SB-1039, As Passed Senate, November 13, 2014

SUBSTITUTE FOR

SENATE BILL NO. 1039

     A bill to amend 1973 PA 186, entitled

"Tax tribunal act,"

by amending sections 21, 35a, 36, 49, and 62 (MCL 205.721,

205.735a, 205.736, 205.749, and 205.762), section 35a as amended by

2008 PA 125, section 49 as amended by 2008 PA 126, and section 62

as amended by 2008 PA 128.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 21. (1) The tax tribunal is created and is a quasi-

judicial agency which, for administrative purposes only, is in the

department of treasury.licensing and regulatory affairs.

     (2) The tribunal consists of 7 members appointed by the

governor, with the advice and consent of the senate, for terms of 4

years. The 2 additional members first appointed by this amendatory

act shall first serve for 3 years.

     (3) A member appointed by a governor is subject to removal

during his or her term by that same governor for cause after notice

and hearing.

     (4) A member appointed by a governor not currently in office

is subject to removal during his or her term as provided in section

10 of article V of the state constitution of 1963.

     (5) A member may be reappointed and a vacancy shall be filled

for an unexpired term in the same manner as the appointment is made

for a full term.

     (6) Members shall undergo annual training on proper courtroom

procedure.

     Sec. 35a. (1) The provisions of this section apply to a

proceeding before the tribunal that is commenced after December 31,

2006.

     (2) A proceeding before the tribunal is original and

independent and is considered de novo.

     (3) Except as otherwise provided in this section or by law,

for an assessment dispute as to the valuation or exemption of

property, the assessment must be protested before the board of

review before the tribunal acquires jurisdiction of the dispute

under subsection (6).(10). For a dispute as to the classification

of property under section 34c of the general property tax act, 1893

PA 206, MCL 211.34c, except for property classified as commercial

real property, industrial real property, or developmental real

property, the classification must be protested before the board of

review and the state tax commission as provided in section 34c of

the general property tax act, 1893 PA 206, MCL 211.34c, before the

tribunal acquires jurisdiction of the dispute under subsection

(11). For a dispute as to the classification of property classified

as commercial real property, industrial real property, or

developmental real property under section 34c of the general

property tax act, 1893 PA 206, MCL 211.34c, the classification may

be protested by the taxpayer before the board of review or appealed

directly to the state tax commission without protest before the

board of review before the tribunal acquires jurisdiction of the

dispute under subsection (11).

     (4) In the 2007 tax year and each tax year after 2007, all of

the following apply:

     (a) For an assessment dispute as to the valuation or exemption

of property classified under section 34c of the general property

tax act, 1893 PA 206, MCL 211.34c, as commercial real property,

industrial real property, or developmental real property, the

assessment may be protested before the board of review or appealed

directly to the tribunal without protest before the board of review

as provided in subsection (6).(10).

     (b) For an assessment dispute as to the valuation or exemption

of property classified under section 34c of the general property

tax act, 1893 PA 206, MCL 211.34c, as commercial personal property,

industrial personal property, or utility personal property, the

assessment may be protested before the board of review or appealed

directly to the tribunal without protest before the board of review

as provided in subsection (6), (10), if a statement of assessable

property is filed under section 19 of the general property tax act,

1893 PA 206, MCL 211.19, prior to the commencement of the board of

review for the tax year involved.

     (c) For an assessment dispute as to the valuation of property

that is subject to taxation under 1974 PA 198, MCL 207.551 to

207.572, the commercial redevelopment act, 1978 PA 255, MCL 207.651

to 207.668, the enterprise zone act, 1985 PA 224, MCL 125.2101 to

125.2123, the technology park development act, 1984 PA 385, MCL

207.701 to 207.718, the obsolete property rehabilitation act, 2000

PA 146, MCL 125.2781 to 125.2797, the commercial rehabilitation

act, 2005 PA 210, MCL 207.841 to 207.856, or 1953 PA 189, MCL

211.181 to 211.182, the assessment may be protested before the

board of review or appealed directly to the tribunal without

protest before the board of review as provided in subsection (6).

(10). This subdivision does not apply to property that is subject

to the neighborhood enterprise zone act, 1992 PA 147, MCL 207.771

to 207.786.

