SB-1038, As Passed Senate, November 13, 2014

SUBSTITUTE FOR

SENATE BILL NO. 1038

     A bill to amend 1893 PA 206, entitled

"The general property tax act,"

by amending sections 7b, 7u, 7cc, 7ee, 9m, 9n, 9o, 24c, 27a, 28,

29, 30, 34c, 53b, 53c, and 154 (MCL 211.7b, 211.7u, 211.7cc,

211.7ee, 211.9m, 211.9n, 211.9o, 211.24c, 211.27a, 211.28, 211.29,

211.30, 211.34c, 211.53b, 211.53c, and 211.154), section 7b as

amended by 2013 PA 161, section 7u as amended by 2012 PA 135,

section 7cc as amended by 2014 PA 40, sections 7ee and 154 as

amended by 2003 PA 247, section 9m as amended by 2014 PA 87,

section 9n as amended by 2013 PA 154, sections 9o, 30, and 53b as

amended by 2013 PA 153, section 24c as amended by 2010 PA 332,

section 27a as amended by 2014 PA 310, section 28 as amended by

2006 PA 143, section 34c as amended by 2012 PA 409, and section 53c

as added by 1995 PA 74, and by adding section 53e.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 7b. (1) Real property used and owned as a homestead by a

disabled veteran who was discharged from the armed forces of the

United States under honorable conditions or by an individual

described in subsection (2) is exempt from the collection of taxes

under this act. To obtain the exemption, an affidavit showing the

facts required by this section and a description of the real

property shall be filed by the property owner or his or her legal

designee with the supervisor or other assessing officer during the

period beginning with the tax day for each year and ending at the

time of the final adjournment of the local December board of

review. The affidavit when filed shall be open to inspection. The

county treasurer shall cancel taxes subject to collection under

this act for any year in which a disabled veteran eligible for the

exemption under this section has acquired title to real property

exempt under this section. Upon granting the exemption under this

section, each local taxing unit shall bear the loss of its portion

of the taxes upon which the exemption has been granted.

     (2) If a disabled veteran who is otherwise eligible for the

exemption under this section dies, either before or after the

exemption under this section is granted, the exemption shall remain

available to or shall continue for his or her unremarried surviving

spouse. The surviving spouse shall comply with the requirements of

subsection (1) and shall indicate on the affidavit that he or she

is the surviving spouse of a disabled veteran entitled to the

exemption under this section. The exemption shall continue as long

as the surviving spouse remains unremarried.

     (3) A person claiming an exemption under this section may

appeal the decision of the March board of review to the Michigan

tax tribunal not later than July 31 in that year. A person claiming

an exemption under this section may appeal the decision of the July

or December board of review to the Michigan tax tribunal not later

than 60 days after the date of that decision. An appeal of the

denial of a claim of exemption under this section may be for the

current year and the 3 immediately preceding years; however, an

appeal may not be taken for a year prior to 2014.

(4) (3) As used in this section, "disabled veteran" means a

person who is a resident of this state and who meets 1 of the

following criteria:

     (a) Has been determined by the United States department of

veterans affairs to be permanently and totally disabled as a result

of military service and entitled to veterans' benefits at the 100%

rate.

     (b) Has a certificate from the United States veterans'

administration, or its successors, certifying that he or she is

receiving or has received pecuniary assistance due to disability

for specially adapted housing.

     (c) Has been rated by the United States department of veterans

affairs as individually unemployable.

     Sec. 7u. (1) The principal residence of persons who, in the

judgment of the supervisor and board of review, by reason of

poverty, are unable to contribute toward the public charges is

eligible for exemption in whole or in part from taxation under this

act. 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.

Federal and state income tax returns are not required for a person

residing in the principal residence if that person was not required

to file a federal or state income tax return in the tax year in

which the exemption under this section is claimed or in the

immediately preceding tax year. If a person was not required to

file a federal or state income tax return in the tax year in which

the exemption under this section is claimed or in the immediately

preceding tax year, an affidavit in a form prescribed by the state

tax commission may be accepted in place of the federal or state

income tax return. 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 USC 9902 , or alternative guidelines adopted by the

governing body of the local assessing unit provided the alternative

guidelines do not provide income eligibility requirements less than

the federal guidelines.

     (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 December board of review.

     (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.

     (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.

     (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.

     (7) A person claiming an exemption under this section may

appeal the decision of the March board of review to the Michigan

tax tribunal not later than July 31 in that year. A person claiming

an exemption under this section may appeal the decision of the July

or December board of review to the Michigan tax tribunal not later

than 60 days after the date of that decision.

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

principal residence or qualified agricultural property as those

terms are defined in section 7dd.

     Sec. 7cc. (1) A principal residence is exempt from the tax

levied by a local school district for school operating purposes to

the extent provided under section 1211 of the revised school code,

1976 PA 451, MCL 380.1211, if an owner of that principal residence

claims an exemption as provided in this section. Notwithstanding

the tax day provided in section 2, the status of property as a

principal residence shall be determined on the date an affidavit

claiming an exemption is filed under subsection (2).

     (2) Except as otherwise provided in subsection (5), an owner

of property may claim 1 exemption under this section by filing an

affidavit on or before May 1 for taxes levied before January 1,

2012 or, for taxes levied after December 31, 2011, on or before

June 1 for the immediately succeeding summer tax levy and all

subsequent tax levies or on or before November 1 for the

immediately succeeding winter tax levy and all subsequent tax

levies with the local tax collecting unit in which the property is

located. The affidavit shall state that the property is owned and

occupied as a principal residence by that owner of the property on

the date that the affidavit is signed. The affidavit shall be on a

form prescribed by the department of treasury. One copy of the

affidavit shall be retained by the owner, 1 copy shall be retained

by the local tax collecting unit until any appeal or audit period

under this act has expired, and 1 copy shall be forwarded to the

department of treasury pursuant to subsection (4), together with

all information submitted under subsection (28) (27) for a

cooperative housing corporation. The affidavit shall require the

owner claiming the exemption to indicate if that owner or that

owner's spouse has claimed another exemption on property in this

state that is not rescinded or a substantially similar exemption,

deduction, or credit on property in another state that is not

rescinded. If the affidavit requires an owner to include a social

security number, that owner's number is subject to the disclosure

restrictions in 1941 PA 122, MCL 205.1 to 205.31. If an owner of

property filed an affidavit for an exemption under this section

before January 1, 2004, that affidavit shall be considered the

affidavit required under this subsection for a principal residence

exemption and that exemption shall remain in effect until rescinded

as provided in this section.

     (3) Except as otherwise provided in subsection (5), a husband

and wife who are required to file or who do file a joint Michigan

income tax return are entitled to not more than 1 exemption under

this section. For taxes levied after December 31, 2002, a person is

not entitled to an exemption under this section if any of the

following conditions occur:

     (a) That person has claimed a substantially similar exemption,

deduction, or credit on property in another state that is not

rescinded.

     (b) Subject to subdivision (a), that person or his or her

spouse owns property in a state other than this state for which

that person or his or her spouse claims an exemption, deduction, or

credit substantially similar to the exemption provided under this

section, unless that person and his or her spouse file separate

income tax returns.

     (c) That person has filed a nonresident Michigan income tax

return, except active duty military personnel stationed in this

state with his or her principal residence in this state.

     (d) That person has filed an income tax return in a state

other than this state as a resident, except active duty military

personnel stationed in this state with his or her principal

residence in this state.

     (e) That person has previously rescinded an exemption under

this section for the same property for which an exemption is now

claimed and there has not been a transfer of ownership of that

property after the previous exemption was rescinded, if either of

the following conditions is satisfied:

     (i) That person has claimed an exemption under this section for

any other property for that tax year.

     (ii) That person has rescinded an exemption under this section

on other property, which exemption remains in effect for that tax

year, and there has not been a transfer of ownership of that

property.

     (4) Upon receipt of an affidavit filed under subsection (2)

and unless the claim is denied under this section, the assessor

shall exempt the property from the collection of the tax levied by

a local school district for school operating purposes to the extent

provided under section 1211 of the revised school code, 1976 PA

451, MCL 380.1211, as provided in subsection (1) until December 31

of the year in which the property is transferred or, except as

otherwise provided in subsection (5), is no longer a principal

residence as defined in section 7dd. The local tax collecting unit

shall forward copies of affidavits to the department of treasury

according to a schedule prescribed by the department of treasury.

     (5) Except as otherwise provided in this subsection, not more

than 90 days after exempted property is no longer used as a

principal residence by the owner claiming an exemption, that owner

shall rescind the claim of exemption by filing with the local tax

collecting unit a rescission form prescribed by the department of

treasury. If an owner is eligible for and claims an exemption for

that owner's current principal residence, that owner may retain an

exemption for not more than 3 tax years on property previously

exempt as his or her principal residence if that property is not

occupied, is for sale, is not leased, and is not used for any

business or commercial purpose by filing a conditional rescission

form prescribed by the department of treasury with the local tax

collecting unit within the time period prescribed in subsection

(2). Beginning in the 2012 tax year, subject to the payment

requirement set forth in this subsection, if a land contract

vendor, bank, credit union, or other lending institution owns

property as a result of a foreclosure or forfeiture of a recorded

instrument under chapter 31, 32, or 57 of the revised judicature

act of 1961, 1961 PA 236, MCL 600.3101 to 600.3285 and MCL 600.5701

to 600.5759, or through deed or conveyance in lieu of a foreclosure

or forfeiture on that property and that property had been exempt

under this section immediately preceding the foreclosure, that land

contract vendor, bank, credit union, or other lending institution

may retain an exemption on that property at the same percentage of

exemption that the property previously had under this section if

that property is not occupied other than by the person who claimed

the exemption under this section immediately preceding the

foreclosure or forfeiture, is for sale, is not leased to any person

other than the person who claimed the exemption under this section

immediately preceding the foreclosure, and is not used for any

business or commercial purpose. A land contract vendor, bank,

credit union, or other lending institution may claim an exemption

under this subsection by filing a conditional rescission form

prescribed by the department of treasury with the local tax

collecting unit within the time period prescribed in subsection

(2). Property is eligible for a conditional rescission if that

property is available for lease and all other conditions under this

subsection are met. A copy of a conditional rescission form shall

be forwarded to the department of treasury according to a schedule

prescribed by the department of treasury. An owner or a land

contract vendor, bank, credit union, or other lending institution

that files a conditional rescission form shall annually verify to

the assessor of the local tax collecting unit on or before December

31 that the property for which the principal residence exemption is

retained is not occupied other than by the person who claimed the

exemption under this section immediately preceding the foreclosure

or forfeiture, is for sale, is not leased except as otherwise

provided in this section, and is not used for any business or

commercial purpose. The land contract vendor, bank, credit union,

or other lending institution may retain the exemption authorized

under this section for not more than 3 tax years. If an owner or a

land contract vendor, bank, credit union, or other lending

institution does not annually verify by December 31 that the

property for which the principal residence exemption is retained is

not occupied other than by the person who claimed the exemption

under this section immediately preceding the foreclosure or

forfeiture, is for sale, is not leased except as otherwise provided

in this section, and is not used for any business or commercial

purpose, the assessor of the local tax collecting unit shall deny

the principal residence exemption on that property. Except as

otherwise provided in this section, if property subject to a

conditional rescission is leased, the local tax collecting unit

shall deny that conditional rescission and that denial is

retroactive and is effective on December 31 of the year immediately

preceding the year in which the property subject to the conditional

rescission is leased. An owner who fails to file a rescission as

required by this subsection is subject to a penalty of $5.00 per

day for each separate failure beginning after the 90 days have

elapsed, up to a maximum of $200.00. This penalty shall be

collected under 1941 PA 122, MCL 205.1 to 205.31, and shall be

deposited in the state school aid fund established in section 11 of

article IX of the state constitution of 1963. This penalty may be

waived by the department of treasury. If a land contract vendor,

bank, credit union, or other lending institution retains an

exemption on property under this subsection, that land contract

vendor, bank, credit union, or other lending institution shall pay

an amount equal to the additional amount that land contract vendor,

bank, credit union, or other lending institution would have paid

under section 1211 of the revised school code, 1976 PA 451, MCL

380.1211, if an exemption had not been retained on that property,

together with an administration fee equal to the property tax

administration fee imposed under section 44. The payment required

under this subsection shall be collected by the local tax

collecting unit at the same time and in the same manner as taxes

collected under this act. The administration fee shall be retained

by the local tax collecting unit. The amount collected that the

land contract vendor, bank, credit union, or other lending

institution would have paid under section 1211 of the revised

school code, 1976 PA 451, MCL 380.1211, if an exemption had not

been retained on that property is an amount that is not captured by

any authority as tax increment revenues and shall be distributed to

the department of treasury monthly for deposit into the state

school aid fund established in section 11 of article IX of the

state constitution of 1963. If a land contract vendor, bank, credit

union, or other lending institution transfers ownership of property

for which an exemption is retained under this subsection, that land

contract vendor, bank, credit union, or other lending institution

shall rescind the exemption as provided in this section and shall

notify the treasurer of the local tax collecting unit of that

transfer of ownership. If a land contract vendor, bank, credit

union, or other lending institution fails to make the payment

required under this subsection for any property within the period

for which property taxes are due and payable without penalty, the

local tax collecting unit shall deny that conditional rescission

and that denial is retroactive and is effective on December 31 of

the immediately preceding year. If the local tax collecting unit

denies a conditional rescission, the local tax collecting unit

shall remove the exemption of the property and the amount due from

the land contract vendor, bank, credit union, or other lending

institution shall be a tax so that the additional taxes, penalties,

and interest shall be collected as provided for in this section. If

payment of the tax under this subsection is not made by the March 1

following the levy of the tax, the tax shall be turned over to the

county treasurer and collected in the same manner as delinquent

taxes under this act. A person who previously occupied property as

his or her principal residence but now resides in a nursing home or

assisted living facility may retain an exemption on that property

if the owner manifests an intent to return to that property by

satisfying all of the following conditions:

     (a) The owner continues to own that property while residing in

the nursing home or assisted living facility.

     (b) The owner has not established a new principal residence.

     (c) The owner maintains or provides for the maintenance of

that property while residing in the nursing home or assisted living

facility.

     (d) That property is not occupied, is not leased, and is not

used for any business or commercial purpose.

