Bill Text: MI SB1034 | 2017-2018 | 99th Legislature | Introduced
Bill Title: Property tax; exemptions; exemption for qualified forest property; modify. Amends sec. 7jj of 1893 PA 206 (MCL 211.7jj[1]).
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2018-12-31 - Assigned Pa 672'18 12/31/18 Addenda [SB1034 Detail]
Download: Michigan-2017-SB1034-Introduced.html
SENATE BILL No. 1034
May 29, 2018, Introduced by Senator BOOHER and referred to the Committee on Natural Resources.
A bill to amend 1893 PA 206, entitled
"The general property tax act,"
by amending section 7jj (MCL 211.7jj[1]), as amended by 2018 PA
117.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 7jj. (1) Except as otherwise limited in this subsection,
qualified forest property is exempt from the tax levied by a local
school district for school operating purposes to the extent
provided under section 1211 of the revised school code, 1976 PA
451, MCL 380.1211, according to the provisions of this section.
Buildings, structures, or land improvements located on qualified
forest property are not eligible for the exemption under this
section. The amount of qualified forest property in this state that
is eligible for the exemption under this section is limited as
follows:
(a) In the fiscal year ending September 30, 2008, 300,000
acres.
(b) In the fiscal year ending September 30, 2009, 600,000
acres.
(c) In the fiscal year ending September 30, 2010, 900,000
acres.
(d) In the fiscal year ending September 30, 2011 and each
fiscal year thereafter through the fiscal year ending September 30,
2018, 1,200,000 acres.
(e) In the fiscal year ending September 30, 2019 and each
fiscal year thereafter, 2,500,000 acres. Beginning in the fiscal
year ending September 30, 2013 and each fiscal year thereafter,
real property eligible for exemption under this section as
qualified forest property as a result of the withdrawal of that
property from the operation of part 511 of the natural resources
and environmental protection act, 1994 PA 451, MCL 324.51101 to
324.51120, as provided in section 51108(5) of the natural resources
and environmental protection act, 1994 PA 451, MCL 324.51108, or as
a result of the property's eligibility for exempt status under this
section as provided for in section 8(2) of the transitional
qualified forest property specific tax act, 2016 PA 260, MCL
211.1098,
shall not be credited against the 1,200,000 number of
acres of property that are eligible for exemption as qualified
forest
property under this section.subdivision
(d) or this
subdivision, as applicable.
(2) If a property owner is interested in obtaining an
exemption for qualified forest property under this section, the
property owner may contact the local conservation district or the
department, and the local conservation district or the department
shall advise the property owner on the exemption process. If
requested by the property owner, the local conservation district or
the department shall provide the property owner with a list of
qualified foresters to prepare a forest management plan. The
department shall maintain a list of qualified foresters throughout
the state and shall make the list available to the conservation
districts and to interested property owners. To claim an exemption
under subsection (1), a property owner shall obtain a forest
management plan from a qualified forester and submit a digital copy
of that forest management plan, an application for exemption as
qualified forest property, and a fee of $50.00 to the department on
a form created by the department by September 1 prior to the tax
year in which the exemption is requested. Before submitting the
application to the department, the property owner is encouraged to
consult with the local conservation district to review the
obligations of the qualified forest program and the obligations of
the property owner's forest management plan. A forest management
plan is not subject to the freedom of information act, 1976 PA 442,
MCL 15.231 to 15.246. The department shall forward a copy of the
application to the local conservation district for review and to
the local tax collecting unit for notification of the application.
(3) A conservation district shall review the application to
determine if the applied-for property meets the minimum
requirements set forth in subsection (17)(k) for enrolling into the
qualified forest program. A conservation district shall respond
within 45 days after the date of its receipt of the application
indicating whether the property in the application is eligible for
enrollment. If the conservation district does not respond within 45
days after its receipt of the application, the property shall be
considered eligible for the exemption under this section.