     (5) For a A dispute regarding a determination of a claim of

exemption of a principal residence or qualified agricultural

property for a year in which the July or December board of review

has authority to determine a claim of exemption for a principal

residence or qualified agricultural property, the claim of

exemption shall be presented to either the July or December board

of review before the tribunal acquires jurisdiction of the dispute.

shall be appealed directly to the tribunal without protest before

the board of review. For a special assessment dispute, the special

assessment shall be protested at the hearing held for the purpose

of confirming the special assessment roll before the tribunal

acquires jurisdiction of the dispute.

     (6) For a dispute regarding a determination of a claim of

exemption of a principal residence by reason of poverty under

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

211.7u, the claim of exemption shall be presented to the March,

July, or December board of review before the tribunal acquires

jurisdiction of the dispute.

     (7) For a dispute regarding a determination of a claim of

exemption of the homestead of a disabled veteran or the unremarried

surviving spouse of a disabled veteran under section 7b of the

general property tax act, 1893 PA 206, MCL 211.7b, the claim of

exemption shall be presented to the March, July, or December board

of review before the tribunal acquires jurisdiction of the dispute.

     (8) For a dispute regarding a determination of a claim of a

qualified error under section 53e of the general property tax act,

1893 PA 206, MCL 211.53e, the claim of exemption shall be presented

to the state tax commission before the tribunal acquires

jurisdiction of the dispute.

     (9) For a dispute regarding a determination of a claim of

exemption of qualified agricultural property under section 7ee of

the general property tax act, 1893 PA 206, MCL 211.7ee, the claim

of exemption shall be appealed directly to the tribunal without

protest before the board of review.