     (6) Except as otherwise provided in subsection (5), if the

assessor of the local tax collecting unit believes that the

property for which an exemption is claimed is not the principal

residence of the owner claiming the exemption, the assessor may

deny a new or existing claim by notifying the owner and the

department of treasury in writing of the reason for the denial and

advising the owner that the denial may be appealed to the

residential property and small claims division of the Michigan tax

tribunal within 35 60 days after the date of mailing of the notice

of denial. The assessor may deny a claim for exemption for the

current year and for the 3 immediately preceding calendar years. If

the assessor denies an existing claim for exemption, the assessor

shall remove the exemption of the property and, if the tax roll is

in the local tax collecting unit's possession, amend the tax roll

to reflect the denial and the local treasurer shall within 30 days

of the date of the denial issue a corrected tax bill for any

additional taxes with interest at the rate of 1.25% per month or

fraction of a month and penalties computed from the date the taxes

were last payable without interest or penalty. If the tax roll is

in the county treasurer's possession, the tax roll shall be amended

to reflect the denial and the county treasurer shall within 30 days

of the date of the denial prepare and submit a supplemental tax

bill for any additional taxes, together with interest at the rate

of 1.25% per month or fraction of a month and penalties computed

from the date the taxes were last payable without interest or

penalty. Interest on any tax set forth in a corrected or

supplemental tax bill shall again begin to accrue 60 days after the

date the corrected or supplemental tax bill is issued at the rate

of 1.25% per month or fraction of a month. Taxes levied in a

corrected or supplemental tax bill shall be returned as delinquent

on the March 1 in the year immediately succeeding the year in which

the corrected or supplemental tax bill is issued. If the assessor

denies an existing claim for exemption, the interest due shall be

distributed as provided in subsection (25). (24). However, if the

property has been transferred to a bona fide purchaser before

additional taxes were billed to the seller as a result of the

denial of a claim for exemption, the taxes, interest, and penalties

shall not be a lien on the property and shall not be billed to the

bona fide purchaser, and the local tax collecting unit if the local

tax collecting unit has possession of the tax roll or the county

treasurer if the county has possession of the tax roll shall notify

the department of treasury of the amount of tax due, interest, and

penalties through the date of that notification. The department of

treasury shall then assess the owner who claimed the exemption

under this section for the tax, interest, and penalties accruing as

a result of the denial of the claim for exemption, if any, as for

unpaid taxes provided under 1941 PA 122, MCL 205.1 to 205.31, and

shall deposit any tax or penalty collected into the state school

aid fund and shall distribute any interest collected as provided in

subsection (25). (24). The denial shall be made on a form

prescribed by the department of treasury. If the property for which

the assessor has denied a claim for exemption under this subsection

is located in a county in which the county treasurer or the county

equalization director have elected to audit exemptions under

subsection (10), the assessor shall notify the county treasurer or

the county equalization director of the denial under this

subsection.

     (7) If the assessor of the local tax collecting unit believes

that the property for which the exemption is claimed is not the

principal residence of the owner claiming the exemption and has not

denied the claim, the assessor shall include a recommendation for

denial with any affidavit that is forwarded to the department of

treasury or, for an existing claim, shall send a recommendation for

denial to the department of treasury, stating the reasons for the

recommendation.

     (8) The department of treasury shall determine if the property

is the principal residence of the owner claiming the exemption.

Except as otherwise provided in subsection (21), the department of

treasury may review the validity of exemptions for the current

calendar year and for the 3 immediately preceding calendar years.

Except as otherwise provided in subsection (5), if the department

of treasury determines that the property is not the principal

residence of the owner claiming the exemption, the department shall

send a notice of that determination to the local tax collecting

unit and to the owner of the property claiming the exemption,

indicating that the claim for exemption is denied, stating the

reason for the denial, and advising the owner claiming the

exemption of the right to appeal the determination to the

department of treasury and what those rights of appeal are. that

the denial may be appealed to the residential property and small

claims division of the Michigan tax tribunal within 60 days after

the date of mailing of the notice of denial. The department of

treasury may issue a notice denying a claim if an owner fails to

respond within 30 days of receipt of a request for information from

that department. An owner may appeal the denial of a claim of

exemption to the department of treasury residential property and

small claims division of the Michigan tax tribunal within 35 60

days after the date of receipt mailing of the notice of denial. An

appeal to the department of treasury shall be conducted according

to the provisions for an informal conference in section 21 of 1941

PA 122, MCL 205.21. Within 10 days after acknowledging an appeal of

a denial of a claim of exemption, the department of treasury shall

notify the assessor and the treasurer for the county in which the

property is located that an appeal has been filed. Upon receipt of

a notice that the department of treasury has denied a claim for

exemption, the assessor shall remove the exemption of the property

and, if the tax roll is in the local tax collecting unit's

possession, amend the tax roll to reflect the denial and the local

treasurer shall within 30 days of the date of the denial issue a

corrected tax bill for any additional taxes with interest at the

rate of 1.25% per month or fraction of a month and penalties

computed from the date the taxes were last payable without interest

and penalty. If the tax roll is in the county treasurer's

possession, the tax roll shall be amended to reflect the denial and

the county treasurer shall within 30 days of the date of the denial

prepare and submit a supplemental tax bill for any additional

taxes, together with interest at the rate of 1.25% per month or

fraction of a month and penalties computed from the date the taxes

were last payable without interest or penalty. Interest on any tax

set forth in a corrected or supplemental tax bill shall again begin

to accrue 60 days after the date the corrected or supplemental tax

bill is issued at the rate of 1.25% per month or fraction of a

month. The department of treasury may waive interest on any tax set

forth in a corrected or supplemental tax bill for the current tax

year and the immediately preceding 3 tax years if the assessor of

the local tax collecting unit files with the department of treasury

a sworn affidavit in a form prescribed by the department of

treasury stating that the tax set forth in the corrected or

supplemental tax bill is a result of the assessor's classification

error or other error or the assessor's failure to rescind the

exemption after the owner requested in writing that the exemption

be rescinded. Taxes levied in a corrected or supplemental tax bill

shall be returned as delinquent on the March 1 in the year

immediately succeeding the year in which the corrected or

supplemental tax bill is issued. If the department of treasury

denies an existing claim for exemption, the interest due shall be

distributed as provided in subsection (25). (24). However, if the

property has been transferred to a bona fide purchaser before

additional taxes were billed to the seller as a result of the

denial of a claim for exemption, the taxes, interest, and penalties

shall not be a lien on the property and shall not be billed to the

bona fide purchaser, and the local tax collecting unit if the local

tax collecting unit has possession of the tax roll or the county

treasurer if the county has possession of the tax roll shall notify

the department of treasury of the amount of tax due and interest

through the date of that notification. The department of treasury

shall then assess the owner who claimed the exemption under this

section for the tax and interest plus penalty accruing as a result

of the denial of the claim for exemption, if any, as for unpaid

taxes provided under 1941 PA 122, MCL 205.1 to 205.31, and shall

deposit any tax or penalty collected into the state school aid fund

and shall distribute any interest collected as provided in

subsection (25).(24).

     (9) The department of treasury may enter into an agreement

regarding the implementation or administration of subsection (8)

with the assessor of any local tax collecting unit in a county that

has not elected to audit exemptions claimed under this section as

provided in subsection (10). The agreement may specify that for a

period of time, not to exceed 120 days, the department of treasury

will not deny an exemption identified by the department of treasury

in the list provided under subsection (11).

     (10) A county may elect to audit the exemptions claimed under

this section in all local tax collecting units located in that

county as provided in this subsection. The election to audit

exemptions shall be made by the county treasurer, or by the county

equalization director with the concurrence by resolution of the

county board of commissioners. The initial election to audit

exemptions shall require an audit period of 2 years. Before 2009,

subsequent elections to audit exemptions shall be made every 2

years and shall require 2 annual audit periods. Beginning in 2009,

an election to audit exemptions shall be made every 5 years and

shall require 5 annual audit periods. An election to audit

exemptions shall be made by submitting an election to audit form to

the assessor of each local tax collecting unit in that county and

to the department of treasury not later than April 1 preceding the

October 1 in the year in which an election to audit is made. The

election to audit form required under this subsection shall be in a

form prescribed by the department of treasury. If a county elects

to audit the exemptions claimed under this section, the department

of treasury may continue to review the validity of exemptions as

provided in subsection (8). If a county does not elect to audit the

exemptions claimed under this section as provided in this

subsection, the department of treasury shall conduct an audit of

exemptions claimed under this section in the initial 2-year audit

period for each local tax collecting unit in that county unless the

department of treasury has entered into an agreement with the

assessor for that local tax collecting unit under subsection (9).

     (11) If a county elects to audit the exemptions claimed under

this section as provided in subsection (10) and the county

treasurer or his or her designee or the county equalization

director or his or her designee believes that the property for

which an exemption is claimed is not the principal residence of the

owner claiming the exemption, the county treasurer or his or her

designee or the county equalization director or his or her designee

may, except as otherwise provided in subsection (5), deny an

existing claim by notifying the owner, the assessor of the local

tax collecting unit, and the department of treasury in writing of

the reason for the denial and advising the owner that the denial

may be appealed to the residential property and small claims

division of the Michigan tax tribunal within 35 60 days after the

date of mailing of the notice of denial. The county treasurer or

his or her designee or the county equalization director or his or

her designee may deny a claim for exemption for the current year

and for the 3 immediately preceding calendar years. If the county

treasurer or his or her designee or the county equalization

director or his or her designee denies an existing claim for

exemption, the county treasurer or his or her designee or the

county equalization director or his or her designee shall direct

the assessor of the local tax collecting unit in which the property

is located to remove the exemption of the property from the

assessment roll and, if the tax roll is in the local tax collecting

unit's possession, direct the assessor of the local tax collecting

unit to amend the tax roll to reflect the denial and the treasurer

of the local tax collecting unit shall within 30 days of the date

of the denial issue a corrected tax bill for any additional taxes

with interest at the rate of 1.25% per month or fraction of a month

and penalties computed from the date the taxes were last payable

without interest and penalty. If the tax roll is in the county

treasurer's possession, the tax roll shall be amended to reflect

the denial and the county treasurer shall within 30 days of the

date of the denial prepare and submit a supplemental tax bill for

any additional taxes, together with interest at the rate of 1.25%

per month or fraction of a month and penalties computed from the

date the taxes were last payable without interest or penalty.

Interest on any tax set forth in a corrected or supplemental tax

bill shall again begin to accrue 60 days after the date the

corrected or supplemental tax bill is issued at the rate of 1.25%

per month or fraction of a month. Taxes levied in a corrected or

supplemental tax bill shall be returned as delinquent on the March

1 in the year immediately succeeding the year in which the

corrected or supplemental tax bill is issued. If the county

treasurer or his or her designee or the county equalization

director or his or her designee denies an existing claim for

exemption, the interest due shall be distributed as provided in

subsection (25). (24). However, if the property has been

transferred to a bona fide purchaser before additional taxes were

billed to the seller as a result of the denial of a claim for

exemption, the taxes, interest, and penalties shall not be a lien

on the property and shall not be billed to the bona fide purchaser,

and the local tax collecting unit if the local tax collecting unit

has possession of the tax roll or the county treasurer if the

county has possession of the tax roll shall notify the department

of treasury of the amount of tax due and interest through the date

of that notification. The department of treasury shall then assess

the owner who claimed the exemption under this section for the tax

and interest plus penalty accruing as a result of the denial of the

claim for exemption, if any, as for unpaid taxes provided under

1941 PA 122, MCL 205.1 to 205.31, and shall deposit any tax or

penalty collected into the state school aid fund and shall

distribute any interest collected as provided in subsection (25).

(24). The department of treasury shall annually provide the county

treasurer or his or her designee or the county equalization

director or his or her designee a list of parcels of property

located in that county for which an exemption may be erroneously

claimed. The county treasurer or his or her designee or the county

equalization director or his or her designee shall forward copies

of the list provided by the department of treasury to each assessor

in each local tax collecting unit in that county within 10 days of

receiving the list.

     (12) If a county elects to audit exemptions claimed under this

section as provided in subsection (10), the county treasurer or the

county equalization director may enter into an agreement with the

assessor of a local tax collecting unit in that county regarding

the implementation or administration of this section. The agreement

may specify that for a period of time, not to exceed 120 days, the

county will not deny an exemption identified by the department of

treasury in the list provided under subsection (11).

     (13) An owner may appeal a denial by the assessor of the local

tax collecting unit under subsection (6), a final decision of the

department of treasury under subsection (8), or a denial by the

county treasurer or his or her designee or the county equalization

director or his or her designee under subsection (11) to the

residential property and small claims division of the Michigan tax

tribunal within 35 60 days after the date of mailing of notice of

that decision. An owner is not required to pay the amount of tax in

dispute in order to appeal a denial of a claim of exemption to the

department of treasury or to receive a final determination of the

residential property and small claims division of the Michigan tax

tribunal. However, interest at the rate of 1.25% per month or

fraction of a month and penalties shall accrue and be computed from

the date the taxes were last payable without interest and penalty.

If the residential property and small claims division of the

Michigan tax tribunal grants an owner's appeal of a denial and that

owner has paid the interest due as a result of a denial under

subsection (6), (8), or (11), the interest received after a

distribution was made under subsection (25) (24) shall be refunded.

     (14) For taxes levied after December 31, 2005, for each county

in which the county treasurer or the county equalization director

does not elect to audit the exemptions claimed under this section

as provided in subsection (10), the department of treasury shall

conduct an annual audit of exemptions claimed under this section

for the current calendar year.

     (15) Except as otherwise provided in subsection (5), an

affidavit filed by an owner for the exemption under this section

rescinds all previous exemptions filed by that owner for any other

property. The department of treasury shall notify the assessor of

the local tax collecting unit in which the property for which a

previous exemption was claimed is located if the previous exemption

is rescinded by the subsequent affidavit. When an exemption is

rescinded, the assessor of the local tax collecting unit shall

remove the exemption effective December 31 of the year in which the

affidavit was filed that rescinded the exemption. For any year for

which the rescinded exemption has not been removed from the tax

roll, the exemption shall be denied as provided in this section.

However, interest and penalty shall not be imposed for a year for

which a rescission form has been timely filed under subsection (5).

     (16) Except as otherwise provided in subsection (30), (28), if

the principal residence is part of a unit in a multiple-unit

dwelling or a dwelling unit in a multiple-purpose structure, an

owner shall claim an exemption for only that portion of the total

taxable value of the property used as the principal residence of

that owner in a manner prescribed by the department of treasury. If

a portion of a parcel for which the owner claims an exemption is

used for a purpose other than as a principal residence, the owner

shall claim an exemption for only that portion of the taxable value

of the property used as the principal residence of that owner in a

manner prescribed by the department of treasury.

     (17) When a county register of deeds records a transfer of

ownership of a property, he or she shall notify the local tax

collecting unit in which the property is located of the transfer.

     (18) The department of treasury shall make available the

affidavit forms and the forms to rescind an exemption, which may be

on the same form, to all city and township assessors, county

equalization officers, county registers of deeds, and closing

agents. A person who prepares a closing statement for the sale of

property shall provide affidavit and rescission forms to the buyer

and seller at the closing and, if requested by the buyer or seller

after execution by the buyer or seller, shall file the forms with

the local tax collecting unit in which the property is located. If

a closing statement preparer fails to provide exemption affidavit

and rescission forms to the buyer and seller, or fails to file the

affidavit and rescission forms with the local tax collecting unit

if requested by the buyer or seller, the buyer may appeal to the

department of treasury residential property and small claims

division of the Michigan tax tribunal within 30 60 days after the

date of mailing of notice to the buyer that an exemption was not

recorded. If the department of treasury determines that the buyer

qualifies for the exemption, the department of treasury shall

notify the assessor of the local tax collecting unit that the

exemption is granted and the assessor of the local tax collecting

unit or, if the tax roll is in the possession of the county

treasurer, the county treasurer shall correct the tax roll to

reflect the exemption. This subsection does not create a cause of

action at law or in equity against a closing statement preparer who

fails to provide exemption affidavit and rescission forms to a

buyer and seller or who fails to file the affidavit and rescission

forms with the local tax collecting unit when requested to do so by

the buyer or seller.

