May 24, 2012, Introduced by Reps. Smiley, Liss, Haugh, Stallworth, Howze, McCann, Geiss, Cavanagh, Ananich, Brunner, Rutledge, Lane and Nathan and referred to the Committee on Tax Policy.
A joint resolution proposing an amendment to the state
constitution of 1963, by adding section 43 to article IX, to
provide for the replacement of certain tax revenue lost as a result
of the exemption or reduction in rate of taxation of certain
personal property.
Resolved by the Senate and House of Representatives of the
state of Michigan, That the following amendment to the state
constitution of 1963, to provide for the replacement of certain tax
revenue lost as a result of the exemption or reduction in rate of
taxation of certain personal property, is proposed, agreed to, and
submitted to the people of the state:
ARTICLE IX
Sec. 43. If the legislature exempts any personal property from
taxation or reduces the allowable rate of taxation for personal
property, the legislature shall replace all revenue lost by the
units of local government as a result of that exemption or
reduction in rate of taxation, including all revenue related to
locally voted millages and millages levied for voted debt
obligations. The lost revenue shall be replaced each year in its
entirety by funds from the general fund paid directly to the
affected units of local government.
For the five calendar years immediately succeeding the
effective date of the exemption or reduction in rate of taxation,
each unit of local government shall receive on a quarterly basis
its pro rata portion of the total personal property tax replacement
amount. The pro rata portion for each unit of local government
shall be determined by calculating the ratio that the tax base of
that unit of local government bears to the total personal property
tax replacement amount. The tax base of each unit of local
government is the annual average of the last five years of taxes
collected on personal property levied by that unit of local
government prior to the effective date of the exemption or
reduction in rate of taxation. The total personal property tax
replacement amount is the total amount to be paid each year from
the general fund to all units of local government pursuant to this
section and shall be calculated by annually averaging the last five
years of taxes collected on personal property levied by all units
of local government prior to the effective date of the exemption or
reduction in rate of taxation. Beginning six calendar years
following the effective date of the exemption or reduction in rate
of taxation and each year thereafter, the legislature may consider
other factors to determine the percentage of the total personal
property tax replacement amount that shall be given to each unit of
local government. In no event shall any unit of local government
receive more than a 5% reduction each year from that amount
received in the immediately preceding year pursuant to this section
and shall never reach a level of funding lower than 50% of the
amounts received in the five calendar years immediately succeeding
the effective date of the exemption or reduction in rate of
taxation pursuant to this section.
If two or more units of local government in existence on the
effective date of the exemption or reduction in rate of taxation,
or any successor local unit of government, consolidate into one
unit of local government, the tax base of that consolidated unit of
local government is the sum of the tax bases of each of the units
of local government that consolidated.
If the powers, duties, and obligations of a unit of local
government are assumed by another unit of local government, whether
by annexation, detachment, conditional transfer, or otherwise, the
corresponding portion of the tax base of the unit of local
government acquired shall be added to the tax base of the unit of
local government assuming those powers, duties, and obligations.
The units of local government that receive replacement revenue
pursuant to this section may use those funds for any lawful purpose
and are not otherwise restricted.
As used in this section, "local government" means any
political subdivision of this state, including, but not limited to,
school districts, cities, villages, townships, charter townships,
counties, charter counties, authorities created by this state,
publicly funded libraries however created, and authorities created
by any unit of local government.
The legislature shall provide by law for the implementation of
this section.
Resolved further, That the foregoing amendment shall be
submitted to the people of the state at the next general election
in the manner provided by law.