, MCL 380.1211, provided under section 7cc.
(e) "Qualified purchaser" means a person who meets all of the
following conditions:
(i) Is a person to whom ownership of an eligible principal
residence is transferred.
(ii) Is at least 65 years of age in the year in which ownership
of an eligible principal residence is transferred.
(iii) Has claimed a principal residence on his or her current
principal residence for not less than 3 years.
(f) "Transfer of ownership" means that term as defined in
section 27a.