Bill Text: MI HB5936 | 2019-2020 | 100th Legislature | Introduced
Bill Title: Property tax: delinquent taxes; fees and interest; allow county treasurers to waive in certain circumstances. Amends secs. 78a & 78g of 1893 PA 206 (MCL 211.78a & 211.78g).
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2020-07-22 - Bill Electronically Reproduced 07/21/2020 [HB5936 Detail]
Download: Michigan-2019-HB5936-Introduced.html
HOUSE BILL NO. 5936
July 21, 2020, Introduced by Rep. Wittenberg
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 78a and 78g (MCL 211.78a and 211.78g), section 78a as amended by 2014 PA 499 and section 78g as amended by 2020 PA 33.
the people of the state of michigan enact:
Sec. 78a. (1) For taxes levied after December 31,
1998, all property returned for delinquent taxes, and upon which taxes,
interest, penalties, and fees remain unpaid after the property is returned as
delinquent to the county treasurers of this state under this act, is subject to
forfeiture, foreclosure, and sale for the enforcement and collection of the
delinquent taxes as provided in section 78, this section, and sections 78b to
79a. As used in section 78, this section, and sections 78b to 79a, "taxes"
includes interest, penalties, and fees imposed before the taxes become
delinquent and unpaid special assessments or other assessments that are due and
payable up to and including the date of the foreclosure hearing under section
78k.
(2) On March 1 in each year,
taxes levied in the immediately preceding year that remain unpaid shall be
returned as delinquent for collection. However, if the last day in a year that
taxes are due and payable before being returned as delinquent is on a Saturday,
Sunday, or legal holiday, the last day taxes are due and payable before being
returned as delinquent is on the next business day and taxes levied in the
immediately preceding year that remain unpaid shall be returned as delinquent
on the immediately succeeding business day. Except as otherwise provided in
section 79 for certified abandoned property, property delinquent for taxes
levied in the second year preceding the forfeiture under section 78g or in a
prior year to which this section applies shall be forfeited to the county
treasurer for the total of the unpaid taxes, interest, penalties, and fees for
those years as provided under section 78g.
(3) A Except as otherwise provided in this subsection and
section 78g(3)(c), a county property tax administration fee of 4%
and , except as provided in section
78g(3)(c), interest computed at a noncompounded rate of 1% per
month or fraction of a month on the taxes that were originally returned as
delinquent, computed from the date that the taxes originally became delinquent,
shall be added to property returned as delinquent under this section. A county
property tax administration fee provided for under this subsection shall not be
less than $1.00. Notwithstanding any provision of
this act to the contrary, a county treasurer may waive up to the full amount of
the fees provided for in this subsection, and may waive up to 75% of the
interest charges provided for in this subsection, if all of the following
conditions are met:
(a)
During the year in which the taxes originally returned as delinquent under this
section were levied, the owner of the property was unemployed for not less than
2 consecutive weeks during a period when the unemployment rate reported for
this state, as determined by the Bureau of Labor Statistics, United States Department
of Labor, was 8.5% or greater.
(b)
During the year in which the taxes originally returned as delinquent under this
section were levied, the total household resources of the owner of the property
was not greater than 200% of the federal poverty income standards as defined
and determined annually by the United States Office of Management and Budget.
As used in this subdivision, "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)
During the year in which the taxes originally returned as delinquent under this
section were levied, the property was the owner's principal residence exempt
from the tax levied by a local school district for school operating purposes
under section 7cc.
(d)
Continuously since December 31 of the year in which the taxes originally returned
as delinquent under this section were levied, the property has been the owner's
principal residence exempt from the tax levied by a local school district for
school operating purposes under section 7cc.
(4) Any person with an
unrecorded property interest or any other person who wishes at any time to
receive notice of the return of delinquent taxes on a parcel of property may
pay an annual fee not to exceed $5.00 by February 1 to the county treasurer and
specify the parcel identification number, the address of the property, and the
address to which the notice shall be sent. Holders of any undischarged
mortgages wishing to receive notice of the return of delinquent taxes on a
parcel or parcels of property may provide a list of such parcels in a form
prescribed by the county treasurer and pay an annual fee not to exceed $1.00
per parcel to the county treasurer and specify for each parcel the parcel
identification number, the address of the property, and the address to which
the notice should be sent. The county treasurer shall notify the person or
holders of undischarged mortgages if delinquent taxes on the property or
properties are returned within that year.
(5) Notwithstanding any
charter provision to the contrary, the governing body of a local governmental
unit that collects delinquent taxes may establish for any property, by
ordinance, procedures for the collection of delinquent taxes and the
enforcement of tax liens and the schedule for the forfeiture or foreclosure of
delinquent tax liens. The procedures and schedule established by ordinance
shall conform at a minimum to those procedures and schedules established under
sections 78a to 78l, except that those
taxes subject to a payment plan approved by the treasurer of the local
governmental unit as of July 1, 1999 shall not be considered delinquent if
payments are not delinquent under that payment plan.
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.
(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 in the following circumstances, as
applicable:
(i) If the property is withheld from the petition for
foreclosure under section 78h(3)(c), the county treasurer may waive 100% of the additional
interest provided for under this subdivision.
(ii) If the conditions described in section
78a(3)(a) to (d) were met at the time the unpaid delinquent taxes for which the
property was forfeited under this section were originally returned as
delinquent under section 78a, the county treasurer may waive up to 75% of the
additional interest provided for under this subdivision.
(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, except as otherwise provided in this subparagraph,
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. If the conditions
described in section 78a(3)(a) to (d) were met at the time the unpaid
delinquent taxes for which the property was forfeited under this section were
originally returned as delinquent under section 78a, the county treasurer may
waive up to 75% of the interest provided for under this subparagraph.
(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 environment, Great Lakes, and energy 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) subsection (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.
