SENATE BILL No. 1012

January 29, 2002, Introduced by Senators GOUGEON, MC MANUS and STILLE and referred

to the Committee on Finance.

A bill to amend 1893 PA 206, entitled

"The general property tax act,"

by amending section 34c (MCL 211.34c), as amended by 2000

PA 415.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1 Sec. 34c. (1) Not later than the first Monday in March in

2 each year, the assessor shall classify every item of assessable

3 property according to the definitions contained in this section.

4 Following the March board of review, the assessor shall tabulate

5 the total number of items and the valuations as approved by the

6 board of review for each classification and for the totals of

7 real and personal property in the local tax collecting unit. The

8 assessor shall transmit to the county equalization department and

9 to the state tax commission the tabulation of assessed valuations

10 and other statistical information the state tax commission

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1 considers necessary to meet the requirements of this act and 1911

2 PA 44, MCL 209.1 to 209.8.

3 (2) The classifications of assessable real property are

4 described as follows:

5 (a) Agricultural real property includes parcels used par-

6 tially or wholly for agricultural operations, with or without

7 buildings, and parcels assessed to the department of natural

8 resources and valued by the state tax commission. As used in

9 this subdivision, "agricultural operations" means the following:

10 (i) Farming in all its branches, including cultivating

11 soil.

12 (ii) Growing and harvesting any agricultural, horticultural,

13 or floricultural commodity.

14 (iii) Dairying.

15 (iv) Raising livestock, bees, fish, fur-bearing animals, or

16 poultry.

17 (v) Turf and tree farming. AS USED IN THIS SUBPARAGRAPH,

18 "TREE FARMING" INCLUDES THE MANAGEMENT AND HARVESTING OF A PARCEL

19 OF PROPERTY STOCKED WITH FOREST PRODUCTS IF THE PARCEL OF PROP-

20 ERTY ON WHICH THE FOREST PRODUCTS ARE LOCATED IS ENROLLED IN A

21 RECOGNIZED TREE FARM SYSTEM AND HAS A CERTIFIED MANAGEMENT PLAN

22 FOR HARVESTING AND PLANTING OF FOREST PRODUCTS.

23 (vi) Performing any practices on a farm incident to, or in

24 conjunction with, farming operations. A commercial storage, pro-

25 cessing, distribution, marketing, or shipping operation is not

26 part of agricultural operations.

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1 (b) Commercial real property includes the following:

2 (i) Platted or unplatted parcels used for commercial

3 purposes, whether wholesale, retail, or service, with or without

4 buildings.

5 (ii) Parcels used by fraternal societies.

6 (iii) Parcels used as golf courses, boat clubs, ski areas,

7 or apartment buildings with more than 4 units.

8 (c) Developmental real property includes parcels containing

9 more than 5 acres without buildings, or more than 15 acres with a

10 market value in excess of its value in use. Developmental real

11 property may include farm land or open space land adjacent to a

12 population center, or farm land subject to several competing val-

13 uation influences.

14 (d) Industrial real property includes the following:

15 (i) Platted or unplatted parcels used for manufacturing and

16 processing purposes, with or without buildings.

17 (ii) Parcels used for utilities sites for generating plants,

18 pumping stations, switches, substations, compressing stations,

19 warehouses, rights-of-way, flowage land, and storage areas.

20 (iii) Parcels used for removal or processing of gravel,

21 stone, or mineral ores, whether valued by the local assessor or

22 by the state geologist.

23 (e) Residential real property includes the following:

24 (i) Platted or unplatted parcels, with or without buildings,

25 and condominium apartments located within or outside a village or

26 city, which are used for, or probably will be used for,

27 residential purposes.

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1 (ii) Parcels that are used for, or probably will be used

2 for, recreational purposes, such as lake lots and hunting lands,

3 located in an area used predominantly for recreational purposes.