     (19) An owner who owned and occupied a principal residence on

May 1 for taxes levied before January 1, 2012 for which the

exemption was not on the tax roll may file an appeal with the July

board of review or December board of review residential property

and small claims division of the Michigan tax tribunal in the year

for which the exemption was claimed or the immediately succeeding 3

years. For taxes levied after December 31, 2011, an owner who owned

and occupied a principal residence on June 1 or November 1 for

which the exemption was not on the tax roll may file an appeal with

the July board of review or December board of review residential

property and small claims division of the Michigan tax tribunal in

the year for which the exemption was claimed or the immediately

succeeding 3 years. If an appeal of a claim for exemption that was

not on the tax roll is received not later than 5 days prior to the

date of the December board of review, the local tax collecting unit

shall convene a December board of review and consider the appeal

pursuant to this section and section 53b.

     (20) An owner who owned and occupied a principal residence

within the time period prescribed in subsection (2) in any year

before the 3 immediately preceding tax years for which the

exemption was not on the tax roll as a result of a qualified error

on the part of the local tax collecting unit may file a request for

the exemption for those tax years with the department of treasury.

The request for the exemption shall be in a form prescribed by the

department of treasury and shall include all documentation the

department of treasury considers necessary to consider the request

and to correct any affected official records if a qualified error

on the part of the local tax collecting unit is recognized and an

exemption is granted. If the department of treasury denies a

request for the exemption under this subsection, the owner is

responsible for all costs related to the request as determined by

the department of treasury. If the department of treasury grants a

request for the exemption under this subsection and the exemption

results in an overpayment of the tax in the years under

consideration, the department of treasury shall notify the

treasurer of the local tax collecting unit, the county treasurer,

and other affected officials of the error and the granting of the

request for the exemption and all affected official records shall

be corrected consistent with guidance provided by the department of

treasury. If granting the request for the exemption results in an

overpayment, a rebate, including any interest paid by the owner,

shall be paid to the owner within 30 days of the receipt of the

notice. A rebate shall be without interest. The treasurer in

possession of the appropriate tax roll may deduct the rebate from

the appropriate tax collecting unit's subsequent distribution of

taxes. The treasurer in possession of the appropriate tax roll

shall bill to the appropriate tax collecting unit the tax

collecting unit's share of taxes rebated. A local tax collecting

unit responsible for a qualified error under this subsection shall

reimburse each county treasurer and other affected local official

required to correct official records under this subsection for the

costs incurred in complying with this subsection.

     (21) If an owner of property received a principal residence

exemption to which that owner was not entitled in any year before

the 3 immediately preceding tax years, as a result of a qualified

error on the part of the local tax collecting unit, the department

of treasury may deny the principal residence exemption as provided

in subsection (8). If the department of treasury denies an

exemption under this subsection, the owner shall be issued a

corrected or supplemental tax bill as provided in subsection (8),

except interest shall not accrue until 60 days after the date the

corrected or supplemental tax bill is issued. A local tax

collecting unit responsible for a qualified error under this

subsection shall reimburse each county treasurer and other affected

local official required to correct official records under this

subsection for the costs incurred in complying with this

subsection.

     (22) If the assessor or treasurer of the local tax collecting

unit believes that the department of treasury erroneously denied a

claim for exemption, the assessor or treasurer may submit written

information supporting the owner's claim for exemption to the

department of treasury within 35 days of the owner's receipt of the

notice denying the claim for exemption. If, after reviewing the

information provided, the department of treasury determines that

the claim for exemption was erroneously denied, the department of

treasury shall grant the exemption and the tax roll shall be

amended to reflect the exemption.

     (23) If granting the exemption under this section results in

an overpayment of the tax, a rebate, including any interest paid,

shall be made 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 rebate

shall be without interest. If an exemption for property classified

as timber-cutover real property is granted under this section for

the 2008 or 2009 tax year, the tax roll shall be corrected and any

delinquent and unpaid penalty, interest, and tax resulting from

that property not having been exempt under this section for the

2008 or 2009 tax year shall be waived.

     (24) If an exemption under this section is erroneously granted

for an affidavit filed before October 1, 2003, an owner may request

in writing that the department of treasury withdraw the exemption.

The request to withdraw the exemption shall be received not later

than November 1, 2003. If an owner requests that an exemption be

withdrawn, the department of treasury shall issue an order

notifying the local assessor that the exemption issued under this

section has been denied based on the owner's request. If an

exemption is withdrawn, the property that had been subject to that

exemption shall be immediately placed on the tax roll 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 as though the exemption had not been

granted. A corrected tax bill shall be issued for the tax year

being adjusted 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. Unless a

denial has been issued prior to July 1, 2003, if an owner requests

that an exemption under this section be withdrawn and that owner

pays the corrected tax bill issued under this subsection within 30

days after the corrected tax bill is issued, that owner is not

liable for any penalty or interest on the additional tax. An owner

who pays a corrected tax bill issued under this subsection more

than 30 days after the corrected tax bill is issued is liable for

the penalties and interest that would have accrued if the exemption

had not been granted from the date the taxes were originally

levied.

(24) (25) Subject to subsection (26), (25), interest at the

rate of 1.25% per month or fraction of a month collected under

subsection (6), (8), or (11) shall be distributed as follows:

     (a) If the assessor of the local tax collecting unit denies

the exemption under this section, as follows:

     (i) To the local tax collecting unit, 70%.

     (ii) To the department of treasury, 10%.

     (iii) To the county in which the property is located, 20%.

     (b) If the department of treasury denies the exemption under

this section, as follows:

     (i) To the local tax collecting unit, 20%.

     (ii) To the department of treasury, 70%.

     (iii) To the county in which the property is located, 10%.

     (c) If the county treasurer or his or her designee or the

county equalization director or his or her designee denies the

exemption under this section, as follows:

     (i) To the local tax collecting unit, 20%.

     (ii) To the department of treasury, 10%.

     (iii) To the county in which the property is located, 70%.

(25) (26) Interest distributed under subsection (25) (24) is

subject to the following conditions:

     (a) Interest distributed to a county shall be deposited into a

restricted fund to be used solely for the administration of

exemptions under this section. Money in that restricted fund shall

lapse to the county general fund on the December 31 in the year 3

years after the first distribution of interest to the county under

subsection (25) (24) and on each succeeding December 31 thereafter.

     (b) Interest distributed to the department of treasury shall

be deposited into the principal residence property tax exemption

audit fund, which is created within the state treasury. The state

treasurer may receive money or other assets from any source for

deposit into the fund. The state treasurer shall direct the

investment of the fund. The state treasurer shall credit to the

fund interest and earnings from fund investments. Money in the fund

shall be considered a work project account and at the close of the

fiscal year shall remain in the fund and shall not lapse to the

general fund. Money from the fund shall be expended, upon

appropriation, only for the purpose of auditing exemption

affidavits.

(26) (27) Interest distributed under subsection (25) (24) is

in addition to and shall not affect the levy or collection of the

county property tax administration fee established under this act.

(27) (28) A cooperative housing corporation is entitled to a

full or partial exemption under this section for the tax year in

which the cooperative housing corporation files all of the

following with the local tax collecting unit in which the

cooperative housing corporation is located if filed within the time

period prescribed in subsection (2):

     (a) An affidavit form.

     (b) A statement of the total number of units owned by the

cooperative housing corporation and occupied as the principal

residence of a tenant stockholder as of the date of the filing

under this subsection.

     (c) A list that includes the name, address, and social

security number of each tenant stockholder of the cooperative

housing corporation occupying a unit in the cooperative housing

corporation as his or her principal residence as of the date of the

filing under this subsection.

     (d) A statement of the total number of units of the

cooperative housing corporation on which an exemption under this

section was claimed and that were transferred in the tax year

immediately preceding the tax year in which the filing under this

section was made.

     (29) Before May 1, 2004 and before May 1, 2005, the treasurer

of each county shall forward to the department of education a

statement of the taxable value of each school district and fraction

of a school district within the county for the preceding 4 calendar

years. This requirement is in addition to the requirement set forth

in section 151 of the state school aid act of 1979, 1979 PA 94, MCL

388.1751.

(28) (30) For a parcel of property open and available for use

as a bed and breakfast, the portion of the taxable value of the

property used as a principal residence under subsection (16) shall

be calculated in the following manner:

     (a) Add all of the following:

     (i) The square footage of the property used exclusively as that

owner's principal residence.

     (ii) 50% of the square footage of the property's common area.

     (iii) If the property was not open and available for use as a

bed and breakfast for 90 or more consecutive days in the

immediately preceding 12-month period, the result of the following

calculation:

     (A) Add the square footage of the property that is open and

available regularly and exclusively as a bed and breakfast, and 50%

of the square footage of the property's common area.

     (B) Multiply the result of the calculation in sub-subparagraph

(A) by a fraction, the numerator of which is the number of

consecutive days in the immediately preceding 12-month period that

the property was not open and available for use as a bed and

breakfast and the denominator of which is 365.

     (b) Divide the result of the calculation in subdivision (a) by

the total square footage of the property.

(29) (31) The owner claiming an exemption under this section

for property open and available as a bed and breakfast shall file

an affidavit claiming the exemption within the time period

prescribed in subsection (2) with the local tax collecting unit in

which the property is located. The affidavit shall be in a form

prescribed by the department of treasury.

(30) (32) As used in this section:

     (a) "Bed and breakfast" means property classified as

residential real property under section 34c that meets all of the

following criteria:

     (i) Has 10 or fewer sleeping rooms, including sleeping rooms

occupied by the owner of the property, 1 or more of which are

available for rent to transient tenants.

     (ii) Serves meals at no extra cost to its transient tenants.

     (iii) Has a smoke detector in proper working order in each

sleeping room and a fire extinguisher in proper working order on

each floor.

     (b) "Common area" includes, but is not limited to, a kitchen,

dining room, living room, fitness room, porch, hallway, laundry

room, or bathroom that is available for use by guests of a bed and

breakfast or, unless guests are specifically prohibited from access

to the area, an area that is used to provide a service to guests of

a bed and breakfast.

     (c) "Qualified error" means that term as defined in section

53b.53e.

     Sec. 7ee. (1) Qualified agricultural property is exempt from

the tax levied by a local school district for school operating

purposes to the extent provided under section 1211 of the revised

school code, 1976 PA 451, MCL 380.1211, according to the provisions

of this section.

     (2) Qualified agricultural property that is classified as

agricultural under section 34c is exempt under subsection (1) and

the owner is not required to file an affidavit claiming an

exemption with the local tax collecting unit unless requested by

the assessor to determine whether the property includes structures

that are not exempt under this section. To claim an exemption under

subsection (1) for qualified agricultural property that is not

classified as agricultural under section 34c, the owner shall file

an affidavit claiming the exemption with the local tax collecting

unit by May 1.

     (3) The affidavit shall be on a form prescribed by the

department of treasury.

     (4) For property classified as agricultural, and upon receipt

of an affidavit filed under subsection (2) for property not

classified as agricultural, the assessor shall determine if the

property is qualified agricultural property and if so shall exempt

the property from the collection of the tax as provided in

subsection (1) until December 31 of the year in which the property

is no longer qualified agricultural property as defined in section

7dd. An owner is required to file a new claim for exemption on the

same property as requested by the assessor under subsection (2).

     (5) Not more than 90 days after all or a portion of the

exempted property is no longer qualified agricultural property, the

owner shall rescind the exemption for the applicable portion of the

property by filing with the local tax collecting unit a rescission

form prescribed by the department of treasury. An owner who fails

to file a rescission as required by this subsection is subject to a

penalty of $5.00 per day for each separate failure beginning after

the 90 days have elapsed, up to a maximum of $200.00. This penalty

shall be collected under 1941 PA 122, MCL 205.1 to 205.31, and

shall be deposited in the state school aid fund established in

section 11 of article IX of the state constitution of 1963. This

penalty may be waived by the department of treasury.

     (6) An owner of property that is qualified agricultural

property on May 1 for which an exemption was not on the tax roll

may file an appeal with the July or December board of review

residential property and small claims division of the Michigan tax

tribunal in the year the exemption was claimed or the immediately

succeeding year. 3 years. An owner of property that is qualified

agricultural property on May 1 for which an exemption was denied by

the assessor in the year the affidavit was filed, may file an

appeal with the July board of review for summer taxes or, if there

is not a summer levy of school operating taxes, with the December

board of review.residential property and small claims division of

the Michigan tax tribunal within 60 days of the denial. An appeal

of a denial of an exemption for qualified agricultural property to

the residential property and small claims division of the Michigan

tax tribunal under this subsection may include the current

assessment year and the 3 immediately preceding years.

     (7) If the assessor of the local tax collecting unit believes

that the property for which an exemption has been granted is not

qualified agricultural property, the assessor may deny or modify an

existing exemption by notifying the owner in writing at the time

required for providing a notice under section 24c. A taxpayer may

appeal the assessor's determination to the board of review meeting

under section 30. A decision of the board of review may be appealed

to the residential property and small claims division of the

Michigan tax tribunal within 60 days of the denial or modification.

     (8) If an exemption under this section is erroneously granted,

an owner may request in writing that the local tax collecting unit

withdraw the exemption. If an owner requests that an exemption be

withdrawn, the local assessor shall notify the owner that the

exemption issued under this section has been denied based on that

owner's request. If an exemption is withdrawn, the property that

had been subject to that exemption shall be immediately placed on

the tax roll 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 as though

the exemption had not been granted. A corrected tax bill shall be

issued for the tax year being adjusted 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. If an owner requests that an exemption under this section

be withdrawn before that owner is contacted in writing by the local

assessor regarding that owner's eligibility for the exemption and

that owner pays the corrected tax bill issued under this subsection

within 30 days after the corrected tax bill is issued, that owner

is not liable for any penalty or interest on the additional tax. An

owner who pays a corrected tax bill issued under this subsection

more than 30 days after the corrected tax bill is issued is liable

for the penalties and interest that would have accrued if the

exemption had not been granted from the date the taxes were

originally levied.

     Sec. 9m. (1) Beginning December 31, 2015 and each year

thereafter, qualified new personal property for which an exemption

has been properly claimed under subsection (2) is exempt from the

collection of taxes under this act.

     (2) A person shall claim the exemption under this section by

filing an affidavit with the local tax collecting unit in which the

qualified new personal property is located as provided in

subsection (3). The affidavit shall be in a form prescribed by the

state tax commission. An affidavit claiming an exemption under this

section applies to all existing and subsequently acquired qualified

new personal property. The local tax collecting unit shall transmit

the affidavits filed, or the information contained in the

affidavits filed, under this section and under section 9n to the

department of treasury in the form and in the manner prescribed by

the department of treasury.

     (3) If a person claiming an exemption under this section has

not filed an affidavit under this section in any prior year with

the local tax collecting unit in which the qualified new personal

property is located, that person shall file the affidavit described

under subsection (2) with that local tax collecting unit not later

than February 10 of the first year for which the person is claiming

the exemption for qualified new personal property in the local tax

collecting unit.