(4) The department shall review the application, comments from
the conservation district, and the forest management plan to
determine if the property is eligible for the exemption under this
section. The department shall review the forest management plan to
determine if the elements required in subsection (17)(f) are in the
plan. Within 90 days of its receipt of the application, forest
management plan, and fee, the department shall review the
application and if the application and supporting documents are not
in compliance, the department shall deny the application and notify
the property owner of that denial. If the application and
supporting documents are in compliance with the requirements of
this section, the department shall approve the application and
shall prepare a qualified forest school tax affidavit, in
recordable
form, indicating all of the following:information
described in subdivisions (a) to (f). If the application and
supporting documents that are in compliance with this section and
approved by the department extend to multiple parcels owned by the
same person and located in the same local tax collecting unit, the
department may include the following information, required for each
parcel in recordable form, in a single qualified forest school tax
affidavit:
(a) The name of the property owner.
(b) The tax parcel identification number of the property.
(c) The legal description of the property.
(d) The year the application was submitted for the exemption.
(e) A statement that the property owner is attesting that the
property for which the exemption is claimed is qualified forest
property and will be managed according to the approved forest
management plan.
(f) A statement indicating that the property owner holds the
timber rights for the property for which the exemption is claimed.
(5) The department shall send a qualified forest school tax
affidavit prepared under subsection (4) to the property owner for
execution. The 90-day review period by the department may be
extended upon request of the property owner. The property owner
shall execute the qualified forest school tax affidavit and shall
have the executed qualified forest school tax affidavit recorded by
the register of deeds in the county in which the property is
located. The property owner shall provide a copy of the qualified
forest school tax affidavit to the department. The department shall
provide
1 copy of the a
spreadsheet listing all parcels for which
it has received a qualified forest school tax affidavit to the
conservation
district and 1 copy to the department of treasury.
These
copies spreadsheets may be sent electronically.
(6) If the application is denied, the property owner has 30
days from the date of notification of the denial by the department
to initiate an appeal of that denial. An appeal of the denial shall
be by certified letter to the director of the department.
(7) To claim an exemption under subsection (1), the owner of
qualified forest property shall provide a copy of the recorded
qualified forest school tax affidavit attesting that the land is
qualified forest property to the local tax collecting unit and
assessor by December 31. An owner may claim an exemption under this
section for not more than 640 acres or the equivalent of 16 survey
units consisting of 1/4 of 1/4 of a section of qualified forest
property in each local tax collecting unit. If an exemption is
granted under this section for less than 640 acres in a local tax
collecting unit, an owner of that property may subsequently claim
an exemption for additional property in that local tax collecting
unit if that additional property meets the requirements of this
section.
(8) If a copy of the recorded qualified forest school tax
affidavit is provided to the assessor by the owner, the assessor
shall exempt the property from the collection of the tax as
provided in subsection (1) until December 31 of the year in which
the property is no longer qualified forest property.
(9) Beginning in the year that qualified forest property is
first exempt under this section and each year thereafter, the local
tax collecting unit shall collect a fee on each parcel of qualified
forest property exempt under this section located in that local tax
collecting unit. The fee shall be determined by multiplying 2 mills
by the taxable value of that qualified forest property. The fee
shall be collected on the summer tax bill or, if the local tax
collecting unit does not collect summer taxes, on the winter tax
bill at the same time and in the same manner as taxes collected
under this act. Each local tax collecting unit shall disburse the
fee collected under this subsection to the department of treasury
for deposit in the private forestland enhancement fund created in
section 51305 of the natural resources and environmental protection
act, 1994 PA 451, MCL 324.51305. If property is no longer exempt as
qualified forest property under this section, the fee under this
subsection shall not be collected on that property. The fee
collected in this subsection shall be subject to the property tax
administration fee established by the local tax collecting unit
under section 44.
