Bill Text: MI HB5124 | 2019-2020 | 100th Legislature | Enrolled
Bill Title: Property tax: delinquent taxes; provisions for reducing redemption amounts; modify. Amends secs. 78g, 78k & 78q of 1893 PA 206 (MCL 211.78g et seq.).
Spectrum: Partisan Bill (Democrat 29-0)
Status: (Passed) 2020-03-03 - Assigned Pa 33'20 With Immediate Effect [HB5124 Detail]
Download: Michigan-2019-HB5124-Enrolled.html
state of michigan
100th Legislature
Regular session of 2020
Introduced by Reps. Byrd, Tate, Robinson, Neeley, Wittenberg, Hertel, Cambensy, Chirkun, Peterson, Elder, Sneller, Sabo, Cherry, Brixie, Lasinski, Coleman, Ellison, Hope, Anthony, Gay-Dagnogo, Cynthia Johnson, Witwer, Kuppa, Yancey, LaGrand, Hood, Love, Bolden and Jones
ENROLLED HOUSE BILL No. 5124
AN ACT to amend
1893 PA 206, entitled “An act to provide for the assessment of rights and
interests, including leasehold interests, in property and the levy and
collection of taxes on property, and for the collection of taxes levied; making
those taxes a lien on the property taxed, establishing and continuing the lien,
providing for the sale or forfeiture and conveyance of property delinquent for
taxes, and for the inspection and disposition of lands bid off to the state and
not redeemed or purchased; to provide for the establishment of a delinquent tax
revolving fund and the borrowing of money by counties and the issuance of
notes; to define and limit the jurisdiction of the courts in proceedings in
connection with property delinquent for taxes; to limit the time within which
actions may be brought; to prescribe certain limitations with respect to rates
of taxation; to prescribe certain powers and duties of certain officers,
departments, agencies, and political subdivisions of this state; to provide for
certain reimbursements of certain expenses incurred by units of local
government; to provide penalties for the violation of this act; and to repeal
acts and parts of acts,” by amending sections 78g, 78k, and 78q (MCL 211.78g,
211.78k, and 211.78q), section 78g as amended by 2014 PA 500, section 78k as
amended by 2016 PA 433, and section 78q as amended by 2019 PA 35.
The People of the
State of Michigan enact:
(2) Not more than 45 days
after property is forfeited under subsection (1), the county treasurer shall
record with the county register of deeds a certificate in a form determined by
the department of treasury for each parcel of property forfeited to the county
treasurer, specifying that the property has been forfeited to the county
treasurer and not redeemed and that absolute title to the property will vest in the county treasurer on the March 31
immediately succeeding the entry of a judgment foreclosing the property under
section 78k or in a contested case 21 days after the entry of a judgment
foreclosing the property under section 78k. If a certificate of forfeiture is
recorded in error, the county treasurer shall record with the county register
of deeds a certificate of error in a form prescribed by the department of
treasury. A certificate submitted to the county register of deeds for recording
under this subsection need not be notarized and may be authenticated by a
digital signature of the county treasurer or by other electronic means. If the
county has elected under section 78 to have this state foreclose property under
this act forfeited to the county treasurer under this section, the county
treasurer shall immediately transmit to the department of treasury a copy of
each certificate recorded under this subsection. The county treasurer shall
upon collection transmit to the department of treasury within 30 days the fee
added to each parcel under subsection (1), which may be paid from the county’s
delinquent tax revolving fund and must be
deposited in the land reutilization fund created under section 78n.
(3) Property forfeited to the
county treasurer under subsection (1) may be redeemed at any time on or before
the March 31 immediately succeeding the entry of a judgment foreclosing the
property under section 78k or in a contested case within 21 days of the entry
of a judgment foreclosing the property under section 78k upon payment to the
county treasurer of all of the following:
(a) The total amount of
unpaid delinquent taxes, interest, penalties, and fees for which the property
was forfeited or the reduced amount of unpaid delinquent taxes, interest, penalties,
and fees payable under subsection (8), if applicable.
(b) Except as otherwise
provided in this subdivision and subdivision (c), in addition to the interest
calculated under sections 60a(1) or (2) and 78a(3), additional interest
computed at a noncompounded rate of 1/2% per month or fraction of a month on
the taxes that were originally returned as delinquent, computed from the March
1 preceding the forfeiture. The county treasurer may waive the additional
interest under this subdivision if the property is withheld from the petition
for foreclosure under section 78h(3)(c).
