Bill Text: MI HB4320 | 2013-2014 | 97th Legislature | Engrossed

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Bill Title: Property tax; classification; qualified forest property tax program; modify. Amends sec. 7jj of 1893 PA 206 (MCL 211.7jj[1]).

Spectrum: Partisan Bill (Republican 8-0)

Status: (Introduced - Dead) 2013-03-20 - Referred To Committee On Natural Resources, Environment And Great Lakes [HB4320 Detail]

Download: Michigan-2013-HB4320-Engrossed.html

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HB-4320, As Passed House, March 19, 2013

 

 

 

 

 

 

 

 

 

 

 

 

 

HOUSE BILL No. 4320

 

February 26, 2013, Introduced by Reps. LaFontaine, Victory, McBroom, Goike, Foster, Pettalia, Rendon and Potvin and referred to the Committee on Natural Resources.

 

     A bill to amend 1893 PA 206, entitled

 

"The general property tax act,"

 

by amending section 7jj (MCL 211.7jj[1]), as added by 2006 PA 378.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 7jj. (1) Except as otherwise limited in this subsection,

 

qualified forest property 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, according to the provisions of this section.

 

Buildings, structures, or land improvements located on qualified

 

forest property are not eligible for the exemption under this

 

section. The amount of qualified forest property in this state that

 

is eligible for the exemption under this section is limited as

 

follows:

 

     (a) In the fiscal year ending September 30, 2008, 300,000

 

acres.

 

     (b) In the fiscal year ending September 30, 2009, 600,000

 

acres.

 

     (c) In the fiscal year ending September 30, 2010, 900,000

 

acres.

 

     (d) In the fiscal year ending September 30, 2011 and each

 

fiscal year thereafter, 1,200,000 2,400,000 acres. Beginning in the

 

fiscal year ending September 30, 2013 and each fiscal year

 

thereafter, real property eligible for exemption under this section

 

as qualified forest property as a result of the withdrawal of that

 

property from the operation of part 511 of the natural resources

 

and environmental protection act, 1994 PA 451, MCL 324.51101 to

 

324.51120, as provided in section 51108(5) of the natural resources

 

and environmental protection act, 1994 PA 451, MCL 324.51108, shall

 

not be credited against the 2,400,000 acres of property that are

 

eligible for exemption as qualified forest property under this

 

section.

 

     (2) If a property owner is interested in obtaining an

 

exemption for qualified forest property under this section, the

 

property owner may contact the local conservation district or the

 

department, and the local conservation district or the department

 

shall advise the property owner on the exemption process. If

 

requested by the property owner, the local conservation district or

 

the department shall provide the property owner with a list of

 

qualified foresters to prepare a forest management plan. The

 

department shall maintain a list of qualified foresters throughout

 

the state and shall make the list available to the conservation

 

districts and to interested property owners. To claim an exemption

 

under subsection (1), a property owner shall obtain a forest

 

management plan from a qualified forester and submit a digital copy

 

of that forest management plan, an application for exemption as

 

qualified forest property, and a fee of $50.00 to the department on

 

a form created by the department by September 1 prior to the tax

 

year within which the exemption is requested. A forest management

 

plan is not subject to the freedom of information act, 1976 PA 442,

 

MCL 15.231 to 15.246. The department shall forward a copy of the

 

application to the local conservation district for review and to

 

the local tax collecting unit for notification of the application.

 

     (3) A conservation district shall review the application to

 

determine if the applied-for property meets the minimum

 

requirements set forth in subsection (16)(i) for enrolling into the

 

qualified forest program. A conservation district shall respond

 

within 45 days of the date of its receipt of the application

 

indicating whether the property in the application is eligible for

 

enrollment. If the conservation district does not respond within 45

 

days of its receipt of the application, the property shall be

 

considered eligible for the exemption under this section.

 

     (4) The department shall review the application, comments from

 

the conservation district, and the forest management plan to

 

determine if the property is eligible for the exemption under this

 

section. The department shall review the forest management plan to

 

determine if the elements required in subsection (16)(e) are in the

 

plan. Within 90 days of its receipt of the application, forest

 

management plan, and fee, the department shall review the

 

application and if the application and supporting documents are not

 

in compliance, the department shall notify the property owner of

 

denial. If the application and supporting documents are in

 

compliance with the requirements of this section, the department

 

shall approve the application and shall prepare a qualified forest

 

school tax affidavit, in recordable form, indicating all of the

 

following:

 

     (a) The name of the property owner.

 

     (b) The legal description of the property.

 

     (c) The year the application was submitted for the exemption.

