HB-4243, As Passed House, March 19, 2013

SUBSTITUTE FOR

HOUSE BILL NO. 4243

     A bill to amend 2006 PA 379, entitled

"Qualified forest property recapture tax act,"

by amending sections 2 and 4 (MCL 211.1032 and 211.1034).

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 2. As used in this act:

     (a) "Benefit period" means the period in years between the

date of the first exempt transfer and the conversion by a change in

use, not to exceed the 10 years immediately preceding the year in

which the qualified forest property is converted by a change in

use.

     (b) "Benefit received on that property" means the sum of the

number of mills levied in the local tax collecting unit on the

qualified forest property in each year of the benefit period,

multiplied by the difference in each year of the benefit period

between the true cash taxable value of the property and the

property's taxable value as determined under section 27a of the

general property tax act, 1893 PA 206, MCL 211.27a.

     (c) "Converted by a change in use" means that due to a change

in use the property is no longer eligible for an exemption as

qualified forest property as determined by the assessor of the

local tax collecting unit based on a recommendation from the

department of natural resources.under section 7jj of the general

property tax act, 1893 PA 206, MCL 211.7jj[1].

     (d) "Exempt transfer" means a conveyance of property that is

not a transfer of ownership pursuant to section 27a(7)(o) of the

general property tax act, 1893 PA 206, MCL 211.27a.

     (e) "Forest products" means that term as defined in section

7jj of the general property tax act, 1893 PA 206, MCL

211.7jj.211.7jj[1].

     (f) "Person" means an individual, partnership, corporation,

limited liability company, association, governmental entity, or

other legal entity.

     (g) "Qualified forest property" means that term as defined in

section 7jj of the general property tax act, 1893 PA 206, MCL

211.7jj.211.7jj[1].

     (h) "Recapture tax" means the qualified forest property

recapture tax imposed under this act.

     (i) "Treasurer" means the state treasurer.

     (j) "True cash taxable value" means the taxable value the

property would have had if section 27a(7)(o) of the general

property tax act, 1893 PA 206, MCL 211.27a, were not in effect.

     Sec. 4. The recapture tax under this act shall be imposed at

the following rate:

     (a) If Except as otherwise provided in subdivision (c), if the

property is converted by a change in use and there have not been 1

or more harvests of forest products on that property consistent

with the approved forest management plan, the recapture tax shall

be calculated in the following manner:

     (i) Multiply the property's state equalized valuation taxable

value at the time the property is converted by a change in use by

the total millage rate levied by all taxing units in the local tax

collecting unit in which the property is located the number of

operating mills levied by the local school district in which the

property is located under section 1211 of the revised school code,

1976 PA 451, MCL 380.1211, reduced by the number of mills collected

as a fee for qualified forest property under section 7jj(9) of the

general property tax act, 1893 PA 206, MCL 211.7jj[1].

     (ii) Multiply the product of the calculation under subparagraph

(i) by 7.the number of years the property had been exempt as

qualified forest property under section 7jj of the general property

tax act, 1893 PA 206, MCL 211.7jj[1], before the property was

converted by a change in use not to exceed the 7 years immediately

preceding the year in which the qualified forest property was

converted by a change in use.

     (iii) Multiply the product of the calculation under subparagraph

(ii) by 2.

     (b) If Except as otherwise provided in subdivision (c), if the

property is converted by a change in use and there have been 1 or

more harvests of forest products on that property consistent with

the approved forest management plan, the recapture tax shall be

calculated in the following manner:

     (i) Multiply the property's state equalized valuation taxable

value at the time the property is converted by a change in use by

the total millage rate levied by all taxing units in the local tax

collecting unit in which the property is located the number of

operating mills levied by the local school district in which the

property is located under section 1211 of the revised school code,

1976 PA 451, MCL 380.1211, reduced by the number of mills collected

as a fee for qualified forest property under section 7jj(9) of the

general property tax act, 1893 PA 206, MCL 211.7jj[1].

     (ii) Multiply the product of the calculation under subparagraph

(i) by 7.the number of years the property had been exempt as

qualified forest property under section 7jj of the general property

tax act, 1893 PA 206, MCL 211.7jj[1], before the property was

converted by a change in use not to exceed the 7 years immediately

preceding the year in which the qualified forest property was

converted by a change in use.

     (c) If the property was eligible for exemption under section

7jj of the general property tax act, 1893 PA 206, MCL 211.7jj[1],

as a result of the withdrawal of that property from the operation

of part 511 of the natural resources and environmental protection

act, 1994 PA 451, MCL 324.51101 to 324.51120, as provided in

section 51108(5) of the natural resources and environmental

protection act, 1994 PA 451, MCL 324.51108, and the property is

converted by a change in use within 7 years after the withdrawal of

that property from the operation of part 511 of the natural

resources and environmental protection act, 1994 PA 451, MCL

324.51101 to 324.51120, the recapture tax is an amount equal to the

application fee and penalty that would have been assessed under

section 51108 of the natural resources and environmental protection

act, 1994 PA 451, MCL 324.51108, to withdraw that property from the

operation of part 511 of the natural resources and environmental

protection act, 1994 PA 451, MCL 324.51101 to 324.51120, in the

year in which the property is converted by a change of use,

calculated as if the property had not been withdrawn from the

operation of part 511 of the natural resources and environmental

protection act, 1994 PA 451, MCL 324.51101 to 324.51120. If the

property is converted by a change in use more than 7 years after

the withdrawal of that property from the operation of part 511 of

the natural resources and environmental protection act, 1994 PA

451, MCL 324.51101 to 324.51120, the recapture tax shall be

calculated under subdivision (a) or (b), as applicable.

(d) (c) In addition to the recapture tax calculated under

subdivision (a), or (b), or (c), if property is converted by a

change in use and the taxable value of the property was not

adjusted under section 27a(3) of the general property tax act, 1893

PA 206, MCL 211.27a, after a transfer of ownership of the property

due to the provisions of section 27a(7)(o) of the general property

tax act, 1893 PA 206, MCL 211.27a, the recapture tax shall include

the benefit received on that property.

     Enacting section 1. This amendatory act takes effect June 1,

2013.