PROPERTY TAX FORECLOSURE TIMELINE

House Bill 4412

Sponsor:  Rep. Joel Sheltrown

1^st House Committee:  Tax Policy

2^nd House Committee:  Urban Policy

Complete to 5-11-09

A SUMMARY OF HOUSE BILL 4412 AS INTRODUCED 2-24-09

The bill would amend the General Property Tax Act to revise the timeline for the tax reversion process.  That is the process that deals with property on which taxes remain unpaid.  The law establishes a series of steps that ultimately can result in the property owner losing the property through tax foreclosure for delinquent taxes.  Under a process in place since 1999, counties conduct land sales of forfeited properties.  In general, House Bill 4412 appears to delay the process by one year.

For example, currently the law provides that on March 1 each year, property that is delinquent for taxes, interest, penalties, and fees for the immediately preceding 12 months or more is forfeited to the county treasurer and will be foreclosed on unless redeemed by a certain date.  House Bill 4412 would say instead that property that is delinquent for the immediately preceding 24 months or more would be forfeited to the county treasurer.  This delays the tax foreclosure process by 12 months.

[The General Property Tax Act would continue to say that taxes levied in the immediately preceding year that remain unpaid would be returned to the county for collection.  However, the bill would delay the process at the next step during the following year, the point at which properties on which taxes are delinquent are forfeited to the county treasurer.]

MCL 211.78a et al.

FISCAL IMPACT:

By extending the foreclosure by an additional 12 months, House Bill 4412 would in effect create a one-time delay in recouping delinquent tax payments, penalties, and interest. Because the specific parcels that would be affected by this change are not known, the magnitude of this impact cannot be determined.

                                                                                           Legislative Analyst:   Chris Couch

                                                                                                  Fiscal Analyst:   Jim Stansell

■ This analysis was prepared by nonpartisan House staff for use by House members in their deliberations, and does not constitute an official statement of legislative intent.