(10) Not more than 90 days after all or a portion of the
exempted property is no longer qualified forest property, the owner
shall
rescind the exemption for the applicable portion of the
property
by filing notify the
department that all or a portion of
the property is no longer qualified forest property. The department
shall notify the county treasurer that a request has been made to
remove the exemption for the applicable portion of the property and
to calculate any recapture tax required under the qualified forest
property recapture tax act, 2006 PA 379, MCL 211.1031 to 211.1036.
The county treasurer shall bill the landowner for any recapture tax
required under the qualified forest property recapture tax act,
2006 PA 379, MCL 211.1031 to 211.1036. When, as provided in section
5 of the qualified forest property recapture tax act, 2006 PA 379,
MCL 211.1035, the proceeds of the recapture tax are deposited into
the private forestland enhancement fund created in section 51305 of
the natural resources and environmental protection act, 1994 PA
451, MCL 324.51305, the department shall prepare a rescission form
for the applicable portion of the property that is no longer
qualified forest property and shall file the rescission form with
the register of deeds for the county in which the exempted property
is
located. a rescission form prescribed by the department. A
copy
of the rescission form shall be provided to the assessor by the
department. The rescission form shall include a legal description
of
the exempted property. An owner who fails to file a rescission
form
as required by this subsection is subject to a penalty of
$5.00
per day for each separate failure beginning after the 90 days
have
elapsed, up to a maximum of $1,000.00. This penalty shall be
collected
under 1941 PA 122, MCL 205.1 to 205.31, and shall be
deposited
in the private forestland enhancement fund created in
section
51305 of the natural resources and environmental protection
act,
1994 PA 451, MCL 324.51305.If
an owner fails to notify the
department that all or a portion of the property is no longer
qualified forest property as required by this subsection, that
owner is subject to a penalty of $5.00 per day for each separate
failure beginning the day immediately after the 90 days have
elapsed, up to a maximum of $1,000.00. This penalty shall be
collected under 1941 PA 122, MCL 205.1 to 205.31, and shall be
deposited in the private forestland enhancement fund created in
section 51305 of the natural resources and environmental protection
act, 1994 PA 451, MCL 324.51305.
(11) An owner of property that is qualified forest property on
December 31 for which an exemption was not on the tax roll may file
an appeal with the July or December board of review under section
53b in the year the exemption was claimed or the immediately
succeeding year.
(12) If property for which an exemption has been granted under
this section is not qualified forest property, the department shall
notify the local tax collecting unit and the property that had been
subject to that exemption shall be immediately placed on the tax
roll by the local tax collecting unit if the local tax collecting
unit has possession of the tax roll or by the county treasurer if
the county has possession of the tax roll as though the exemption
had not been granted. A corrected tax bill shall be issued for each
tax year being adjusted by the local tax collecting unit if the
local tax collecting unit has possession of the tax roll or by the
county treasurer if the county has possession of the tax roll.
(13) If all or a portion of property for which an exemption
has been granted under this section is converted by a change in use
and
is no longer qualified forest property, an owner or if an owner
of qualified forest property does not wish to keep all or a portion
of the property enrolled in the qualified forest program, the owner
of the property converted by a change in use or to be withdrawn
from
the qualified forest program shall immediately
notify the
local
tax collecting unit, the assessor, the department , and the
department
of treasury as provided for
in subsection (10) on a form
created by the department. The form shall include a legal
description of the exempted property. A copy of the form shall be
filed with the register of deeds for the county in which the
exempted property is located. Upon notice that property is no
longer qualified forest property, the local tax collecting unit and
assessor shall immediately rescind the exemption under this section
and shall place the property on the tax roll as though the
exemption under this section had not been granted for the
immediately succeeding tax year and the department of treasury
shall immediately begin collection of any applicable tax and
penalty under this act or under the qualified forest property
recapture
tax act, 2006 PA 379, MCL 211.1031 to 211.1036. However,
beginning
June 1, 2013 and ending November 30, 2013, owners of
property
exempt as qualified forest property prior to January 1,
2013
may execute a new qualified forest school tax affidavit under
this
section. If an owner of property exempt as qualified forest
property
elects to execute a new qualified forest school tax
affidavit
under this section, that owner is not required to pay the
$50.00
fee required under subsection (2). If an owner of qualified
forest
property elects not to execute a new qualified forest school
tax
affidavit under this section, the existing affidavit shall be
rescinded
without penalty and the property shall be placed on the
tax
roll as though the exemption under this section had not been
granted.