(c) If the property is
classified as residential real property under section 34c, the property is a
principal residence exempt from the tax levied by a local school district for
school operating purposes under section 7cc, and a tax foreclosure avoidance
agreement is in effect for the property under section 78q(5), while the tax
foreclosure avoidance agreement is effective, all of the following apply:
(i) The property must be withheld from the petition for foreclosure under section
78h.
(ii) The additional interest
under subdivision (b) does not apply and interest computed at a noncompounded rate of
1/2% per month or fraction of a month on the taxes that were originally
returned as delinquent, computed from the date that the taxes originally were
returned as delinquent, applies to the property.
(d) All recording fees and all fees for service of process or notice.
(4) If property is redeemed by a person with a legal interest as
provided under subsection (3), any unpaid taxes not returned as delinquent to
the county treasurer under section 78a are not extinguished.
(5) If property is redeemed by a person with a legal interest as
provided under subsection (3), the person redeeming does not acquire a title or
interest in the property greater than that person would have had if the
property had not been forfeited to the county treasurer, but the person
redeeming, other than the owner, is entitled to a lien for the amount paid to
redeem the property in addition to any other lien or interest the person may
have, which must be recorded within 30 days with the register of deeds by the
person entitled to the lien. The lien acquired has the same priority as the
existing lien, title, or interest.
(6) If property is redeemed as provided under subsection (3), the county
treasurer shall issue a redemption certificate in quadruplicate in a form
prescribed by the department of treasury. One of the quadruplicate certificates
must be delivered to the person making the redemption payment, 1 must be filed in the office of
the county treasurer, 1 must be recorded in the office of the county register of deeds,
and 1 must be immediately transmitted to the department of treasury if
this state is the foreclosing governmental unit. The county treasurer shall
also make a note of the redemption certificate in the tax record kept in his or
her office, with the name of the person making the final redemption payment,
the date of the payment, and the amount paid. If the county treasurer accepts
partial redemption payments, the county treasurer shall include in the tax
record kept in his or her office the name of the person or persons making each
partial redemption payment, the date of each partial redemption payment, the amount
of each partial redemption payment, and the total amount of all redemption
payments. A certificate and the entry of the certificate in the tax record by
the county treasurer is prima facie evidence of a redemption payment in the
courts of this state. A certificate submitted to the county register of deeds
for recording under this subsection need not be notarized and may be
authenticated by a digital signature of the county treasurer or by other
electronic means. If a redemption certificate is recorded in error, the county
treasurer shall record with the county register of deeds a certificate of error
in a form prescribed by the department of treasury. A copy of a certificate of
error recorded under this section must be immediately transmitted to the department of treasury if
this state is the foreclosing governmental unit.
(7) If a foreclosing
governmental unit has reason to believe that a property forfeited under this
section may be the site of environmental contamination, the foreclosing
governmental unit shall provide the department of environmental quality with
any information in the possession of the foreclosing governmental unit that
suggests the property may be the site of environmental contamination.
(8)
Notwithstanding any provision of this act or charter to the contrary, until
July 1, 2023, all of the following apply to property for which delinquent
property taxes remain unpaid, including property forfeited under this section,
located in a local unit of government that, pursuant to subsection (10)(b)(i) or (ii), is
participating in a payment reduction program authorized by this subsection:
(a) If
the property is subject to an exemption under section 7u and the property’s
owner has not previously received a payment reduction under this subsection,
the foreclosing governmental unit may do 1 or more of the following:
(i) If
the total amount of unpaid delinquent taxes is greater than 10% of the
property’s taxable value for the calendar year preceding the year the property
was exempt from the collection of taxes under section 7u, reduce the amount
required to be paid under section 78a(1) or required to be paid to redeem the
property under subsection (3)(a) to 10% of the property’s taxable value
for the calendar year preceding the year the property was exempt from the
collection of taxes under section 7u. A reduction under this subparagraph must
be allocated to each taxing unit based on the proportion that its unpaid
delinquent taxes certified to the county treasurer bear to the total amount of
unpaid delinquent taxes certified to the county treasurer in connection with
the property.
