March 1, 2007, Introduced by Senators JACOBS, SCHAUER and THOMAS and referred to the Committee on Finance.
A bill to provide for the exemption of certain property from
certain taxes; to levy and collect a specific tax upon the owners
of certain property; to provide for the disposition of the tax; to
prescribe the powers and duties of certain local government
officials; and to provide penalties.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act shall be known and may be cited as the
"commercial rental property specific tax act".
Sec. 2. As used in this act:
(a) "Additions" and "losses" mean those terms as defined in
section 34d of the general property tax act, 1893 PA 206, MCL
211.34d.
(b) "Commercial rental property" means real property that
meets all of the following conditions:
(i) Is classified as commercial real property or industrial
real property under section 34c of the general property tax act,
1893 PA 206, MCL 211.34c.
(ii) All or a portion is subject to a lease or is offered for
lease.
(c) "Commission" means the state tax commission created by
1927 PA 360, MCL 209.101 to 209.107.
(d) "Net occupancy loss" means the sum of both of the
following:
(i) All prior losses attributable to that property pursuant to
section 34d(1)(h)(iii) of the general property tax act, 1893 PA 206,
MCL 211.34d, before the effective date of this act, minus all prior
additions attributable to that property pursuant to section
34d(1)(b)(vii) of the general property tax act, 1893 PA 206, MCL
211.34d, before May 14, 2002.
(ii) All prior occupancy losses minus all prior occupancy
additions.
(e) "Occupancy addition" means an increase in the value
attributable to commercial rental property's occupancy rate.
(f) "Occupancy loss" means an adjustment in value because of a
decrease in commercial rental property's occupancy rate.
(g) "Taxable value" means the taxable value as determined
under section 27a of the general property tax act, 1893 PA 206, MCL
211.27a.
(h) "Transfer of ownership" means that term as defined in
section 27a of the general property tax act, 1893 PA 206, MCL
211.27a.
Sec. 3. Commercial rental property is exempt from ad valorem
property taxes collected under the general property tax act, 1893
PA 206, MCL 211.1 to 211.157, as provided under section 7ll of the
general property tax act, 1893 PA 206, MCL 211.7ll.
Sec. 4. (1) The assessor of each local tax collecting unit in
which there is commercial rental property shall determine annually
as of December 31 the value and adjusted taxable value of each
parcel of commercial rental property located in that local tax
collecting unit.
(2) Except as otherwise provided in this section, commercial
rental property shall be assessed at 50% of its true cash value
under section 3 of article IX of the state constitution of 1963.
(3) Except as otherwise provided in subsection (4), for taxes
levied in 2008 and for each year after 2008, the adjusted taxable
value of each parcel of commercial rental property is the lesser of
the following:
(a) The property's adjusted taxable value in the immediately
preceding year minus any losses, adjusted by any occupancy loss,
multiplied by the lesser of 1.05 or the inflation rate, adjusted by
any occupancy addition, plus all additions. Adjusted taxable value
shall reflect an occupancy addition only if either an occupancy
loss had been previously allowed because of a decrease in the
commercial rental property's occupancy rate or if the value of
commercial rental property that was new construction was reduced
because of a below-market occupancy rate. The amount of any
occupancy addition shall not exceed the amount of any net occupancy
loss. For taxes levied in 2008, the commercial rental property's
adjusted taxable value in the immediately preceding year is the sum
of both of the following:
(i) The taxable value that property would have had in 2008 if
the property had been subject to the collection of taxes under the
general property tax act, 1893 PA 206, MCL 211.1 to 211.157.
(ii) All additions that would have been attributable to that
property pursuant to section 34d(1)(b)(vii) of the general property
tax act, 1893 PA 206, MCL 211.34d, after May 14, 2002 and before
the effective date of this act, notwithstanding the opinion of the
Michigan supreme court in WPW Acquisition Company v City of Troy,
466 Mich 117 (2002) (Docket No. 118750).
(b) The commercial rental property's current state equalized
valuation.
(4) In 2008 and each year after 2008, not later than January
15, if the adjusted taxable value of commercial rental property is
adjusted under subsection (3) due to an occupancy loss, an owner of
that commercial rental property shall file a copy of a rent roll
for that commercial rental property or a sworn statement of the
square foot percentage of occupancy of that commercial rental
property as of the immediately preceding December 31 with the
assessor of the local tax collecting unit in which that commercial
rental property is located.
(5) Upon a transfer of ownership of commercial rental property
after 2008, the commercial rental property's adjusted taxable value
for the calendar year following the year of the transfer is the
commercial rental property's state equalized valuation for the
calendar year following the transfer.
(6) If the adjusted taxable value of commercial rental
property is adjusted under subsection (5), a subsequent increase in
the commercial rental property's adjusted taxable value is subject
to the limitation set forth in subsection (3) until a subsequent
transfer of ownership occurs.
(7) An owner of commercial rental property may appeal the
determination of the commercial rental property's adjusted taxable
value at the same time and in the same manner as appeals under the
general property tax act, 1893 PA 206, MCL 211.1 to 211.157.
Sec. 5. (1) There is levied upon the owner of every commercial
rental property a specific tax to be known as the commercial rental
property specific tax.
(2) The amount of the commercial rental property specific tax
in each year shall be determined by multiplying the number of mills
that would be assessed in the local tax collecting unit if the
property were subject to the collection of taxes under the general
property tax act, 1893 PA 206, MCL 211.1 to 211.157, by the
commercial rental property's adjusted taxable value.
(3) The commercial rental property specific tax is an annual
tax, payable at the same times, in the same installments, and to
the same collecting officer or officers as taxes collected under
the general property tax act, 1893 PA 206, MCL 211.1 to 211.157.
(4) The collecting officer or officers shall disburse the
commercial rental property specific tax to and among this state and
cities, townships, villages, school districts, counties, or other
taxing units, at the same times and in the same proportions as
required by law for the disbursement of taxes collected under the
general property tax act, 1893 PA 206, MCL 211.1 to 211.157.
(5) The collecting officer or officers shall send a copy of
the amount of disbursement made to each taxing unit under this
section to the commission on a form provided by the commission.
(6) Commercial rental property located in a renaissance zone
under the Michigan renaissance zone act, 1996 PA 376, MCL 125.2681
to 125.2696, is exempt from the commercial rental property specific
tax levied under this act to the extent and for the duration
provided pursuant to the Michigan renaissance zone act, 1996 PA
376, MCL 125.2681 to 125.2696, except for that portion of the
commercial rental property specific tax attributable to a tax
described in section 7ff(2) of the general property tax act, 1893
PA 206, MCL 211.7ff. The commercial rental property specific tax
calculated under this subsection shall be disbursed proportionately
to the taxing unit or units that levied the tax described in
section 7ff(2) of the general property tax act, 1893 PA 206, MCL
211.7ff.
Sec. 6. Unpaid commercial rental property specific taxes are
subject to forfeiture, foreclosure, and sale in the same manner and
at the same time as taxes returned as delinquent under the general
property tax act, 1893 PA 206, MCL 211.1 to 211.157.
Enacting section 1. This act does not take effect unless
Senate Bill No. 313
of the 94th Legislature is enacted into law.