Bill Text: MI HB5335 | 2019-2020 | 100th Legislature | Introduced
Bill Title: Property tax; delinquent taxes; reduced redemption and stipulated payment agreements; provide for. Amends secs. 78g & 78h of 1893 PA 206 (MCL 211.78g & 211.78h).
Spectrum: Strong Partisan Bill (Democrat 18-1)
Status: (Introduced - Dead) 2020-01-16 - Bill Electronically Reproduced 01/16/2020 [HB5335 Detail]
Download: Michigan-2019-HB5335-Introduced.html
HOUSE BILL NO. 5335
January 15, 2020, Introduced by Reps. Robinson,
Brenda Carter, Kennedy, Tate, Yancey, Gay-Dagnogo, Byrd, Garrett, Love,
Wittenberg, Tyrone Carter, Whitsett, Bolden, Haadsma, Peterson, Inman,
Coleman, Cynthia Johnson and Jones and referred to the Committee on Local
Government and Municipal Finance.
A bill to amend 1893 PA 206, entitled
"The general property tax act,"
by amending sections 78g and 78h (MCL 211.78g and 211.78h), section 78g as amended by 2014 PA 500 and section 78h as amended by 2014 PA 499.
the people of the state of michigan enact:
Sec. 78g. (1) Except as otherwise provided in this subsection, on March 1 in each tax year, certified abandoned property and property that is delinquent for taxes, interest, penalties, and fees for the immediately preceding 12 months or more is forfeited to the county treasurer for the total amount of those unpaid delinquent taxes, interest, penalties, and fees. If property is forfeited to a county treasurer under this subsection, the foreclosing governmental unit does not have a right to possession of the property until the April 1 immediately succeeding the entry of a judgment foreclosing the property under section 78k or in a contested case until 22 days after the entry of a judgment foreclosing the property under section 78k. If property is forfeited to a county treasurer under this subsection, the county treasurer shall add a $175.00 fee to each parcel of property for which those delinquent taxes, interest, penalties, and fees remain unpaid. A county treasurer shall withhold a parcel of property from forfeiture for any reason determined by the state tax commission. The state tax commission shall determine the procedure for withholding a parcel of property from forfeiture under this subsection. shall be determined by the state tax commission.
(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 shall 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 shall 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) or (9), 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 either a tax foreclosure avoidance agreement is in effect for the property under section 78q(5) or a reduced redemption and stipulated payment agreement is in effect for the property under subsection (9), while the tax foreclosure avoidance agreement either of those agreements is effective, all of the following shall apply:
(i) The property shall must be withheld from the petition for foreclosure under section 78h.
(ii) The additional interest under subdivision (b) shall 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, shall apply 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 shall must be recorded within 30 days with the register of deeds by the person entitled to the lien. The lien acquired shall have 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 shall must be delivered to the person making the redemption payment, 1 shall must be filed in the office of the county treasurer, 1 shall must be recorded in the office of the county register of deeds, and 1 shall 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 shall 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) Before July 1, 2016, if the amount of unpaid delinquent taxes, interest, penalties, and fees for which a property was forfeited is greater than 50% of the state equalized valuation of the property and the property is subject to and in compliance with a delinquent property tax installment payment plan under section 78q(1) or a tax foreclosure avoidance agreement under section 78q(5), or both, the foreclosing governmental unit may reduce the amount of taxes, interest, penalties, and fees required to be paid to redeem the property under subdivision subsection (3)(a) to an amount equal to 50% of the state equalized valuation of the property. If a property is redeemed by payment of the reduced amount under this subsection, any remaining unpaid taxes, interest, penalties, and fees for which the property was forfeited and otherwise payable shall be canceled by the county treasurer. A foreclosing governmental unit may not approve a reduction in the amount necessary 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.
(9) Notwithstanding any provision of this act or charter to the contrary, a county treasurer may enter into a reduced redemption and stipulated payment 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 this section, subject to all of the following:
(a) 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 the owner makes an initial payment of at least 10% of the reduced redemption amount described in subdivision (c).
(b) The amount of unpaid delinquent taxes, interest, penalties, and fees for which the property was forfeited is greater than 50% of the state equalized valuation of the property.
(c) Under the reduced redemption and stipulated payment agreement, the reduced amount of taxes, interest, penalties, and fees required to be paid to redeem the property under subsection (3)(a) is equal to 50% of the state equalized valuation of the property.