(ii)
Cancel some or all of any unpaid delinquent taxes that represent charges for
services that have become delinquent and have been certified to the county
treasurer for collection of taxes and enforcement of the lien for the taxes
under section 21(3) of the revenue bond act of 1933, 1933 PA 94, MCL 141.121.
(iii)
Cancel all of the interest, penalties, and fees required to be paid under this
act.
(b) If
the amount required to be paid under this act is reduced under subdivision (a),
the foreclosing governmental unit may further reduce the amount by an amount
not to exceed 10% of the unpaid delinquent taxes required to be paid to redeem
the property if the property is redeemed by a single lump-sum payment made
within a period to be determined by the foreclosing governmental unit.
(c) A
foreclosing governmental unit may apply the provisions of this subsection to
property subject to a delinquent property tax installment payment plan under
section 78q(1) or a tax foreclosure avoidance agreement under section 78q(5).
Except as provided in this subdivision, the terms and conditions of a payment
reduction applied to property under this subsection must be consistent with the
terms and conditions of a delinquent property tax installment payment plan
under section 78q(1) or tax foreclosure agreement under section 78q(5) for the
property. If the owner of property subject to a delinquent property tax
installment payment plan under section 78q(1) or a tax foreclosure
avoidance agreement under section 78q(5) has failed to pay any amounts owed
under the plan or agreement, that nonpayment does not prohibit the property
owner from receiving a payment reduction under this subsection. Notwithstanding
any provision of this act to the contrary, the full amount owed by an owner of
property as reduced by this subsection must be payable in not more than 3 years
after the date the reduction is established by the foreclosing governmental
unit.
(d) If
a property owner has paid a reduced amount under this subsection in accordance
with the terms, conditions, and time period established by the county
treasurer, any remaining unpaid taxes, interest, penalties, and fees otherwise
payable shall be canceled by the county treasurer, including, but not limited
to, any interest, fee, or penalty payment requirements set forth in a
delinquent property tax installment payment plan under section 78q(1) or a tax
foreclosure avoidance agreement under section 78q(5) with respect to the
property. A county treasurer shall not impose any additional interest,
penalties, fees, or other charges of any kind in connection with a payment
reduction program under this subsection.
(e) If
the owner of property subject to a payment reduction under this subsection
fails to pay the full reduced amount of delinquent taxes, penalties, and fees
under this subsection in accordance with the terms, conditions, and time period
established by the county treasurer, all of the following apply:
(i) The
amount required to be paid to redeem the property is the sum of both of the
following:
(A)
The full amount of any unpaid delinquent taxes on the property.
(B)
Interest under section 78g(3)(b) and any additional interest, fees, charges,
and penalties otherwise applicable to any unpaid taxes on the property,
including, but not limited to, interest, fees, charges, and penalties canceled
under subdivision (d).
(ii) The
property must be included in the immediately succeeding petition for
foreclosure under section 78h.
(f) A
foreclosing governmental unit may not approve a reduction in the amount
required to redeem property under this subsection if the reduction would cause
noncompliance with section 87c(7) or otherwise impermissibly impair an
outstanding debt of the county or any taxing unit.
(g)
All payments collected in connection with property under this subsection must
be distributed to each taxing unit that has certified to the county treasurer
unpaid delinquent taxes for the property in an amount based on the proportion
that the taxing unit’s unpaid delinquent taxes certified to the county
treasurer bear to the total amount of unpaid delinquent taxes certified to the
county treasurer in connection with the property.
(h) A
county treasurer shall set forth the terms and benefits of a payment reduction
program available under this subsection in a plan available upon request to the
department of treasury. The plan must set forth which of the reductions
described in subdivisions (a) and (b) are available under the program and must
include any other information determined to be necessary or appropriate in the
discretion of the county treasurer.
(9) If
a payment reduction under subsection (8) is in effect for property for which a
county has issued notes under this act that are secured by the delinquent taxes
and interest on that property, at any time within 2 years after the date that
those taxes were returned as delinquent, the county treasurer may charge back
to any taxing unit the face amount of the delinquent taxes that were owed to
that taxing unit on the date those taxes were returned as delinquent, less the
amount of any payments received by the county treasurer on that property. All
subsequent payments of delinquent taxes and interest on that property must be
retained by the county treasurer in a separate account and either paid to or
credited to the account of that taxing unit.
