SENATE BILL
No. 798
October 13, 1999, Introduced by Senator BULLARD and referred to the Committee on
Finance.
A bill to amend 1893 PA 206, entitled
"The general property tax act,"
by amending section 9 (MCL 211.9), as amended by 1996 PA 582.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
1 Sec. 9. The following personal property is exempt from
2 taxation:
3 (a) The personal property of charitable, educational, and
4 scientific institutions incorporated under the laws of this
5 state. This exemption does not apply to secret or fraternal
6 societies, but the personal property of all charitable homes of
7 the SECRET OR FRATERNAL societies and OF
nonprofit corporations
8 that own and operate facilities for the aged and chronically ill
9 in which the net income from the operation of the corporations
10 does not inure to the benefit of a person other than the
11 residents is exempt.
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2
1 (b) The property of all library associations, circulating
2 libraries, libraries of reference, and reading rooms owned or
3 supported by the public and not used for gain.
4 (c) The property of posts of the grand army of the republic,
5 sons of veterans' unions, and of the women's relief corps con-
6 nected with them, of young men's Christian associations, women's
7 Christian temperance union associations, young people's Christian
8 unions, a boy or girl scout or camp fire girls organization, 4-H
9 clubs, and other similar associations.
10 (d) Pensions receivable from the United States.
11 (e) The property of Indians who are not citizens.
12 (f) The personal property owned and used by a householder
13 such as customary furniture, fixtures, provisions, fuel, and
14 other similar equipment, and the wearing apparel
including per-
15 sonal jewelry, family pictures, school books, library books of
16 reference, and allied items. Personal property is not exempt
17 under this subdivision if it is used to produce income, if it is
18 held for speculative investment, or if it constitutes an inven-
19 tory of goods for sale in the regular course of trade.
20 (g) Household furnishings, provisions, and fuel to the
21 state equalized value of not more than $5,000.00
IN TAXABLE
22 VALUE, of each social or professional fraternity, sorority, and
23 student cooperative house recognized by the educational institu-
24 tion at which it is located.
25 (h) The working tools of a mechanic to the state
equalized
26 value of not more than $500.00 IN TAXABLE VALUE.
"Mechanic", as
27 used in this subdivision, means a person skilled in a trade
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1 pertaining to a craft or in the construction or repair of
2 machinery if the person's employment by others is dependent on
3 his or her furnishing the tools.
4 (i) Fire engines and other implements used in extinguishing
5 fires owned or used by an organized or independent fire company.
6 (j) Property actually being used in
agricultural opera-
7 tions and the farm implements held for sale or
resale by retail
8 servicing dealers for use in agricultural production. As used in
9 this subdivision, "agricultural operations" means farming in all
10 its branches, including cultivation of the soil, growing and har-
11 vesting of an agricultural, horticultural, or floricultural com-
12 modity, dairying, raising of livestock, bees, fur-bearing ani-
13 mals, or poultry, turf and tree farming, raising and harvesting
14 of fish, and any practices performed by a farmer or on a farm as
15 an incident to, or in conjunction with, farming operations, but
16 excluding retail sales and food processing operations. Property
17 used in agricultural operations includes machinery used to pre-
18 pare the crop for market operated incidental to a farming opera-
19 tion that does not substantially alter the form, shape, or sub-
20 stance of the crop and is limited to cleaning, cooling, washing,
21 pitting, grading, sizing, sorting, drying, bagging, boxing, crat-
22 ing, and handling if not less than 33% of the volume of the crops
23 processed in the year ending on the applicable tax day or in at
24 least 3 of the immediately preceding 5 years were grown by the
25 farmer in Michigan who is the owner or user of the crop process-
26 ing machinery.
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1 (k) Personal property to the state equalized value
of not
2 more than $500.00 IN TAXABLE VALUE used by a householder in the
3 operation of a business in the householder's dwelling or at 1
4 other location in the city, township, or village where the house-
5 holder resides.