     (4) Except for a person claiming an exemption under this

section for personal property that was subject to section 9f or

1974 PA 198, MCL 207.551 to 207.572, in 2015, if an affidavit

claiming the exemption under this section is filed as provided in

subsection (3) by February 10, 2016, and the person claiming the

exemption under this section complied with section 19(9) in 2015,

or if the filing requirement under section 19(9) was not applicable

because the qualified new personal property was acquired in 2015,

the person claiming the exemption under this section is not

required to file a statement under section 19 for that qualified

new personal property in 2016. Except for a person claiming an

exemption under this section for personal property that was subject

to section 9f or 1974 PA 198, MCL 207.551 to 207.572, in 2015, if

an affidavit claiming the exemption under this section is filed as

provided in subsection (3), beginning in 2017, the person claiming

the exemption under this section is not required to file a

statement under section 19 for qualified new personal property

exempt under this section. For a person claiming an exemption under

this section for personal property that was subject to section 9f

or 1974 PA 198, MCL 207.551 to 207.572, in 2015, if an affidavit

claiming the exemption under this section is filed as provided in

subsection (3) and the person claiming the exemption under this

section complied with section 19(9) in 2015, the person claiming

the exemption under this section is not required to file a

statement under section 19 for that qualified new personal property

in the first year for which that person is claiming an exemption

under this section or in any subsequent year. For a person claiming

an exemption under this section for personal property that was

subject to section 9f or 1974 PA 198, MCL 207.551 to 207.572, in

2015, if an affidavit claiming the exemption under this section is

filed as provided in subsection (3), but the person claiming the

exemption under this section did not comply with section 19(9) in

2015, the person claiming the exemption under this section shall

file a statement under section 19 for that person's qualified new

personal property in the first year for which that person is

claiming an exemption under this section for qualified new personal

property, but that person is not required to file a statement under

section 19 for that qualified new personal property in any

subsequent year. If the person claiming the exemption under this

section has not filed an affidavit as required under subsection

(2), the personal property for which the person is claiming an

exemption is subject to the collection of taxes under this act and

that person shall file a statement under section 19.

     (5) If the assessor of the local tax collecting unit believes

that personal property for which an affidavit claiming an exemption

is filed under subsection (2) is not qualified new personal

property, the assessor may deny that claim for exemption by

notifying the person that filed the affidavit in writing of the

reason for the denial and advising the person that the denial may

be appealed to the board of review under section 30. or 53b. A

qualified error may be appealed to the state tax commission under

section 53e. The assessor may deny a claim for exemption under this

subsection for the current year only. If the assessor denies a

claim for exemption, the assessor shall remove the exemption of

that personal property and amend the tax roll to reflect the denial

and the local treasurer shall within 30 days of the date of the

denial issue a corrected tax bill for any additional taxes.

     (6) A person claiming an exemption for qualified new personal

property exempt under this section shall maintain books and records

and shall provide access to those books and records as provided in

section 22.

     (7) If a person fraudulently claims an exemption for personal

property under this section, that person is subject to the

penalties provided for in section 21(2).

     (8) As used in this section:

     (a) "Affiliated person" means a sole proprietorship,

partnership, limited liability company, corporation, association,

flow-through entity, member of a unitary business group, or other

entity related to a person claiming an exemption under this

section.

     (b) "Direct integrated support" means any of the following:

     (i) Research and development related to goods produced in

industrial processing and conducted in furtherance of that

industrial processing.

     (ii) Testing and quality control functions related to goods

produced in industrial processing and conducted in furtherance of

that industrial processing.

     (iii) Engineering related to goods produced in industrial

processing and conducted in furtherance of that industrial

processing.

     (iv) Receiving or storing equipment, materials, supplies,

parts, or components for industrial processing, or scrap materials

or waste resulting from industrial processing, at the industrial

processing site or at another site owned or leased by the owner or

lessee of the industrial processing site.

     (v) Storing of finished goods inventory if the inventory was

produced by a business engaged primarily in industrial processing

and if the inventory is stored either at the site where it was

produced or at another site owned or leased by the business that

produced the inventory.

     (vi) Sorting, distributing, or sequencing functions that

optimize transportation and just-in-time inventory management and

material handling for inputs to industrial processing.

     (c) "Eligible manufacturing personal property" means all

personal property located on occupied real property if that

personal property is predominantly used in industrial processing or

direct integrated support. Personal property located on occupied

real property is predominantly used in industrial processing or

direct integrated support if the result of the following

calculation is more than 50%:

     (i) Multiply the original cost of all personal property located

on that occupied real property by its percentage of use in

industrial processing or in direct integrated support. Personal

property is used in industrial processing if it is not used to

generate, transmit, or distribute electricity for sale, if it is

not utility personal property as described in section 34c(3)(e),

and if its purchase or use by the person claiming the exemption

would be eligible for exemption under section 4t of the general

sales tax act, 1933 PA 167, MCL 205.54t, or section 4o of the use

tax act, 1937 PA 94, MCL 205.94o. For an item of personal property

that is used in industrial processing, its percentage of use in

industrial processing shall equal the percentage of the exemption

the property would be eligible for under section 4t of the general

sales tax act, 1933 PA 167, MCL 205.54t, or section 4o of the use

tax act, 1937 PA 94, MCL 205.94o. Utility personal property as

described in section 34c(3)(e) is not used in direct integrated

support.

     (ii) Divide the result of the calculation under subparagraph (i)

by the total original cost of all personal property located on that

occupied real property.

     (d) "Industrial processing" means that term as defined in

section 4t of the general sales tax act, 1933 PA 167, MCL 205.54t,

or section 4o of the use tax act, 1937 PA 94, MCL 205.94o.

Industrial processing does not include the generation,

transmission, or distribution of electricity for sale.

     (e) "New personal property" means property that was initially

placed in service in this state or outside of this state after

December 31, 2012.

     (f) "Occupied real property" means all of the following:

     (i) A parcel of real property that is entirely owned, leased,

or otherwise occupied by a person claiming an exemption under this

section.

     (ii) Contiguous parcels of real property that are entirely

owned, leased, or otherwise occupied by a person claiming an

exemption under this section and that host a single, integrated

business operation engaged primarily in industrial processing,

direct integrated support, or both. A business operation is not

engaged primarily in industrial processing, direct integrated

support, or both if it engages in significant business activities

that are not directly related to industrial processing or direct

integrated support.

     (iii) The portion of a parcel of real property that is owned,

leased, or otherwise occupied by a person claiming the exemption or

by an affiliated person.

     (g) "Original cost" means the fair market value of eligible

manufacturing personal property at the time of acquisition by the

current owner. There is a rebuttable presumption that the

acquisition price paid by the current owner for eligible

manufacturing personal property reflects the fair market value of

that eligible manufacturing personal property. The department may

provide guidelines for circumstances in which the actual

acquisition cost of eligible manufacturing personal property is not

determinative of the fair market value of that eligible

manufacturing personal property and for the basis of determining

fair market value of eligible manufacturing personal property in

those circumstances.

     (h) "Qualified error" means that term as defined in section

53e.

(i) (h) "Qualified new personal property" means property that

meets all of the following conditions:

     (i) Is eligible manufacturing personal property.

     (ii) Is new personal property.

     Sec. 9n. (1) Beginning December 31, 2015 and each year

thereafter, qualified previously existing personal property for

which an exemption has been properly claimed under subsection (2)

is exempt from the collection of taxes under this act.

     (2) A person shall claim the exemption under this section by

filing an affidavit with the local tax collecting unit in which the

qualified previously existing personal property is located as

provided in subsection (3). The affidavit shall be in a form

prescribed by the state tax commission. A person claiming an

exemption for previously existing personal property is only

required to file the affidavit claiming the exemption under this

section for the first year for which the exemption for that

qualified previously existing personal property is claimed in the

local tax collecting unit.

     (3) If a person claiming an exemption under this section has

not filed an affidavit under this section in any prior year with

the local tax collecting unit in which the qualified previously

existing personal property is located claiming an exemption for

that qualified previously existing personal property, that person

shall file the affidavit described under subsection (2) with that

local tax collecting unit not later than February 10 of the first

year for which the person is claiming the exemption for that

qualified previously existing personal property in the local tax

collecting unit. If an affidavit claiming the exemption for

qualified previously existing personal property under this section

is filed as provided in this subsection and the person claiming an

exemption for that qualified previously existing personal property

complied with section 19(9) with respect to that qualified

previously existing personal property in 2015, or if the filing

requirement under section 19(9) was not applicable because the

qualified previously existing personal property was acquired in

2015 or later, the person claiming the exemption under this section

is not required to also file a statement under section 19 for that

qualified previously existing personal property in the first year

for which the exemption is claimed or in any subsequent year. If an

affidavit claiming the exemption for qualified previously existing

personal property under this section is filed as provided in this

subsection but the person claiming the exemption under this section

did not comply with section 19(9) with respect to that qualified

previously existing personal property in 2015, the person claiming

the exemption under this section shall file a statement under

section 19 for that qualified previously existing personal property

in the first year for which the person is claiming an exemption for

that qualified previously existing personal property, but the

person is not required to file a statement under section 19 for

that qualified previously existing personal property in any

subsequent year. If a person claiming an exemption for qualified

previously existing personal property has not filed an affidavit as

required under this section, that person's qualified previously

existing personal property is subject to the collection of taxes

under this act and that person shall file a statement under section

19.

     (4) If the assessor of the local tax collecting unit believes

that personal property for which an affidavit claiming an exemption

is filed under subsection (2) is not qualified previously existing

personal property, the assessor may deny that claim for exemption

by notifying the person that filed the affidavit in writing of the

reason for the denial and advising the person that the denial may

be appealed to the board of review under section 30. or 53b. A

qualified error may be appealed to the state tax commission under

section 53e. The assessor may deny a claim for exemption under this

subsection for the current year only. If the assessor denies a

claim for exemption, the assessor shall remove the exemption of

that personal property and amend the tax roll to reflect the denial

and the local treasurer shall within 30 days of the date of the

denial issue a corrected tax bill for any additional taxes.

     (5) A person claiming an exemption for qualified previously

existing personal property exempt under this section shall maintain

books and records and shall provide access to those books and

records as provided in section 22.

     (6) If a person fraudulently claims an exemption for personal

property under this section, that person is subject to the

penalties provided for in section 21(2).

     (7) As used in this section:

     (a) "Direct integrated support", "eligible manufacturing

personal property", and "industrial processing" mean those terms as

defined in section 9m.

     (b) "Qualified error" means that term as defined in section

53e.

(c) (b) "Qualified previously existing personal property"

means personal property that meets all of the following conditions:

     (i) Is eligible manufacturing personal property.

     (ii) Meets any of the following conditions:

     (A) Has been subject to or exempt from the collection of taxes

under this act for the immediately preceding 10 years.

     (B) If that personal property was located both outside of and

within this state in the immediately preceding 10 years, that

personal property was subject to or exempt from the collection of

taxes under this act, or would have been subject to or exempt from

the collection of taxes under this act if located in this state,

for the immediately preceding 10 years.

     (C) If that personal property was located outside of this

state in the immediately preceding 10 years, that personal property

would have been subject to or exempt from the collection of taxes

under this act for the immediately preceding 10 years if that

personal property had been located in this state.

     Sec. 9o. (1) Beginning December 31, 2013, eligible personal

property for which an exemption has been properly claimed under

this section is exempt from the collection of taxes under this act.

     (2) An owner of eligible personal property shall claim the

exemption under this section by annually filing an affidavit with

the local tax collecting unit in which the eligible personal

property is located not later than February 10 in each tax year.

The affidavit shall be in a form prescribed by the state tax

commission and shall include any address where any property owned

by, leased to, or in the possession of that owner or a related

entity is located within that local tax collecting unit. The

affidavit shall require the owner to attest that the combined true

cash value of all industrial personal property and commercial

personal property in that local tax collecting unit owned by,

leased to, or in the possession of that owner or a related entity

on December 31 of the immediately preceding year is less than

$80,000.00.

     (3) If an affidavit claiming the exemption under this section

is filed as provided in subsection (2), the owner of that eligible

personal property is not required to also file a statement under

section 19 in that tax year.

     (4) A person who claims an exemption for eligible personal

property under this section shall maintain books and records and

shall provide access to those books and records as provided in

section 22.

     (5) If the assessor of the local tax collecting unit believes

that personal property for which an affidavit claiming an exemption

is filed under subsection (2) is not eligible personal property,

the assessor may deny that claim for exemption by notifying the

person that filed the affidavit in writing of the reason for the

denial and advising the person that the denial may be appealed to

the board of review under section 30 or 53b during that tax year. A

qualified error may be appealed to the state tax commission under

section 53e. The assessor may deny a claim for exemption for the

current year and for the 3 immediately preceding calendar years. If

the assessor denies a claim for exemption, the assessor shall

remove the exemption of that personal property and, if the tax roll

is in the local tax collecting unit's possession, amend the tax

roll to reflect the denial and the local treasurer shall within 30

days of the date of the denial issue a corrected tax bill for any

additional taxes with interest at the rate of 1% per month or

fraction of a month and penalties computed from the date the taxes

were last payable without interest or penalty. If the tax roll is

in the county treasurer's possession, the tax roll shall be amended

to reflect the denial and the county treasurer shall within 30 days

of the date of the denial prepare and submit a supplemental tax

bill for any additional taxes, together with interest at the rate

of 1% per month or fraction of a month and penalties computed from

the date the taxes were last payable without interest or penalty.

Interest on any tax set forth in a corrected or supplemental tax

bill shall again begin to accrue 60 days after the date the

corrected or supplemental tax bill is issued at the rate of 1% per

month or fraction of a month. Taxes levied in a corrected or

supplemental tax bill shall be returned as delinquent on the March

1 in the year immediately succeeding the year in which the

corrected or supplemental tax bill is issued.

     (6) If a person fraudulently claims an exemption for personal

property under this section, that person is subject to the

penalties provided for in section 21(2).

     (7) For 2014 only, if an owner of eligible personal property

did not timely file an affidavit to claim the exemption under this

section, that owner may file an appeal with the March 2014 board of

review to claim the exemption.

     (8) As used in this section:

     (a) "Commercial personal property" means personal property

that is classified as commercial personal property under section

34c or would be classified as commercial personal property under

section 34c if not exempt from the collection of taxes under this

act under this section or section 9m or 9n.

     (b) "Control", "controlled by", and "under common control

with" mean the possession of the power to direct or cause the

direction of the management and policies of a related entity,

directly or indirectly, whether derived from a management position,

official office, or corporate office held by an individual; by an

ownership interest, beneficial interest, or equitable interest; or

by contractual agreement or other similar arrangement. There is a

rebuttable presumption that control exists if any person, directly

or indirectly, owns, controls, or holds the power to vote, directly

or by proxy, 10% or more of the ownership interest of any other

person or has contributed more than 10% of the capital of the other

person. Indirect ownership includes ownership through attribution

or through 1 or more intermediary entities.

     (c) "Eligible personal property" means property that meets all

of the following conditions:

     (i) Is industrial personal property or commercial personal

property.

     (ii) The combined true cash value of all industrial personal

property and commercial personal property in that local tax

collecting unit owned by, leased to, or in the possession of the

person claiming an exemption under this section or a related entity

on December 31 of the immediately preceding year is less than

$80,000.00.

     (iii) Is not leased to or used by a person that previously owned

the property or a person that, directly or indirectly, controls, is

controlled by, or is under common control with the person that

previously owned the property.

     (d) "Industrial personal property" means personal property

that is classified as industrial personal property under section

34c or would be classified as industrial personal property under

section 34c if not exempt from the collection of taxes under this

act under this section or section 9m or 9n.