4 (f) Timber-cutover real property includes parcels that are

5 stocked with forest products of merchantable type and size, cut-

6 over forest land with little or no merchantable FOREST products

7 , and marsh lands or other barren land. However, when a typi-

8 cal purchase of this type of land is for residential or recrea-

9 tional uses, the classification shall be changed to residential.

10 (3) The classifications of assessable personal property are

11 described as follows:

12 (a) Agricultural personal property includes farm buildings

13 on leased land and any agricultural equipment and produce not

14 exempt by law.

15 (b) Commercial personal property includes the following:

16 (i) All equipment, furniture, and fixtures on commercial

17 parcels, and inventories not exempt by law.

18 (ii) Outdoor advertising signs and billboards.

19 (iii) Well drilling rigs and other equipment attached to a

20 transporting vehicle but not designed for operation while the

21 vehicle is moving on the highway.

22 (iv) Unlicensed commercial vehicles or commercial vehicles

23 licensed as special mobile equipment or by temporary permits.

24 (v) Commercial buildings on leased land.

25 (c) Industrial personal property includes the following:

26 (i) All machinery and equipment, furniture and fixtures, and

27 dies on industrial parcels, and inventories not exempt by law.

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1 (ii) Industrial buildings on leased land.

2 (iii) Personal property of mining companies valued by the

3 state geologist.

4 (d) Residential personal property includes a home, cottage,

5 or cabin on leased land, and a mobile home that would be asses-

6 sable as real property under section 2a except that the land on

7 which it is located is not assessable because the land is

8 exempt.

9 (e) Utility personal property includes the following:

10 (i) Electric transmission and distribution systems, substa-

11 tion equipment, spare parts, gas distribution systems, and water

12 transmission and distribution systems.

13 (ii) Oil wells and allied equipment such as tanks, gathering

14 lines, field pump units, and buildings.

15 (iii) Inventories not exempt by law.

16 (iv) Gas wells with allied equipment and gathering lines.

17 (v) Oil or gas field equipment stored in the open or in

18 warehouses such as drilling rigs, motors, pipes, and parts.

19 (vi) Gas storage equipment.

20 (vii) Transmission lines of gas or oil transporting

21 companies.

22 (viii) Utility buildings on leased land.

23 (4) For taxes levied before January 1, 2003, buildings on

24 leased land of any classification are improvements where the

25 owner of the improvement is not the owner of the land or fee, the

26 value of the land is not assessed to the owner of the building,

27 and the improvement has been assessed as personal property

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1 pursuant to section 14(6). For taxes levied after December 31,

2 2002, buildings located upon leased land, except buildings exempt

3 under section 9f, shall be assessed as real property under sec-

4 tion 2 and shall bear the same classification as the parcel upon

5 which the building is located. For taxes levied after December

6 31, 2001, buildings exempt under section 9f shall be assessed as

7 personal property.

8 (5) If the total usage of a parcel includes more than 1

9 classification, the assessor shall determine the classification

10 that most significantly influences the total valuation of the

11 parcel.

12 (6) An owner of any assessable property who disputes the

13 classification of that parcel shall notify the assessor and may

14 protest the assigned classification to the March board of

15 review. An owner or assessor may appeal the decision of the

16 March board of review by filing a petition with the state tax

17 commission not later than June 30 in that tax year. The state

18 tax commission shall arbitrate the petition based on the written

19 petition and the written recommendations of the assessor and the

20 state tax commission staff. An appeal may not be taken from the

21 decision of the state tax commission regarding classification

22 complaint petitions and the state tax commission's determination

23 is final and binding for the year of the petition.

24 (7) The department of treasury may appeal the classification

25 of any assessable property to the residential and small claims

26 division of the Michigan tax tribunal not later than December 31

27 in the tax year for which the classification is appealed.

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1 (8) This section shall not be construed to encourage the

2 assessment of property at other than the uniform percentage of

3 true cash value prescribed by this act.

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