May 24, 2011, Introduced by Senators GREEN, KAHN, CASPERSON and MARLEAU and referred to the Committee on Energy and Technology.
A bill to amend 1893 PA 206, entitled
"The general property tax act,"
by amending sections 2 and 8 (MCL 211.2 and 211.8), section 2 as
amended by 2002 PA 620 and section 8 as amended by 2006 PA 633.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 2. (1) For the purpose of taxation, real property
includes all of the following:
(a) All land within this state, all buildings and fixtures on
the land, and all appurtenances to the land, except as expressly
exempted by law.
(b) All real property owned by this state or purchased or
condemned for public highway purposes by any board, officer,
commission, or department of this state and sold on land contract,
notwithstanding the fact that the deed has not been executed
transferring title.
(c) For taxes levied after December 31, 2002, buildings and
improvements located upon leased real property, except buildings
and improvements exempt under section 9f or improvements assessable
under section 8(h), if the value of the buildings or improvements
is not otherwise included in the assessment of the real property.
However, buildings and improvements located on leased real property
shall not be treated as real property unless they would be treated
as real property if they were located on real property owned by the
taxpayer.
(d) For taxes levied after December 31, 2012, a wind energy
system. As used in this subdivision, "wind energy system" means an
integrated unit consisting of a wind turbine composed of a rotor,
an electrical generator, a control system, an inverter or other
power conditioning unit, and a tower, which uses moving air to
produce power.
(2) The taxable status of persons and real and personal
property for a tax year shall be determined as of each December 31
of the immediately preceding year, which is considered the tax day,
any provisions in the charter of any city or village to the
contrary notwithstanding. An assessing officer is not restricted to
any particular period in the preparation of the assessment roll but
may survey, examine, or review property at any time before or after
the tax day.
(3) Notwithstanding a provision to the contrary in any law, if
real property is acquired for public purposes by purchase or
condemnation, all general property taxes, but not penalties, levied
during the 12 months immediately preceding, but not including, the
day title passes to the public agency shall be prorated in
accordance with this subsection. The seller or condemnee is
responsible for the portion of taxes from the levy date or dates
to, but not including, the day title passes and the public agency
is responsible for the remainder of the taxes. If the date that
title will pass cannot be ascertained definitely and an agreement
in advance to prorate taxes is desirable, an estimated date for the
passage of title may be agreed to. In the absence of an agreement,
the public agency shall compute the proration of taxes as of the
date title passes. The question of proration of taxes shall not be
considered in any condemnation proceeding. As used in this
subsection, "levy date" means the day on which general property
taxes become due and payable. In addition to the portion of taxes
for which the public agency is responsible under the provisions of
this subsection, the public agency is also responsible for all
general property taxes levied on or after the date title passes and
before the property is removed from the tax rolls.
(4) In a real estate transaction between private parties in
the absence of an agreement to the contrary, the seller is
responsible for that portion of the annual taxes levied during the
12 months immediately preceding, but not including, the day title
passes, from the levy date or dates to, but not including, the day
title passes and the buyer is responsible for the remainder of the
annual taxes. As used in this subsection, "levy date" means the day
on which a general property tax becomes due and payable.
Sec. 8. For the purposes of taxation, personal property
includes all of the following:
(a) All goods, chattels, and effects within this state.
(b) All goods, chattels, and effects belonging to inhabitants
of this state, located without this state, except that property
actually and permanently invested in business in another state
shall not be included.
(c) All interests owned by individuals in real property, the
fee title to which is in this state or the United States, except as
otherwise provided in this act.
(d) For taxes levied before January 1, 2003, buildings and
improvements located upon leased real property, except if the value
of the real property is also assessed to the lessee or owner of
those buildings and improvements. For taxes levied after December
31, 2002, buildings and improvements located upon leased real
property, except buildings and improvements exempt under section 9f
or improvements assessable under subdivision (h), shall be assessed
as real property under section 2 to the owner of the buildings or
improvements in the local tax collecting unit in which the
buildings or improvements are located if the value of the buildings
or improvements is not otherwise included in the assessment of the
real property. For taxes levied after December 31, 2001, buildings
and improvements exempt under section 9f or improvements assessable
under subdivision (h) and located on leased real property shall be
assessed as personal property.