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

association, limited liability company, or any other legal entity.

     (f) "Qualified error" means that term as defined in section

53e.

(g) (f) "Related entity" means a person that, directly or

indirectly, controls, is controlled by, or is under common control

with the person claiming an exemption under this section.

     Sec. 24c. (1) The assessor shall give to each owner or person

or persons listed on the assessment roll of the property a notice

by first-class mail of an increase in the tentative state equalized

valuation or the tentative taxable value for the year. The notice

shall specify each parcel of property, the tentative taxable value

for the current year, and the taxable value for the immediately

preceding year. The notice shall also specify the time and place of

the meeting of the board of review. The notice shall also specify

the difference between the property's tentative taxable value in

the current year and the property's taxable value in the

immediately preceding year.

     (2) The notice shall include, in addition to the information

required by subsection (1), all of the following:

     (a) The state equalized valuation for the immediately

preceding year.

     (b) The tentative state equalized valuation for the current

year.

     (c) The net change between the tentative state equalized

valuation for the current year and the state equalized valuation

for the immediately preceding year.

     (d) The classification of the property as defined by section

34c.

     (e) The inflation rate for the immediately preceding year as

defined in section 34d.

     (f) A statement provided by the state tax commission

explaining the relationship between state equalized valuation and

taxable value. If the assessor believes that a transfer of

ownership has occurred in the immediately preceding year, the

statement shall state that the ownership was transferred and that

the taxable value of that property is the same as the state

equalized valuation of that property.

     (g) The assessor's office telephone number.

     (h) A statement that the owner or person or persons listed on

the assessment roll may meet with the assessor or his or her

designee prior to the board of review.

     (3) When required by the income tax act of 1967, 1967 PA 281,

MCL 206.1 to 206.532, 206.713, the assessment notice shall include

or be accompanied by information or forms prescribed by the income

tax act of 1967, 1967 PA 281, MCL 206.1 to 206.532.206.713.

     (4) The assessment notice shall be addressed to the owner

according to the records of the assessor and mailed not less than

14 days before the meeting of the board of review. The failure to

send or receive an assessment notice does not invalidate an

assessment roll or an assessment on that property.

     (5) The tentative state equalized valuation shall be

calculated by multiplying the assessment by the tentative equalized

valuation multiplier. If the assessor has made assessment

adjustments that would have changed the tentative multiplier, the

assessor may recalculate the multiplier for use in the notice.

     (6) The state tax commission shall prepare a model assessment

notice form that shall be made available to local units of

government.

     (7) The assessment notice under subsection (1) shall include

the following statement:

     "If you purchased your principal residence after May 1 last

year, to claim the principal residence exemption, if you have not

already done so, you are required to file an affidavit before May

1.".

     (8) For taxes levied after December 31, 2003, the assessment

notice under subsection (1) shall separately state the state

equalized valuation and taxable value for any leasehold

improvements.

     Sec. 27a. (1) Except as otherwise provided in this section,

property shall be assessed at 50% of its true cash value under

section 3 of article IX of the state constitution of 1963.

     (2) Except as otherwise provided in subsection (3), for taxes

levied in 1995 and for each year after 1995, the taxable value of

each parcel of property is the lesser of the following:

     (a) The property's taxable value in the immediately preceding

year minus any losses, multiplied by the lesser of 1.05 or the

inflation rate, plus all additions. For taxes levied in 1995, the

property's taxable value in the immediately preceding year is the

property's state equalized valuation in 1994.

     (b) The property's current state equalized valuation.

     (3) Upon a transfer of ownership of property after 1994, the

property's taxable value for the calendar year following the year

of the transfer is the property's state equalized valuation for the

calendar year following the transfer.

     (4) If the taxable value of property is adjusted under

subsection (3), a subsequent increase in the property's taxable

value is subject to the limitation set forth in subsection (2)

until a subsequent transfer of ownership occurs. If the taxable

value of property is adjusted under subsection (3) and the assessor

determines that there had not been a transfer of ownership, the

taxable value of the property shall be adjusted at the July or

December board of review. Notwithstanding the limitation provided

in section 53b(1) on the number of years for which a correction may

be made, the July or December board of review For a qualified

error, the state tax commission may adjust the taxable value of

property under this subsection for the current year and for the 3

immediately preceding calendar years under section 53e. A corrected

tax bill shall be issued for each tax year for which the taxable

value is adjusted 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. For

purposes of section 53b, an adjustment under this subsection shall

be considered the correction of a clerical error.

     (5) Assessment of property, as required in this section and

section 27, is inapplicable to the assessment of property subject

to the levy of ad valorem taxes within voted tax limitation

increases to pay principal and interest on limited tax bonds issued

by any governmental unit, including a county, township, community

college district, or school district, before January 1, 1964, if

the assessment required to be made under this act would be less

than the assessment as state equalized prevailing on the property

at the time of the issuance of the bonds. This inapplicability

shall continue until levy of taxes to pay principal and interest on

the bonds is no longer required. The assessment of property

required by this act shall be applicable for all other purposes.

     (6) As used in this act, "transfer of ownership" means the

conveyance of title to or a present interest in property, including

the beneficial use of the property, the value of which is

substantially equal to the value of the fee interest. Transfer of

ownership of property includes, but is not limited to, the

following:

     (a) A conveyance by deed.

     (b) A conveyance by land contract. The taxable value of

property conveyed by a land contract executed after December 31,

1994 shall be adjusted under subsection (3) for the calendar year

following the year in which the contract is entered into and shall

not be subsequently adjusted under subsection (3) when the deed

conveying title to the property is recorded in the office of the

register of deeds in the county in which the property is located.

     (c) A conveyance to a trust after December 31, 1994, except

under any of the following conditions:

     (i) If the settlor or the settlor's spouse, or both, conveys

the property to the trust and the sole present beneficiary or

beneficiaries are the settlor or the settlor's spouse, or both.

     (ii) Beginning December 31, 2014, for residential real

property, if the settlor or the settlor's spouse, or both, conveys

the residential real property to the trust and the sole present

beneficiary or beneficiaries are the settlor's or the settlor's

spouse's mother, father, brother, sister, son, daughter, adopted

son, adopted daughter, grandson, or granddaughter and the

residential real property is not used for any commercial purpose

following the conveyance. Upon request by the department of

treasury or the assessor, the sole present beneficiary or

beneficiaries shall furnish proof within 30 days that the sole

present beneficiary or beneficiaries meet the requirements of this

subparagraph. If a present beneficiary fails to comply with a

request by the department of treasury or assessor under this

subparagraph, that present beneficiary is subject to a fine of

$200.00.

     (d) A conveyance by distribution from a trust, except under

any of the following conditions:

     (i) If the distributee is the sole present beneficiary or the

spouse of the sole present beneficiary, or both.

     (ii) Beginning December 31, 2014, a distribution of residential

real property if the distributee is the settlor's or the settlor's

spouse's mother, father, brother, sister, son, daughter, adopted

son, adopted daughter, grandson, or granddaughter and the

residential real property is not used for any commercial purpose

following the conveyance. Upon request by the department of

treasury or the assessor, the sole present beneficiary or

beneficiaries shall furnish proof within 30 days that the sole

present beneficiary or beneficiaries meet the requirements of this

subparagraph. If a present beneficiary fails to comply with a

request by the department of treasury or assessor under this

subparagraph, that present beneficiary is subject to a fine of

$200.00.

     (e) A change in the sole present beneficiary or beneficiaries

of a trust, except under any of the following conditions:

     (i) A change that adds or substitutes the spouse of the sole

present beneficiary.

     (ii) Beginning December 31, 2014, for residential real

property, a change that adds or substitutes the settlor's or the

settlor's spouse's mother, father, brother, sister, son, daughter,

adopted son, adopted daughter, grandson, or granddaughter and the

residential real property is not used for any commercial purpose

following the conveyance. Upon request by the department of

treasury or the assessor, the sole present beneficiary or

beneficiaries shall furnish proof within 30 days that the sole

present beneficiary or beneficiaries meet the requirements of this

subparagraph. If a present beneficiary fails to comply with a

request by the department of treasury or assessor under this

subparagraph, that present beneficiary is subject to a fine of

$200.00.

     (f) A conveyance by distribution under a will or by intestate

succession, except under any of the following conditions:

     (i) If the distributee is the decedent's spouse.

     (ii) Beginning December 31, 2014, for residential real

property, if the distributee is the decedent's or the decedent's

spouse's mother, father, brother, sister, son, daughter, adopted

son, adopted daughter, grandson, or granddaughter and the

residential real property is not used for any commercial purpose

following the conveyance. Upon request by the department of

treasury or the assessor, the sole present beneficiary or

beneficiaries shall furnish proof within 30 days that the sole

present beneficiary or beneficiaries meet the requirements of this

subparagraph. If a present beneficiary fails to comply with a

request by the department of treasury or assessor under this

subparagraph, that present beneficiary is subject to a fine of

$200.00.

     (g) A conveyance by lease if the total duration of the lease,

including the initial term and all options for renewal, is more

than 35 years or the lease grants the lessee a bargain purchase

option. As used in this subdivision, "bargain purchase option"

means the right to purchase the property at the termination of the

lease for not more than 80% of the property's projected true cash

value at the termination of the lease. After December 31, 1994, the

taxable value of property conveyed by a lease with a total duration

of more than 35 years or with a bargain purchase option shall be

adjusted under subsection (3) for the calendar year following the

year in which the lease is entered into. This subdivision does not

apply to personal property except buildings described in section

14(6) and personal property described in section 8(h), (i), and

(j). This subdivision does not apply to that portion of the

property not subject to the leasehold interest conveyed.

     (h) Except as otherwise provided in this subdivision, a

conveyance of an ownership interest in a corporation, partnership,

sole proprietorship, limited liability company, limited liability

partnership, or other legal entity if the ownership interest

conveyed is more than 50% of the corporation, partnership, sole

proprietorship, limited liability company, limited liability

partnership, or other legal entity. Unless notification is provided

under subsection (10), the corporation, partnership, sole

proprietorship, limited liability company, limited liability

partnership, or other legal entity shall notify the assessing

officer on a form provided by the state tax commission not more

than 45 days after a conveyance of an ownership interest that

constitutes a transfer of ownership under this subdivision. Both of

the following apply to a corporation subject to 1897 PA 230, MCL

455.1 to 455.24:

     (i) A transfer of stock of the corporation is a transfer of

ownership only with respect to the real property that is assessed

to the transferor lessee stockholder.

     (ii) A cumulative conveyance of more than 50% of the

corporation's stock does not constitute a transfer of ownership of

the corporation's real property.

     (i) A transfer of property held as a tenancy in common, except

that portion of the property not subject to the ownership interest

conveyed.

     (j) A conveyance of an ownership interest in a cooperative

housing corporation, except that portion of the property not

subject to the ownership interest conveyed.

     (7) Transfer of ownership does not include the following:

     (a) The transfer of property from 1 spouse to the other spouse

or from a decedent to a surviving spouse.

     (b) A transfer from a husband, a wife, or a husband and wife

creating or disjoining a tenancy by the entireties in the grantors

or the grantor and his or her spouse.

     (c) A transfer of that portion of property subject to a life

estate or life lease retained by the transferor, until expiration

or termination of the life estate or life lease. That portion of

property transferred that is not subject to a life lease shall be

adjusted under subsection (3).

     (d) A transfer through foreclosure or forfeiture of a recorded

instrument under chapter 31, 32, or 57 of the revised judicature

act of 1961, 1961 PA 236, MCL 600.3101 to 600.3285 and MCL 600.5701

to 600.5759, or through deed or conveyance in lieu of a foreclosure

or forfeiture, until the mortgagee or land contract vendor

subsequently transfers the property. If a mortgagee does not

transfer the property within 1 year of the expiration of any

applicable redemption period, the property shall be adjusted under

subsection (3).

     (e) A transfer by redemption by the person to whom taxes are

assessed of property previously sold for delinquent taxes.

     (f) A conveyance to a trust if the settlor or the settlor's

spouse, or both, conveys the property to the trust and any of the

following conditions are satisfied:

     (i) If the sole present beneficiary of the trust is the settlor

or the settlor's spouse, or both.

     (ii) Beginning December 31, 2014, for residential real

property, if the sole present beneficiary of the trust is the

settlor's or the settlor's spouse's mother, father, brother,

sister, son, daughter, adopted son, adopted daughter, grandson, or

granddaughter and the residential real property is not used for any

commercial purpose following the conveyance. Upon request by the

department of treasury or the assessor, the sole present

beneficiary or beneficiaries shall furnish proof within 30 days

that the sole present beneficiary or beneficiaries meet the

requirements of this subparagraph. If a present beneficiary fails

to comply with a request by the department of treasury or assessor

under this subparagraph, that present beneficiary is subject to a

fine of $200.00.

     (g) A transfer pursuant to a judgment or order of a court of

record making or ordering a transfer, unless a specific monetary

consideration is specified or ordered by the court for the

transfer.

     (h) A transfer creating or terminating a joint tenancy between

2 or more persons if at least 1 of the persons was an original

owner of the property before the joint tenancy was initially

created and, if the property is held as a joint tenancy at the time

of conveyance, at least 1 of the persons was a joint tenant when

the joint tenancy was initially created and that person has

remained a joint tenant since the joint tenancy was initially

created. A joint owner at the time of the last transfer of

ownership of the property is an original owner of the property. For

purposes of this subdivision, a person is an original owner of

property owned by that person's spouse.

     (i) A transfer for security or an assignment or discharge of a

security interest.

     (j) A transfer of real property or other ownership interests

among members of an affiliated group. As used in this subsection,

"affiliated group" means 1 or more corporations connected by stock

ownership to a common parent corporation. Upon request by the state

tax commission, a corporation shall furnish proof within 45 days

that a transfer meets the requirements of this subdivision. A

corporation that fails to comply with a request by the state tax

commission under this subdivision is subject to a fine of $200.00.

     (k) Normal public trading of shares of stock or other

ownership interests that, over any period of time, cumulatively

represent more than 50% of the total ownership interest in a

corporation or other legal entity and are traded in multiple

transactions involving unrelated individuals, institutions, or

other legal entities.

     (l) A transfer of real property or other ownership interests

among corporations, partnerships, limited liability companies,

limited liability partnerships, or other legal entities if the

entities involved are commonly controlled. Upon request by the

state tax commission, a corporation, partnership, limited liability

company, limited liability partnership, or other legal entity shall

furnish proof within 45 days that a transfer meets the requirements

of this subdivision. A corporation, partnership, limited liability

company, limited liability partnership, or other legal entity that

fails to comply with a request by the state tax commission under

this subdivision is subject to a fine of $200.00.

     (m) A direct or indirect transfer of real property or other

ownership interests resulting from a transaction that qualifies as

a tax-free reorganization under section 368 of the internal revenue

code, 26 USC 368. Upon request by the state tax commission, a

property owner shall furnish proof within 45 days that a transfer

meets the requirements of this subdivision. A property owner who

fails to comply with a request by the state tax commission under

this subdivision is subject to a fine of $200.00.

     (n) A transfer of qualified agricultural property, if the

person to whom the qualified agricultural property is transferred

files an affidavit with the assessor of the local tax collecting

unit in which the qualified agricultural property is located and

with the register of deeds for the county in which the qualified

agricultural property is located attesting that the qualified

agricultural property shall remain qualified agricultural property.