(10) A
foreclosing governmental unit’s authority to apply any of the payment-reduction
measures otherwise available under subsection (8) is subject to all of the
following:
(a) A
foreclosing governmental unit that seeks to implement a program under
subsection (8) shall provide written notice to the treasurer of each affected
local unit of government within the county in which the property is located of
the foreclosing governmental unit’s intent to implement the program and state
that the local unit of government has the option of participating in the
program. The notice must contain all of the terms and conditions to be offered
under the program, in addition to any other information that the foreclosing
governmental unit considers necessary or appropriate.
(b)
Not later than 21 days after the foreclosing governmental unit provides the
written notice described in subdivision (a), the treasurer of any affected
local unit of government may provide the foreclosing governmental unit with 1
of the following, as applicable:
(i)
Written notice of nonparticipation in the program, if the local unit of
government is located in a county with a population of more than 1,500,000
according to the most recent population estimate produced by the United States
Census Bureau’s Population Estimates Program (PEP). All property within a local
unit of government that provides written notice of nonparticipation under this
subparagraph will be excluded from the program. Any affected local unit of
government whose treasurer does not provide written notice of nonparticipation
under this subparagraph is conclusively presumed to have consented to
participation in the program, and all property within that local unit of
government will be included in the program.
(ii)
Written notice of participation in the program, if the local unit of government
is located in a county other than one described in subparagraph (i) and
the governing body of the local unit of government has approved a resolution to
participate in the program. All property within a local unit of government that
provides written notice of participation under this subparagraph will be
included in the program. Any affected local unit of government whose treasurer
does not provide written notice of participation under this subparagraph is
conclusively presumed to have declined to participate in the program, and all
property within that local unit of government will be excluded from the
program.
(11)
As used in this section, “local unit of government” means a city, township, or
village.
Sec. 78k. (1) If a petition for foreclosure is filed under
section 78h, not later than the date of the hearing, the foreclosing
governmental unit shall file with the clerk of the circuit court proof of
service of the notice of the show cause hearing under section 78j, proof of
service of the notice of the foreclosure hearing under this section, and proof
of the personal visit to the property and publication under section 78i.
(2) A person claiming an interest in a parcel of property set
forth in the petition for foreclosure may contest the validity or correctness
of the forfeited unpaid delinquent taxes, interest, penalties, and fees for 1
or more of the following reasons:
(a) No law authorizes the tax.
(b) The person appointed to decide whether a tax will be levied under a law of this state acted without
jurisdiction, or did not impose the tax in question.
(c) The property was exempt from the tax in question, or the
tax was not legally levied.
(d) The tax has been paid within the time limited by law for
payment or redemption.
(e) The tax was assessed fraudulently.
(f) The description of the property used in the assessment
was so indefinite or erroneous that the forfeiture was void.
(3) A person claiming an interest in a parcel of property set
forth in the petition for foreclosure who desires to contest that petition
shall file written objections with the clerk of the circuit court and serve those
objections on the foreclosing governmental unit before the date of the hearing
required under this section.
(4) If the court determines that the owner of property
subject to foreclosure is a minor heir, is incompetent, is without means of
support, or is undergoing a substantial financial hardship, the court may
withhold that property from foreclosure for 1 year or may enter an order
extending the redemption period as the court determines to be equitable. If the
court withholds property from foreclosure under this subsection, a taxing
unit’s lien for taxes due is not prejudiced and that property must be included in the immediately succeeding year’s tax
foreclosure proceeding.
(5) The circuit court shall enter final judgment on a
petition for foreclosure filed under section 78h at any time after the hearing
under this section but not later than the March 30 immediately succeeding the
hearing with the judgment effective on the March 31 immediately succeeding the
hearing for uncontested cases or 10 days after the conclusion of the hearing
for contested cases. All redemption rights to the property expire on the March
31 immediately succeeding the entry of a judgment foreclosing the property
under this section, or in a contested case 21 days after the entry of a judgment
foreclosing the property under this section. The circuit court’s judgment must specify all of the following:
(a) The legal description and, if known, the street address
of the property foreclosed and the forfeited unpaid delinquent taxes, interest,
penalties, and fees due on each parcel of property.
