Payments in Lieu of Taxes

Senate Bill 1105

Sponsor:  Sen. Shirley Johnson

Committee:  Appropriations

Complete to September 15, 2004

A SUMMARY OF SB 1105, H-1

This bill would make a number of significant changes to the manner and the amount of payments made to local governmental units for Payments in Lieu of Taxes. 

·                    No payments from State Education Tax revenue (SET) would be made to the School Aid Fund.  Valuations of purchased lands would be set at 2003 levels and would be frozen for 3 years.

 

·                    New property acquisitions would be frozen at the valuation in place at the time of purchased, and no revaluation would occur until 2006.

 

·                    A minimum of $250 would be paid to any assessing district.  This means that tax payments to local assessing units would not be made if the total tax payment is less than $250.  The bill further states that no penalties can be assessed for late payments. 

·                    The annual appropriation for PILT would be split 50:50 from the General Fund and State Restricted funds. 

FISCAL IMPACT:

Payments to local governmental units would be reduced by $2.8 million.  Of this amount, $2.4 is related to the SET payment.  Approximately $400,000 will have been paid for penalties for late payments in 2004, but it should be noted that these payments are more than 6 months late.  Savings related to the $250 minimum valuation has been estimated to be as much as $10,000. 

The 50:50 split between the General Fund and State restricted funds would create a savings of more than $1.0 million in payments historically made from the Game and Fish Protection Fund, the Michigan Natural Resources Trust Fund and from the State Waterways Fund.

 

                                                                                                  Fiscal Analyst:   Kirk Lindquist

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