(e) Tombs or vaults built within any burial grounds and kept
for hire or rent, in whole or in part, and the stock of a
corporation or association owning the tombs, vaults, or burial
grounds.
(f) All other personal property not enumerated in this section
and not especially exempted by law.
(g) The personal property of gas and coke companies, natural
gas companies, electric light companies, waterworks companies,
hydraulic companies, and pipe line companies transporting oil or
gas as public or common carriers, to be assessed in the local tax
collecting unit in which the personal property is located. The
mains, pipes, supports, and wires of these companies, including the
supports and wire or other line used for communication purposes in
the operation of those facilities, and the rights of way and the
easements or other interests in real property by virtue of which
the mains, pipes, supports, and wires are erected and maintained,
shall be assessed as personal property in the local tax collecting
unit where laid, placed, or located. Interests in underground rock
strata used for gas storage purposes, whether by lease or ownership
separate from the surface of real property, shall be separately
valued and assessed as personal property in the local tax
collecting unit in which it is located to the person who holds the
interest. Interests in underground rock strata shall be reported as
personal property to the appropriate assessing officer for all
property descriptions included in the storage field in the local
tax collecting unit and a separate valuation shall be assessed for
each school district. The personal property of street railroad,
plank road, cable or electric railroad or transportation companies,
bridge companies, and all other companies not required to pay a
specific tax to this state in lieu of all other taxes, shall,
except as otherwise provided in this section, be assessed in the
local tax collecting unit in which the property is located, used,
or laid, and the track, road, or bridge of a company is considered
personal property. None of the property assessable as personal
property under this subdivision shall be affected by any assessment
or tax levied on the real property through or over which the
personal property is laid, placed, or located, nor shall any right
of way, easement, or other interest in real property, assessable as
personal property under this subdivision, be extinguished or
otherwise affected in case the real property subject to assessment
is sold in the exercise of the taxing power.
(h) During the tenancy of a lessee, leasehold improvements and
structures installed and constructed on real property by the
lessee, provided and to the extent the improvements or structures
add to the true cash value or taxable value of the real property
notwithstanding that the real property is encumbered by a lease
agreement, and the value added by the improvements or structures is
not otherwise included in the assessment of the real property or
not otherwise assessable under subdivision (j). The cost of
leasehold improvements and structures on real property shall not be
the sole indicator of value. Leasehold improvements and structures
assessed under this subdivision shall be assessed to the lessee.
(i) A leasehold estate received by a sublessor from which the
sublessor receives net rentals in excess of net rentals required to
be paid by the sublessor except to the extent that the excess
rentals are attributable to the installation and construction of
improvements and structures assessed under subdivision (h) or (j)
or included in the assessment of the real property. For purposes of
this act, a leasehold estate is considered to be owned by the
lessee receiving additional net rentals. A lessee in possession is
required to provide the assessor with the name and address of its
lessor. Taxes collected under this act on leasehold estates shall
become a lien against the rentals paid by the sublessee to the
sublessor.
(j) To the extent not assessed as real property, a leasehold
estate of a lessee created by the difference between the income
that would be received by the lessor from the lessee on the basis
of the present economic income of the property as defined and
allowed by section 27(4), minus the actual value to the lessor
under the lease. This subdivision does not apply to property if
subject to a lease entered into before January 1, 1984 for which
the terms of the lease governing the rental rate or the tax
liability have not been renegotiated after December 31, 1983. This
subdivision does not apply to a nonprofit housing cooperative. As
used in this subdivision, "nonprofit cooperative housing
corporation" means a nonprofit cooperative housing corporation that
is engaged in providing housing services to its stockholders and
members and that does not pay dividends or interest upon stock or
membership investment but that does distribute all earnings to its
stockholders or members.
(k) For taxes levied after December 31, 2002, a trade fixture.
(l) For taxes levied after December 31, 2005 and before January
1, 2013, a wind energy system. As used in this subdivision, "wind
energy system" means an integrated unit consisting of a wind
turbine composed of a rotor, an electrical generator, a control
system, an inverter or other power conditioning unit, and a tower,
which uses moving air to produce power.