Bill Text: MI SB1076 | 2021-2022 | 101st Legislature | Introduced
Bill Title: Property tax: tax tribunal; certain tribunal determinations in assessment disputes as to the valuation of property; require. Amends sec. 3 of 1973 PA 186 (MCL 205.703) & adds sec. 38.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2022-06-09 - Referred To Committee On Finance [SB1076 Detail]
Download: Michigan-2021-SB1076-Introduced.html
SENATE BILL NO. 1076
A bill to amend 1973 PA 186, entitled
"Tax tribunal act,"
by amending section 3 (MCL 205.703), as amended by 2008 PA 125, and by adding section 38.
the people of the state of michigan enact:
(a) "Agency" means a board, official, or administrative agency empowered to make a decision, finding, ruling, assessment, determination, or order that is subject to review under the jurisdiction of the tribunal or that has collected a tax for which a refund is claimed.
(b) "Chairperson" means the chairperson of the tribunal.
(c) "Entire tribunal" means the hearing division of the tribunal other than the residential property and small claims division created in section 61.
(d) (c) "Mediation" means a voluntary process in which a mediator facilitates communication between parties, assists in identifying issues, and helps explore solutions to promote a mutually acceptable settlement.
(e) (d) "Mediator" means a neutral third party who is certified by the tribunal under section 47 as a mediator in a proceeding before the tribunal or as a facilitator in the court of claims, and who is agreed to by the parties.
(f) (e) "Proceeding" means an appeal taken under this act.
(g) (f) "Property tax laws" does not include the drain code of 1956, 1956 PA 40, MCL 280.1 to 280.630.
(h) (g) "Tribunal" means the tax tribunal created under section 21.
Sec. 38. (1) Subject to subsection (2), in an assessment dispute before the entire tribunal as to the true cash value of real or personal property, the tribunal shall, in accordance with section 35a(2), make an independent determination of and separately state its findings of fact and conclusions of law as to all of the following, in the following order:
(a) The market in which the property subject to assessment competes, the supply and demand for the property, the demand for potential uses of the property, and the economic viability of the property at the specific location within the market in which it competes.
(b) The reasonably probable use to which the property subject to assessment can be put in the immediate future and the present use of the property that results in the highest and best use, subject to all of the following:
(i) The tribunal shall state its findings of fact and conclusions of law as to the uses that are physically possible.
(ii) The tribunal shall state its findings of fact and conclusions of law as to the uses that are legally permissible under applicable land use legislation, regulations, easements, ordinances, or other encumbrances existing on the tax day.
(iii) The tribunal shall state its findings of fact and conclusions of law as to the uses that are financially feasible. For purposes of this subparagraph, a use is financially feasible if it will produce income from or value to the property after considering all risks and costs necessary to create and maintain the use. In determining financial feasibility, the tribunal shall determine the value of the land in the market area, the value of all improvements to the land, the cost to convert or renovate the land, and existing improvements to support the use.
(iv) The tribunal shall state its findings of fact and conclusions of law as to the maximally productive use that meets the requirements of subparagraphs (i) to (iii) and results in the highest value that can be appropriately supported.
(c) The calculation of a replacement or reproduction construction cost for property that has the same highest and best use and the same utility, features, and age as the property subject to assessment.
(d) The comparable properties in the market in which the property subject to assessment competes that have the same highest and best use as the property subject to assessment. In determining comparable properties, the tribunal shall do all of the following:
(i) Determine that the information for each property considered to be comparable has been verified and accurately and completely discloses all private restrictions and covenants on the use of the property, the impact of those private restrictions and covenants, the terms of the sale, the method of financing, and market information.
(ii) Include only property considered to be comparable with a use that is the same as the highest and best use of the property subject to assessment in accordance with subdivision (b).
(iii) Include property considered to be comparable only if the sale or rental of the property occurred under economic conditions that were not substantially different from the highest and best use of the property subject to assessment unless there is substantial evidence that the economic conditions are common at the location of the property subject to assessment.
(iv) Include property considered to be comparable that was vacant at the time of sale only if there is substantial evidence to support all of the following:
(A) The cause of the vacancy is typical for marketing properties of the same class or there is substantial evidence to support a method of adjusting the value of the vacant comparable property, to support the extent of the adjustment, and to support a conclusion that the final adjusted value for the vacant property is not speculative.
(B) The time of the vacancy is within the marketing exposure time period typical for properties of the same class or there is substantial evidence to support a method of adjusting the value of the vacant comparable property, to support the extent of the adjustment, and to support a conclusion that the final adjusted value for the vacant property is not speculative.
(C) The vacancy does not reflect a use different from the highest and best use of the property subject to assessment.
(D) The vacancy is not the result of economic or market conditions that are different from the property subject to assessment or there is substantial evidence to support a method of adjusting the value of the vacant comparable property, to support the extent of the adjustment, and to support a conclusion that the final adjusted value for the vacant property is not speculative.
(v) Exclude property considered to be comparable that was made subject to a private restriction or covenant in connection with the sale or rental of the property if that private restriction or covenant causes the comparable property to have a substantially impaired highest and best use as compared to the property subject to assessment or if that private restriction or covenant does not assist in the economic development of the property, does not provide a continuing benefit to the property, or materially increases the likelihood of vacancy or inactivity on the property.
(e) The basis for all of the following:
(i) Selecting the most relevant units and basis for comparison consistent with the treatment in the market of comparable property.
(ii) Adjusting the comparable properties for differences in location, age, size, physical condition and characteristics, function, rental terms, financing and other income use, economic characteristics, legal characteristics, and other components that influence the value.
(iii) Excluding any comparable property pursuant to subdivision (d).
(f) The method of valuation, subject to all of the following:
(i) In determining the method of valuation, the tribunal shall use, weigh, and reconcile all of the following:
(A) The method of valuation used by the assessor.
(B) All of the following methods of valuation:
(I) Comparable sales.
(II) Capitalization of income.
(III) Cost less depreciation.
(ii) In using, weighing, and reconciling the methods of valuation under subparagraph (i), the tribunal shall state whether the information supporting each method of valuation is accurate and reliable and shall, as it considers necessary, require additional information from the parties to determine a value that is credible and not speculative.
(iii) The tribunal shall not disregard any method of valuation identified in subparagraph (i) absent a reasonable justification supported by substantial evidence or a stipulation that complies with the requirements of subsection (2)(a).
(2) The tribunal's determinations under subsection (1) are subject to all of the following:
(a) The tribunal may consider the parties' stipulation to a finding of fact or conclusion of law under subsection (1) only if the parties further provide a stipulated explanation of the evidentiary basis for that finding of fact or conclusion of law that comports with the evidentiary basis required for an independent tribunal determination under subsection (1).
(b) For each finding of fact under subsection (1), the tribunal shall separately identify supporting evidence that is substantial and reliable and has been verified.
(c) If the evidence on the record does not constitute substantial evidence, the tribunal shall require additional evidence from the parties sufficient to support a conclusion that the tribunal has reached an independent determination.
(d) All of the tribunal's determinations under subsection (1) must be made in accordance with generally accepted appraisal principles, including the "Uniform Standards of Professional Appraisal Practice" promulgated by the Appraisal Foundation.
(3) As used in this section:
(a) "Private restriction or covenant" means a requirement, provision, or statement in a deed, lease, or contract that restrains or limits the use of the property or requires a use of the property.
(b) "Tax day" means that term as provided in section 2 of the general property tax act, 1893 PA 206, MCL 211.2.
(c) "True cash value" means that term as defined in section 27 of the general property tax act, 1893 PA 206, MCL 211.27.