6 (l) The products, materials, or goods processed or
otherwise
7 and in whatever form, but expressly excepting alcoholic bever-
8 ages, located in a public warehouse, United States customs port
9 of entry bonded warehouse, dock, or port facility on December 31
10 of each year, if those products, materials, or goods are desig-
11 nated as in transit to destinations out of
OUTSIDE THIS state
12 pursuant to the published tariffs of a railroad or common carrier
13 by the filing of the freight
bill covering the products,
14 materials, or goods with the agency designated by the tariffs,
15 so as to entitle ENTITLING the shipper to
transportation rate
16 privileges. Products in a United States customs port of entry
17 bonded warehouse that arrived from another state or a foreign
18 country, whether awaiting shipment to another state or to a final
19 destination within this state, are considered to be in transit
20 and temporarily at rest, and not subject to personal property
21 taxation. To obtain AN exemption FOR PRODUCTS, MATERIALS, OR
22 GOODS UNDER THIS SUBDIVISION, the owner shall file a sworn state-
23 ment with, and in the form required by, the assessing officer of
24 the tax district in which the warehouse, dock, or port facility
25 is located, at a time between the tax day, December 31, and
26 before closing of the ASSESSING OFFICER CLOSES
THE assessment
27 rolls by the assessing officer, describing the
products,
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1 materials, or goods, and reporting their cost and value as of
2 December 31 of each year. The status of persons ,
and pro-
3 ducts, materials, or goods for which AN exemption is requested
4 shall be IS determined as of December 31, which
shall be IS
5 the tax day. The assessment on the basis of average monthly
6 inventory does not apply in valuing products, materials, or
goods
7 for which exemption is requested. Any property
located in a
8 public warehouse, dock, or port facility on December 31 of each
9 year , which THAT is exempt from taxation under
this subdivi-
10 sion but which THAT is not shipped outside
the THIS state
11 pursuant to the particular tariff under which the transportation
12 rate privilege was established , shall be
assessed upon the
13 next IMMEDIATELY succeeding or a subsequent
assessment roll by
14 the assessing officer and taxed at the same rate of taxation as
15 other taxable properties PROPERTY for the year or
years for
16 which the property was exempted , to the owner at
the time of
17 the omission , unless the owner or person
entitled to posses-
18 sion of the products, materials, or goods is a resident of, or
19 authorized to do business in, this state and files with the
20 assessing officer, with whom statements of taxable property are
21 required to be filed, a statement under oath that the products,
22 materials, or goods are not for sale or use in this state and
23 will be shipped to a point or points outside this state. If a
24 person, firm, or corporation claims exemption by the
filing
25 of a sworn statement, the person, firm, or
corporation shall
26 append to the statement of taxable property required to be filed
27 in the next IMMEDIATELY SUCCEEDING year or, if a
statement of
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1 taxable property is not filed for the next
IMMEDIATELY
2 SUCCEEDING year, TO a sworn statement FILED on a form required by
3 the assessing officer, shall be filed showing a
complete list
4 of the property for which the exemption was claimed with a state-
5 ment of the manner of shipment and of the point or points to
6 which the products, materials, or goods were shipped from the
7 public warehouse, dock, or port facility. and THE
ASSESSING
8 OFFICER SHALL ASSESS the products, materials, or goods not
9 shipped to a point or points outside this state shall be
10 assessed upon the next
IMMEDIATELY succeeding assessment roll
11 , or on a subsequent assessment roll by
the assessing officer
12 and THE PRODUCTS, MATERIALS, OR GOODS SHALL BE taxed at the same
13 rate of taxation as other taxable properties
PROPERTY for the
14 year or years for which the property was exempted ,
to the
15 owner at the time of the omission. The records, accounts, and
16 books of warehouses, docks, or port facilities, individuals,
17 partnerships, corporations, owners, or those in possession of
18 tangible personal property shall be open to and available for
19 inspection, examination, or auditing by assessing officers. A
20 warehouse, dock, or port facility, individual,
partnership,
21 corporation, owner, or person in possession of tangible personal
22 property shall report within 90 days after shipment of products,
23 materials, or goods in transit, for which AN exemption under this
24 section was claimed or granted, the destination of shipments or
25 parts of shipments and the cost value of those shipments OR PARTS
26 OF SHIPMENTS to the assessing officer. For failure to
comply
27 with this requirement, the A warehouse, dock,
or port
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1 facility, individual, partnership, corporation, or owner is
2 subject to a fine of $100.00 for each omission
FAILURE TO
3 REPORT THE DESTINATION AND LOST VALUE OF SHIPMENTS OR PARTS OF
4 SHIPMENTS AS REQUIRED IN THIS SUBDIVISION. A person, firm, indi-
5 vidual, partnership, corporation, or owner failing to report pro-
6 ducts, materials, or goods located in a warehouse, dock, or port
7 facility to the assessing officer is subject to a fine of $100.00
8 and a penalty of 50% of the final amount of taxes found to be
9 assessable for the year on property not reported, the assessable
10 taxes and penalty to be spread on a subsequent assessment roll in
11 the same manner as general taxes on personal property. For the
12 purpose of this subdivision, a public warehouse, dock, or port
13 facility means a warehouse, dock, or port facility owned or oper-
14 ated by a person, firm, or corporation engaged in the business of
15 storing products, materials, or goods for hire for profit who
16 issues a schedule of rates for storage of the products, materi-
17 als, or goods and who issues warehouse receipts pursuant to
Act
18 No. 303 of the Public Acts of 1909, being sections 443.50 to
19 443.55 of the Michigan Compiled Laws 1909 PA 303,
MCL 443.50 TO
20 443.55. A United States customs port of entry bonded warehouse
21 means a CUSTOMS warehouse within a classification designated by
22 19 C.F.R. 19.1 and which THAT is located in a
port of entry, as
23 defined by 19 C.F.R. 101.1(m) 101.1. A portion
of a public
24 warehouse, United States customs port of entry bonded warehouse,
25 dock, or port facility leased to a tenant or a portion of any
26 premises owned or leased or operated by a consignor or consignee
27 or an affiliate or subsidiary of the consignor or consignee
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1 shall IS not be considered a
public warehouse, dock, or port
2 facility.