(10) (6) The jurisdiction of the tribunal in an assessment

dispute as to property classified under section 34c of the general

property tax act, 1893 PA 206, MCL 211.34c, as commercial real

property, industrial real property, developmental real property,

commercial personal property, industrial personal property, or

utility personal property is invoked by a party in interest, as

petitioner, filing a written petition on or before May July 31 of

the tax year involved. The jurisdiction of the tribunal in an

assessment dispute as to property classified under section 34c of

the general property tax act, 1893 PA 206, MCL 211.34c, as

agricultural real property, residential real property, timber-

cutover real property, or agricultural personal property is invoked

by a party in interest, as petitioner, filing a written petition on

or before July 31 of the tax year involved. The jurisdiction of the

tribunal in an assessment dispute as to property subject to an

order issued by the state tax commission under section 154(1) of

the general property tax act, 1893 PA 206, MCL 211.154, is invoked

by a party in interest, as petitioner, filing a written petition

within 60 days after that order is issued. In all other matters,

except as otherwise provided in this section, the jurisdiction of

the tribunal is invoked by a party in interest, as petitioner,

filing a written petition within 35 60 days after the final

decision, ruling, or determination. The jurisdiction of the

tribunal in a dispute regarding a determination of a claim of

exemption of a principal residence by reason of poverty under

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

211.7u, is invoked by the person claiming the exemption, as

petitioner, filing a written petition by July 31 if the claim of

exemption was denied by the March board of review or within 60 days

after the July or December board of review denied the claim for

exemption. The jurisdiction of the tribunal in a dispute regarding

a determination of a claim of exemption of the homestead of a

disabled veteran or the unremarried surviving spouse of a disabled

veteran under section 7b of the general property tax act, 1893 PA

206, MCL 211.7b, is invoked by the person claiming the exemption,

as petitioner, filing a written petition by July 31 if the claim of

exemption was denied by the March board of review or within 60 days

after the July or December board of review denied the claim for

exemption. The jurisdiction of the tribunal in a dispute regarding

a determination of a claim of a qualified error under section 53e

of the general property tax act, 1893 PA 206, MCL 211.53e, is

invoked by the taxpayer or assessing officer filing a written

petition within 60 days after the decision of the state tax

commission. The jurisdiction of the tribunal in a dispute regarding

a determination of a claim of exemption of qualified agricultural

property under section 7ee of the general property tax act, 1893 PA

206, MCL 211.7ee, is invoked by the person claiming the exemption,

as petitioner, filing a written petition within 60 days of the

denial or modification of the exemption. An appeal of a contested

tax bill shall be made within 60 days after mailing by the

assessment district treasurer and the appeal is limited solely to

correcting arithmetic errors or mistakes and is not a basis of

appeal as to disputes of valuation of the property, the property's

exempt status, or the property's equalized value resulting from

equalization of its assessment by the county board of commissioners

or the state tax commission. Service of the petition on the

respondent shall be by certified mail. For an assessment dispute,

service of the petition shall be mailed to the assessor of that

local tax collecting unit if the respondent is the local tax

collecting unit. Except for petitions filed under chapter 6, a copy

of the petition shall also be sent to the secretary of the school

board in the local school district in which the property is located

and to the clerk of any county that may be affected.

     (11) The jurisdiction of the tribunal in a dispute as to the

classification of property under section 34c of the general

property tax act, 1893 PA 206, MCL 211.34c, is invoked by an owner

or an assessor, as petitioner, filing a written petition within the

time frame prescribed in section 34c of the general property tax

act, 1893 PA 206, MCL 211.34c. An appeal as to the classification

of property under section 34c of the general property tax act, 1893

PA 206, MCL 211.34c, may include the year in which the petition is

filed only. Service of the petition on the respondent shall be by

certified mail. Service of the petition shall be mailed to the

assessor of that local tax collecting unit if the respondent is the

local tax collecting unit. A copy of the petition shall also be

sent to the secretary of the school board in the local school

district in which the property is located, to the clerk of any

county that may be affected, and to the state treasurer.

(12) (7) A petition is considered filed on or before the

expiration of the time period provided in this section or by law if

1 or more of the following occur:

     (a) The petition is postmarked by the United States postal

service on or before the expiration of that time period.

     (b) The petition is delivered in person on or before the

expiration of that time period.

     (c) The petition is given to a designated delivery service for

delivery on or before the expiration of that time period and the

petition is delivered by that designated delivery service or, if

the petition is not delivered by that designated delivery service,

the petitioner establishes that the petition was given to that

designated delivery service for delivery on or before the

expiration of that time period.

(13) (8) A petition required to be filed by a day during which

the offices of the tribunal are not open for business shall be

filed by the next business day.

(14) (9) A petition or answer may be amended at any time by

leave of the tribunal and in compliance with its rules. If a tax

was paid while the determination of the right to the tax is pending

before the tribunal, the taxpayer may amend his or her petition to

seek a refund of that tax.

(15) (10) A person or legal entity may appear before the

tribunal in his or her own behalf or may be represented by an

attorney or by any other person.

(16) (11) As used in this section, "designated delivery

service" means a delivery service provided by a trade or business

that is designated by the tribunal for purposes of this subsection.

The tribunal shall issue a tribunal notice not later than December

31 in each calendar year designating not less than 1 delivery

service for the immediately succeeding calendar year. The tribunal

may designate a delivery service only if the tribunal determines

that the delivery service meets all of the following requirements:

     (a) Is available to the general public.

     (b) Is at least as timely and reliable on a regular basis as

the United States postal service.

     (c) Records electronically to a database kept in the regular

course of business or marks on the petition the date on which the

petition was given to the delivery service for delivery.

     (d) Any other requirement the tribunal prescribes.

     Sec. 36. (1) Tribunal, The tribunal, upon written request of a

party to a proceeding, shall issue subpoenas forthwith requiring

the attendance and testimony of witnesses and the production of

evidence, including, but not limited to, books, records,

correspondence, and documents in their possession or under their

control, unless the request is unreasonable or oppressive. On

written request, the tribunal shall revoke a subpoena if the

testimony to be provided and the evidence , the production of which

is required, does to be produced do not relate to a matter in issue

, or if the subpoena does not describe with sufficient

particularity the evidence, the production of which is required, or

if for any other reason sufficient in law. the subpoena is invalid.

In case of refusal to comply with a subpoena, the party on whose

behalf it was issued may file a petition, in the circuit court for

Ingham county or for the county in which the proceeding is held,

for an order requiring compliance.

     (2) When directed by the chairman, a state or local

governmental unit or agency shall make available books, records,

documents, information, and assistance to the tribunal.

     Sec. 49. (1) The tribunal by rule shall prescribe filing fees

and other fees to be paid in connection with a proceeding before

the tribunal. The fees shall be paid to the clerk of the tribunal

and by order of the tribunal may be taxed as costs.

