HB-6162, As Passed House, September 25, 2008

SUBSTITUTE FOR

HOUSE BILL NO. 6162

A bill to amend 1893 PA 206, entitled

"The general property tax act,"

by amending section 7u (MCL 211.7u), as amended by 2003 PA 140.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 7u. (1) The principal residence of ~~persons~~ a qualified

taxpayer who, ~~in the judgment of the supervisor and board of~~

~~review,~~ by reason of poverty, ~~are~~ is unable to contribute toward

the public charges is eligible for exemption ~~in whole or in part~~

from ~~taxation~~ the collection of taxes under this act as provided in

this section. Factors used to determine eligibility for an

exemption under this section shall include, but are not limited to,

the specific income and asset levels of the person claiming an

exemption under this section and total household income and assets,

as set forth in this section. This section does not apply to the

property of a corporation.

~~(2) To be eligible for exemption under this section, a person~~

~~shall do all of the following on an annual basis:~~

~~(a) Be an owner of and occupy as a principal residence the~~

~~property for which an exemption is requested.~~

~~(b) File a claim with the supervisor or board of review on a~~

~~form provided by the local assessing unit, accompanied by federal~~

~~and state income tax returns for all persons residing in the~~

~~principal residence, including any property tax credit returns,~~

~~filed in the immediately preceding year or in the current year. The~~

~~filing of a claim under this subsection constitutes an appearance~~

~~before the board of review for the purpose of preserving the~~

~~claimant's right to appeal the decision of the board of review~~

~~regarding the claim.~~

~~(c) Produce a valid driver's license or other form of~~

~~identification if requested by the supervisor or board of review.~~

~~(d) Produce a deed, land contract, or other evidence of~~

~~ownership of the property for which an exemption is requested if~~

~~required by the supervisor or board of review.~~

~~(e) Meet the federal poverty guidelines updated annually in~~

~~the federal register by the~~ ~~United States~~ ~~department of health and~~

~~human services under authority of section 673 of subtitle B of~~

~~title VI of the omnibus budget reconciliation act of 1981, Public~~

~~Law 97-35, 42 U.S.C. 9902, or alternative guidelines adopted by the~~

~~governing body of the local assessing unit provided the alternative~~

House Bill No. 6162 (H-1) as amended September 25, 2008

~~guidelines do not provide income eligibility requirements less than~~

~~the federal guidelines.~~

(2) The application and renewal affidavit for an exemption

under this section shall be in a form prescribed by the department

of treasury. The department of treasury shall design the

application and renewal affidavit to ensure uniformity, clarity,

simplicity, and ease of use by applicants.

(3) The application for an exemption under this section shall

be filed after January 1 but before the day prior to the last day

of ~~the~~ any board of review held under this act. If a qualified

taxpayer is granted an exemption under this section for a tax year,

that qualified taxpayer may submit a renewal affidavit to claim an

exemption in the immediately succeeding tax year.

(4) ~~The governing body of the local assessing unit shall~~

~~determine and make available to the public the policy and~~

~~guidelines the local assessing unit uses for the granting of~~

~~exemptions under this section. The guidelines shall include but not~~

~~be limited to the specific income and asset levels of the claimant~~

~~and total household income and assets.~~ If a qualified taxpayer is

eligible for an exemption under this section, the board of review [and

supervisor]

shall grant the exemption for the tax year in which the application

is filed and may grant the exemption for the 2 immediately

preceding tax years if the qualified taxpayer would have been

eligible for an exemption under this section if the qualified

taxpayer had claimed an exemption under this section. If a person

claiming an exemption under this section is not eligible for an

exemption under this section, the board of review may grant the

House Bill No. 6162 (H-1) as amended September 25, 2008

exemption for the 2 immediately preceding tax years if the person

claiming the exemption would have been eligible for an exemption

under this section if the person had claimed an exemption under

this section. If the board of review [and supervisor] grants the

exemption for the 2

immediately preceding tax years, any exempted and unpaid taxes,

interest, penalties, and fees for the 2 immediately preceding tax

years for which the exemption is granted shall be extinguished. Any

taxes paid in the 2 immediately preceding tax years shall be

refunded to the taxpayer 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

within 30 days of the date the exemption is granted. The refund

shall be without interest. The board of review shall report the

exemption and the refund to the department of treasury in a form

prescribed by the department of treasury.

(5) ~~The board of review shall follow the policy and guidelines~~

~~of the local assessing unit in granting or denying an exemption~~

~~under this section unless the board of review determines there are~~

~~substantial and compelling reasons why there should be a deviation~~

~~from the policy and guidelines and the substantial and compelling~~

~~reasons are communicated in writing to the claimant.~~ If the person

claiming the exemption under this section meets the applicable

household income requirement set forth in subsection (9)(b)(v) and

satisfies the asset level established under subsection (9)(b)(vi),

if any, the board of review [and supervisor] shall exempt a percentage of

the

taxable value of that person's principal residence as determined by

the board of review [and supervisor].

