January 30, 2018, Introduced by Rep. Lucido and referred to the Committee on Tax Policy.
A bill to amend 1893 PA 206, entitled
"The general property tax act,"
by amending section 7cc (MCL 211.7cc), as amended by 2017 PA 121.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 7cc. (1) A principal residence 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, if an owner of that principal residence
claims an exemption as provided in this section. Notwithstanding
the tax day provided in section 2, the status of property as a
principal residence shall be determined on the date an affidavit
claiming an exemption is filed under subsection (2).
(2) Except as otherwise provided in subsection (5), an owner
of property may claim 1 exemption under this section by filing an
affidavit on or before May 1 for taxes levied before January 1,
2012 or, for taxes levied after December 31, 2011, on or before
June 1 for the immediately succeeding summer tax levy and all
subsequent tax levies or on or before November 1 for the
immediately succeeding winter tax levy and all subsequent tax
levies with the local tax collecting unit in which the property is
located. The affidavit shall state that the property is owned and
occupied as a principal residence by that owner of the property on
the date that the affidavit is signed and shall state that the
owner has not claimed a substantially similar exemption, deduction,
or credit on property in another state. The affidavit shall be on a
form prescribed by the department of treasury. One copy of the
affidavit shall be retained by the owner and 1 copy shall be
retained by the local tax collecting unit, together with all
information submitted under subsection (28) for a cooperative
housing corporation. The local tax collecting unit shall forward to
the department of treasury a copy of the affidavit and any
information submitted under subsection (28) upon a request from the
department of treasury. The affidavit shall require the owner
claiming the exemption to indicate if that owner or that owner's
spouse has claimed another exemption on property in this state that
is not rescinded or a substantially similar exemption, deduction,
or credit on property in another state that is not rescinded. If
the affidavit requires an owner to include a social security
number, that owner's number is subject to the disclosure
restrictions in 1941 PA 122, MCL 205.1 to 205.31. If an owner of
property filed an affidavit for an exemption under this section
before January 1, 2004, that affidavit shall be considered the
affidavit required under this subsection for a principal residence
exemption and that exemption shall remain in effect until rescinded
as provided in this section.
(3) Except as otherwise provided in subsection (5), a married
couple 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. For taxes levied after December 31, 2002, a person is
not entitled to an exemption under this section in any calendar
year in which any of the following conditions occur:
(a) That person has claimed a substantially similar exemption,
deduction, or credit, regardless of amount, on property in another
state. Upon request by the department of treasury, the assessor of
the local tax collecting unit, the county treasurer or his or her
designee, or the county equalization director or his or her
designee, a person who claims an exemption under this section
shall, within 30 days, file an affidavit on a form prescribed by
the department of treasury stating that the person has not claimed
a substantially similar exemption, deduction, or credit on property
in another state. A claim for a substantially similar exemption,
deduction, or credit in another state occurs at the time of the
filing or granting of a substantially similar exemption, deduction,
or credit in another state. If the assessor of the local tax
collecting unit, the department of treasury, or the county denies
an existing claim for exemption under this section, an owner of the
property subject to that denial cannot rescind a substantially
similar exemption, deduction, or credit claimed in another state in
order to qualify for the exemption under this section for any of
the years denied. If a person claims an exemption under this
section and a substantially similar exemption, deduction, or credit
in another state, that person is subject to a penalty of $500.00.
The penalty shall be distributed in the same manner as interest is
distributed under subsection (25).
(b) Subject to subdivision (a), that person or his or her
spouse owns property in a state other than this state for which
that person or his or her spouse claims an exemption, deduction, or
credit substantially similar to the exemption provided under this
section, unless that person and his or her spouse file separate
income tax returns.
(c) That person has filed a nonresident Michigan income tax
return, except active duty military personnel stationed in this
state with his or her principal residence in this state.
(d) That person has filed an income tax return in a state
other than this state as a resident, except active duty military
personnel stationed in this state with his or her principal
residence in this state.
(e) That person has previously rescinded an exemption under
this section for the same property for which an exemption is now
claimed and there has not been a transfer of ownership of that
property after the previous exemption was rescinded, if either of
the following conditions is satisfied:
(i) That person has claimed an exemption under this section
for any other property for that tax year.
(ii) That person has rescinded an exemption under this section
on other property, which exemption remains in effect for that tax
year, and there has not been a transfer of ownership of that
property.
(4) Upon receipt of an affidavit filed under subsection (2)
and unless the claim is denied under this section, the assessor
shall exempt the property from the collection of 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, as provided in subsection (1) until December 31
of the year in which the property is transferred or, except as
otherwise
provided in subsections (5), and (32), and (33), is no
longer a principal residence as defined in section 7dd, or the
owner is no longer entitled to an exemption as provided in
subsection (3).