The affidavit under this subdivision shall be in a form prescribed

by the department of treasury. An owner of qualified agricultural

property shall inform a prospective buyer of that qualified

agricultural property that the qualified agricultural property is

subject to the recapture tax provided in the agricultural property

recapture act, 2000 PA 261, MCL 211.1001 to 211.1007, if the

qualified agricultural property is converted by a change in use, as

that term is defined in section 2 of the agricultural property

recapture act, 2000 PA 261, MCL 211.1002. If property ceases to be

qualified agricultural property at any time after being

transferred, all of the following shall occur:

     (i) The taxable value of that property shall be adjusted under

subsection (3) as of the December 31 in the year that the property

ceases to be qualified agricultural property.

     (ii) The property is subject to the recapture tax provided for

under the agricultural property recapture act, 2000 PA 261, MCL

211.1001 to 211.1007.

     (o) A transfer of qualified forest property, if the person to

whom the qualified forest property is transferred files a qualified

forest taxable value affidavit with the assessor of the local tax

collecting unit in which the qualified forest property is located

and with the register of deeds for the county in which the

qualified forest property is located attesting that the qualified

forest property shall remain qualified forest property. The

qualified forest taxable value affidavit under this subdivision

shall be in a form prescribed by the department of agriculture and

rural development. The qualified forest taxable value affidavit

shall include a legal description of the qualified forest property,

the name of the new property owner, the year the transfer of the

property occurred, a statement indicating that the property owner

is attesting that the property for which the exemption is claimed

is qualified forest property and will be managed according to the

approved forest management plan, and any other information

pertinent to the parcel and the property owner. The property owner

shall provide a copy of the qualified forest taxable value

affidavit to the department. The department shall provide 1 copy of

the qualified forest taxable value affidavit to the local tax

collecting unit, 1 copy to the conservation district, and 1 copy to

the department of treasury. These copies may be sent

electronically. The exception to the recognition of a transfer of

ownership, as herein stated, shall extend to the land only of the

qualified forest property. If qualified forest property is improved

by buildings, structures, or land improvements, then those

improvements shall be recognized as a transfer of ownership, in

accordance with the provisions of section 7jj[1]. An owner of

qualified forest property shall inform a prospective buyer of that

qualified forest property that the qualified forest property is

subject to the recapture tax provided in the qualified forest

property recapture tax act, 2006 PA 379, MCL 211.1031 to 211.1036,

if the qualified forest property is converted by a change in use,

as that term is defined in section 2 of the qualified forest

property recapture tax act, 2006 PA 379, MCL 211.1032. If property

ceases to be qualified forest property at any time after being

transferred, all of the following shall occur:

     (i) The taxable value of that property shall be adjusted under

subsection (3) as of the December 31 in the year that the property

ceases to be qualified forest property, except to the extent that

the transfer of the qualified forest property would not have been

considered a transfer of ownership under this subsection.

     (ii) Except as otherwise provided in subparagraph (iii), the

property is subject to the recapture tax provided for under the

qualified forest property recapture tax act, 2006 PA 379, MCL

211.1031 to 211.1036.

     (iii) Beginning June 1, 2013 and ending November 30, 2013,

owners of property enrolled as qualified forest property prior to

January 1, 2013 may execute a new qualified forest taxable value

affidavit with the department of agriculture and rural development.

If a landowner elects to execute a qualified forest taxable value

affidavit, that owner is not required to pay the $50.00 fee

required under section 7jj[1](2). If a landowner elects not to

execute a qualified forest taxable value affidavit, the existing

affidavit shall be rescinded, without subjecting the property to

the recapture tax provided for under the qualified forest property

recapture tax act, 2006 PA 379, MCL 211.1031 to 211.1036, and the

taxable value of that property shall be adjusted under subsection

(3).

     (p) Beginning on December 8, 2006, a transfer of land, but not

buildings or structures located on the land, which meets 1 or more

of the following requirements:

     (i) The land is subject to a conservation easement under

subpart 11 of part 21 of the natural resources and environmental

protection act, 1994 PA 451, MCL 324.2140 to 324.2144. As used in

this subparagraph, "conservation easement" means that term as

defined in section 2140 of the natural resources and environmental

protection act, 1994 PA 451, MCL 324.2140.

     (ii) A transfer of ownership of the land or a transfer of an

interest in the land is eligible for a deduction as a qualified

conservation contribution under section 170(h) of the internal

revenue code, 26 USC 170.

     (q) A transfer of real property or other ownership interests

resulting from a consolidation or merger of a domestic nonprofit

corporation that is a boy or girl scout or camp fire girls

organization, a 4-H club or foundation, a young men's Christian

association, or a young women's Christian association and at least

50% of the members of that organization or association are

residents of this state.

     (r) A change to the assessment roll or tax roll resulting from

the application of section 16a of 1897 PA 230, MCL 455.16a.

     (s) Beginning December 31, 2013 through December 30, 2014, a

transfer of residential real property if the transferee is related

to the transferor by blood or affinity to the first degree and the

use of the residential real property does not change following the

transfer.

     (t) Beginning December 31, 2014, a transfer of residential

real property if the transferee is the transferor's or the

transferor's spouse's mother, father, brother, sister, son,

daughter, adopted son, adopted daughter, grandson, or granddaughter

and the residential real property is not used for any commercial

purpose following the conveyance. Upon request by the department of

treasury or the assessor, the transferee shall furnish proof within

30 days that the transferee meets the requirements of this

subparagraph. subdivision. If a transferee fails to comply with a

request by the department of treasury or assessor under this

subparagraph, subdivision, that transferee is subject to a fine of

$200.00.

     (u) Beginning December 31, 2014, for residential real

property, a conveyance from a trust if the person to whom the

residential real property is conveyed is the settlor's or the

settlor's spouse's mother, father, brother, sister, son, daughter,

adopted son, adopted daughter, grandson, or granddaughter and the

residential real property is not used for any commercial purpose

following the conveyance. Upon request by the department of

treasury or the assessor, the sole present beneficiary or

beneficiaries shall furnish proof within 30 days that the sole

present beneficiary or beneficiaries meet the requirements of this

subparagraph. subdivision. If a present beneficiary fails to comply

with a request by the department of treasury or assessor under this

subparagraph, subdivision, that present beneficiary is subject to a

fine of $200.00.

     (8) If all of the following conditions are satisfied, the

local tax collecting unit shall revise the taxable value of

qualified agricultural property taxable on the tax roll in the

possession of that local tax collecting unit to the taxable value

that qualified agricultural property would have had if there had

been no transfer of ownership of that qualified agricultural

property since December 31, 1999 and there had been no adjustment

of that qualified agricultural property's taxable value under

subsection (3) since December 31, 1999:

     (a) The qualified agricultural property was qualified

agricultural property for taxes levied in 1999 and each year after

1999.

     (b) The owner of the qualified agricultural property files an

affidavit with the assessor of the local tax collecting unit under

subsection (7)(n).

     (9) If the taxable value of qualified agricultural property is

adjusted under subsection (8), the owner of that qualified

agricultural property shall not be entitled to a refund for any

property taxes collected under this act on that qualified

agricultural property before the adjustment under subsection (8).

     (10) The register of deeds of the county where deeds or other

title documents are recorded shall notify the assessing officer of

the appropriate local taxing unit not less than once each month of

any recorded transaction involving the ownership of property and

shall make any recorded deeds or other title documents available to

that county's tax or equalization department. Unless notification

is provided under subsection (6), the buyer, grantee, or other

transferee of the property shall notify the appropriate assessing

office in the local unit of government in which the property is

located of the transfer of ownership of the property within 45 days

of the transfer of ownership, on a form prescribed by the state tax

commission that states the parties to the transfer, the date of the

transfer, the actual consideration for the transfer, and the

property's parcel identification number or legal description. Forms

filed in the assessing office of a local unit of government under

this subsection shall be made available to the county tax or

equalization department for the county in which that local unit of

government is located. This subsection does not apply to personal

property except buildings described in section 14(6) and personal

property described in section 8(h), (i), and (j).

     (11) As used in this section:

     (a) "Additions" means that term as defined in section 34d.

     (b) "Beneficial use" means the right to possession, use, and

enjoyment of property, limited only by encumbrances, easements, and

restrictions of record.

     (c) "Inflation rate" means that term as defined in section

34d.

     (d) "Losses" means that term as defined in section 34d.

     (e) "Qualified agricultural property" means that term as

defined in section 7dd.

     (f) "Qualified error" means that term as defined in section

53e.

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

in section 7jj[1].

(h) (g) "Residential real property" means real property

classified as residential real property under section 34c.

     Sec. 28. (1) Those electors of the township appointed by the

township board shall constitute a board of review for the township.

At least 2/3 of the members shall be property taxpayers of the

township. Members appointed to the board of review shall serve for

terms of 2 years beginning at noon on January 1 of each odd-

numbered year. Each member of the board of review shall qualify by

taking the constitutional oath of office within 10 days after

appointment. The township board may fill any vacancy that occurs in

the membership of the board of review. A member of the township

board is not eligible to serve on the board or to fill any vacancy.

The assessor for the township is not eligible to serve on the board

or to fill any vacancy. A spouse, mother, father, sister, brother,

son, or daughter, including an adopted child, of the assessor is

not eligible to serve on the board or to fill any vacancy. A

majority of the board of review constitutes a quorum for the

transaction of business, but a lesser number may adjourn and a

majority vote of those present shall decide all questions. The

assessor is not eligible to vote on any issue before the board of

review. At least 2 members of a 3-member board of review shall be

present to conduct any business or hearings of the board of review.

     (2) The township board may appoint 3, 6, or 9 electors of the

township, who shall constitute a board of review for the township.

If 6 or 9 members are appointed as provided in this subsection, the

membership of the board of review shall be divided into board of

review committees consisting of 3 members each for the purpose of

hearing and deciding issues protested pursuant to section 30. Two

of the 3 members of a board of review committee constitute a quorum

for the transaction of the business of the committee. All meetings

of the members of the board of review and committees shall be held

during the same hours of the same day and at the same location.

     (3) A township board may appoint not more than 2 alternate

members for the same term as regular members of the board of

review. Each alternate member shall be a property taxpayer of the

township. Alternate members shall qualify by taking the

constitutional oath of office within 10 days after appointment. The

township board may fill any vacancy that occurs in the alternate

membership of the board of review. A member of the township board

is not eligible to serve as an alternate member or to fill any

vacancy. The assessor for the township is not eligible to serve as

an alternate member or to fill any vacancy. A spouse, mother,

father, sister, brother, son, or daughter, including an adopted

child, of the assessor is not eligible to serve as an alternate

member or to fill any vacancy. An alternate member may be called to

perform the duties of a regular member of the board of review in

the absence of a regular member. An alternate member may also be

called to perform the duties of a regular member of the board of

review for the purpose of reaching a decision in issues protested

in which a regular member has abstained for reasons of conflict of

interest.

     (4) The size, composition, and manner of appointment of the

board of review of a city may be prescribed by the charter of a

city. In the absence of or in place of a charter provision, the

governing body of the city, by ordinance, may establish the city

board of review in the same manner and for the same purposes as

provided by this section for townships. Notwithstanding any charter

provision to the contrary, the assessor for the city is not

eligible to serve on the board of review, to serve as an alternate

member, or to fill any vacancy.

     (5) A majority of the entire board of review membership shall

indorse the assessment roll as provided in section 30. The duties

and responsibilities of the board contained in section 29 shall be

carried out by the entire membership of the board of review and a

majority of the membership constitutes a quorum for those purposes.

     (6) An assessor for a township or city shall provide testimony

and information to the board of review if such information is

requested by the board of review or if the assessor determines it

is necessary to provide further factual information in response to

an appeal.

     Sec. 29. (1) On the Tuesday immediately following the first

Monday in March, the board of review of each township shall meet at

the office of the supervisor, at which time the supervisor shall

submit to the board the assessment roll for the current year, as

prepared by the supervisor, and the board shall proceed to examine

and review the assessment roll.

     (2) During that day, and the day following, if necessary, the

board, of its own motion, or on sufficient cause being shown by a

person, shall add to the roll the names of persons, the value of

personal property, and the description and value of real property

liable to assessment in the township, omitted from the assessment

roll. The board shall correct errors in the names of persons, in

the descriptions of property upon the roll, and in the assessment

and valuation of property. The board shall do whatever else is

necessary to make the roll comply with this act.

     (3) The roll shall be reviewed and all evidence considered

according to the facts existing on the tax day. The board shall not

add to the roll property not subject to taxation on the tax day,

and the board shall not remove from the roll property subject to

taxation on that the tax day regardless of a change in the taxable

status of the property since that the tax day.

     (4) The board shall pass upon each valuation and each

interest, and shall enter the valuation of each, as fixed by the

board, in a separate column.

     (5) The roll as prepared by the supervisor shall stand as

approved and adopted as the act of the board of review, except as

changed by a vote of the board. If for any cause a quorum does not

assemble during the days above mentioned, the roll as prepared by

the supervisor shall stand as if approved by the board of review.

     (6) The business which the board may perform shall be

conducted at a public meeting of the board held in compliance with

Act No. 267 of the Public Acts of 1976, being sections 15.261 to

15.275 of the Michigan Compiled Laws. the open meetings act, 1976

PA 267, MCL 15.261 to 15.275. Public notice of the time, date, and

place of the meeting shall be given in the manner required by Act

No. 267 of the Public Acts of 1976. the open meetings act, 1976 PA

267, MCL 15.261 to 15.275. Notice of the date, time, and place of

the meeting of the board of review shall be given at least 1 week

before the meeting by publication in a generally circulated

newspaper serving the area. The notice shall appear in 3 successive

issues of the newspaper where available; otherwise, by the posting

of the notice in 5 conspicuous places in the township.

     (7) When the board of review makes a change in the assessment

of property or adds property to the assessment roll, the person

chargeable with the assessment shall be promptly notified in such a

manner as that will assure the person opportunity to attend the

second meeting of the board of review provided in section 30.

     Sec. 30. (1) Except as otherwise provided in subsection (2),

the board of review shall meet on the second Monday in March.

     (2) The governing body of the city or township may authorize,

by adoption of an ordinance or resolution, alternative starting

dates in March when the board of review shall initially meet, which

alternative starting dates shall be the Tuesday or Wednesday

following the second Monday of March.

     (3) The first meeting of the board of review shall start not

earlier than 9 a.m. and not later than 3 p.m. and last for not less

than 6 hours. The board of review shall also meet for not less than

6 hours during the remainder of that week. Persons or their agents

who have appeared to file a protest before the board of review at a

scheduled meeting or at a scheduled appointment shall be afforded

an opportunity to be heard by the board of review. The board of

review shall schedule a final meeting after the board of review

makes a change in the assessed value or tentative taxable value of

property, adds property to the assessment roll, changes the

classification of property on the assessment roll as provided in

section 34c, exempts the homestead of a disabled veteran or the

unremarried surviving spouse of a disabled veteran under section

7b, exempts a person's principal residence, in whole or in part, by

reason of poverty under section 7u, or exempts personal property

under section 9m, 9n, or 9o and removes it from the assessment

roll. The board of review shall hold at least 3 hours of its

required sessions for review of assessment rolls during the week of

the second Monday in March after 6 p.m.

