HOUSE BILL No. 4347


     February 27, 2001, Introduced by Reps. Stallworth and Lemmons and referred to the Committee on Tax Policy.


        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:

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           Sec. 9.  The following personal property is exempt from

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      taxation:

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           (a) The personal property of NONPROFIT CORPORATIONS, SOCIE-

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      TIES, AND ORGANIZATIONS, INCLUDING charitable, educational, and

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      scientific institutions incorporated under the laws of this

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      state.  This exemption does not apply to secret or fraternal

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      societies, but the personal property of all charitable homes of

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       the  SECRET OR FRATERNAL societies and OF nonprofit corporations

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      OR ORGANIZATIONS that own and operate facilities for the aged and

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      chronically ill in which the net income from the operation of the




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      corporations, SOCIETIES, OR ORGANIZATIONS does not inure to the

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      benefit of a person other than the residents is exempt.

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           (b) The property of all library associations, circulating

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      libraries, libraries of reference, and reading rooms owned or

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      supported by the public and not used for gain.

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           (c) The property of posts of the grand army of the republic,

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      sons of veterans' unions, and of the women's relief corps con-

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      nected with them, of young men's Christian associations, women's

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      Christian temperance union associations, young people's Christian

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      unions, a boy or girl scout or camp fire girls organization, 4-H

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      clubs, and other similar associations.

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           (d) Pensions receivable from the United States.

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           (e) The property of Indians who are not citizens.

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           (f) The personal property owned and used by a householder

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      such as customary furniture, fixtures, provisions, fuel, and

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      other similar equipment,  and the  wearing apparel including per-

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      sonal jewelry, family pictures, school books, library books of

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      reference, and allied items.  Personal property is not exempt

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      under this subdivision if it is used to produce income, if it is

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      held for speculative investment, or if it constitutes an inven-

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      tory of goods for sale in the regular course of trade.

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           (g) Household furnishings, provisions, and fuel  to the

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      state equalized value  of not more than $5,000.00 IN TAXABLE

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      VALUE, of each social or professional fraternity, sorority, and

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      student cooperative house recognized by the educational institu-

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      tion at which it is located.





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           (h) The working tools of a mechanic  to the state equalized

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      value  of not more than $500.00 IN TAXABLE VALUE.  "Mechanic", as

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      used in this subdivision, means a person skilled in a trade per-

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      taining to a craft or in the construction or repair of machinery

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      if the person's employment by others is dependent on his or her

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      furnishing the tools.

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           (i) Fire engines and other implements used in extinguishing

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      fires owned or used by an organized or independent fire company.

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           (j) Property actually  being  used in agricultural opera-

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      tions and  the  farm implements held for sale or resale by retail

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      servicing dealers for use in agricultural production.  As used in

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      this subdivision, "agricultural operations" means farming in all

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      its branches, including cultivation of the soil, growing and har-

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      vesting of an agricultural, horticultural, or floricultural com-

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      modity, dairying, raising of livestock, bees, fur-bearing ani-

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      mals, or poultry, turf and tree farming, raising and harvesting

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      of fish, and any practices performed by a farmer or on a farm as

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      an incident to, or in conjunction with, farming operations, but

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      excluding retail sales and food processing operations.  Property

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      used in agricultural operations includes machinery used to pre-

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      pare the crop for market operated incidental to a farming opera-

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      tion that does not substantially alter the form, shape, or sub-

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      stance of the crop and is limited to cleaning, cooling, washing,

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      pitting, grading, sizing, sorting, drying, bagging, boxing, crat-

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      ing, and handling if not less than 33% of the volume of the crops

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      processed in the year ending on the applicable tax day or in at

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      least 3 of the immediately preceding 5 years were grown by the



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      farmer in Michigan who is the owner or user of the crop

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      processing machinery.

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           (k) Personal property  to the state equalized value  of not

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      more than $500.00 IN TAXABLE VALUE used by a householder in the

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      operation of a business in the householder's dwelling or at 1

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      other location in the city, township, or village  where  IN WHICH

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      the householder resides.