(d) While the reduced redemption and stipulated payment agreement is effective, the property is withheld or removed from the petition for foreclosure as provided under section 78h(3)(c), interest at the rate provided in subsection (3)(c)(ii) applies, and the owner makes timely payments as provided under the agreement, including timely payment of all nondelinquent taxes on the property.
(e) The reduced redemption and stipulated payment agreement requires regular periodic installment payments, with a final payment that is not disproportionately larger than a regular periodic installment payment and regular periodic installment payments in the final year that are not disproportionately larger than regular periodic installment payments in prior years.
(f) The reduced redemption and stipulated payment agreement provides that if the property is redeemed by payment of the reduced amount, any remaining unpaid taxes, interest, penalties, and fees for which the property was forfeited and otherwise payable will be canceled by the county treasurer.
(g) The reduced redemption and stipulated payment agreement provides that if the owner fails to comply with the agreement or if the agreement is no longer effective, all of the following apply:
(i) Interest under subsection (3)(b) and any additional interest otherwise applicable will apply to any unpaid taxes on the property.
(ii) The property will be included in the immediately succeeding petition for foreclosure under section 78h.
(iii) The owner shall not bid on property subject to sale under section 78m, if that property was subject to the reduced redemption and stipulated payment agreement.
(10) A county treasurer may refuse to enter into a reduced redemption and stipulated payment agreement with an owner under subsection (9) if that owner is not in compliance with another reduced redemption and stipulated payment agreement with the county treasurer, or with a tax foreclosure avoidance agreement or a delinquent property tax installment plan with the county treasurer under section 78q.
(11) A reduced redemption and stipulated payment agreement may not be approved under subsection (9) if the agreement would cause noncompliance with section 87c(7) or otherwise impermissibly impair an outstanding debt of the county.
Sec. 78h. (1) Not later than June 15 in each tax year, the foreclosing governmental unit shall file a single petition with the clerk of the circuit court of that county listing all property forfeited and not redeemed to the county treasurer under section 78g to be foreclosed under section 78k for the total of the forfeited unpaid delinquent taxes, interest, penalties, and fees. If available to the foreclosing governmental unit, the petition shall must include the street address of each parcel of property set forth in the petition. The petition shall must seek a judgment in favor of the foreclosing governmental unit for the forfeited unpaid delinquent taxes, interest, penalties, and fees listed against each parcel of property. The petition shall must request that a judgment be entered vesting absolute title to each parcel of property in the foreclosing governmental unit, without right of redemption.
(2) If property is redeemed after the petition for foreclosure is filed under this section, the foreclosing governmental unit shall request that the circuit court remove that property from the petition for foreclosure before entry of judgment foreclosing the property under section 78k.
(3) The foreclosing governmental unit may withhold the following property from the petition for foreclosure filed under this section:
(a) Property the title to which is held by minor heirs or persons who are incompetent, persons without means of support, or persons unable to manage their affairs due to age or infirmity, until a guardian is appointed to protect that person's rights and interests.
(b) Property the title to which is held by a person undergoing substantial financial hardship, as determined under a written policy developed and adopted by the foreclosing governmental unit. The foreclosing governmental unit shall make available to the public the written policy adopted under this subdivision. The written policy adopted under this subdivision shall must include, but is not limited to, all of the following:
(i) The person requesting that the property be withheld from the petition for foreclosure holds the title to the property.
(ii) The total household resources of the person requesting that the property be withheld from the petition for foreclosure meets the federal poverty income standards as defined and determined annually by the United States office of management and budget Office of Management and Budget or alternative guidelines adopted by the foreclosing governmental unit, provided that the alternative guidelines include all persons who would otherwise meet the federal poverty income standards under this subparagraph. As used in this subparagraph, "total household resources" means that term as defined in section 508 of the income tax act of 1967, 1967 PA 281, MCL 206.508.
(c) Property the title to which is held by a person subject to a reduced redemption and stipulated payment agreement under section 78g(9), or to a delinquent property tax installment payment plan or tax foreclosure avoidance agreement under section 78q.
(4) If a foreclosing governmental unit withholds property from the petition for foreclosure under subsection (3), a taxing unit's lien for taxes due or the foreclosing governmental unit's right to include the property in a subsequent petition for foreclosure is not prejudiced.
(5) The clerk of the circuit court in which the petition is filed shall immediately set the date, time, and place for a hearing on the petition for foreclosure, which hearing shall must be held not more than 30 days before the March 1 immediately succeeding the date the petition for foreclosure is filed.