(b) That fee simple title to property foreclosed by the
judgment will vest absolutely in the foreclosing governmental unit, except as
otherwise provided in subdivisions (c) and (e), without any further rights of
redemption, if all forfeited delinquent taxes, interest, penalties, and fees,
which delinquent taxes, interest, penalties, and fees may be reduced by the
foreclosing governmental unit in accordance with section 78g(8), are not paid on or before the March 31 immediately
succeeding the entry of a judgment foreclosing the property under this section,
or in a contested case within 21 days of the entry of a judgment foreclosing
the property under this section.
(c) That all liens against the property, including any lien
for unpaid taxes or special assessments, except future installments of special
assessments and liens recorded by this state or the foreclosing governmental
unit under the
natural resources and environmental protection act, 1994 PA 451, MCL 324.101 to
324.90106, are extinguished, if all forfeited delinquent taxes, interest,
penalties, and fees are not paid on or before the March 31 immediately
succeeding the entry of a judgment foreclosing the property under this section,
or in a contested case within 21 days of the entry of a judgment foreclosing
the property under this section.
(d) That, except as otherwise provided in subdivisions (c)
and (e), the foreclosing governmental unit has good and marketable fee simple
title to the property, if all forfeited delinquent taxes, interest, penalties,
and fees are not paid on or before the March 31 immediately succeeding the
entry of a judgment foreclosing the property under this section, or in a
contested case within 21 days of the entry of a judgment foreclosing the
property under this section.
(e) That all existing recorded and unrecorded interests in
that property are extinguished, except a visible or recorded easement or
right-of-way, private deed restrictions, interests of a lessee or an assignee
of an interest of a lessee under a recorded oil or gas lease, interests in oil
or gas in that property that are owned by a person other than the owner of the
surface that have been preserved as provided in section 1(3) of 1963 PA 42, MCL
554.291, interests in property assessable as personal property under section
8(g), or restrictions or other governmental interests imposed under the natural resources and environmental protection
act, 1994 PA 451, MCL 324.101 to 324.90106, if all forfeited delinquent taxes,
interest, penalties, and fees are not paid on or before the March 31
immediately succeeding the entry of a judgment foreclosing the property under
this section, or in a contested case within 21 days of the entry of a judgment
foreclosing the property under this section.
(f) A finding that all persons entitled to notice and an
opportunity to be heard have been provided that notice and opportunity. A
person is considered to
have been provided notice and an opportunity to be heard if the foreclosing
governmental unit followed the procedures for provision of notice by mail, for
visits to forfeited property, and for publication under section 78i, or if 1 or
more of the following apply:
(i) The person had
constructive notice of the hearing under this section by acquiring an interest
in the property after the date the notice of forfeiture is recorded under
section 78g.
(ii) The person appeared at the hearing under this section or filed written
objections with the clerk of the circuit court under subsection (3) before the
hearing.
(iii) Before the hearing under this section, the person had actual notice of
the hearing.
(g) A judgment entered
under this section is a final order with respect to the property affected by
the judgment and except as provided in subsection (7) must not be modified, stayed,
or held invalid after the March 31 immediately succeeding the entry of a
judgment foreclosing the property under this section, or for contested cases 21
days after the entry of a judgment foreclosing the property under this section.
(6) Except as otherwise provided in subsection (5)(c) and (e), fee
simple title to property set forth in a petition for foreclosure filed under
section 78h on which forfeited delinquent taxes, interest, penalties, and fees
are not paid on or before the March 31 immediately succeeding the entry of a
judgment foreclosing the property under this section, or in a contested case
within 21 days of the entry of a judgment foreclosing the property under this
section, will vest absolutely in the foreclosing governmental unit, and the
foreclosing governmental unit will have absolute title to the property, including all interests
in oil or gas in that property except the interests of a lessee or an assignee
of an interest of a lessee under an oil or gas lease in effect as to that
property or any part of that property if the lease was recorded in the office
of the register of deeds in the county in which the property is located before
the date of filing the petition for foreclosure under section 78h, and interests
preserved as provided in section 1(3) of 1963 PA 42, MCL 554.291. The
foreclosing governmental unit’s title is not subject to any recorded or
unrecorded lien and must not be stayed or held invalid except as provided in
subsection (7) or (9).