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           (l) The products, materials, or goods processed or otherwise

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      and in whatever form, but expressly excepting alcoholic bever-

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      ages, located in a public warehouse, United States customs port

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      of entry bonded warehouse, dock, or port facility on December 31

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      of each year, if those products, materials, or goods are desig-

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      nated as in transit to destinations  out of  OUTSIDE THIS state

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      pursuant to the published tariffs of a railroad or common carrier

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      by  the  filing  of  the freight bill covering the products,

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      materials, or goods with the agency designated by the tariffs,

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       so as to entitle  ENTITLING the shipper to transportation rate

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      privileges.  Products in a United States customs port of entry

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      bonded warehouse that arrived from another state or a foreign

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      country, whether awaiting shipment to another state or to a final

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      destination within this state, are considered to be in transit

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      and temporarily at rest, and not subject to personal property

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      taxation.  To obtain AN exemption FOR PRODUCTS, MATERIALS, OR

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      GOODS UNDER THIS SUBDIVISION, the owner shall file a sworn state-

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      ment with, and in the form required by, the assessing officer of

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      the tax district in which the warehouse, dock, or port facility

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      is located, at a time between the tax day, December 31, and



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      before  closing of  THE ASSESSING OFFICER CLOSES the assessment

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      rolls  by the assessing officer,  describing the products, mate-

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      rials, or goods, and reporting their cost and value as of

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      December 31 of each year.  The status of persons  ,  and pro-

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      ducts, materials, or goods for which AN exemption is requested

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       shall be  IS determined as of December 31, which  shall be 
   IS

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      the tax day.   The assessment on the basis of average monthly

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      inventory does not apply in valuing products, materials, or goods

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      for which exemption is requested.  Any property located in a

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      public warehouse, dock, or port facility on December 31 of each

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      year  , which  THAT is exempt from taxation under this subdivi-

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      sion but  which  THAT is not shipped outside  the  THIS state

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      pursuant to the particular tariff under which the transportation

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      rate privilege was established  ,  shall be assessed upon the

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       next  IMMEDIATELY succeeding or a subsequent assessment roll by

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      the assessing officer and taxed at the same rate of taxation as

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      other taxable  properties  PROPERTY for the year or years for

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      which the property was exempted  ,  to the owner at the time of

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      the omission  ,  unless the owner or person entitled to posses-

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      sion of the products, materials, or goods is a resident of, or

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      authorized to do business in, this state and files with the

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      assessing officer, with whom statements of taxable property are

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      required to be filed, a statement under oath that the products,

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      materials, or goods are not for sale or use in this state and

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      will be shipped to a point or points outside this state.  If a

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      person, firm, or corporation claims exemption by  the  filing

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       of  a sworn statement, the person, firm, or corporation shall



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      append to the statement of taxable property required to be filed

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      in the  next  IMMEDIATELY SUCCEEDING year or, if a statement of

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      taxable property is not filed for the  next  IMMEDIATELY

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      SUCCEEDING year, TO a sworn statement FILED on a form required by

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      the assessing officer,  shall be filed showing  a complete list

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      of the property for which the exemption was claimed with a state-

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      ment of the manner of shipment and of the point or points to

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      which the products, materials, or goods were shipped from the

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      public warehouse, dock, or port facility.  and  THE ASSESSING

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      OFFICER SHALL ASSESS the products, materials, or goods not

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      shipped to a point or points outside this state  shall be

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      assessed  upon the  next  IMMEDIATELY succeeding assessment
   roll

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       ,  or on a subsequent assessment roll  by the assessing
   officer

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      and THE PRODUCTS, MATERIALS, OR GOODS SHALL BE taxed at the same

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      rate of taxation as other taxable  properties  PROPERTY for the

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      year or years for which the property was exempted  ,  to the

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      owner at the time of the omission.  The records, accounts, and

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      books of warehouses, docks, or port facilities, individuals,

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      partnerships, corporations, owners, or those in possession of

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      tangible personal property shall be open to and available for

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      inspection, examination, or auditing by assessing officers.  A

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      warehouse, dock,  or  port facility, individual, partnership,

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      corporation, owner, or person in possession of tangible personal

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      property shall report within 90 days after shipment of products,

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      materials, or goods in transit, for which AN exemption under this

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      section was claimed or granted, the destination of shipments or

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      parts of shipments and the cost value of those shipments OR PARTS



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      OF SHIPMENTS to the assessing officer.   For failure to comply

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      with this requirement, the  A warehouse, dock,  or  port
   facili-

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      ty, individual, partnership, corporation, or owner is subject to

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      a fine of $100.00 for each  omission  FAILURE TO REPORT THE

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      DESTINATION AND COST VALUE OF SHIPMENTS OR PARTS OF SHIPMENTS AS

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      REQUIRED IN THIS SUBDIVISION.  A person, firm, individual, part-

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      nership, corporation, or owner failing to report products, mate-

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      rials, or goods located in a warehouse, dock, or port facility to

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      the assessing officer is subject to a fine of $100.00 and a pen-

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      alty of 50% of the final amount of taxes found to be assessable

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      for the year on property not reported, the assessable taxes and

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      penalty to be spread on a subsequent assessment roll in the same