     (2) The residential property and small claims division of the

tribunal shall not charge fees or costs on appeals for any of the

following:

     (a) Appeals relating to the valuation of principal residence

property as defined in rules promulgated by the tax tribunal.

     (b) Appeals relating to a claim for exemption by reason of

poverty under section 7u of the general property tax act, 1893 PA

206, MCL 211.7u.

     (3) The Michigan tax tribunal fund is created in the

department of labor and economic growth licensing and regulatory

affairs as a separate interest bearing fund. All fees collected

pursuant to this act shall be deposited in the Michigan tax

tribunal fund. The state treasurer shall direct the investment of

the Michigan tax tribunal fund. Money in the Michigan tax tribunal

fund shall remain in the Michigan tax tribunal fund at the close of

the fiscal year and shall not revert to the general fund. Money in

the Michigan tax tribunal fund shall be used solely for operation

of the tribunal.

     Sec. 62. (1) The residential property and small claims

division created in section 61 has jurisdiction over a proceeding,

otherwise cognizable by the tribunal, in which residential property

is exclusively involved. Property other than residential property

may be included in a proceeding before the residential property and

small claims division if the amount of that property's taxable

value or state equalized valuation in dispute is not more than

$100,000.00. $150,000.00, adjusted annually by the inflation rate.

The residential property and small claims division also has

jurisdiction over a proceeding involving an appeal of any other tax

over which the tribunal has jurisdiction if the amount of the tax

in dispute is $20,000.00 $75,000.00 or less, adjusted annually by

the inflation rate. As used in this subsection, "inflation rate"

means the ratio of the general price level for the state fiscal

year ending in the calendar year immediately preceding the current

year divided by the general price level for the state fiscal year

ending in the calendar year before the year immediately preceding

the current year.

     (2) A person or legal entity entitled to proceed under section

31, and whose proceeding meets the jurisdictional requirements of

subsection (1), may elect to proceed before either the residential

property and small claims division or the entire tribunal. A formal

record of residential property and small claims division

proceedings is not required. Within 20 days after a hearing officer

or referee issues a proposed order, a party may file exceptions to

the proposed order. The tribunal shall review the exceptions to

determine if the proposed order shall be adopted as a final order.

Upon a showing of good cause or at the tribunal's discretion, the

tribunal may modify the proposed order and issue a final order or

hold a rehearing by a tribunal member. A rehearing is not limited

to the evidence presented before the hearing officer or referee.

     (3) Except as otherwise provided in this subsection, the

residential property and small claims division shall meet in the

county in which the property in question is located or in a county

contiguous to the county in which the property in question is

located. A petitioner-appellant shall not be required to travel

more than 100 miles from the location of the property in question

to the hearing site, except that a rehearing by a tribunal member

shall be at a site determined by the tribunal. By leave of the

tribunal and with the mutual consent of all parties, a residential

property and small claims division proceeding may take place at a

location mutually agreed upon by all parties or may take place by

the use of amplified telephonic or video conferencing equipment.

     (4) The tribunal shall make a short form for the simplified

filing of residential property and small claims appeals.

     (5) In a proceeding before the residential property and small

claims division for property other than residential property, if

the amount of taxable value or state equalized valuation in dispute

is greater than $20,000.00, or in nonproperty matters if the amount

in dispute is greater than $1,000.00, the filing fee is the amount

that would have been paid if the proceeding was brought before the

entire tribunal and not the residential property and small claims

division.

     (6) As used in this chapter, "residential property" means any

of the following:

     (a) Real property exempt under section 7cc of the general

property tax act, 1893 PA 206, MCL 211.7cc.

     (b) Real property classified as residential real property

under section 34c of the general property tax act, 1893 PA 206, MCL

211.34c.

     (c) Real property with less than 4 rental units.

     (d) Real property classified as agricultural real property

under section 34c of the general property tax act, 1893 PA 206, MCL

211.34c.

     (e) Real property exempt under section 7ee of the general

property tax act, 1893 PA 206, MCL 211.7ee.

     Enacting section 1. This amendatory act does not take effect

unless Senate Bill No. 1038 of the 97th Legislature is enacted into

law.