(7) The foreclosing governmental unit or a person claiming to have a
property interest under section 78i in property foreclosed under this section
may appeal the circuit court’s order or the circuit court’s judgment
foreclosing property to the court of appeals. An appeal under this subsection
is limited to the record of the proceedings in the circuit court under this
section is not de novo. The circuit court’s judgment foreclosing
property must be stayed until the court of appeals has reversed, modified,
or affirmed that judgment. If an appeal under this subsection stays the circuit
court’s judgment foreclosing property, the circuit court’s judgment is stayed
only as to the property that is the subject of that appeal and the circuit
court’s judgment foreclosing other property that is not the subject of that
appeal is not stayed. To appeal the circuit court’s judgment foreclosing
property, a person appealing the judgment shall pay to the county treasurer the
amount determined to be due to the county treasurer under the judgment on or
before the March 31 immediately succeeding the entry of a judgment foreclosing
the property under this section, or in a contested case within 21 days of the
entry of a judgment foreclosing the property under this section, together with
a notice of appeal. If the circuit court’s judgment foreclosing the property is
affirmed on appeal, the amount determined to be due must be refunded to the person
who appealed the judgment. If the circuit court’s judgment foreclosing the
property is reversed or modified on appeal, the county treasurer shall refund
the amount determined to be due to the person who appealed the judgment, if
any, and retain the balance in accordance with the order of the court of
appeals.
(8) The foreclosing governmental unit shall record a notice of judgment
for each parcel of foreclosed property in the office of the register of deeds
for the county in which the foreclosed property is located in a form prescribed
by the department of treasury.
(9) After the entry of a judgment foreclosing the property under this
section, if the property has not been transferred under section 78m to a person
other than the foreclosing governmental unit, a foreclosing governmental unit
may cancel the foreclosure by recording with the register of deeds for the
county in which the property is located a certificate of error in a form
prescribed by the department of treasury, if the foreclosing governmental unit
discovers any of the following:
(a) The foreclosed property was not subject to taxation on the date of
the assessment of the unpaid taxes for which the property was foreclosed.
(b) The description of the property used in the assessment of the unpaid
taxes for which the property was foreclosed was so indefinite or erroneous that
the forfeiture of the property was void.
(c) The taxes for which the property was foreclosed had been paid to the
proper officer within the time provided under this act for the payment of the
taxes or the redemption of the property.
(d) A certificate, including a certificate issued under section 135, or
other written verification authorized by law was issued by the proper officer
within the time provided under this act for the payment of the taxes for which
the property was foreclosed or for the redemption of the property.
(e) An owner of an interest in the property entitled to notice under
section 78i was not provided notice sufficient to satisfy the minimum
requirements of due process required under the state constitution of 1963 and
the Constitution of the United States.
(f) A judgment of foreclosure was entered under this section in
violation of an order issued by a United States Bankruptcy Court.
(10) A certificate of error submitted to the county register of deeds
for recording under subsection (9) need not be notarized and may be
authenticated by a digital signature of the foreclosing governmental unit or by
other electronic means.
Sec. 78q.
(1) Notwithstanding any provision of this act or charter to the contrary, a
foreclosing governmental unit may create a delinquent property tax installment
payment plan for eligible property, the title to which is held by a financially
distressed person. A delinquent property tax installment payment
plan created under this subsection may be combined with and made subject to a
delinquent property tax payment reduction under section 78g(8)(c). Any
payment under that delinquent property tax installment payment plan made during
a calendar year in which an owner of property is subject to a payment reduction
under section 78g(8) must be credited to the amount owed under section 78g(8)
and the credit must not exceed the amount owed under section 78g(8).
(2) If a financially distressed person agrees to participate in a
delinquent property tax installment payment plan created under subsection (1)
and makes the initial payment required under that delinquent property tax
installment payment plan, the foreclosing governmental unit may remove eligible
property the title to which is held by that financially distressed person from
the petition for foreclosure as provided in section 78h(3)(c).
(3) If a financially distressed person successfully completes a
delinquent property tax installment payment plan created under subsection (1),
interest under section 78g(3)(b) and any additional interest otherwise
applicable must be waived.
(4) If a financially distressed person does not successfully complete a
delinquent property tax installment payment plan created under subsection (1),
both of the following apply:
(a) Interest under section 78g(3)(b) and any additional interest
otherwise applicable apply to any unpaid taxes on the property.
(b) The eligible property must be included in the immediately succeeding petition for
foreclosure under section 78h.