 

     (d) A statement that the property owner is attesting that the

 

property for which the exemption is claimed is qualified forest

 

property and will be managed according to the approved forest

 

management plan.

 

     (5) The department shall send a qualified forest school tax

 

affidavit prepared under subsection (4) to the property owner for

 

execution. The 90-day review period by the department may be

 

extended upon request of the property owner. The property owner

 

shall execute the qualified forest school tax affidavit and shall

 

have the executed qualified forest school tax affidavit recorded by

 

the register of deeds in the county in which the property is

 

located. The property owner shall provide a copy of the qualified

 

forest school tax affidavit to the department. The department shall

 

provide 1 copy of the qualified forest school tax affidavit to the

 

conservation district and 1 copy to the department of treasury.

 

These copies may be sent electronically.

 

     (6) If the application is denied, the property owner has 30

 

days from the date of notification of the denial by the department

 

to initiate an appeal of that denial. An appeal of the denial shall

 

be by certified letter to the director of the department.

 

     (7) (2) To claim an exemption under subsection (1), the owner

 

of qualified forest property shall file an affidavit claiming the

 

exemption and an approved forest management plan or a certificate

 

provided by a third-party certifying organization with the provide

 

a copy of the recorded qualified forest school tax affidavit

 

attesting that the land is qualified forest property to the local

 

tax collecting unit and assessor by December 31. An owner may claim

 

an exemption under this section for not more than 320 acres 640

 

acres maximum or the equivalent of 16 survey units consisting of

 

1/4 of 1/4 of a section of qualified forest property in each local

 

tax collecting unit. If an exemption is granted under this section

 

for less than 320 640 acres in a local tax collecting unit, an

 

owner of that property may subsequently claim an exemption for

 

additional property in that local tax collecting unit if that

 

additional property meets the requirements of this section.

 

     (3) The affidavit shall be on a form prescribed by the

 

department of treasury and shall require the person submitting the

 

affidavit to attest that the property for which the exemption is

 

claimed is qualified forest property and will be managed according

 

to the approved forest management plan.

 

     (8) (4) The If a copy of the recorded qualified forest school

 

tax affidavit is provided to the assessor by the owner, the

 

assessor shall determine if the property is qualified forest

 

property based on a recommendation from the department of natural

 

resources and confirmation that the acreage limitation set forth in

 

subsection (1) has not been reached and if so shall exempt the

 

property from the collection of the tax as provided in subsection

 

(1) until December 31 of the year in which the property is no

 

longer qualified forest property.

 

     (9) Beginning in the year that qualified forest property is

 

first exempt under this section and each year thereafter, the local

 

tax collecting unit shall collect a fee on each parcel of qualified

 

forest property exempt under this section located in that local tax

 

collecting unit. The fee shall be determined by multiplying 2 mills

 

by the taxable value of that qualified forest property. The fee

 

shall be collected at the same time and in the same manner as taxes

 

collected under this act. Each local tax collecting unit shall

 

disburse the fee collected under this subsection to the department

 

of treasury for deposit in the private forestland enhancement fund

 

created in section 51305 of the natural resources and environmental

 

protection act, 1994 PA 451, MCL 324.51305. If property is no

 

longer exempt as qualified forest property under this section, the

 

fee under this subsection shall not be collected on that property.

 

The fee collected in this subsection shall be subject to the

 

property tax administration fee established by the local tax

 

collecting unit under section 44.

 

     (10) (5) Not more than 90 days after all or a portion of the

 

exempted property is no longer qualified forest property, the owner

 

shall rescind the exemption for the applicable portion of the

 

property by filing with the local tax collecting unit register of

 

deeds for the county in which the exempted property is located a

 

rescission form prescribed by the department. of treasury. A copy

 

of the rescission form shall be provided to the assessor. The

 

rescission form shall include a legal description of the exempted

 

property. 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 $1,000.00. This penalty shall be collected under 1941 PA

 

122, MCL 205.1 to 205.31, and shall be deposited in the general

 

fund of this state.private forestland enhancement fund.

 

     (11) (6) An owner of property that is qualified forest

 

property on December 31 for which an exemption was not on the tax

 

roll may file an appeal with the July or December board of review

 

under section 53b in the year the exemption was claimed or the

 

immediately succeeding year. An owner of property that is qualified

 

forest property on May 1 for which an exemption was denied by the

 

assessor in the year the affidavit was filed may file an appeal

 

with the July board of review for summer taxes or, if there is not

 

a summer levy of school operating taxes, with the December board of

 

review under section 53b.