(5) Except as otherwise provided in this subsection and
subsections (32) and (33), not more than 90 days after exempted
property is no longer used as a principal residence by the owner
claiming an exemption, that owner shall rescind the claim of
exemption by filing with the local tax collecting unit a rescission
form prescribed by the department of treasury. The local tax
collecting unit shall retain the rescission form and shall forward
a copy of it to the department of treasury upon a request from the
department of treasury. If an owner is eligible for and claims an
exemption for that owner's current principal residence, that owner
may retain an exemption for not more than 3 tax years on property
previously exempt as his or her principal residence if that
property is not occupied, is for sale, is not leased, and is not
used for any business or commercial purpose by filing a conditional
rescission form prescribed by the department of treasury with the
local tax collecting unit within the time period prescribed in
subsection (2). Beginning in the 2012 tax year, subject to the
payment requirement set forth in this subsection, if a land
contract vendor, bank, credit union, or other lending institution
owns property as a result of a foreclosure or forfeiture of a
recorded instrument under chapter 31, 32, or 57 of the revised
judicature act of 1961, 1961 PA 236, MCL 600.3101 to 600.3285 and
MCL 600.5701 to 600.5759, or through deed or conveyance in lieu of
a foreclosure or forfeiture on that property and that property had
been exempt under this section immediately preceding the
foreclosure, that land contract vendor, bank, credit union, or
other lending institution may retain an exemption on that property
at the same percentage of exemption that the property previously
had under this section if that property is not occupied other than
by the person who claimed the exemption under this section
immediately preceding the foreclosure or forfeiture, is for sale,
is not leased to any person other than the person who claimed the
exemption under this section immediately preceding the foreclosure,
and is not used for any business or commercial purpose. A land
contract vendor, bank, credit union, or other lending institution
may claim an exemption under this subsection by filing a
conditional rescission form prescribed by the department of
treasury with the local tax collecting unit within the time period
prescribed in subsection (2). Property is eligible for a
conditional rescission if that property is available for lease and
all other conditions under this subsection are met. A copy of a
conditional rescission form shall be forwarded to the department of
treasury according to a schedule prescribed by the department of
treasury. An owner or a land contract vendor, bank, credit union,
or other lending institution that files a conditional rescission
form shall annually verify to the assessor of the local tax
collecting unit on or before December 31 that the property for
which the principal residence exemption is retained is not occupied
other than by the person who claimed the exemption under this
section immediately preceding the foreclosure or forfeiture, is for
sale, is not leased except as otherwise provided in this section,
and is not used for any business or commercial purpose. The land
contract vendor, bank, credit union, or other lending institution
may retain the exemption authorized under this section for not more
than 3 tax years. If an owner or a land contract vendor, bank,
credit union, or other lending institution does not annually verify
by December 31 that the property for which the principal residence
exemption is retained is not occupied other than by the person who
claimed the exemption under this section immediately preceding the
foreclosure or forfeiture, is for sale, is not leased except as
otherwise provided in this section, and is not used for any
business or commercial purpose, the assessor of the local tax
collecting unit shall deny the principal residence exemption on
that property. Except as otherwise provided in this section, if
property subject to a conditional rescission is leased, the local
tax collecting unit shall deny that conditional rescission and that
denial is retroactive and is effective on December 31 of the year
immediately preceding the year in which the property subject to the
conditional rescission is leased. 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 $200.00. This penalty shall
be collected under 1941 PA 122, MCL 205.1 to 205.31, and shall be
deposited in the state school aid fund established in section 11 of
article IX of the state constitution of 1963. This penalty may be
waived by the department of treasury. If a land contract vendor,
bank, credit union, or other lending institution retains an
exemption on property under this subsection, that land contract
vendor, bank, credit union, or other lending institution shall pay
an amount equal to the additional amount that land contract vendor,
bank, credit union, or other lending institution would have paid
under section 1211 of the revised school code, 1976 PA 451, MCL
380.1211, if an exemption had not been retained on that property,
together with an administration fee equal to the property tax
administration fee imposed under section 44. The payment required
under this subsection shall be collected by the local tax
collecting unit at the same time and in the same manner as taxes
collected under this act. The administration fee shall be retained
by the local tax collecting unit. The amount collected that the
land contract vendor, bank, credit union, or other lending
institution would have paid under section 1211 of the revised
school code, 1976 PA 451, MCL 380.1211, if an exemption had not
been retained on that property is an amount that is not captured by
any authority as tax increment revenues and shall be distributed to
the department of treasury monthly for deposit into the state
school aid fund established in section 11 of article IX of the
state constitution of 1963. If a land contract vendor, bank, credit
union, or other lending institution transfers ownership of property
for which an exemption is retained under this subsection, that land
contract vendor, bank, credit union, or other lending institution
shall rescind the exemption as provided in this section and shall
notify the treasurer of the local tax collecting unit of that
transfer of ownership. If a land contract vendor, bank, credit
union, or other lending institution fails to make the payment
required under this subsection for any property within the period
for which property taxes are due and payable without penalty, the
local tax collecting unit shall deny that conditional rescission
and that denial is retroactive and is effective on December 31 of
the immediately preceding year. If the local tax collecting unit
denies a conditional rescission, the local tax collecting unit
shall remove the exemption of the property and the amount due from
the land contract vendor, bank, credit union, or other lending
institution shall be a tax so that the additional taxes, penalties,
and interest shall be collected as provided for in this section. If
payment of the tax under this subsection is not made by the March 1
following the levy of the tax, the tax shall be turned over to the
county treasurer and collected in the same manner as delinquent
taxes under this act. An owner of property who previously occupied
that property as his or her principal residence but now resides in
a nursing home or assisted living facility may retain an exemption
on that property if the owner manifests an intent to return to that
property by satisfying all of the following conditions:
(a) The owner continues to own that property while residing in
the nursing home or assisted living facility.