(5) Notwithstanding any provision of this act or charter to the
contrary, until June 30, 2026, a county treasurer may enter into a tax
foreclosure avoidance agreement for a term of up to 5 years with an owner of
property returned as delinquent to the county treasurer under this act or
forfeited to the county treasurer under section 78g if the property is
classified as residential real property under section 34c, if the property is
eligible property, and if the owner makes an initial payment of the delinquent
taxes owed on the property in an amount determined by the county
treasurer. A tax foreclosure avoidance agreement entered
into under this subsection may be combined with and made subject to a
delinquent property tax payment reduction under section 78g(8)(c). Any payment
under that tax foreclosure avoidance agreement made during a calendar year in
which an owner of property is subject to a payment reduction under section
78g(8) must be credited to the amount owed under section 78g(8) and the
credit must not exceed the amount owed under section 78g(8). While a tax foreclosure
avoidance agreement is effective, the property must be withheld or removed
from the petition for foreclosure as provided under section 78h(3)(c), interest
at the rate provided in section 78g(3)(c)(ii) applies, and the owner
shall make timely payments as provided under the tax foreclosure avoidance
agreement, including timely payment of all nondelinquent taxes on the property.
A tax foreclosure avoidance agreement must require regular periodic installment
payments. The final payment must not be disproportionately larger than a
regular periodic installment payment and regular periodic installment payments
in the final year must not be disproportionately larger than regular periodic
installment payments in prior years. A county treasurer may refuse to enter
into a tax foreclosure avoidance agreement with an owner under this subsection
if that owner is not in compliance with another tax foreclosure avoidance
agreement with the county treasurer or with a delinquent property tax
installment plan with the county treasurer under this section. A county
treasurer may not enter into more than 2 tax foreclosure avoidance agreements
with an owner. If an owner fails to comply with a tax foreclosure avoidance
agreement or if the tax foreclosure avoidance agreement is no longer effective,
all of the following apply:
(a) Interest under section 78g(3)(b) and any additional interest
otherwise applicable apply to any unpaid taxes on the property.
(b) The property must be included in the immediately succeeding petition for
foreclosure under section 78h.
(c) The owner shall not bid on property subject to sale under section
78m, if that property was subject to the tax foreclosure avoidance agreement.
(6) A delinquent property tax installment payment plan or a tax foreclosure
avoidance agreement may not be approved under this section if the delinquent
property tax installment payment plan or tax foreclosure avoidance agreement
would impermissibly impair an outstanding debt of the county.
(7) If a foreclosing governmental unit has created a delinquent property
tax installment payment plan under this section, the department of treasury may
audit the books and records of that foreclosing governmental unit concerning
the details of that delinquent property tax installment payment plan.
(8) Property classified as industrial real property under section 34c
that is occupied at less than 10% of its facility capacity for more than 3
years and that is located in a county with a population of more than 1,500,000
according to the most recent federal decennial census is not eligible to
participate in a delinquent property tax installment payment plan and is
subject to section 78m, including sale under section 78m(2) to the person
bidding the highest amount above the minimum bid.
(9) If a delinquent property tax installment payment plan is in effect
for property for which a county has issued notes under this act that are
secured by the delinquent taxes and interest on that property, at any time 2
years after the date that those taxes were returned as delinquent, the county
treasurer may charge back to any taxing unit the face amount of the delinquent
taxes that were owed to that taxing unit on the date those taxes were returned
as delinquent, less the amount of any principal installments received by the
county treasurer on that property under the delinquent property tax installment
payment plan. All subsequent payments of delinquent taxes and interest on that
property must be retained by the county treasurer in a separate account and
either paid to or credited to the account of that taxing unit.
(10) As used in this section:
(a) “Eligible property” means property that is a principal residence
exempt from the tax levied by a local school district for school operating
purposes under section 7cc.
(b) “Financially distressed person” means a person who meets all of the
following conditions:
(i) Is eligible to have
property to which he or she holds title withheld from a petition for
foreclosure under section 78h(3)(b).
(ii) Is not delinquent in
satisfying a delinquent property tax installment payment plan or tax
foreclosure avoidance agreement under this section for any other property
within the foreclosing governmental unit.
This act is ordered to take immediate effect.
Clerk of the House of Representatives
Secretary of the Senate
Approved___________________________________________
____________________________________________________
Governor