 

     (7) If the assessor of the local tax collecting unit believes

 

that the property for which an exemption has been granted is not

 

qualified forest property based on a recommendation from the

 

department of natural resources, the assessor may deny or modify an

 

existing exemption by notifying the owner in writing at the time

 

required for providing a notice under section 24c. A taxpayer may

 

appeal the assessor's determination to the board of review meeting

 

under section 30. A decision of the board of review may be appealed

 

to the residential and small claims division of the Michigan tax

 

tribunal.

 

     (12) (8) If property for which an exemption has been granted

 

under this section is not qualified forest property, 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 each 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.

 

     (13) (9) If all or a portion of property for which an

 

exemption has been granted under this section is converted by a

 

change in use and is no longer qualified forest property, the

 

property is subject to the qualified forest property recapture tax

 

levied an owner shall immediately notify the local tax collecting

 

unit, the assessor, the department, and the department of treasury

 

on a form created by the department. The form shall include a legal

 

description of the exempted property. A copy of the form shall be

 

filed with the register of deeds for the county in which the

 

exempted property is located. Upon notice that property is no

 

longer qualified forest property, the local tax collecting unit and

 

assessor shall immediately rescind the exemption under this section

 

and shall place the property on the tax roll as though the

 

exemption under this section had not been granted for the

 

immediately succeeding tax year and the department of treasury

 

shall immediately begin collection of any applicable tax and

 

penalty under this act or under the qualified forest property

 

recapture tax act, 2006 PA 379, MCL 211.1031 to 211.1036. An owner

 

of qualified forest property shall inform a prospective buyer of

 

that qualified forest property that the qualified forest property

 

is subject to the recapture tax provided in the qualified forest

 

property recapture tax act, if the qualified forest property is

 

converted by a change in use.However, beginning June 1, 2013 and

 

ending November 30, 2013, owners of property exempt as qualified

 

forest property prior to January 1, 2013 may execute a new

 

qualified forest school tax affidavit under this section. If an

 

owner of property exempt as qualified forest property elects to

 

execute a new qualified forest school tax affidavit under this

 

section, that owner is not required to pay the $50.00 fee required

 

under subsection (2). If an owner of qualified forest property

 

elects not to execute a new qualified forest school tax affidavit

 

under this section, the existing affidavit shall be rescinded

 

without penalty and the property shall be placed on the tax roll as

 

though the exemption under this section had not been granted. If a

 

property owner elects not to execute a qualified forest school tax

 

affidavit under this section, the property is not subject to the

 

recapture tax provided for under the qualified forest property

 

recapture tax act, 2006 PA 379, MCL 211.1031 to 211.1036.

 

     (14) (10) If qualified forest property is exempt under this

 

section, an owner of that qualified forest property shall annually

 

report to the department of natural resources on a form prescribed

 

by the department of natural resources the amount of timber

 

produced on that qualified forest property and whether any

 

buildings or structures have been constructed on the qualified

 

forest property. when a forest practice or timber harvest has

 

occurred on the qualified forest property during a calendar year.

 

The report shall indicate the forest practice completed or the

 

volume and value of timber harvested on that qualified forest

 

property. One copy of the form shall be forwarded to the

 

conservation district, and 1 copy shall be retained by the

 

department for 7 years. If it is determined by the department that

 

a forest practice or harvest has occurred in a calendar year and no

 

report was filed, a fine of $500.00 may be collected by the

 

department. Beginning in 2008, December 31, 2013 and every 3 years

 

year thereafter, the department of natural resources shall provide

 

to the standing committees of the senate and house of

 

representatives with primary jurisdiction over forestry issues a

 

report that includes all of the following:

 

     (a) The number of acres of qualified forest property in each

 

county.

 

     (b) The amount of timber produced on qualified forest property

 

each year.

 

     (c) The number of forest management plans completed by

 

conservation districts and the total number of forest management

 

plans submitted for approval each year.

 

     (15) While qualified forest property is exempt under this

 

section, the owner shall retain the current management plan, most

 

recent harvest records, recorded copy of a receipt of the tax

 

exemption, and a map that shows the location and size of any

 

buildings and structures on the property. The owner shall make the

 

documents available to the department upon request. The department

 

shall maintain a database listing all qualified forest properties,

 

including the dates indicated for forest practices and harvests in

 

the forest management plan, and shall notify the property owner and

 

the conservation district in any year that forest practices or

 

harvests are to occur. If an owner does not accomplish forest

 

practices and harvests within 3 years after the time specified in

 

the current forest management plan, and the plan has not been

 

amended to extend the date of forest practices and harvests, the

 

property is not eligible for the exemption under this section and

 

the property shall be placed on the tax roll as though the

 

exemption under this section had not been granted as provided in

 

this section and shall be subject to repayment as indicated in the

 

qualified forest property recapture tax act, 2006 PA 379, MCL

 

