Bill Text: MI HB4370 | 2011-2012 | 96th Legislature | Introduced

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Bill Title: Property tax; exemptions; poverty exemption; revise. Amends sec. 7u of 1893 PA 206 (MCL 211.7u).

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2011-03-03 - Printed Bill Filed 03/03/2011 [HB4370 Detail]

Download: Michigan-2011-HB4370-Introduced.html

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HOUSE BILL No. 4370

 

March 2, 2011, Introduced by Rep. Jackson and referred to the Committee on Tax Policy.

 

     A bill to amend 1893 PA 206, entitled

 

"The general property tax act,"

 

by amending section 7u (MCL 211.7u), as amended by 2003 PA 140.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 7u. (1) The principal residence of persons a qualified

 

taxpayer who, in the judgment of the supervisor and board of

 

review, by reason of poverty, are is unable to contribute toward

 

the public charges is eligible for exemption in whole or in part

 

from taxation the collection of taxes under this act as provided in

 

this section. Factors used to determine eligibility for an

 

exemption under this section shall include, but are not limited to,

 

the specific income and asset levels of the person claiming an

 

exemption under this section and total household income and assets,

 

as set forth in this section. This section does not apply to the

 

property of a corporation.

 

     (2) To be eligible for exemption under this section, a person

 

shall do all of the following on an annual basis:

 

     (a) Be an owner of and occupy as a principal residence the

 

property for which an exemption is requested.

 

     (b) File a claim with the supervisor or board of review on a

 

form provided by the local assessing unit, accompanied by federal

 

and state income tax returns for all persons residing in the

 

principal residence, including any property tax credit returns,

 

filed in the immediately preceding year or in the current year. The

 

filing of a claim under this subsection constitutes an appearance

 

before the board of review for the purpose of preserving the

 

claimant's right to appeal the decision of the board of review

 

regarding the claim.

 

     (c) Produce a valid driver's license or other form of

 

identification if requested by the supervisor or board of review.

 

     (d) Produce a deed, land contract, or other evidence of

 

ownership of the property for which an exemption is requested if

 

required by the supervisor or board of review.

 

     (e) Meet the federal poverty guidelines updated annually in

 

the federal register by the United States department of health and

 

human services under authority of section 673 of subtitle B of

 

title VI of the omnibus budget reconciliation act of 1981, Public

 

Law 97-35, 42 U.S.C. 9902, or alternative guidelines adopted by the

 

governing body of the local assessing unit provided the alternative

 

guidelines do not provide income eligibility requirements less than

 

the federal guidelines.

 

     (2) The application and renewal affidavit for an exemption

 

under this section shall be in a form prescribed by the department

 

of treasury. The department of treasury shall design the

 

application and renewal affidavit to ensure uniformity, clarity,

 

simplicity, and ease of use by applicants.

 

     (3) The application for an exemption under this section shall

 

be filed after January 1 but before the day prior to the last day

 

of the any board of review held under this act. If a qualified

 

taxpayer is granted an exemption under this section for a tax year,

 

that qualified taxpayer may submit a renewal affidavit to claim an

 

exemption in the immediately succeeding tax year.

 

     (4) The governing body of the local assessing unit shall

 

determine and make available to the public the policy and

 

guidelines the local assessing unit uses for the granting of

 

exemptions under this section. The guidelines shall include but not

 

be limited to the specific income and asset levels of the claimant

 

and total household income and assets. If a qualified taxpayer is

 

eligible for an exemption under this section, the board of review

 

and supervisor shall grant the exemption for the tax year in which

 

the application is filed and may grant the exemption for the 2

 

immediately preceding tax years if the qualified taxpayer would

 

have been eligible for an exemption under this section if the

 

qualified taxpayer had claimed an exemption under this section. If

 

a person claiming an exemption under this section is not eligible

 

for an exemption under this section, the board of review may grant

 

the exemption for the 2 immediately preceding tax years if the

 

person claiming the exemption would have been eligible for an

 

exemption under this section if the person had claimed an exemption

 

under this section. If the board of review and supervisor grant the

 

exemption for the 2 immediately preceding tax years, any exempted

 

and unpaid taxes, interest, penalties, and fees for the 2

 

immediately preceding tax years for which the exemption is granted

 

shall be extinguished. Any taxes paid in the 2 immediately

 

preceding tax years shall be refunded 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 refund shall be without interest. The board of

 

review shall report the exemption and the refund to the department

 

of treasury in a form prescribed by the department of treasury.

 

     (5) The board of review shall follow the policy and guidelines

 

of the local assessing unit in granting or denying an exemption

 

under this section unless the board of review determines there are

 

substantial and compelling reasons why there should be a deviation

 

from the policy and guidelines and the substantial and compelling

 

reasons are communicated in writing to the claimant. If the person

 

claiming the exemption under this section meets the applicable

 

household income requirement set forth in subsection (9)(b)(v) and

 

satisfies the asset level established under subsection (9)(b)(vi),

 

if any, the board of review and supervisor shall exempt a

 

percentage of the taxable value of that person's principal

 

residence as determined by the board of review and supervisor.