(b) The owner has not established a new principal residence.
(c) The owner maintains or provides for the maintenance of
that property while residing in the nursing home or assisted living
facility.
(d) That property is not occupied, is not leased, and is not
used for any business or commercial purpose.
(6)
Except as otherwise provided in subsections (5), and (32),
and (33), if the assessor of the local tax collecting unit believes
that the property for which an exemption is claimed is not the
principal residence of the owner claiming the exemption, the
assessor may deny a new or existing claim by notifying the owner
and the department of treasury in writing of the reason for the
denial and advising the owner that the denial may be appealed to
the residential and small claims division of the Michigan tax
tribunal within 35 days after the date of the notice. The assessor
may deny a claim for exemption for the current year and for the 3
immediately preceding calendar years. If the assessor denies an
existing claim for exemption, the assessor shall remove the
exemption of the property and, if the tax roll is in the local tax
collecting unit's possession, amend the tax roll to reflect the
denial and the local treasurer shall within 30 days of the date of
the denial issue a corrected tax bill for any additional taxes with
interest at the rate of 1.25% per month or fraction of a month and
penalties computed from the date the taxes were last payable
without interest or penalty. If the tax roll is in the county
treasurer's possession, the tax roll shall be amended to reflect
the denial and the county treasurer shall within 30 days of the
date of the denial prepare and submit a supplemental tax bill for
any additional taxes, together with interest at the rate of 1.25%
per month or fraction of a month and penalties computed from the
date the taxes were last payable without interest or penalty.
Interest on any tax set forth in a corrected or supplemental tax
bill shall again begin to accrue 60 days after the date the
corrected or supplemental tax bill is issued at the rate of 1.25%
per month or fraction of a month. Taxes levied in a corrected or
supplemental tax bill shall be returned as delinquent on the March
1 in the year immediately succeeding the year in which the
corrected or supplemental tax bill is issued. If the assessor
denies an existing claim for exemption, the interest due shall be
distributed as provided in subsection (25). However, if the
property has been transferred to a bona fide purchaser before
additional taxes were billed to the seller as a result of the
denial of a claim for exemption, the taxes, interest, and penalties
shall not be a lien on the property and shall not be billed to the
bona fide purchaser, and the local tax collecting unit if the local
tax collecting unit has possession of the tax roll or the county
treasurer if the county has possession of the tax roll shall notify
the department of treasury of the amount of tax due, interest, and
penalties through the date of that notification. The department of
treasury shall then assess the owner who claimed the exemption
under this section for the tax, interest, and penalties accruing as
a result of the denial of the claim for exemption, if any, as for
unpaid taxes provided under 1941 PA 122, MCL 205.1 to 205.31, and
shall deposit any tax or penalty collected into the state school
aid fund and shall distribute any interest collected as provided in
subsection (25). The denial shall be made on a form prescribed by
the department of treasury. If the property for which the assessor
has denied a claim for exemption under this subsection is located
in a county in which the county treasurer or the county
equalization director have elected to audit exemptions under
subsection (10), the assessor shall notify the county treasurer or
the county equalization director of the denial under this
subsection.
(7) If the assessor of the local tax collecting unit believes
that the property for which the exemption is claimed is not the
principal residence of the owner claiming the exemption and has not
denied the claim, the assessor shall include a recommendation for
denial with any affidavit that is forwarded to the department of
treasury or, for an existing claim, shall send a recommendation for
denial to the department of treasury, stating the reasons for the
recommendation.
(8) The department of treasury shall determine if the property
is the principal residence of the owner claiming the exemption.
Except as otherwise provided in subsection (21), the department of
treasury may review the validity of exemptions for the current
calendar year and for the 3 immediately preceding calendar years.
