SB-1009, As Passed Senate, September 8, 2016
June 1, 2016, Introduced by Senator JOHNSON and referred to the Committee on Finance.
A bill to amend 1893 PA 206, entitled
"The general property tax act,"
by amending section 78q (MCL 211.78q), as added by 2014 PA 499.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 78q. (1) Notwithstanding any provision of this act or
charter to the contrary, a foreclosing governmental unit may create
a delinquent property tax installment payment plan for eligible
property, the title to which is held by a financially distressed
person.
(2) If a financially distressed person agrees to participate
in a delinquent property tax installment payment plan created under
subsection (1) and makes the initial payment required under that
delinquent property tax installment payment plan, the foreclosing
governmental unit may remove eligible property the title to which
is held by that financially distressed person from the petition for
foreclosure as provided in section 78h(3)(c).
(3) If a financially distressed person successfully completes
a delinquent property tax installment payment plan created under
subsection (1), interest under section 78g(3)(b) and any additional
interest otherwise applicable shall be waived.
(4) If a financially distressed person does not successfully
complete a delinquent property tax installment payment plan created
under subsection (1), both of the following shall occur:
(a) Interest under section 78g(3)(b) and any additional
interest otherwise applicable shall apply to any unpaid taxes on
the property.
(b) The eligible property shall be included in the immediately
succeeding petition for foreclosure under section 78h.
(5) Notwithstanding any provision of this act or charter to
the
contrary, until June 30, 2016, 2019,
a county treasurer may
enter into a tax foreclosure avoidance agreement for a term of up
to 5 years with an owner of property returned as delinquent to the
county treasurer under this act or forfeited to the county
treasurer under section 78g if the property is classified as
residential real property under section 34c, if the property is
eligible property, and if the owner makes an initial payment of at
least 10% of the delinquent taxes owed on the property. While a tax
foreclosure avoidance agreement is effective, the property shall be
withheld or removed from the petition for foreclosure as provided
under section 78h(3)(c), interest at the rate provided in section
78g(3)(c)(ii) shall apply, and the owner shall make timely payments
as provided under the tax foreclosure avoidance agreement,
including timely payment of all nondelinquent taxes on the
property. A tax foreclosure avoidance agreement shall require
regular periodic installment payments. The final payment shall not
be disproportionately larger than a regular periodic installment
payment and regular periodic installment payments in the final year
shall not be disproportionately larger than regular periodic
installment payments in prior years. A county treasurer may refuse
to enter into a tax foreclosure avoidance agreement with an owner
under this subsection if that owner is not in compliance with
another tax foreclosure avoidance agreement with the county
treasurer or with a delinquent property tax installment plan with
the county treasurer under this section. A county treasurer may not
enter into more than 2 tax foreclosure avoidance agreements with an
owner. If an owner fails to comply with a tax foreclosure avoidance
agreement or if the tax foreclosure avoidance agreement is no
longer effective, all of the following shall occur:
(a) Interest under section 78g(3)(b) and any additional
interest otherwise applicable shall apply to any unpaid taxes on
the property.
(b) The property shall be included in the immediately
succeeding petition for foreclosure under section 78h.
(c) The owner shall not bid on property subject to sale under
section 78m, if that property was subject to the tax foreclosure
avoidance agreement.
(6) A delinquent property tax installment payment plan or a
tax foreclosure avoidance agreement may not be approved under this
section if the delinquent property tax installment payment plan or
tax foreclosure avoidance agreement would impermissibly impair an
outstanding debt of the county.
(7) If a foreclosing governmental unit has created a
delinquent property tax installment payment plan under this
section, the department of treasury may audit the books and records
of that foreclosing governmental unit concerning the details of
that delinquent property tax installment payment plan.
(8) Property classified as industrial real property under
section 34c that is occupied at less than 10% of its facility
capacity for more than 3 years and that is located in a county with
a population of more than 1,500,000 according to the most recent
federal decennial census is not eligible to participate in a
delinquent property tax installment payment plan and shall proceed
under section 78m, including sale to the person bidding the highest
amount above the minimum bid as required under section 78m(2).
(9) If a delinquent property tax installment payment plan is
in effect for property for which a county has issued notes under
this act that are secured by the delinquent taxes and interest on
that property, at any time 2 years after the date that those taxes
were returned as delinquent, the county treasurer may charge back
to any taxing unit the face amount of the delinquent taxes that
were owed to that taxing unit on the date those taxes were returned
as delinquent, less the amount of any principal installments
received by the county treasurer on that property under the
delinquent property tax installment payment plan. All subsequent
payments of delinquent taxes and interest on that property shall be
retained by the county treasurer in a separate account and either
paid to or credited to the account of that taxing unit.
(10) As used in this section:
(a) "Eligible property" means property that is a principal
residence exempt from the tax levied by a local school district for
school operating purposes under section 7cc.
(b) "Financially distressed person" means a person who meets
all of the following conditions:
(i) Is eligible to have property to which he or she holds
title withheld from a petition for foreclosure under section
78h(3)(b).
(ii) Is not delinquent in satisfying a delinquent property tax
installment payment plan or tax foreclosure avoidance agreement
under this section for any other property within the foreclosing
governmental unit.