Bill Text: MI SB0042 | 2017-2018 | 99th Legislature | Introduced

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Bill Title: Property tax; delinquent taxes; administration of delinquent tax revolving funds; clarify. Amends secs. 87b & 87f of 1893 PA 206 (MCL 211.87b & 211.87f).

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2017-01-18 - Referred To Committee On Finance [SB0042 Detail]

Download: Michigan-2017-SB0042-Introduced.html

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SENATE BILL No. 42

 

 

January 18, 2017, Introduced by Senator BRANDENBURG and referred to the Committee on Finance.

 

 

     A bill to amend 1893 PA 206, entitled

 

"The general property tax act,"

 

by amending sections 87b and 87f (MCL 211.87b and 211.87f), section

 

87b as amended and section 87f as added by 2016 PA 82.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 87b. (1) The county board of commissioners of any county,

 

on behalf of the taxing units in the county and, for purposes of

 

the state education tax under the state education tax act, 1993 PA

 

331, MCL 211.901 to 211.906, this state, may create a delinquent

 

tax revolving fund that, at the option of the county treasurer, may

 

be designated as the "100% tax payment fund". Upon the

 

establishment of the fund, all delinquent taxes, except taxes on

 

personal property, due and payable to the taxing units in the

 

county, except those units that collect their own delinquent taxes

 

after March 1 by charter or otherwise, are due and payable to the

 

county, on behalf of the taxing units in the county and this state.

 

Money and other property and assets held in the delinquent tax

 

revolving fund shall be kept separate from and shall not be

 

commingled with any other money, property, or assets in the custody

 

of the county treasurer. All money, property, and assets acquired

 

by the county treasurer, whether as revenues or otherwise, shall be

 

held by it in trust for the taxing units in the county for which

 

the taxes are levied. The county shall have no right, title, or

 

interest in the delinquent tax revolving fund except for the right

 

to payment provided for in section 87b(7) or 87c(3). If the county

 

determines to borrow pursuant to section 87c or 87d, that borrowing

 

shall be done on behalf of the county and its taxing units and the

 

primary obligation to pay to the county the amount of taxes and the

 

interest on the taxes shall rest with the local taxing units and

 

this state for the state education tax under the state education

 

tax act, 1993 PA 331, MCL 211.901 to 211.906. If the delinquent

 

taxes that are due and payable to the county are not received by

 

the county on behalf of the taxing units in the county and this

 

state for any reason, the county has full right of recourse against

 

the taxing unit or to this state for the state education tax under

 

the state education tax act, 1993 PA 331, MCL 211.901 to 211.906,

 

to recover the amount of the delinquent taxes and interest at the

 

rate of 1% per month or fraction of a month or a lower rate as

 

established by resolution of the board of commissioners until

 

repaid to the county by the taxing unit. However, if the county

 

borrows to provide funds for those payments, the interest rate

 

shall not exceed the highest interest rate paid on that borrowing.

If the board of commissioners reduces the interest rate on the

 

recovery of uncollected delinquent taxes as provided in this

 

subsection, that decrease shall not apply to any year's delinquent

 

taxes when borrowing against that year's delinquent taxes occurred

 

before the board of commissioners adopted a resolution to reduce

 

the interest rate on the recovery of uncollected delinquent taxes.

 

Any amount that is due from a local taxing unit or this state for a

 

prior year's uncollected delinquent tax is a lien against any

 

future delinquent tax payments that may be payable to a local

 

taxing unit or this state and the lien shall be satisfied by

 

offsetting the amount due to the county from the local taxing unit

 

or this state when distributions from the delinquent tax revolving

 

fund are made by the county to the local taxing unit or this state

 

in a subsequent year. A resolution or agreement previously executed

 

or adopted to this effect is validated and confirmed. For

 

delinquent state education taxes under the state education tax act,

 

1993 PA 331, MCL 211.901 to 211.906, the county may offset

 

uncollectible delinquent taxes against collections of the state

 

education tax under the state education tax act, 1993 PA 331, MCL

 

211.901 to 211.906, received by the county and owed to this state

 

under this act. The fund shall be segregated into separate funds or

 

accounts for each year's delinquent taxes. A separate delinquent

 

tax revolving fund shall be created for each year's delinquent

 

taxes in any county that elects to borrow under section 87f. This

 

subsection does not restrict a foreclosing governmental unit from

 

selling or transferring property under section 78m or 78r.

 

     (2) If a delinquent tax revolving fund is established, the

county treasurer shall be the agent for the county, on behalf of

 

the taxing units in the county and this state, and, without further

 

action by the county board of commissioners, may enter into

 

contracts with other municipalities, this state, or private

 

persons, firms, or corporations in connection with any transaction

 

relating to the fund or any borrowing made by the county pursuant

 

to section 87c or 87d, including all services necessary to complete

 

this borrowing.