Except
as otherwise provided in subsections (5), and (32), and
(33), if the department of treasury determines that the property is
not the principal residence of the owner claiming the exemption,
the department shall send a notice of that determination to the
local tax collecting unit and to the owner of the property claiming
the exemption, indicating that the claim for exemption is denied,
stating the reason for the denial, and advising the owner claiming
the exemption of the right to appeal the determination to the
department of treasury and what those rights of appeal are. The
department of treasury may issue a notice denying a claim if an
owner fails to respond within 30 days of receipt of a request for
information from that department. An owner may appeal the denial of
a claim of exemption to the department of treasury within 35 days
of receipt of the notice of denial. An appeal to the department of
treasury shall be conducted according to the provisions for an
informal conference in section 21 of 1941 PA 122, MCL 205.21.
Within 10 days after acknowledging an appeal of a denial of a claim
of exemption, the department of treasury shall notify the assessor
and the treasurer for the county in which the property is located
that an appeal has been filed. Upon receipt of a notice that the
department of treasury has denied a claim for exemption, the
assessor shall remove the exemption of the property and, if the tax
roll is in the local tax collecting unit's possession, amend the
tax roll to reflect the denial and the local treasurer shall within
30 days of the date of the denial issue a corrected tax bill for
any additional taxes with interest at the rate of 1.25% per month
or fraction of a month and penalties computed from the date the
taxes were last payable without interest and penalty. If the tax
roll is in the county treasurer's possession, the tax roll shall be
amended to reflect the denial and the county treasurer shall within
30 days of the date of the denial prepare and submit a supplemental
tax bill for any additional taxes, together with interest at the
rate of 1.25% per month or fraction of a month and penalties
computed from the date the taxes were last payable without interest
or penalty. Interest on any tax set forth in a corrected or
supplemental tax bill shall again begin to accrue 60 days after the
date the corrected or supplemental tax bill is issued at the rate
of 1.25% per month or fraction of a month. The department of
treasury may waive interest on any tax set forth in a corrected or
supplemental tax bill for the current tax year and the immediately
preceding 3 tax years if the assessor of the local tax collecting
unit files with the department of treasury a sworn affidavit in a
form prescribed by the department of treasury stating that the tax
set forth in the corrected or supplemental tax bill is a result of
the assessor's classification error or other error or the
assessor's failure to rescind the exemption after the owner
requested in writing that the exemption be rescinded. Taxes levied
in a corrected or supplemental tax bill shall be returned as
delinquent on the March 1 in the year immediately succeeding the
year in which the corrected or supplemental tax bill is issued. If
the department of treasury denies an existing claim for exemption,
the interest due shall be distributed as provided in subsection
(25). However, if the property has been transferred to a bona fide
purchaser before additional taxes were billed to the seller as a
result of the denial of a claim for exemption, the taxes, interest,
and penalties shall not be a lien on the property and shall not be
billed to the bona fide purchaser, and the local tax collecting
unit if the local tax collecting unit has possession of the tax
roll or the county treasurer if the county has possession of the
tax roll shall notify the department of treasury of the amount of
tax due and interest through the date of that notification. The
department of treasury shall then assess the owner who claimed the
exemption under this section for the tax and interest plus penalty
accruing as a result of the denial of the claim for exemption, if
any, as for unpaid taxes provided under 1941 PA 122, MCL 205.1 to
205.31, and shall deposit any tax or penalty collected into the
state school aid fund and shall distribute any interest collected
as provided in subsection (25).
(9) The department of treasury may enter into an agreement
regarding the implementation or administration of subsection (8)
with the assessor of any local tax collecting unit in a county that
has not elected to audit exemptions claimed under this section as
provided in subsection (10). The agreement may specify that for a
period of time, not to exceed 120 days, the department of treasury
will not deny an exemption identified by the department of treasury
in the list provided under subsection (11).
(10) A county may elect to audit the exemptions claimed under
this section in all local tax collecting units located in that
county as provided in this subsection. The election to audit
exemptions shall be made by the county treasurer, or by the county
equalization director with the concurrence by resolution of the
county board of commissioners. The initial election to audit
exemptions shall require an audit period of 2 years. Before 2009,
subsequent elections to audit exemptions shall be made every 2
years and shall require 2 annual audit periods. Beginning in 2009,
an election to audit exemptions shall be made every 5 years and
shall require 5 annual audit periods. An election to audit
exemptions shall be made by submitting an election to audit form to
the assessor of each local tax collecting unit in that county and
to the department of treasury not later than April 1 preceding the
October 1 in the year in which an election to audit is made. The
election to audit form required under this subsection shall be in a
form prescribed by the department of treasury. If a county elects
to audit the exemptions claimed under this section, the department
of treasury may continue to review the validity of exemptions as
provided in subsection (8). If a county does not elect to audit the
exemptions claimed under this section as provided in this
subsection, the department of treasury shall conduct an audit of
exemptions claimed under this section in the initial 2-year audit
period for each local tax collecting unit in that county unless the
department of treasury has entered into an agreement with the
assessor for that local tax collecting unit under subsection (9).