     (4) A board of review shall meet a total of at least 12 hours

during the week beginning the second Monday in March to hear

protests. At the request of a person whose property is assessed on

the assessment roll or of his or her agent, and if sufficient cause

is shown, the board of review shall change the classification of

property on the assessment roll as provided in section 34c or

correct the assessed value or tentative taxable value of the

property in a manner that will make the valuation of the property

relatively just and proper under this act. For a claim of exemption

for the homestead of a disabled veteran or the unremarried

surviving spouse of a disabled veteran under section 7b, if an

exemption is approved, the board of review shall remove the

homestead from the tax roll and file an affidavit with the proper

officials involved in the assessment and collection of taxes and

all affected official records shall be corrected. For a claim of

exemption by reason of poverty under section 7u, if an exemption is

approved, the board of review shall remove the person's principal

residence, in whole or in part, from the tax roll and file an

affidavit with the proper officials involved in the assessment and

collection of taxes and all affected official records shall be

corrected. For the appeal of a denial of a claim of exemption for

personal property under section 9m, 9n, or 9o, or for an appeal

under section 9o(7), if an exemption is approved, the board of

review shall remove the personal property from the assessment roll.

The board of review may examine under oath the person making the

application, or any other person concerning the matter. A member of

the board of review may administer the oath. A nonresident taxpayer

may file his or her appearance, protest, and papers in support of

the protest by letter, and his or her personal appearance is not

required. The board of review, on its own motion, may change

assessed values or tentative taxable values or add to the roll

property omitted from the roll that is liable to assessment if the

person who is assessed for the altered valuation or for the omitted

property is promptly notified and granted an opportunity to file

objections to the change at the meeting or at a subsequent meeting.

An objection to a change in assessed value or tentative taxable

value or to the addition of property to the tax roll shall be

promptly heard and determined. Each person who makes a request,

protest, or application to the board of review for a classification

change for property on the assessment roll as provided in section

34c, for the correction of the assessed value or tentative taxable

value of the person's property, for the exemption of the homestead

of a disabled veteran or the unremarried surviving spouse of a

disabled veteran under section 7b, for the exemption of that

person's principal residence, in whole or in part, by reason of

poverty under section 7u, or for the exemption of that person's

personal property under section 9m, 9n, or 9o shall be notified in

writing, not later than the first Monday in June, of the board of

review's action on the request, protest, or application, of the

classification of the property, of the state equalized valuation or

tentative taxable value of the property, and of information

regarding the right of further appeal to the tax tribunal.

Information regarding the right of further appeal to the tax

tribunal shall include, but is not limited to, a statement of the

right to appeal to the tax tribunal, the address of the tax

tribunal, and the final date for filing an appeal with the tax

tribunal.

     (5) If an exemption for personal property under section 9m,

9n, or 9o is approved, the board of review shall file an affidavit

with the proper officials involved in the assessment and collection

of taxes and all affected official records shall be corrected. If

the board of review does not approve an exemption under section 9m,

9n, or 9o, the person claiming the exemption for that personal

property may appeal that decision in writing to the Michigan tax

tribunal. A correction under this subsection that approves an

exemption under section 9o may be made for the year in which the

appeal was filed and the immediately preceding 3 tax years. A

correction under this subsection that approves an exemption under

section 9m or 9n may be made only for the year in which the appeal

was filed.

     (6) After the board of review completes the review of the

assessment roll, a majority of the board of review shall indorse

the roll and sign a statement to the effect that the roll is the

assessment roll for the year in which it has been prepared and

approved by the board of review.

     (7) The completed assessment roll shall be delivered by the

appropriate assessing officer to the county equalization director

not later than the tenth day after the adjournment of the board of

review, or the Wednesday following the first Monday in April,

whichever date occurs first.

     (8) The governing body of the township or city may authorize,

by adoption of an ordinance or resolution, a resident taxpayer to

file his or her protest before the board of review by letter

without a personal appearance by the taxpayer or his or her agent.

If that ordinance or resolution is adopted, the township or city

shall include a statement notifying taxpayers of this option in

each assessment notice under section 24c and on each notice or

publication of the meeting of the board of review.

     Sec. 34c. (1) Not later than the first Monday in March in each

year, the assessor shall classify every item of assessable property

according to the definitions contained in this section. Following

the March board of review, the assessor shall tabulate the total

number of items and the valuations as approved by the board of

review for each classification and for the totals of real and

personal property in the local tax collecting unit. The assessor

shall transmit to the county equalization department and to the

state tax commission the tabulation of assessed valuations and

other statistical information the state tax commission considers

necessary to meet the requirements of this act and 1911 PA 44, MCL

209.1 to 209.8.

     (2) The classifications of assessable real property are

described as follows:

     (a) Agricultural real property includes parcels used partially

or wholly for agricultural operations, with or without buildings.

For taxes levied after December 31, 2002, agricultural real

property includes buildings on leased land used for agricultural

operations. If a parcel of real property is classified as

agricultural real property and is engaged in agricultural

operations, any contiguous parcel owned by the same taxpayer, that

is a vacant parcel, a wooded parcel, or a parcel on which is

located 1 or more agricultural outbuildings that comprise more than

50% of the taxable value of all buildings on that parcel as

indicated by the assessment records for the local tax collecting

unit in which that parcel is located, shall be classified as

agricultural real property. Contiguity is not broken by a boundary

between local tax collecting units, a section boundary, a road, a

right-of-way, or property purchased or taken under condemnation

proceedings by a public utility for power transmission lines if the

2 parcels separated by the purchased or condemned property were a

single parcel prior to the sale or condemnation. For purposes of

this subsection, contiguity requires that the parcel classified as

agricultural real property by reason of its agriculture use and the

vacant parcel, wooded parcel, or parcel on which is located 1 or

more agricultural outbuildings must be immediately adjacent to each

other, without intervening parcels that do not qualify for

classification as agricultural real property based on their actual

agricultural use. It is the intent of the legislature that if a

parcel of real property is classified as agricultural real property

and is engaged in agricultural operations, any contiguous parcel

owned by the same taxpayer, that is a vacant parcel, a wooded

parcel, or a parcel on which is located 1 or more agricultural

outbuildings that comprise more than 50% of the taxable value of

all buildings on that parcel as indicated by the assessment records

for the local tax collecting unit in which that parcel is located,

shall be classified as agricultural real property even if the

contiguous parcels are located in different local tax collecting

units. Property shall not lose its classification as agricultural

real property as a result of an owner or lessee of that property

implementing a wildlife risk mitigation action plan. As used in

this subdivision:

     (i) "Agricultural outbuilding" means a building or other

structure primarily used for agricultural operations.

     (ii) "Agricultural operations" means the following:

     (A) Farming in all its branches, including cultivating soil.

     (B) Growing and harvesting any agricultural, horticultural, or

floricultural commodity.

     (C) Dairying.

     (D) Raising livestock, bees, fish, fur-bearing animals, or

poultry, including operating a game bird hunting preserve licensed

under part 417 of the natural resources and environmental

protection act, 1994 PA 451, MCL 324.41701 to 324.41712, and also

including farming operations that harvest cervidae on site where

not less than 60% of the cervidae were born as part of the farming

operation. As used in this subparagraph, "livestock" includes, but

is not limited to, cattle, sheep, new world camelids, goats, bison,

privately owned cervids, ratites, swine, equine, poultry,

aquaculture, and rabbits. Livestock does not include dogs and cats.

     (E) Raising, breeding, training, leasing, or boarding horses.

     (F) Turf and tree farming.

     (G) Performing any practices on a farm incident to, or in

conjunction with, farming operations. A commercial storage,

processing, distribution, marketing, or shipping operation is not

part of agricultural operations.

     (iii) "Project" means certain risk mitigating measures, which

may include, but are not limited to, the following:

     (A) Making it difficult for wildlife to access feed by storing

livestock feed securely, restricting wildlife access to feeding and

watering areas, and deterring or reducing wildlife presence around

livestock feed by storing feed in an enclosed barn, wrapping bales

or covering stacks with tarps, closing ends of bags, storing grains

in animal-proof containers or bins, maintaining fences, practicing

small mammal and rodent control, or feeding away from wildlife

cover.

     (B) Minimizing wildlife access to livestock feed and water by

feeding livestock in an enclosed area, feeding in open areas near

buildings and human activity, removing extra or waste feed when

livestock are moved, using hay feeders to reduce waste, using

artificial water systems to help keep livestock from sharing water

sources with wildlife, fencing off stagnant ponds, wetlands, or

areas of wildlife habitats that pose a disease risk, and keeping

mineral feeders near buildings and human activity or using devices

that restrict wildlife usage.

     (iv) "Wildlife risk mitigation action plan" means a written

plan consisting of 1 or more projects to help reduce the risks of a

communicable disease spreading between wildlife and livestock that

is approved by the department of agriculture and rural development

under the animal industry act, 1988 PA 466, MCL 287.701 to 287.746.

     (b) Commercial real property includes the following:

     (i) Platted or unplatted parcels used for commercial purposes,

whether wholesale, retail, or service, with or without buildings.

     (ii) Parcels used by fraternal societies.

     (iii) Parcels used as golf courses, boat clubs, ski areas, or

apartment buildings with more than 4 units.

     (iv) For taxes levied after December 31, 2002, buildings on

leased land used for commercial purposes.

     (c) Developmental real property includes parcels containing

more than 5 acres without buildings, or more than 15 acres with a

market value in excess of its value in use. Developmental real

property may include farm land or open space land adjacent to a

population center, or farm land subject to several competing

valuation influences.

     (d) Industrial real property includes the following:

     (i) Platted or unplatted parcels used for manufacturing and

processing purposes, with or without buildings.

     (ii) Parcels used for utilities sites for generating plants,

pumping stations, switches, substations, compressing stations,

warehouses, rights-of-way, flowage land, and storage areas.

     (iii) Parcels used for removal or processing of gravel, stone,

or mineral ores.

     (iv) For taxes levied after December 31, 2002, buildings on

leased land used for industrial purposes.

     (v) For taxes levied after December 31, 2002, buildings on

leased land for utility purposes.

     (e) Residential real property includes the following:

     (i) Platted or unplatted parcels, with or without buildings,

and condominium apartments located within or outside a village or

city, which are used for, or probably will be used for, residential

purposes.

     (ii) Parcels that are used for, or probably will be used for,

recreational purposes, such as lake lots and hunting lands, located

in an area used predominantly for recreational purposes.

     (iii) For taxes levied after December 31, 2002, a home, cottage,

or cabin on leased land, and a mobile home that would be assessable

as real property under section 2a except that the land on which it

is located is not assessable because the land is exempt.

     (f) Timber-cutover real property includes parcels that are

stocked with forest products of merchantable type and size, cutover

forest land with little or no merchantable products, and marsh

lands or other barren land. However, when a typical purchase of

this type of land is for residential or recreational uses, the

classification shall be changed to residential.

     (3) The classifications of assessable personal property are

described as follows:

     (a) Agricultural personal property includes any agricultural

equipment and produce not exempt by law.

     (b) Commercial personal property includes the following:

     (i) All equipment, furniture, and fixtures on commercial

parcels, and inventories not exempt by law.

     (ii) All outdoor advertising signs and billboards.

     (iii) Well drilling rigs and other equipment attached to a

transporting vehicle but not designed for operation while the

vehicle is moving on the highway.

     (iv) Unlicensed commercial vehicles or commercial vehicles

licensed as special mobile equipment or by temporary permits.

     (c) Industrial personal property includes the following:

     (i) All machinery and equipment, furniture and fixtures, and

dies on industrial parcels, and inventories not exempt by law.

     (ii) Personal property of mining companies.

     (d) For taxes levied before January 1, 2003, residential

personal property includes a home, cottage, or cabin on leased

land, and a mobile home that would be assessable as real property

under section 2a except that the land on which it is located is not

assessable because the land is exempt.

     (e) Utility personal property includes the following:

     (i) Electric transmission and distribution systems, substation

equipment, spare parts, gas distribution systems, and water

transmission and distribution systems.

     (ii) Oil wells and allied equipment such as tanks, gathering

lines, field pump units, and buildings.

     (iii) Inventories not exempt by law.

     (iv) Gas wells with allied equipment and gathering lines.

     (v) Oil or gas field equipment stored in the open or in

warehouses such as drilling rigs, motors, pipes, and parts.

     (vi) Gas storage equipment.

     (vii) Transmission lines of gas or oil transporting companies.

     (4) For taxes levied before January 1, 2003, buildings on

leased land of any classification are improvements where the owner

of the improvement is not the owner of the land or fee, the value

of the land is not assessed to the owner of the building, and the

improvement has been assessed as personal property pursuant to

section 14(6).

     (5) If the total usage of a parcel includes more than 1

classification, the assessor shall determine the classification

that most significantly influences the total valuation of the

parcel.

     (6) An Except as otherwise provided in subsection (7), an

owner of any assessable property who disputes the classification of

that parcel shall notify the assessor and may protest the assigned

classification to the March board of review. An owner or assessor

may appeal the decision of the March board of review by filing a

petition with the state tax commission not later than June 30 in

that tax year. The state tax commission shall arbitrate the

petition based on the written petition and the written

recommendations of the assessor and the state tax commission staff.

An appeal may not be taken from the decision of the state tax

commission regarding classification complaint petitions and the

state tax commission's determination is final and binding for the

year of the petition.assessable property or an assessor may protest

the assigned classification of that assessable property for the

current year only by filing a petition with the March board of

review or with the July or December board of review. For a dispute

as to the classification of property classified under this section

as commercial real property, industrial real property, or

developmental real property, the classification may be protested by

the owner to the board of review or may be appealed directly to the

state tax commission without protest before the board of review. An

owner of assessable property or an assessor may appeal the decision

of the March board of review for the current year only by filing a

petition with the state tax commission not later than July 31 in

that tax year. An owner of assessable property or an assessor may

appeal the decision of the July or December board of review for the

current year only by filing a petition with the state tax

commission not later than 60 days after the decision of the July or

December board of review. An owner of assessable property or an

assessor may appeal the decision of the state tax commission for

the current year only by filing a petition with the Michigan tax

tribunal not later than 60 days after the decision of the state tax

commission. An owner of assessable property or an assessor may

appeal the decision of the Michigan tax tribunal for the current

year only by filing a petition with the Michigan court of appeals

not later than 21 days after the decision of the Michigan tax

tribunal.

     (7) The department of treasury may appeal the classification

of any assessable property to the residential and small claims

division of the Michigan tax tribunal not later than December 31 in

the tax year for which the classification is appealed.If an

assessor and owner believe that the assessor has incorrectly

classified assessable property under this section, that incorrect

classification is a qualified error and an owner of that assessable

property may appeal that qualified error as provided in section

53e. As used in this subsection, "qualified error" means that term

as defined in section 53e.

     (8) This section shall not be construed to encourage the

assessment of property at other than the uniform percentage of true

cash value prescribed by this act.