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      manner as general taxes on personal property.  For the purpose of

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      this subdivision, a public warehouse, dock, or port facility

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      means a warehouse, dock, or port facility owned or operated by a

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      person, firm, or corporation engaged in the business of storing

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      products, materials, or goods for hire for profit who issues a

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      schedule of rates for storage of the products, materials, or

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      goods and who issues warehouse receipts pursuant to  Act No. 303

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      of the Public Acts of 1909, being sections 443.50 to 443.55 of

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      the Michigan Compiled Laws  1909 PA 303, MCL 443.50 TO 443.55.  A

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      United States customs port of entry bonded warehouse means a

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      CUSTOMS warehouse within a classification designated by 19

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      C.F.R. 19.1 and  which  THAT is located in a port of entry, as

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      defined by 19 C.F.R.   101.1(m)  101.1.  A portion of a public

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      warehouse, United States customs port of entry bonded warehouse,

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      dock, or port facility leased to a tenant or a portion of any



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      premises owned or leased or operated by a consignor or consignee

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      or an affiliate or subsidiary of the consignor or consignee

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       shall  IS not  be considered  a public warehouse, dock, or
   port

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      facility.

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           (m) Personal property owned by a bank or trust company orga-

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      nized under the laws of this state, A national banking associa-

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      tion, or AN incorporated bank holding company as defined in sec-

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      tion 2 of the bank holding company act of 1956, chapter 240,

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      70 Stat. 133, 12 U.S.C. 1841, that controls a bank, national

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      banking association, trust company, or industrial bank subsidiary

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      located in this state.   However, buildings  BUILDINGS owned by a

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      state or national bank, trust company, or incorporated bank hold-

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      ing company and situated upon lands of which the state or

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      national bank, trust company, or incorporated bank holding com-

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      pany is not the owner of the fee are considered real property and

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      are not exempt from taxation.  and personal  PERSONAL property

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      owned by a state or national bank, trust company, or incorporated

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      bank holding company that is leased, loaned, or otherwise made

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      available to and used by a private individual, association, or

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      corporation in connection with a business conducted for profit is

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      not exempt from taxation.

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           (n) Farm products, processed or otherwise, the ultimate use

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      of which is for human or animal consumption as food, except wine,

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      beer, and other alcoholic beverages regularly placed in storage

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      in a public warehouse, dock, or port facility  ,  while in stor-

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      age are considered in transit and only temporarily at rest  ,

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      and are not subject to personal property taxation.  The assessing



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      officer is the determining authority as to what constitutes, is

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      defined as, or classified as, farm products as used in this

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      subdivision.  The records, accounts, and books of warehouses,

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      docks, or port facilities, individuals, partnerships, corpora-

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      tions, owners, or those in possession of farm products shall be

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      open to and available for inspection, examination, or auditing by

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      assessing officers.

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           (o) Sugar, in solid or liquid form, produced from sugar

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      beets,  and  dried beet pulp, and beet molasses  , when  IF
   owned

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      or held by processors.

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           (p) The personal property of a parent cooperative

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      preschool.  As used in this subdivision and section 7z, "parent

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      cooperative preschool" means a nonprofit, nondiscriminatory edu-

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      cational institution maintained as a community service and admin-

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      istered by parents of children currently enrolled in the pre-

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      school, that provides an educational and developmental program

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      for children younger than compulsory school age, that provides an

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      educational program for parents, including active participation

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      with children in preschool activities, that is directed by quali-

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      fied preschool personnel, and that is licensed  by the department

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      of social services  under  Act No. 116 of the Public Acts of

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      1973, being sections 722.111 to 722.128 of the Michigan Compiled

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      Laws  1973 PA 116, MCL 722.111 TO 722.128.

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           (q) All equipment used exclusively in wood harvesting, but

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      not including portable or stationary sawmills or other equipment

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      used in secondary processing operations.  As used in this

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      subdivision, "wood harvesting" means  the  clearing  of  land
   for



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      forest management purposes,  the  planting  of  trees,
    and  all

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      forms of cutting or chipping  of  trees, and  the  loading
    of

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      them  TREES on trucks for removal from the harvest area.

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           (r) Liquefied petroleum gas tanks located on residential or

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      agricultural property  and  used to store liquefied petroleum gas

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      for residential or agricultural property use.  As used in this

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      subdivision, "liquefied petroleum gas" means that term as defined

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      in section 51 of  Act No. 150 of the Public Acts of 1927, being

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      section 207.151 of the Michigan Compiled Laws  1927 PA 150, MCL

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      207.151.

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           (s) Water conditioning systems used for a residential

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      dwelling.
































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