(11) If a county elects to audit the exemptions claimed under
this section as provided in subsection (10) and the county
treasurer or his or her designee or the county equalization
director or his or her designee believes that the property for
which an exemption is claimed is not the principal residence of the
owner claiming the exemption, the county treasurer or his or her
designee or the county equalization director or his or her designee
may,
except as otherwise provided in subsections (5), and (32), and
(33), deny an existing claim by notifying the owner, the assessor
of the local tax collecting unit, and the department of treasury in
writing of the reason for the denial and advising the owner that
the denial may be appealed to the residential and small claims
division of the Michigan tax tribunal within 35 days after the date
of the notice. The county treasurer or his or her designee or the
county equalization director or his or her designee may deny a
claim for exemption for the current year and for the 3 immediately
preceding calendar years. If the county treasurer or his or her
designee or the county equalization director or his or her designee
denies an existing claim for exemption, the county treasurer or his
or her designee or the county equalization director or his or her
designee shall direct the assessor of the local tax collecting unit
in which the property is located to remove the exemption of the
property from the assessment roll and, if the tax roll is in the
local tax collecting unit's possession, direct the assessor of the
local tax collecting unit to amend the tax roll to reflect the
denial and the treasurer of the local tax collecting unit shall
within 30 days of the date of the denial issue a corrected tax bill
for any additional taxes with interest at the rate of 1.25% per
month or fraction of a month and penalties computed from the date
the taxes were last payable without interest and penalty. If the
tax roll is in the county treasurer's possession, the tax roll
shall be amended to reflect the denial and the county treasurer
shall within 30 days of the date of the denial prepare and submit a
supplemental tax bill for any additional taxes, together with
interest at the rate of 1.25% per month or fraction of a month and
penalties computed from the date the taxes were last payable
without interest or penalty. Interest on any tax set forth in a
corrected or supplemental tax bill shall again begin to accrue 60
days after the date the corrected or supplemental tax bill is
issued at the rate of 1.25% per month or fraction of a month. Taxes
levied in a corrected or supplemental tax bill shall be returned as
delinquent on the March 1 in the year immediately succeeding the
year in which the corrected or supplemental tax bill is issued. If
the county treasurer or his or her designee or the county
equalization director or his or her designee denies an existing
claim for exemption, the interest due shall be distributed as
provided in subsection (25). However, if the property has been
transferred to a bona fide purchaser before additional taxes were
billed to the seller as a result of the denial of a claim for
exemption, the taxes, interest, and penalties shall not be a lien
on the property and shall not be billed to the bona fide purchaser,
and the local tax collecting unit if the local tax collecting unit
has possession of the tax roll or the county treasurer if the
county has possession of the tax roll shall notify the department
of treasury of the amount of tax due and interest through the date
of that notification. The department of treasury shall then assess
the owner who claimed the exemption under this section for the tax
and interest plus penalty accruing as a result of the denial of the
claim for exemption, if any, as for unpaid taxes provided under
1941 PA 122, MCL 205.1 to 205.31, and shall deposit any tax or
penalty collected into the state school aid fund and shall
distribute any interest collected as provided in subsection (25).
The department of treasury shall annually provide the county
treasurer or his or her designee or the county equalization
director or his or her designee a list of parcels of property
located in that county for which an exemption may be erroneously
claimed. The county treasurer or his or her designee or the county
equalization director or his or her designee shall forward copies
of the list provided by the department of treasury to each assessor
in each local tax collecting unit in that county within 10 days of
receiving the list.
(12) If a county elects to audit exemptions claimed under this
section as provided in subsection (10), the county treasurer or the
county equalization director may enter into an agreement with the
assessor of a local tax collecting unit in that county regarding
the implementation or administration of this section. The agreement
may specify that for a period of time, not to exceed 120 days, the
county will not deny an exemption identified by the department of
treasury in the list provided under subsection (11).
(13) An owner may appeal a denial by the assessor of the local
tax collecting unit under subsection (6), a final decision of the
department of treasury under subsection (8), or a denial by the
county treasurer or his or her designee or the county equalization
director or his or her designee under subsection (11) to the
residential and small claims division of the Michigan tax tribunal
within 35 days of that decision. An owner is not required to pay
the amount of tax in dispute in order to appeal a denial of a claim
of exemption to the department of treasury or to receive a final
determination of the residential and small claims division of the
Michigan tax tribunal. However, interest at the rate of 1.25% per
month or fraction of a month and penalties shall accrue and be
computed from the date the taxes were last payable without interest
and penalty. If the residential and small claims division of the
Michigan tax tribunal grants an owner's appeal of a denial and that
owner has paid the interest due as a result of a denial under
subsection (6), (8), or (11), the interest received after a
distribution was made under subsection (25) shall be refunded.