211.1031 to 211.1036. Information in the database specific to an

 

individual property owner's forest management plan is exempt from

 

disclosure under the freedom of information act, 1976 PA 442, MCL

 

15.231 to 15.246. However, information in the database in the

 

aggregate, including, but not limited to, how much timber would be

 

expected to be on the market each year as a result of enrollees, is

 

not exempt from disclosure under the freedom of information act,

 

1976 PA 442, MCL 15.231 to 15.246.

 

     (16) (11) As used in this section:

 

     (a) "Approved forest management plan" means 1 of the

 

following:

 

     (i) A a forest management plan approved by the department of

 

natural resources. developed by a qualified forester. An owner of

 

property may shall submit a proposed forest management plan to the

 

department of natural resources for approval as prescribed in

 

subsection (2). The proposed forest management plan shall include a

 

statement signed by the owner that he or she agrees to comply with

 

all terms and conditions contained in the approved forest

 

management plan. The department of natural resources may charge a

 

fee of not more than $200.00 for the consideration of each proposed

 

forest management plan submitted. The department of natural

 

resources shall review and either approve or disapprove each

 

proposed forest management plan submitted. If a forest management

 

plan and application are submitted to the department, the

 

department shall review and either approve or disapprove the

 

owner's application within 90 days of submission. Approval of the

 

plan shall be based solely on compliance with the elements required

 

in subdivision (e). Denial of the plan shall be based solely on

 

noncompliance with the requirements listed in subdivision (e). If

 

the department of natural resources disapproves a proposed forest

 

management plan, the department of natural resources shall indicate

 

the changes necessary to qualify the proposed forest management

 

plan for approval on subsequent review. At the request of the owner

 

submitting a proposed forest management plan, the department of

 

natural resources may agree to complete a proposed forest

 

management plan. An owner and the department of natural resources

 

may mutually agree to amend a proposed forest management plan or an

 

approved forest management plan. An owner may submit amendments to

 

his or her forestry plan to the department. The department may

 

reject amendments that delay a harvest date repeatedly or

 

indefinitely. A forest management plan submitted to the department

 

of natural resources for approval shall not extend beyond a period

 

of 20 years. An be for a maximum of 20 years. To continue receiving

 

an exemption under this section, an owner of property may shall

 

submit a digital copy of any succeeding proposed forest management

 

plan to the department of natural resources for approval together

 

with a fee of $50.00. The first amendment to the plan shall not be

 

subject to a fee. Additional amendments may be subject to a fee of

 

$50.00.

 

     (ii) A forest management plan certified by a third-party

 

certifying organization.

 

     (b) "Conservation district" means a conservation district

 

organized under part 93 of the natural resources and environmental

 

protection act, 1994 PA 451, MCL 324.9301 to 324.9313.

 

     (c) (b) "Converted by a change in use" means that term as

 

defined in section 2 of the qualified forest property recapture tax

 

act, 2006 PA 379, MCL 211.1032.

 

     (d) "Department" means the department of agriculture and rural

 

development.

 

     (e) "Forest management plan" means a written plan prepared and

 

signed by a qualified forester that prescribes measures to optimize

 

production, utilization, and regeneration of forest resources. The

 

forest management plan shall include a schedule and timetables for

 

the various silvicultural practices used on forestlands, which

 

shall be a maximum of 20 years in length. A forest management plan

 

shall include all of the following:

 

     (i) The name and address of each owner of the property.

 

     (ii) The legal description and parcel identification number of

 

the property or of the parcel on which the property is located.

 

     (iii) A statement of the owner's forest management objectives.

 

     (iv) A map, diagram, or aerial photograph that identifies both

 

forested and unforested areas of the property, using conventional

 

map symbols indicating the species, size, and stocking rate and

 

other major features of the property, including the location of any

 

buildings. The location and use of any buildings can be established

 

on a map created by a qualified forester and does not require a

 

survey by a registered surveyor.

 

     (v) A description of forest practice, including harvesting,

 

thinning, and reforestation, that will be undertaken, specifying

 

the approximate period of time before each is completed.

 

     (vi) A description of soil conservation practices that may be

 

necessary to control any soil erosion that may result from the

 

forest practice described pursuant to subparagraph (v).

 

     (vii) A description of activities that may be undertaken for

 

the management of forest resources other than trees, including

 

wildlife habitat, watersheds, and aesthetic features.