If a property owner elects not to execute a qualified
forest
school tax affidavit under this section, the property is not
subject
to the recapture tax provided for under the qualified
forest
property recapture tax act, 2006 PA 379, MCL 211.1031 to
211.1036.
(14) If qualified forest property is exempt under this
section, an owner of that qualified forest property shall report to
the department on a form prescribed by the department when a forest
practice or timber harvest has occurred on the qualified forest
property during a calendar year. The report shall indicate the
forest practice completed and the volume and value of timber
harvested on that qualified forest property. One copy of the form
shall be forwarded to the conservation district, and 1 copy shall
be retained by the department for 7 years. If it is determined by
the department that a forest practice or harvest has occurred in a
calendar year and no report was filed, a fine of $500.00 may be
collected by the department. Beginning December 31, 2013 and each
year thereafter, the department shall provide to the standing
committees of the senate and house of representatives with primary
jurisdiction over forestry issues a report that includes all of the
following:
(a) The number of acres of qualified forest property in each
county.
(b) The number of acres of agricultural use property that is
combined with productive forest under subsection (17)(k)(iii).
(c) The amount of timber produced on qualified forest property
each year.
(d) The number of forest management plans completed by
conservation districts and the total number of forest management
plans submitted for approval each year.
(15) While qualified forest property is exempt under this
section, the owner shall retain the current management plan, most
recent harvest records, recorded copy of a receipt of the tax
exemption, and a map that shows the location and size of any
buildings and structures on the property. The owner shall make the
documents available to the department upon request. The department
shall maintain a database listing all qualified forest properties,
including the dates indicated for forest practices and harvests in
the forest management plan, and shall notify the property owner and
the conservation district in any year that forest practices or
harvests are to occur. If an owner does not accomplish forest
practices and harvests within 3 years after the time specified in
the current forest management plan and the plan has not been
amended to extend the date of forest practices and harvests, the
property is not eligible for the exemption under this section, the
department shall notify the local tax collecting unit that the
property is not eligible for the exemption under this section, and
the property shall be placed on the tax roll as though the
exemption under this section had not been granted as provided in
this section and shall be subject to repayment as indicated in the
qualified forest property recapture tax act, 2006 PA 379, MCL
211.1031 to 211.1036. Information in the database specific to an
individual property owner's forest management plan is exempt from
disclosure under the freedom of information act, 1976 PA 442, MCL
15.231 to 15.246. However, information in the database in the
aggregate, including, but not limited to, how much timber would be
expected to be on the market each year as a result of enrollees, is
not exempt from disclosure under the freedom of information act,
1976 PA 442, MCL 15.231 to 15.246.
(16) Notwithstanding any provision in this section to the
contrary, property is exempt from the tax levied by a local school
district for school operating purposes as provided in subsection
(1) if all of the following conditions are met:
(a) The property was subject to the transitional qualified
forest property specific tax under the transitional qualified
forest property specific tax act, 2016 PA 260, MCL 211.1091 to
211.1101, for a period of 5 years as determined by the department
under section 8 of the transitional qualified forest property
specific tax act, 2016 PA 260, MCL 211.1098.
(b) Pursuant to section 8 of the transitional qualified forest
property specific tax act, 2016 PA 260, MCL 211.1098, the
department has determined that the property is still eligible for
the exemption under this section.