(14) For taxes levied after December 31, 2005, for each county
in which the county treasurer or the county equalization director
does not elect to audit the exemptions claimed under this section
as provided in subsection (10), the department of treasury shall
conduct an annual audit of exemptions claimed under this section
for the current calendar year.
(15) Except as otherwise provided in subsection (5), an
affidavit filed by an owner for the exemption under this section
rescinds all previous exemptions filed by that owner for any other
property. The department of treasury shall notify the assessor of
the local tax collecting unit in which the property for which a
previous exemption was claimed is located if the previous exemption
is rescinded by the subsequent affidavit. When an exemption is
rescinded as provided in subsection (5), the assessor of the local
tax collecting unit shall remove the exemption effective December
31 of the year in which the affidavit was filed that rescinded the
exemption. For any year for which the rescinded exemption has not
been removed from the tax roll, the exemption shall be denied as
provided in this section. However, interest and penalty shall not
be imposed for a year for which a rescission form has been timely
filed under subsection (5).
(16) Except as otherwise provided in subsection (30), if the
principal residence is part of a unit in a multiple-unit dwelling
or a dwelling unit in a multiple-purpose structure, an owner shall
claim an exemption for only that portion of the total taxable value
of the property used as the principal residence of that owner in a
manner prescribed by the department of treasury. If a portion of a
parcel for which the owner claims an exemption is used for a
purpose other than as a principal residence, the owner shall claim
an exemption for only that portion of the taxable value of the
property used as the principal residence of that owner in a manner
prescribed by the department of treasury.
(17) When a county register of deeds records a transfer of
ownership of a property, he or she shall notify the local tax
collecting unit in which the property is located of the transfer.
(18) The department of treasury shall make available the
affidavit forms and the forms to rescind an exemption, which may be
on the same form, to all city and township assessors, county
equalization officers, county registers of deeds, and closing
agents. A person who prepares a closing statement for the sale of
property shall provide affidavit and rescission forms to the buyer
and seller at the closing and, if requested by the buyer or seller
after execution by the buyer or seller, shall file the forms with
the local tax collecting unit in which the property is located. If
a closing statement preparer fails to provide exemption affidavit
and rescission forms to the buyer and seller, or fails to file the
affidavit and rescission forms with the local tax collecting unit
if requested by the buyer or seller, the buyer may appeal to the
department of treasury within 30 days of notice to the buyer that
an exemption was not recorded. If the department of treasury
determines that the buyer qualifies for the exemption, the
department of treasury shall notify the assessor of the local tax
collecting unit that the exemption is granted and the assessor of
the local tax collecting unit or, if the tax roll is in the
possession of the county treasurer, the county treasurer shall
correct the tax roll to reflect the exemption. This subsection does
not create a cause of action at law or in equity against a closing
statement preparer who fails to provide exemption affidavit and
rescission forms to a buyer and seller or who fails to file the
affidavit and rescission forms with the local tax collecting unit
when requested to do so by the buyer or seller.
(19) An owner who owned and occupied a principal residence on
May 1 for taxes levied before January 1, 2012 for which the
exemption was not on the tax roll may file an appeal with the July
board of review or December board of review in the year for which
the exemption was claimed or the immediately succeeding 3 years.
For taxes levied after December 31, 2011, an owner who owned and
occupied a principal residence on June 1 or November 1 for which
the exemption was not on the tax roll, or an owner of property who
previously occupied that property as his or her principal residence
but did not occupy that property on June 1 or November 1 while
residing in a nursing home or assisted living facility under the
circumstances
described in subsection (5)(a) to (d), or while
absent on active duty as a member of any branch of the Armed Forces
of the United States, including the Coast Guard, a reserve
component of any branch of the Armed Forces of the United States,
or the National Guard, under the circumstances described in
subsection (32)(a) to (d), or while absent due to the demolition or
destruction of a dwelling on the property under the circumstances
described in subsection (33)(a) to (d), for which the exemption was
not on the tax roll, may file an appeal with the July board of
review or December board of review in the year for which the
exemption was claimed or the immediately succeeding 3 years. If an
appeal of a claim for exemption that was not on the tax roll is
received not later than 5 days before the date of the December
board of review, the local tax collecting unit shall convene a
December board of review and consider the appeal pursuant to this
section and section 53b.
(20) An owner who owned and occupied a principal residence
within the time period prescribed in subsection (2) in any year
before the 3 immediately preceding tax years for which the
exemption was not on the tax roll as a result of a qualified error
on the part of the local tax collecting unit may file a request for
the exemption for those tax years with the department of treasury.