 

     (f) "Forest practice" means any action intended to improve

 

forestland or forest resources and includes, but is not limited to,

 

any of the following:

 

     (i) The preparation of forest management plans for forestland.

 

     (ii) The improvement of species of forest trees.

 

     (iii) Reforestation.

 

     (iv) The harvesting of species of forest trees.

 

     (v) Road construction associated with the improvement or

 

harvesting of forest tree species or reforestation.

 

     (vi) Use of chemicals or fertilizers for the purpose of growing

 

or managing species of forest trees.

 

     (vii) Applicable silvicultural practices.

 

     (g) (c) "Forest products" includes, but is not limited to,

 

timber and pulpwood-related products.

 

     (h) "Harvest" means the point at which timber that has been

 

cut, severed, or removed for purposes of sale or use is first

 

measured in the ordinary course of business as determined by

 

reference to common practice in the timber industry.

 

     (d) "Natural resources professional" and "registered forester"

 

mean those terms as defined in section 51101 of the natural

 

resources and environmental protection act, 1994 PA 451, MCL

 

324.51101.

 

     (e) "Proposed forest management plan" means a proposed plan

 

for sustainable forest management that includes, but is not limited

 

to, harvesting, planting, and regeneration of forest products on a

 

parcel of property that is prepared by a qualified forester. A

 

proposed forest management plan shall include all of the following:

 

     (i) The name and address of each owner of the property.

 

     (ii) The legal description and parcel identification number of

 

the property or of the parcel on which the property is located.

 

     (iii) A statement of the owner's forest management objectives.

 

     (iv) A map, diagram, or aerial photograph that identified both

 

forested and unforested areas of the property, using conventional

 

map symbols indicating the species, size, and density of vegetation

 

and other major features of the property.

 

     (v) A description of the forestry practices, including

 

harvesting, thinning, and reforestation, that will be undertaken,

 

specifying the approximate period of time before each is completed.

 

     (vi) A description of soil conservation practices that may be

 

necessary to control any soil erosion that may result from the

 

forestry practices described pursuant to subparagraph (v).

 

     (vii) A proposed forest management plan shall also include a

 

description of activities that may be undertaken for the management

 

of forest resources other than trees, including wildlife habitat,

 

watersheds, and aesthetic features.

 

     (i) (f) "Qualified forest property" means a parcel of real

 

property that meets all of the following conditions as determined

 

by the department of natural resources:agriculture and rural

 

development:

 

     (i) Is not less than 20 10 contiguous acres in size, of which

 

not less than 80% 50% is stocked with productive forest capable of

 

producing wood forest products. Contiguity is not broken by a road,

 

a right-of-way, or property purchased or taken under condemnation

 

proceedings by a public utility for power transmission lines if the

 

2 parcels separated by the purchased or condemned property were a

 

single parcel prior to the sale or condemnation. As used in this

 

subparagraph, "productive forest" means real property capable of

 

growing not less than 20 cubic feet of wood per acre per year.

 

However, if property has been considered productive forest, an act

 

of God that negatively affects that property shall not result in

 

that property not being considered productive forest.

 

     (ii) Is stocked with forest products.

 

     (iii) Has no buildings or structures located on the real

 

property.

 

     (ii) (iv) Is subject to an approved forest management plan.

 

     (iii) For a parcel exempt as qualified agricultural property

 

under section 7ee, the qualified forest portion of the parcel shall

 

be not less than 10 contiguous acres of which not less than 50% is

 

productive forest capable of producing forest products.

 

     (j) (g) "Qualified forester" means natural resources

 

professional, a registered forester, or a conservation district

 

forester.an individual who meets 1 or more of the following

 

requirements and has registered with the department of agriculture

 

and rural development under section 51306 of the natural resources

 

and environmental protection act, 1994 PA 451, MCL 324.51306:

 

     (i) Is a forester certified by the society of American

 

foresters.

 

     (ii) Is a forest stewardship plan writer.

 

     (iii) Is a technical service provider as registered by the

 

United States department of agriculture for forest management plan

 

development.

 

     (iv) Is a registered forester.

 

     (h) "Third-party certifying organization" means an independent

 

third-party organization that assesses and evaluates forest

 

management practices according to the standards of a certification

 

program that measures whether forest management practices are

 

consistent with principles of sustainable forestry. Third-party

 

certifying organization includes, but is not limited to, the forest

 

stewardship council and the sustainable forest initiative.

 

     (k) "Registered forester" means a person registered under

 

article 21 of the occupational code, 1980 PA 299, MCL 339.2101 to

 

339.2108.

 

     Enacting section 1. This amendatory act takes effect June 1,

 

2013.