(c) The property owner, with the department's assistance,
executes a recordable qualified forest school tax affidavit, has
the executed qualified forest school tax affidavit recorded by the
register of deeds in the county in which the property is located,
and provides copies of the executed qualified forest school tax
affidavit to other interested parties as required by the
department.
(17) As used in this section:
(a) "Agricultural use property" means real property devoted
primarily to agricultural use as that term is defined in section
36101 of the natural resources and environmental protection act,
1994 PA 451, MCL 324.36101.
(b) "Approved forest management plan" means a forest
management plan developed by a qualified forester. An owner of
property shall submit a forest management plan to the department
for approval as prescribed in subsection (2). The forest management
plan shall include a statement signed by the owner that he or she
agrees to comply with all terms and conditions contained in the
approved forest management plan. If a forest management plan and
application are submitted to the department, the department shall
review and either approve or disapprove the owner's application
within 90 days after submission. Approval of the plan shall be
based solely on compliance with the elements required in
subdivision (f). Denial of the plan shall be based solely on
noncompliance with the requirements listed in subdivision (f). If
the department disapproves a forest management plan, the department
shall indicate the changes necessary to qualify the forest
management plan for approval on subsequent review. An owner may
submit amendments to his or her forestry plan to the department.
The department may reject amendments that delay a harvest date
repeatedly or indefinitely. A forest management plan submitted for
approval shall be for a maximum of 20 years. To continue receiving
an exemption under this section, an owner of property shall submit
a digital copy of any succeeding proposed forest management plan to
the department for approval together with a fee of $50.00. The
first amendment to the plan is not subject to a fee. Additional
amendments may be subject to a fee of $50.00.
(c) "Conservation district" means a conservation district
organized under part 93 of the natural resources and environmental
protection act, 1994 PA 451, MCL 324.9301 to 324.9313.
(d) "Converted by a change in use" means both of the
following:
(i) That term as defined in section 2 of the qualified forest
property recapture tax act, 2006 PA 379, MCL 211.1032.
(ii) That due to a change in use of either productive forest
property or agricultural use property, the property is no longer
eligible for exemption as qualified forest property under
subdivision (k)(iii).
(e) "Department" means the department of agriculture and rural
development.
(f) "Forest management plan" means a written plan prepared and
signed by a qualified forester that prescribes measures to optimize
production,
utilization, and regeneration,
and harvest of forest
resources.
timber. The forest management plan shall include a
schedule and timetables for the various silvicultural practices
used on forestlands, which shall be a maximum of 20 years in
length. A forest management plan shall include all of the
following:
(i) The name and address of each owner of the property.
(ii) The legal description and parcel identification number of
the property or of the parcel on which the property is located.
(iii) A statement of the owner's forest management objectives.
(iv) A map, diagram, or aerial photograph that identifies both
forested and unforested areas of the property, using conventional
map symbols indicating the species, size, and stocking rate and
other major features of the property, including the location of any
buildings. The location and use of any buildings may be established
on a map created by a qualified forester and does not require a
survey by a registered surveyor.
(v) A description of all stands or management units, including
basal
area for forested stands, and forest practice,
practices,
including harvesting, thinning, and reforestation, that will be
undertaken, specifying the approximate period of time before each
is completed.
(vi) A description of soil conservation practices that may be
necessary to control any soil erosion that may result from the
forest practice described pursuant to subparagraph (v).
(vii) A description of activities that may be undertaken for
the management of forest resources other than trees, including
wildlife habitat, watersheds, and aesthetic features.
(g) "Forest practice" means any action intended to improve
forestland or forest resources and includes, but is not limited to,
any of the following:
(i) The improvement of species of forest trees.
(ii) Reforestation.
(iii) The harvesting of species of forest trees.
(iv) Road construction associated with the improvement or
harvesting of forest tree species or reforestation.
(v) Use of chemicals or fertilizers for the purpose of growing
or managing species of forest trees.
(vi) Applicable silvicultural practices.
(h) "Forest products" includes, but is not limited to, timber
and pulpwood-related products.