     (9) The assessor of each city or township in which is located

property that is subject to payment in lieu of taxes under subpart

14 of part 21 of the natural resources and environmental protection

act, 1994 PA 451, MCL 324.2152 to 324.2154, shall place that

property on an assessment roll that is separate from the assessment

roll prepared under section 24. For purposes of calculating the

debt limitation imposed by section 11 of article VII of the state

constitution of 1963, the separate assessment roll for property

that is subject to payment in lieu of taxes under subpart 14 of

part 21 of the natural resources and environmental protection act,

1994 PA 451, MCL 324.2152 to 324.2154, required by this subsection

shall be combined with the assessment roll prepared under section

24.

     Sec. 53b. (1) If there has been a qualified error, the

qualified error shall be verified by the local assessing officer

and approved by the board of review. Except as otherwise provided

in subsection (9), the board of review shall meet for the purposes

of this section on Tuesday following the second Monday in December

and on Tuesday following the third Monday in July. If approved, the

board of review shall file an affidavit within 30 days relative to

the qualified error with the proper officials and all affected

official records shall be corrected. If the qualified error results

in an overpayment or underpayment, the rebate, including any

interest paid, shall be made to the taxpayer or the taxpayer shall

be notified and payment made within 30 days of the notice. A rebate

shall be without interest. The treasurer in possession of the

appropriate tax roll may deduct the rebate from the appropriate tax

collecting unit's subsequent distribution of taxes. The treasurer

in possession of the appropriate tax roll shall bill to the

appropriate tax collecting unit the tax collecting unit's share of

taxes rebated. Except as otherwise provided in subsections (6) and

(8) and section 27a(4), a correction under this subsection may be

made for the current year and the immediately preceding year only.

     (2) Action pursuant to subsection (1) may be initiated by the

taxpayer or the assessing officer.

(1) (3) The board of review meeting in July and December shall

meet only for the purpose described in subsection (1) and to hear

appeals provided for in sections 7u, 7cc, 7ee, 7jj , 9m, 9n, and

9o. and 34c and to consider applications for exemptions provided

for under sections 7b and 7u. Except as otherwise provided in

subsection (4), the board of review shall meet for the purposes of

this section on Tuesday following the second Monday in December and

on Tuesday following the third Monday in July. If an exemption is

approved under section 7b for the homestead of a disabled veteran

or the unremarried surviving spouse of a disabled veteran, the

board of review shall remove the homestead from the tax roll and

file an affidavit with the proper officials involved in the

assessment and collection of taxes and all affected official

records shall be corrected. If an exemption under section 7u is

approved, the board of review shall file an affidavit with the

proper officials involved in the assessment and collection of taxes

and all affected official records shall be corrected. If an appeal

under section 7cc, 7ee, 7jj , 9m, 9n, or 9o or approval of an

exemption under section 7b results in a determination that an

overpayment has been made, the board of review shall file an

affidavit and a rebate shall be made. at the times and in the

manner provided in subsection (1). The rebate, including any

interest paid, shall be made to the taxpayer or the taxpayer shall

be notified and payment made within 30 days of the notice. A rebate

shall be without interest. The treasurer in possession of the

appropriate tax roll may deduct the rebate from the appropriate tax

collecting unit's subsequent distribution of taxes. The treasurer

in possession of the appropriate tax roll shall bill to the

appropriate tax collecting unit the tax collecting unit's share of

taxes rebated. Except as otherwise provided in sections 7cc, 7ee,

section 7b or 7jj, and 9o, a correction under this subsection shall

be made for the year in which the appeal is made only. If the board

of review approves an exemption or provides a rebate for property

under section 7cc, 7ee, or 7b or 7jj as provided in this

subsection, the board of review shall require the owner to execute

the affidavit provided for in section 7cc, 7ee, or 7b or 7jj. and

shall forward a copy of any section 7cc affidavits to the

department of treasury.

     (4) If an exemption under section 7cc is approved by the board

of review under this section, the provisions of section 7cc apply.

If an exemption under section 7cc is not approved by the board of

review under this section, the owner may appeal that decision in

writing to the department of treasury within 35 days of the board

of review's denial and the appeal shall be conducted as provided in

section 7cc(8).

     (2) If an exemption under section 7b is approved by the board

of review under this section, the provisions of section 7b apply.

If an exemption under section 7b is not approved by the board of

review under this section, a person claiming an exemption under

this section may appeal the decision of the July or December board

of review to the Michigan tax tribunal not later than 60 days after

the date of that decision.

(3) (5) An owner or assessor may appeal a decision of the

board of review under this section regarding an exemption under

section 7ee or 7jj to the residential and small claims division of

the Michigan tax tribunal. An owner is not required to pay the

amount of tax in dispute in order to receive a final determination

of the residential and small claims division of the Michigan tax

tribunal. However, interest and penalties, if any, shall accrue and

be computed based on interest and penalties that would have accrued

from the date the taxes were originally levied as if there had not

been an exemption.

     (6) A correction under this section that approves a principal

residence exemption pursuant to section 7cc may be made for the

year in which the appeal was filed and the 3 immediately preceding

tax years.

     (7) For the appeal of a denial of a claim of exemption for

personal property under section 9m, 9n, or 9o, if an exemption is

approved, the board of review shall remove the personal property

from the assessment roll.

     (8) If an exemption for personal property under section 9m,

9n, or 9o is approved, the board of review shall file an affidavit

with the proper officials involved in the assessment and collection

of taxes and all affected official records shall be corrected. If

the board of review does not approve an exemption under section 9m,

9n, or 9o, the person claiming the exemption for that personal

property may appeal that decision in writing to the Michigan tax

tribunal. A correction under this subsection that approves an

exemption under section 9o may be made for the year in which the

appeal was filed and the immediately preceding 3 tax years. A

correction under this subsection that approves an exemption under

section 9m or 9n may be made only for the year in which the appeal

was filed.

(4) (9) The governing body of the city or township may

authorize, by adoption of an ordinance or resolution, 1 or more of

the following alternative meeting dates for the purposes of this

section:

     (a) An alternative meeting date during the week of the second

Monday in December.

     (b) An alternative meeting date during the week of the third

Monday in July.

     (10) As used in this section, "qualified error" means 1 or

more of the following:

     (a) A clerical error relative to the correct assessment

figures, the rate of taxation, or the mathematical computation

relating to the assessing of taxes.

     (b) A mutual mistake of fact.

     (c) An adjustment under section 27a(4) or an exemption under

section 7hh(3)(b).

     (d) An error of measurement or calculation of the physical

dimensions or components of the real property being assessed.

     (e) An error of omission or inclusion of a part of the real

property being assessed.

     (f) An error regarding the correct taxable status of the real

property being assessed.

     (g) An error made by the taxpayer in preparing the statement

of assessable personal property under section 19.

     (h) An error made in the denial of a claim of exemption for

personal property under section 9m, 9n, or 9o.

     Sec. 53c. (1) If the March board of review denies a claim for

exemption under section 7u, the person claiming the exemption may

appeal that decision to the Michigan tax tribunal not later than

July 31.

     (2) If the July or December board of review denies a claim for

exemption under section 7u, the person claiming the exemption may

appeal that decision to the Michigan tax tribunal within 30 60 days

of the denial.

     Sec. 53e. (1) If there has been a qualified error, the

qualified error shall be verified by the local assessing officer

and submitted to the state tax commission for approval. If

approved, the state tax commission shall file an order within 30

days relative to the qualified error with the proper officials and

all affected official records shall be corrected. If the qualified

error results in an overpayment or underpayment, the rebate,

including any interest paid, shall be made to the taxpayer or the

taxpayer shall be notified and payment made within 30 days of the

notice. A rebate shall be without interest. The treasurer in

possession of the appropriate tax roll may deduct the rebate from

the appropriate tax collecting unit's subsequent distribution of

taxes. The treasurer in possession of the appropriate tax roll

shall bill to the appropriate tax collecting unit the tax

collecting unit's share of taxes rebated. Except as otherwise

provided in this subsection, a correction under this subsection may

be made for the current year and the 3 immediately preceding years.

A correction under this subsection for a claim of exemption under

section 9m or 9n may be made for the current year only.

     (2) Action pursuant to subsection (1) may be initiated by the

owner or the assessing officer.

     (3) If a qualified error made in the denial of a claim of

exemption for personal property under section 9m, 9n, or 9o is

approved, the state tax commission shall file an order with the

proper officials involved in the assessment and collection of taxes

and all affected official records shall be corrected. If the state

tax commission does not approve a qualified error made in the

denial of a claim of exemption for personal property under section

9m, 9n, or 9o, the person claiming the exemption for that personal

property may appeal that decision to the Michigan tax tribunal as

provided in this section.

     (4) The owner or the assessing officer may appeal the decision

of the state tax commission under this section to the Michigan tax

tribunal within 60 days of that decision.

     (5) As used in this section, "qualified error" means 1 or more

of the following:

     (a) A clerical error relative to the correct assessment

figures, the rate of taxation, or the mathematical computation

relating to the assessing of taxes.

     (b) A mutual mistake of fact.

     (c) An adjustment under section 27a(4) or an exemption under

section 7hh(3)(b).

     (d) An error of measurement or calculation of the physical

dimensions or components of the real property being assessed.

     (e) An error of omission or inclusion of a part of the real

property being assessed.

     (f) An error regarding the correct taxable status of the real

property being assessed.

     (g) An error made by the taxpayer in preparing the statement

of assessable personal property under section 19.

     (h) An error made in the denial of a claim of exemption for

personal property under section 9m, 9n, or 9o.

     (i) An error made by an assessor in classifying property under

section 34c, if that assessor acknowledges in writing on a form

prescribed by the state tax commission his or her error in the

classification of that property.

     Sec. 154. (1) If the state tax commission determines that

property subject to the collection of taxes under this act,

including property subject to taxation under 1974 PA 198, MCL

207.551 to 207.572, 1905 PA 282, MCL 207.1 to 207.21, 1953 PA 189,

MCL 211.181 to 211.182, and the commercial redevelopment act, 1978

PA 255, MCL 207.651 to 207.668, has been incorrectly reported or

omitted for any previous year, but not to exceed the current

assessment year and 2 3 years immediately preceding the date the

incorrect reporting or omission was discovered and disclosed to the

state tax commission, the state tax commission shall place the

corrected assessment value for the appropriate years on the

appropriate assessment roll. The state tax commission shall issue

an order certifying to the treasurer of the local tax collecting

unit if the local tax collecting unit has possession of a tax roll

for a year for which an assessment change is made or the county

treasurer if the county has possession of a tax roll for a year for

which an assessment change is made the amount of taxes due as

computed by the correct annual rate of taxation for each year

except the current year. Taxes computed under this section shall

not be spread against the property for a period before the last

change of ownership of the property.

     (2) If an assessment change made under this section results in

increased property taxes, the additional taxes shall be collected

by the treasurer of the local tax collecting unit if the local tax

collecting unit has possession of a tax roll for a year for which

an assessment change is made or by the county treasurer if the

county has possession of a tax roll for a year for which an

assessment change is made. Not later than 20 days after receiving

the order certifying the amount of taxes due under subsection (1),

the treasurer of the local tax collecting unit if the local tax

collecting unit has possession of a tax roll for a year for which

an assessment change is made or the county treasurer if the county

has possession of a tax roll for a year for which an assessment

change is made shall submit a corrected tax bill, itemized by

taxing jurisdiction, to each person identified in the order and to

the owner of the property on which the additional taxes are

assessed, if different than a person named in the order, by first-

class mail, address correction requested. Except for real property

subject to taxation under 1974 PA 198, MCL 207.551 to 207.572, 1905

PA 282, MCL 207.1 to 207.21, 1953 PA 189, MCL 211.181 to 211.182,

and the commercial redevelopment act, 1978 PA 255, MCL 207.651 to

207.668, and for real property only, if the additional taxes remain

unpaid on the March 1 in the year immediately succeeding the year

in which the state tax commission issued the order certifying the

additional taxes under subsection (1), the real property on which

the additional taxes are due shall be returned as delinquent to the

county treasurer. Real property returned for delinquent taxes under

this section, and upon which taxes, interest, penalties, and fees

remain unpaid after the property is returned as delinquent to the

county treasurer, is subject to forfeiture, foreclosure, and sale

for the enforcement and collection of the delinquent taxes as

provided in sections 78 to 79a.

     (3) Except as otherwise provided in subsection (4), a

corrected tax bill based on an assessment roll corrected for

incorrectly reported or omitted personal property that is issued

after the effective date of the amendatory act that added this

subsection shall include penalty and interest at the rate of 1.25%

per month or fraction of a month from the date the taxes originally

could have been paid without interest or penalty. If the tax bill

has not been paid within 60 days after the corrected tax bill is

issued, interest shall again begin to accrue at the rate of 1.25%

per month or fraction of a month.

     (4) If a person requests that an increased assessment due to

incorrectly reported or omitted personal property be added to the

assessment roll under this section before March 1, 2004 with

respect to statements filed or required to be filed under section

19 for taxes levied before January 1, 2004, and the corrected tax

bill issued under this subsection is paid within 30 days after the

corrected tax bill is issued, that person is not liable for any

penalty or interest on that portion of the additional tax

attributable to the increased assessment resulting from that

request. However, a person who pays a corrected tax bill issued

under this subsection more than 30 days after the corrected tax

bill is issued is liable for the penalties and interest imposed

under subsection (3).

     (5) Except as otherwise provided in this section, the

treasurer of the local tax collecting unit or the county treasurer

shall disburse the payments of interest received to this state and

to a city, township, village, school district, county, and

authority, in the same proportion as required for the disbursement

of taxes collected under this act. The amount to be disbursed to a

local school district, except for that amount of interest

attributable to mills levied under section 1211(2) or 1211c of the

revised school code, 1976 PA 451, MCL 380.1211 and 380.1211c, and

mills that are not included as mills levied for school operating

purposes under section 1211 of the revised school code, 1976 PA

451, MCL 380.1211, shall be paid to the state treasury and credited

to the state school aid fund established by section 11 of article

IX of the state constitution of 1963. For an intermediate school

district receiving state aid under section 56, 62, or 81 of the

state school aid act of 1979, 1979 PA 94, MCL 388.1656, 388.1662,

and 388.1681, of the interest that would otherwise be disbursed to

or retained by the intermediate school district, all or a portion,

to be determined on the basis of the tax rates being utilized to

compute the amount of the state school aid, shall be paid instead

to the state treasury and credited to the state school aid fund

established by section 11 of article IX of the state constitution

of 1963.

     (6) If an assessment change made under this section results in

a decreased tax liability, a refund of excess tax payments shall be

made by the county treasurer and shall include interest at the rate

of 1% per month or fraction of a month for taxes levied before

January 1, 1997 and interest at the rate provided under section 37

of the tax tribunal act, 1973 PA 186, MCL 205.737, for taxes levied

after December 31, 1996, from the date of the payment of the tax to

the date of the payment of the refund. The county treasurer shall

charge a refund of excess tax payments under this subsection to the

various taxing jurisdictions in the same proportion as the taxes

levied.

     (7) A person to whom property is assessed under this section

or the local tax collecting unit may appeal the state tax

commission's order to the Michigan tax tribunal within 60 days of

the date of the state tax commission's order under subsection (1).

An appeal of the state tax commission's order may include the

current assessment year and the 3 immediately preceding years, as

set forth in the state tax commission's order under subsection (1).

     Enacting section 1. This amendatory act does not take effect

unless Senate Bill No. 1039 of the 97th Legislature is enacted into

law.