 

     (3) The county treasurer shall pay from the fund any or all

 

delinquent taxes that are due and payable to the county and any

 

school district, intermediate school district, community college

 

district, city, township, special assessment district, this state,

 

or any other political unit for which delinquent tax payments are

 

due within 20 days after sufficient funds are deposited within the

 

delinquent tax revolving fund or, if the county treasurer is

 

treasurer for a county with a population greater than 1,500,000

 

persons, within 30 days after sufficient funds are deposited within

 

the delinquent tax revolving fund. In a county with a delinquent

 

tax revolving fund where the county does not borrow pursuant to

 

section 87c or 87d, if the county treasurer does not make payment

 

of the delinquent taxes to the local units within 10 days after the

 

completion of county settlement with all local units under section

 

55, the county shall pay interest on the unpaid delinquent taxes

 

from the date of actual county settlement at the rate of 12% per

 

annum for the number of days involved.

 

     (4) Except as provided in subsection (5), the county treasurer

 

shall pay from the fund directly to a school district its share of

the fund when a single school district exists within a political

 

unit.

 

     (5) If a local taxing unit has borrowed money in anticipation

 

of collecting taxes for any school district or other municipality

 

and the county treasurer has been so notified in writing, the

 

county treasurer shall pay to the local taxing unit the shares of

 

the fund for that school district or municipality. For purposes of

 

this subsection, "local taxing unit" means a city, village, or

 

township.

 

     (6) The interest charges, penalties, and county property tax

 

administration fee rates established under this act shall remain in

 

effect and shall be payable to the county delinquent tax revolving

 

fund.

 

     (7) Any surplus in the fund may be transferred to the county

 

general fund by appropriate action of the county board of

 

commissioners.

 

     (8) A county board of commissioners may borrow money to create

 

a delinquent tax revolving fund as provided in section 87c or 87d,

 

or both.

 

     (9) This section shall not supersede section 87 but is an

 

alternative method for paying delinquent taxes to local units.

 

However, where this section is used by a county, section 87 shall

 

not be used.

 

     (10) Except for subsection (7), this section may be superseded

 

by section 87f, as provided in section 87f(1).

 

     Sec. 87f. (1) In any county that has created a delinquent tax

 

revolving fund under section 87b, the county board of commissioners

may, by resolution, elect to continue the delinquent tax revolving

 

fund under this section. Except for section 87b(7) and all of the

 

powers granted to a county treasurer by sections 87b and 87c, this

 

section supersedes sections 87b and 87c as to a delinquent tax

 

revolving fund continued under this section. A resolution passed

 

under this subsection shall authorize the county treasurer to do

 

the following:

 

     (a) Operate the delinquent tax revolving fund for delinquent

 

taxes returned for collection for the period during which

 

delinquent tax revenue notes secured by delinquent taxes pledged

 

from the delinquent tax revolving fund remain outstanding.

 

     (b) In that year, issue the county's delinquent tax revenue

 

notes pursuant to the revenue bond act of 1933, 1933 PA 94, MCL

 

141.103 to 141.140, in an amount that will not exceed the aggregate

 

amount of the following:

 

     (i) The delinquent taxes pledged to secure each borrowing.

 

     (ii) At the option of the county treasurer and to the extent

 

authorized under subsection (6), a note reserve fund in an amount

 

not to exceed 15% of each borrowing.

 

     (iii) The cost of issuance.

 

     (2) Upon the board of commissioners' passage of the resolution

 

under subsection (1), the delinquent tax revolving fund shall be

 

continued, and the fund may be designated by the county treasurer

 

as the "100% tax payment fund". Thereafter, all delinquent taxes,

 

except taxes on personal property, due and payable to the taxing

 

units in the county, except those units that collect their own

 

delinquent taxes after March 1 by charter or otherwise, are due and

payable to the county treasurer, on behalf of the taxing units in

 

the county and this state. Money and other property and assets held

 

in the delinquent tax revolving fund shall be kept separate from

 

and shall not be commingled with any other money, property, or

 

assets in the custody of the county treasurer. All money, property,

 

and assets acquired by the county treasurer, whether as revenues or

 

otherwise, shall be held by it in trust for the taxing units in the

 

county for which the taxes are levied. The county shall have no

 

right, title, or interest in the delinquent tax revolving fund

 

except for the right to payment provided for in sections 87b(7) and

 

87c(3), and under section 22a(2) of the revenue bond act of 1933,

 