(i) "Harvest" means the point at which timber that has been
cut, severed, or removed for purposes of sale or use is first
measured in the ordinary course of business as determined by
reference to common practice in the timber industry.
(j)
"Productive Subject
to subparagraph (v), "productive
forest" means real property capable of growing not less than 20
cubic
feet of wood per acre per year. However, if The term includes
real property on which there is a tree density that meets at least
one of subparagraphs (i) to (iv), as follows:
(i) At least 200 seedlings per acre with a diameter of at
least 1 inch measured by caliper at the root crown. A clear cut
that is adequately producing the desired species through natural
regeneration is not subject to the 1-inch requirement of this
subparagraph.
(ii) At least 100 saplings per acre 2 to 5 inches in diameter
measured 4.5 feet from level ground.
(iii) At least 3 cords per acre of either of the following
types of poletimber:
(A) Conifer species 5 to 9 inches in diameter measured 4.5
feet from level ground.
(B) All other species 5 to 11 inches in diameter measured 4.5
feet from level ground.
(iv) At least 1,300 board feet per acre of either of the
following types of sawtimber:
(A) Conifer species at least 9 inches in diameter measured 4.5
feet from level ground.
(B) All other species at least 11 inches in diameter measured
4.5 feet from level ground.
(v) If property has been considered productive forest, an act
of God that negatively affects that property shall not result in
that property not being considered productive forest.
(k) "Qualified forest property" means a parcel of real
property that meets all of the following conditions as determined
by
the department: of agriculture and rural development:
(i) Is not less than 20 10 contiguous
acres in size. For
parcels less than 40 acres, not less than 80% shall be stocked with
productive
forest timberland capable of producing forest products.
For parcels 40 acres or more, not less than 50% shall be stocked
with
productive forest timberland
capable of producing forest
products. These stocking density requirements apply on a per-parcel
basis only and cannot be met on a basis that averages stocking
density across multiple parcels. Contiguity is not broken by a
road, a right-of-way, or property purchased or taken under
condemnation proceedings by a public utility for power transmission
lines if the 2 parcels separated by the purchased or condemned
property were a single parcel prior to the sale or condemnation.
(ii) Is subject to an approved forest management plan.
(iii) If a parcel contains both productive forest and
agricultural use property, the combined acreage of the productive
forest and the agricultural use property meets all of the following
requirements:
(A) The parcel is not less than 20 contiguous acres. If a
parcel is less than 40 acres, not less than 80% shall be the
combined productive forest and agricultural use property. If the
parcel is 40 acres or more, not less than 50% shall be the combined
productive forest and agricultural use property.
(B) The acreage of agricultural use property on the parcel
shall be determined by the assessor in the local tax collecting
unit in which the parcel is located. The property owner shall
request the determination. The assessor shall report the acreage of
the agricultural use property in a form prescribed by the state tax
commission to the property owner and the department within 30 days
after the date of the request for the determination. An owner that
disagrees with an assessor's determination of the acreage of
agricultural use property on the parcel may appeal that
determination to the board of review under section 53b. If the
property owner converts all or part of the agricultural use
property to forest property by planting trees or other means, the
property owner shall notify the department and the assessor of the
conversion and the forest management plan shall be modified to
reflect the change in use.
(l) "Qualified forester" means an individual who meets 1 or
more of the following requirements and has registered with the
department of agriculture and rural development under section 51306
of the natural resources and environmental protection act, 1994 PA
451, MCL 324.51306:
(i) Is a forester certified by the Society of American
Foresters.
(ii) Is a forest stewardship plan writer.
(iii) Is a technical service provider as registered by the
United States Department of Agriculture for forest management plan
development.
(iv) Is a registered forester.
(v) Is a member of the Association of Consulting Foresters.
(m) "Registered forester" means an individual registered under
part 535 of the natural resources and environmental protection act,
1994 PA 451, MCL 324.53501 to 324.53519.