House Bill No. 6162 (H-1) as amended September 25, 2008

(6) ~~A person who files a claim under this section is not~~

~~prohibited from also appealing the assessment on the property for~~

~~which that claim is made before the board of review in the same~~

~~year.~~ The governing body of the local tax collecting unit shall

make available to the public the eligibility requirements for the

exemption under this section and application forms and renewal

affidavits. If a qualified taxpayer is granted an exemption under

this section for a tax year, the local tax collecting unit shall

mail a renewal affidavit to that qualified taxpayer in the

immediately succeeding tax year. The local tax collecting unit

shall publish notice of the availability of, and the eligibility

requirements for, the exemption under this section in a newspaper

of general circulation within the local tax collecting unit.

(7) ~~As used in this section, "principal residence" means~~

~~principal residence or qualified agricultural property as those~~

~~terms are defined in section 7dd.~~ The board of review [and supervisor]

may deny an

exemption under this section for 1 or more of the following

reasons:

(a) The board of review [and supervisor] determines that the person

claiming

the exemption is not a qualified taxpayer.

(b) The board of review [and supervisor] determines that the claim

for

exemption is based on fraud. If the board of review [and supervisor]

determines that

the claim for exemption is based on fraud, the person claiming the

exemption is subject to the penalties set forth in section 27 of

1941 PA 122, MCL 205.27.

qualified taxpayer

claiming the exemption under this section has no interest in the

House Bill No. 6162 (H-1) as amended September 25, 2008

property for which an exemption is claimed and the claim for

exemption is an attempt to avoid the collection of taxes under this

act.

(d) The board of review [and supervisor] determines that a person

who does not

occupy the property holds an ownership interest in the property and

that person does not satisfy the applicable household income

requirement set forth in subsection (9)(b)(v) or does not satisfy

the asset level established under subsection (9)(b)(vi), if any,

unless the person claiming the exemption can demonstrate to the

satisfaction of the board of review [and supervisor] that he or she does

not receive

any support from that person.

(e) The board of review [and supervisor] determines that there are

substantial

and compelling reasons why there should be a deviation from the

applicable household income requirement set forth in subsection

(9)(b)(v) or the asset level established under subsection

(9)(b)(vi), if any, and the substantial and compelling reasons are

communicated in writing to the person claiming an exemption under

this section. The substantial and compelling reasons for the denial

of an exemption under this subdivision shall be specific to the

person whose application for exemption is denied and shall not be

systematically used to deny otherwise eligible applicants.

(f) The state equalized valuation of the principal residence

for which an exemption is claimed under this section is

substantially greater than the average state equalized valuation of

a principal residence in the local tax collecting unit.

(8) Filing an application for exemption or a renewal affidavit

under this subsection is an appearance before the board of review

and preserves the applicant's right to appeal the decision of the

board of review regarding the claim for exemption. A qualified

taxpayer who files an application for exemption or a renewal

affidavit under this section may also appeal the assessment on the

property for which the exemption is claimed before the board of

review in the same tax year.

(9) As used in this section:

(a) "Principal residence" means principal residence or

qualified agricultural property as those terms are defined in

section 7dd.

(b) "Qualified taxpayer" means a person who meets all of the

following requirements:

(i) Owns and occupies as a principal residence the property for

which an exemption is claimed.

(ii) Files an application for exemption with the supervisor or

board of review, accompanied by federal and state income tax

returns for all persons residing in the principal residence,

including any property tax credit returns, filed in the immediately

preceding tax year or in the current tax year.

(iii) Produces a valid driver license, state personal

identification card, or other form of identification, if requested

by the supervisor or board of review.

(iv) Produces a deed, land contract, or other evidence of

ownership of the property for which an exemption is requested, if

requested by the supervisor or board of review.

(v) Has household income that meets 1 of the following

requirements:

(A) Is equal to or less than the federal poverty guidelines

published annually in the federal register by the United States

department of health and human services under its authority to

revise the poverty line under 42 USC 9902.

(B) Is equal to or less than alternative income guidelines

adopted by the governing body of the local tax collecting unit.

Alternative income guidelines shall not provide an income

eligibility requirement that is less than the income eligibility

requirement set forth in sub-subparagraph (A).

(vi) A local tax collecting unit may establish an asset level

as a criterion for exemption under this section. If the local tax

collecting unit has established an asset level as a criterion for

exemption under this section, the asset level of the person

claiming an exemption under this section does not exceed that asset

level. A local tax collecting unit shall not consider any of the

following in calculating the asset level of a person claiming an

exemption under this section:

(A) The state equalized valuation of the principal residence

of the person claiming an exemption under this section.

(B) Any individual item of tangible personal property with a

value of less than $5,000.00, excluding cash, stocks, bonds, and