1933 PA 94, MCL 141.122a. If the county determines to borrow

 

pursuant to section 87c or 87d, that borrowing shall be done on

 

behalf of the county and its taxing units and the primary

 

obligation to pay to the county treasurer the amount of taxes and

 

the interest on the taxes shall rest with the local taxing units

 

and this state for the state education tax under the state

 

education tax act, 1993 PA 331, MCL 211.901 to 211.906. If the

 

delinquent taxes that are due and payable to the county treasurer

 

on behalf of the taxing units in the county and this state are not

 

received by the county treasurer for any reason, the county

 

treasurer has full right of recourse against the taxing unit or to

 

this state for the state education tax under the state education

 

tax act, 1993 PA 331, MCL 211.901 to 211.906, to recover the amount

 

of the delinquent taxes and interest at the rate of 1% per month or

 

fraction of a month or a lower rate as established by resolution of

 

the board of commissioners until repaid to the county treasurer by

the taxing unit. However, if the county treasurer borrows to

 

provide funds for those payments, the interest rate shall not

 

exceed the highest interest rate paid on that borrowing. If the

 

board of commissioners reduces the interest rate on the recovery of

 

uncollected delinquent taxes as provided in this subsection, that

 

decrease shall not apply to any year's delinquent taxes when

 

borrowing against that year's delinquent taxes occurred before the

 

board of commissioners adopted a resolution to reduce the interest

 

rate on the recovery of uncollected delinquent taxes. Any amount

 

that is due from a local taxing unit or this state for a prior

 

year's uncollected delinquent tax is a lien against any future

 

delinquent tax payments that may be payable to a local taxing unit

 

or this state and the lien shall be satisfied by offsetting the

 

amount due to the county from the local taxing unit or this state

 

when distributions from the delinquent tax revolving fund are made

 

by the county treasurer to the local taxing unit or this state in a

 

subsequent year. A resolution or agreement previously executed or

 

adopted to this effect is validated and confirmed. For delinquent

 

state education taxes under the state education tax act, 1993 PA

 

331, MCL 211.901 to 211.906, the county may offset uncollectible

 

delinquent taxes against collections of the state education tax

 

under the state education tax act, 1993 PA 331, MCL 211.901 to

 

211.906, received by the county and owed to this state under this

 

act. The fund shall be segregated into separate funds or accounts

 

for each year's delinquent taxes.

 

     (3) The delinquent taxes returned to the county treasurer

 

shall remain the property of the local units of government and the

county treasurer shall solely serve as a collection agent for those

 

delinquent taxes, with a county treasurer or other foreclosing

 

governmental unit authorized to perform collection functions under

 

sections 78 to 78s.

 

     (4) All of the taxes, interest, fees, and charges required to

 

be collected by the county treasurer by this act related to

 

delinquent taxes shall remain in full force and effect in the event

 

this section applies.

 

     (5) Subject to the limitations of subsections (1) and (6), the

 

county treasurer shall have the power to borrow money and issue

 

delinquent tax revenue notes as permitted by the revenue bond act

 

of 1933, 1933 PA 94, MCL 141.101 to 141.140, for the purpose of

 

continuing the delinquent tax revolving fund. Delinquent tax

 

revenue notes issued pursuant to the revenue bond act of 1933, 1933

 

PA 94, MCL 141.101 to 141.140, shall be secured by a statutory lien

 

on the delinquent taxes from which the borrowing is to be repaid

 

and all other property and assets and any revenues derived from the

 

delinquent taxes and other property and assets that are held in the

 

delinquent tax revolving fund. The lien shall automatically attach

 

without further action or authorization by the county. The lien on

 

the delinquent taxes and all other property and assets that are

 

held in the delinquent tax revolving fund and any revenues derived

 

from those sources shall be valid and binding from the time the

 

notes are executed and delivered. The lien shall automatically

 

attach and be effective, binding, and enforceable against the

 

county, its successors, transferees, and creditors, and all others

 

asserting rights, regardless of whether those parties have notice

of the lien and without the need for any physical delivery,

 

recordation, filing, or further act. In addition, the amounts

 

collected that are subject to the lien shall be held in trust for

 

the owners of the notes authorized by this subsection. Any property

 

eligible to be conveyed and properly conveyed to a land bank fast

 

track authority as tax reverted property, as defined by section

 

3(q) of the land bank fast track act, 2003 PA 258, MCL 124.753, or

 

to this state or a person, city, village, township, or county

 

pursuant to section 78m or 78r of the general property tax act,

 

1893 PA 206, MCL 211.78m and 211.78r, shall be released from any

 

lien created under this section.

 

     (6) The resolution adopted pursuant to subsection (1)

 

authorizing the county treasurer to issue delinquent tax revenue

 

notes pursuant to the revenue bond act of 1933, 1933 PA 94, MCL

 

141.101 to 141.140, shall be approved by the county board of

 

commissioners and, in a charter or unified county, the chief

 

executive officer of the county in the manner authorized under the

 

charter or by law. The resolution shall also specify the following:

 

     (a) The existence of a note reserve, if any, to meet any

 

possible future deficiencies in the note and interest redemption

 

account created for a note.

 

     (b) The reasonable excess amount of the reserve authorized to

 

be created to secure the delinquent tax revenue notes and the

 

maximum size of the reserve, which shall not exceed 15% of the

 

principal amount of the notes to be issued.

 

     (c) The amount of any excess delinquent taxes, if any, that

 

may be set to fund or provide for a reserve for future deficiencies

in amounts available to repay the county's delinquent tax revenue

 

notes.

 

     (d) Any additional security under section 7b(5) or (6) of the

 

revenue bond act of 1933, 1933 PA 94, MCL 141.1076.141.107b.