The request for the exemption shall be in a form prescribed by the
department of treasury and shall include all documentation the
department of treasury considers necessary to consider the request
and to correct any affected official records if a qualified error
on the part of the local tax collecting unit is recognized and an
exemption is granted. If the department of treasury denies a
request for the exemption under this subsection, the owner is
responsible for all costs related to the request as determined by
the department of treasury. If the department of treasury grants a
request for the exemption under this subsection and the exemption
results in an overpayment of the tax in the years under
consideration, the department of treasury shall notify the
treasurer of the local tax collecting unit, the county treasurer,
and other affected officials of the error and the granting of the
request for the exemption and all affected official records shall
be corrected consistent with guidance provided by the department of
treasury. If granting the request for the exemption results in an
overpayment, a rebate, including any interest paid by the owner,
shall be paid to the owner within 30 days of the receipt of the
notice. A rebate shall be without interest. The treasurer in
possession of the appropriate tax roll may deduct the rebate from
the appropriate tax collecting unit's subsequent distribution of
taxes. The treasurer in possession of the appropriate tax roll
shall bill to the appropriate tax collecting unit the tax
collecting unit's share of taxes rebated. A local tax collecting
unit responsible for a qualified error under this subsection shall
reimburse each county treasurer and other affected local official
required to correct official records under this subsection for the
costs incurred in complying with this subsection.
(21) If an owner of property received a principal residence
exemption to which that owner was not entitled in any year before
the 3 immediately preceding tax years, as a result of a qualified
error on the part of the local tax collecting unit, the department
of treasury may deny the principal residence exemption as provided
in subsection (8). If the department of treasury denies an
exemption under this subsection, the owner shall be issued a
corrected or supplemental tax bill as provided in subsection (8),
except interest shall not accrue until 60 days after the date the
corrected or supplemental tax bill is issued. A local tax
collecting unit responsible for a qualified error under this
subsection shall reimburse each county treasurer and other affected
local official required to correct official records under this
subsection for the costs incurred in complying with this
subsection.
(22) If the assessor or treasurer of the local tax collecting
unit believes that the department of treasury erroneously denied a
claim for exemption, the assessor or treasurer may submit written
information supporting the owner's claim for exemption to the
department of treasury within 35 days of the owner's receipt of the
notice denying the claim for exemption. If, after reviewing the
information provided, the department of treasury determines that
the claim for exemption was erroneously denied, the department of
treasury shall grant the exemption and the tax roll shall be
amended to reflect the exemption.
(23) If granting the exemption under this section results in
an overpayment of the tax, a rebate, including any interest paid,
shall be made to the taxpayer 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
within 30 days of the date the exemption is granted. The rebate
shall be without interest. If an exemption for property classified
as timber-cutover real property is granted under this section for
the 2008 or 2009 tax year, the tax roll shall be corrected and any
delinquent and unpaid penalty, interest, and tax resulting from
that property not having been exempt under this section for the
2008 or 2009 tax year shall be waived.
(24) If an exemption under this section is erroneously granted
for an affidavit filed before October 1, 2003, an owner may request
in writing that the department of treasury withdraw the exemption.
The request to withdraw the exemption shall be received not later
than November 1, 2003. If an owner requests that an exemption be
withdrawn, the department of treasury shall issue an order
notifying the local assessor that the exemption issued under this
section has been denied based on the 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. Unless a
denial has been issued before July 1, 2003, if an owner requests
that an exemption under this section be withdrawn 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.
(25) Subject to subsection (26), interest at the rate of 1.25%
per month or fraction of a month collected under subsection (6),
(8), or (11) shall be distributed as follows:
(a) If the assessor of the local tax collecting unit denies
the exemption under this section, as follows:
(i) To the local tax collecting unit, 70%.
(ii) To the department of treasury, 10%.
(iii) To the county in which the property is located, 20%.
(b) If the department of treasury denies the exemption under
this section, as follows:
(i) To the local tax collecting unit, 20%.
(ii) To the department of treasury, 70%.
(iii) To the county in which the property is located, 10%.
(c) If the county treasurer or his or her designee or the
county equalization director or his or her designee denies the
exemption under this section, as follows:
(i) To the local tax collecting unit, 20%.
(ii) To the department of treasury, 10%.
(iii) To the county in which the property is located, 70%.
(26) Interest distributed under subsection (25) is subject to
the following conditions:
(a) Interest distributed to a county shall be deposited into a
restricted fund to be used solely for the administration of
exemptions under this section. Money in that restricted fund shall
lapse to the county general fund on the December 31 in the year 3
years after the first distribution of interest to the county under
subsection (25) and on each succeeding December 31 thereafter.
(b) Interest distributed to the department of treasury shall
be deposited into the principal residence property tax exemption
audit fund, which is created within the state treasury. The state
treasurer may receive money or other assets from any source for
deposit into the fund. The state treasurer shall direct the
investment of the fund. The state treasurer shall credit to the
fund interest and earnings from fund investments. Money in the fund
shall be considered a work project account and at the close of the
fiscal year shall remain in the fund and shall not lapse to the
general fund. Money from the fund shall be expended, upon
appropriation, only for the purpose of auditing exemption
affidavits.