3 (m) Personal property owned by a bank or trust company orga-
4 nized under the laws of this state, A national banking associa-
5 tion, or AN incorporated bank holding company as defined in sec-
6 tion 2 of the bank holding company act of 1956, chapter 240,
7 70 Stat. 133, 12 U.S.C. 1841, that controls a bank, national
8 banking association, trust company, or industrial bank subsidiary
9 located in this state. However, buildings
BUILDINGS owned by a
10 state or national bank, trust company, or incorporated bank hold-
11 ing company and situated upon lands of ON
PROPERTY FOR which
12 the state or national bank, trust company, or incorporated bank
13 holding company is not the owner of the fee are considered real
14 property and are not exempt from taxation and personal
UNDER
15 THIS SECTION. PERSONAL property owned by a state or national
16 bank, trust company, or incorporated bank holding company that is
17 leased, loaned, or otherwise made available to and used by a pri-
18 vate individual, association, or corporation in connection with a
19 business conducted for profit is not exempt from taxation
UNDER
20 THIS SECTION.
21 (n) Farm products, processed or otherwise, the ultimate use
22 of which is for human or animal consumption as food, except wine,
23 beer, and other alcoholic beverages regularly placed in storage
24 in a public warehouse, dock, or port facility ,
while in stor-
25 age are considered in transit and only temporarily at rest
,
26 and are not subject to personal property taxation. The assessing
27 officer is the determining authority as to what constitutes, is
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1 defined as, or classified as, farm products as used in this
2 subdivision. The records, accounts, and books of warehouses,
3 docks, or port facilities, individuals, partnerships, corpora-
4 tions, owners, or those in possession of farm products shall be
5 open to and available for inspection, examination, or auditing by
6 assessing officers.
7 (o) Sugar, in solid or liquid form, produced from sugar
8 beets, and dried beet pulp, and beet molasses
, when IF owned
9 or held by processors.
10 (p) The personal property of a parent cooperative
11 preschool. As used in this subdivision and section 7z, "parent
12 cooperative preschool" means a nonprofit, nondiscriminatory edu-
13 cational institution maintained as a community service and admin-
14 istered by parents of children currently enrolled in the pre-
15 school, that provides an educational and developmental program
16 for children younger than compulsory school age, that provides an
17 educational program for parents, including active participation
18 with children in preschool activities, that is directed by quali-
19 fied preschool personnel, and that is licensed by the
department
20 of social services under Act No. 116 of
the Public Acts of
21 1973, being sections 722.111 to 722.128 of the Michigan
Compiled
22 Laws 1973 PA 116, MCL 722.111 TO 722.128.
23 (q) All equipment used exclusively in wood harvesting, but
24 not including portable or stationary sawmills or other equipment
25 used in secondary processing operations. As used in this subdi-
26 vision, "wood harvesting" means the clearing
of land for
27 forest management purposes, the planting
of trees, and all
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1 forms of cutting or chipping of trees, and
the loading of
2 them TREES on trucks for removal from the harvest
area.
3 (r) Liquefied petroleum gas tanks located on residential or
4 agricultural property and used to store liquefied
petroleum gas
5 for residential or agricultural property use. As used in this
6 subdivision, "liquefied petroleum gas" means that term as defined
7 in section 51 of Act No. 150 of the Public Acts of 1927,
being
8 section 207.151 of the Michigan Compiled Laws 1927
PA 150,
9 MCL 207.151.
10 (s) Water conditioning systems used for a residential
11 dwelling.
12 (T) PERSONAL PROPERTY OWNED BY AN ENTITY LICENSED OR AUTHO-
13 RIZED TO DO BUSINESS IN THIS STATE UNDER THE INSURANCE CODE OF
14 1956, 1956 PA 218, MCL 500.100 TO 500.8302. BUILDINGS OWNED BY
15 AN ENTITY LICENSED OR AUTHORIZED TO DO BUSINESS IN THIS STATE
16 UNDER THE INSURANCE CODE OF 1956, 1956 PA 218, MCL 500.100 TO
17 500.8302, AND SITUATED ON PROPERTY FOR WHICH THE ENTITY LICENSED
18 OR AUTHORIZED TO DO BUSINESS IN THIS STATE UNDER THE INSURANCE
19 CODE OF 1956, 1956 PA 218, MCL 500.100 TO 500.8302 IS NOT THE
20 OWNER OF THE FEE ARE CONSIDERED REAL PROPERTY AND ARE NOT EXEMPT
21 UNDER THIS SECTION. PERSONAL PROPERTY OWNED BY AN ENTITY
22 LICENSED OR AUTHORIZED TO DO BUSINESS IN THIS STATE UNDER THE
23 INSURANCE CODE OF 1956, 1956 PA 218, MCL 500.100 TO 500.8302,
24 THAT IS LEASED, LOANED, OR OTHERWISE MADE AVAILABLE TO AND USED
25 BY A PRIVATE INDIVIDUAL, ASSOCIATION, OR CORPORATION IN CONNEC-
26 TION WITH A BUSINESS CONDUCTED FOR PROFIT IS NOT EXEMPT UNDER
27 THIS SECTION.
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