 

     (6) A person who files a claim under this section is not

 

prohibited from also appealing the assessment on the property for

 

which that claim is made before the board of review in the same

 

year. The governing body of the local tax collecting unit shall

 

make available to the public the eligibility requirements for the

 

exemption under this section and application forms and renewal

 

affidavits. If a qualified taxpayer is granted an exemption under

 

this section for a tax year, the local tax collecting unit shall

 

mail a renewal affidavit to that qualified taxpayer in the

 

immediately succeeding tax year. The local tax collecting unit

 

shall publish notice of the availability of, and the eligibility

 

requirements for, the exemption under this section in a newspaper

 

of general circulation within the local tax collecting unit.

 

     (7) As used in this section, "principal residence" means

 

principal residence or qualified agricultural property as those

 

terms are defined in section 7dd. The board of review and

 

supervisor may deny an exemption under this section for 1 or more

 

of the following reasons:

 

     (a) The board of review and supervisor determine that the

 

person claiming the exemption is not a qualified taxpayer.

 

     (b) The board of review and supervisor determine that the

 

claim for exemption is based on fraud. If the board of review and

 

supervisor determine that the claim for exemption is based on

 

fraud, the person claiming the exemption is subject to the

 

penalties set forth in section 27 of 1941 PA 122, MCL 205.27.

 

     (c) The board of review and supervisor determine that the

 

qualified taxpayer claiming the exemption under this section has no

 

interest in the property for which an exemption is claimed and the

 

claim for exemption is an attempt to avoid the collection of taxes

 

under this act.

 

     (d) The board of review and supervisor determine that a person

 

who does not occupy the property holds an ownership interest in the

 

property and that person does not satisfy the applicable household

 

income requirement set forth in subsection (9)(b)(v) or does not

 

satisfy the asset level established under subsection (9)(b)(vi), if

 

any, unless the person claiming the exemption can demonstrate to

 

the satisfaction of the board of review and supervisor that he or

 

she does not receive any support from that person.

 

     (e) The board of review and supervisor determine that there

 

are substantial and compelling reasons why there should be a

 

deviation from the applicable household income requirement set

 

forth in subsection (9)(b)(v) or the asset level established under

 

subsection (9)(b)(vi), if any, and the substantial and compelling

 

reasons are communicated in writing to the person claiming an

 

exemption under this section. The substantial and compelling

 

reasons for the denial of an exemption under this subdivision shall

 

be specific to the person whose application for exemption is denied

 

and shall not be systematically used to deny otherwise eligible

 

applicants.

 

     (f) The state equalized valuation of the principal residence

 

for which an exemption is claimed under this section is

 

substantially greater than the average state equalized valuation of

 

a principal residence in the local tax collecting unit.

 

     (8) Filing an application for exemption or a renewal affidavit

 

under this subsection is an appearance before the board of review

 

and preserves the applicant's right to appeal the decision of the

 

board of review regarding the claim for exemption. A qualified

 

taxpayer who files an application for exemption or a renewal

 

affidavit under this section may also appeal the assessment on the

 

property for which the exemption is claimed before the board of

 

review in the same tax year.

 

     (9) As used in this section:

 

     (a) "Principal residence" means principal residence or

 

qualified agricultural property as those terms are defined in

 

section 7dd.

 

     (b) "Qualified taxpayer" means a person who meets all of the

 

following requirements:

 

     (i) Owns and occupies as a principal residence the property for

 

which an exemption is claimed.

 

     (ii) Files an application for exemption with the supervisor or

 

board of review, accompanied by federal and state income tax

 

returns for all persons residing in the principal residence,

 

including any property tax credit returns, filed in the immediately

 

preceding tax year or in the current tax year.

 

     (iii) Produces a valid driver license, state personal

 

identification card, or other form of identification, if requested

 

by the supervisor or board of review.

 

     (iv) Produces a deed, land contract, or other evidence of

 

ownership of the property for which an exemption is requested, if

 

requested by the supervisor or board of review.

 

     (v) Has household income that meets 1 of the following

 

requirements:

 

     (A) Is equal to or less than the federal poverty guidelines

 

published annually in the federal register by the United States

 

department of health and human services under its authority to

 

revise the poverty line under 42 USC 9902.

 

     (B) Is equal to or less than alternative income guidelines

 

adopted by the governing body of the local tax collecting unit.

 

Alternative income guidelines shall not provide an income

 

eligibility requirement that is less than the income eligibility

 

requirement set forth in sub-subparagraph (A).

 

     (vi) A local tax collecting unit may establish an asset level

 

as a criterion for exemption under this section. If the local tax

 

collecting unit has established an asset level as a criterion for

 

exemption under this section, the asset level of the person

 

claiming an exemption under this section does not exceed that asset

 

level. A local tax collecting unit shall not consider any of the

 

following in calculating the asset level of a person claiming an

 

exemption under this section:

 

     (A) The state equalized valuation of the principal residence

 

of the person claiming an exemption under this section.

 

     (B) Any individual item of tangible personal property with a

 

value of less than $5,000.00, excluding cash, stocks, bonds, and

 

similar items of value.

 

     (C) Cash, stocks, bonds, and similar items of value with an

 

aggregate value of less than $5,000.00.

 

     (D) An account established under the individual or family

 

development account program act, 2006 PA 513, MCL 206.701 to

 

206.711.

 

     (E) An account established under the Michigan education

 

savings program act, 2000 PA 161, MCL 390.1471 to 390.1486, or any

 

other qualified tuition program approved under section 529 of the

 

internal revenue code.

 

     (F) One automobile per household.

 

     (c) "Household income" means that term as defined in section

 

508 of the income tax act of 1967, 1967 PA 281, MCL 206.508.