(27) Interest distributed under subsection (25) is in addition
to and shall not affect the levy or collection of the county
property tax administration fee established under this act.
(28) A cooperative housing corporation is entitled to a full
or partial exemption under this section for the tax year in which
the cooperative housing corporation files all of the following with
the local tax collecting unit in which the cooperative housing
corporation is located if filed within the time period prescribed
in subsection (2):
(a) An affidavit form.
(b) A statement of the total number of units owned by the
cooperative housing corporation and occupied as the principal
residence of a tenant stockholder as of the date of the filing
under this subsection.
(c) A list that includes the name, address, and social
security number of each tenant stockholder of the cooperative
housing corporation occupying a unit in the cooperative housing
corporation as his or her principal residence as of the date of the
filing under this subsection.
(d) A statement of the total number of units of the
cooperative housing corporation on which an exemption under this
section was claimed and that were transferred in the tax year
immediately preceding the tax year in which the filing under this
section was made.
(29) Before May 1, 2004 and before May 1, 2005, the treasurer
of each county shall forward to the department of education a
statement of the taxable value of each school district and fraction
of a school district within the county for the preceding 4 calendar
years. This requirement is in addition to the requirement set forth
in section 151 of the state school aid act of 1979, 1979 PA 94, MCL
388.1751.
(30) For a parcel of property open and available for use as a
bed and breakfast, the portion of the taxable value of the property
used as a principal residence under subsection (16) shall be
calculated in the following manner:
(a) Add all of the following:
(i) The square footage of the property used exclusively as
that owner's principal residence.
(ii) 50% of the square footage of the property's common area.
(iii) If the property was not open and available for use as a
bed and breakfast for 90 or more consecutive days in the
immediately preceding 12-month period, the result of the following
calculation:
(A) Add the square footage of the property that is open and
available regularly and exclusively as a bed and breakfast, and 50%
of the square footage of the property's common area.
(B) Multiply the result of the calculation in sub-subparagraph
(A) by a fraction, the numerator of which is the number of
consecutive days in the immediately preceding 12-month period that
the property was not open and available for use as a bed and
breakfast and the denominator of which is 365.
(b) Divide the result of the calculation in subdivision (a) by
the total square footage of the property.
(31) The owner claiming an exemption under this section for
property open and available as a bed and breakfast shall file an
affidavit claiming the exemption within the time period prescribed
in subsection (2) with the local tax collecting unit in which the
property is located. The affidavit shall be in a form prescribed by
the department of treasury.
(32) An owner of property who previously occupied that
property as his or her principal residence but now is absent while
on active duty as a member of any branch of the Armed Forces of the
United States, including the Coast Guard, a reserve component of
any branch of the Armed Forces of the United States, or the
National Guard, may retain an exemption on that property if the
owner manifests an intent to return to that property by satisfying
all of the following conditions:
(a) The owner continues to own that property while absent on
active duty as a member of any branch of the Armed Forces of the
United States, including the Coast Guard, a reserve component of
any branch of the Armed Forces of the United States, or the
National Guard.
(b) The owner has not established a new principal residence.
(c) The owner maintains or provides for the maintenance of
that property while absent on active duty as a member of any branch
of the Armed Forces of the United States, including the Coast
Guard, a reserve component of any branch of the Armed Forces of the
United States, or the National Guard.
(d) That property is not used for any business or commercial
purpose except as provided in section 7dd(c).
(33) An owner of property who previously occupied that
property as his or her principal residence but now is absent due to
the demolition or destruction of a dwelling on that property may
retain an exemption on that property if the owner manifests an
intent to return to that property by satisfying all of the
following conditions:
(a) The owner continues to own that property while absent due
to the demolition or destruction of a dwelling on that property.
(b) The owner has not established a new principal residence.
(c) The owner provides for reconstruction of a dwelling on
that property within a reasonable period of time immediately
succeeding its demolition or destruction, for purposes of occupying
the reconstructed dwelling upon its completion.
(d) That property is not occupied, is not leased, and is not
used for any business or commercial purpose.
(34) (33)
As used in this section:
(a) "Bed and breakfast" means property classified as
residential real property under section 34c that meets all of the
following criteria:
(i) Has 10 or fewer sleeping rooms, including sleeping rooms
occupied by the owner of the property, 1 or more of which are
available for rent to transient tenants.
(ii) Serves meals at no extra cost to its transient tenants.
(iii) Has a smoke detector in proper working order in each
sleeping room and a fire extinguisher in proper working order on
each floor.
(b) "Common area" includes, but is not limited to, a kitchen,
dining room, living room, fitness room, porch, hallway, laundry
room, or bathroom that is available for use by guests of a bed and
breakfast or, unless guests are specifically prohibited from access
to the area, an area that is used to provide a service to guests of
a bed and breakfast.
(c) "Qualified error" means that term as defined in section
53b.