July 13, 2016, Introduced by Rep. Iden and referred to the Committee on Tax Policy.
A bill to amend 1973 PA 186, entitled
"Tax tribunal act,"
by amending sections 3, 21, 22, 25, 26, 32, 34, 35a, 49, 51, and 62
(MCL 205.703, 205.721, 205.722, 205.725, 205.726, 205.732, 205.734,
205.735a, 205.749, 205.751, and 205.762), sections 3, 32, and 35a
as amended by 2008 PA 125, section 22 as amended by 2008 PA 127,
sections 26 and 49 as amended by 2008 PA 126, section 34 as amended
by 1980 PA 437, and section 62 as amended by 2008 PA 128; and to
repeal acts and parts of acts.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 3. As used in this act:
(a) "Agency" means a board, official, or administrative agency
empowered to make a decision, finding, ruling, assessment,
determination, or order that is subject to review under the
jurisdiction of the tribunal or that has collected a tax for which
a refund is claimed.
(b) "Chairperson" means the chairperson of the tribunal.
(c) "Entire tribunal" means the hearing division of the
tribunal other than the residential property and small claims
division created in section 61.
(d) (c)
"Mediation" means a
voluntary process in which a
mediator facilitates communication between parties, assists in
identifying issues, and helps explore solutions to promote a
mutually acceptable settlement.
(e) (d)
"Mediator" means a
neutral third party who is
certified by the tribunal under section 47 as a mediator in a
proceeding before the tribunal or as a facilitator in the court of
claims, and who is agreed to by the parties.
(f) (e)
"Proceeding" means an
appeal taken under this act.
(g) (f)
"Property tax laws" does
not include the drain code of
1956, 1956 PA 40, MCL 280.1 to 280.630.
(h) (g)
"Tribunal" means the tax
tribunal created under
section 21.
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 shall consist of 7 members, each
appointed by the governor as a full- or part-time member, with the
advice
and consent of the senate, for terms a term of 4 years. The
2
additional members first appointed by this amendatory act shall
first
serve for 3 years. When
making an appointment, the governor
shall consider a list of qualified candidates solicited from at
least 1 appropriate professional association located and primarily
operating in this state.
(3) Subject to subsection (6), the full- or part-time status
of a member, including any hourly basis for that status, shall not
be diminished during the length of his or her term without his or
her consent.
(4) 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.
(5) The governor shall designate a member as chairperson, who
shall assign matters, apportion business of the tribunal, and
perform other duties prescribed by law. The chairperson shall serve
in that capacity at the pleasure of the governor.
(6) The governor may remove a member, after notice and an
opportunity to be heard, for failure to substantially perform his
or her duties under this act, malfeasance, misfeasance, or
nonfeasance in office, or other good cause.
(7) Members shall receive training on matters relevant to the
work of the tribunal, including, but not limited to, proper
courtroom procedures and state and local tax issues.
Sec. 22. (1) All of the following apply to tribunal
membership:
(a)
(1) The members of the tribunal shall be citizens of the
United States and residents of this state.
(b) At least 2 members shall be attorneys admitted to practice
in this state who have been engaged for at least 5 years
immediately preceding the appointment in active government,
corporate, or private practice dealing with federal and state or
local tax matters, including property taxes, or in the discharge of
a judicial or quasi-judicial office.
(c) At least 1 member shall be a certified assessor holding
the
highest level of certification granted by the state assessors
board.
tax commission.
(d) At least 1 member shall be a professional real estate
appraiser holding a recognized certification indicating competence
in the valuation of complex income producing and residential
property of the type subject to property taxation, with a
certification having required a review of sample appraisals and 5
years of experience as an appraiser.
(e) At least 1 member shall be a certified public accountant
with 5 years of experience in state or local tax matters.
(f) Appointees who are not attorneys, certified assessors,
professional real estate appraisers, or certified public
accountants shall have at least 5 years of experience in state or
local tax matters.
(2) Each member shall take and subscribe to the constitutional
oath of office before entering on the discharge of his or her
duties.
(3)
Each member shall devote his or her entire time to, and
personally
perform the duties of , his or
her office, and shall not
engage
in other business or professional activity for
remuneration.including, but not limited to, the maintenance
of his
or her docket as assigned and directed by the chairperson and in
accordance with rules prescribed under section 32. Except as
otherwise provided in this subsection, a member shall not engage in
any other gainful employment or business or professional activity
for remuneration, or hold any other office in or engage in any
other profitable undertaking with any governmental entity of this
state, another state, or the United States. Additionally, a member
shall not act as an attorney, representative, or accountant for
others in a matter involving any tax imposed or levied by this
state or any of its political subdivisions. However, a member may
do any of the following:
(a) Own passive interests in business entities.
(b) Earn income from incidental teaching or scholarly
activities.
(c) Receive compensation for extrajudicial activities
described in canon 4 of the Michigan code of judicial conduct if
the receipt of that compensation does not create an appearance of
impropriety, including, but not limited to, an appearance that the
source of that compensation influenced the member in the
performance of his or her duties.
(d) Act professionally on his or her own behalf, including,
but not limited to, as his or her own attorney or accountant.
(e) Provide professional services to family members,
including, but not limited to, legal, accounting, and tax services,
so long as he or she is not paid for those services.
(4)
Each Before October 1,
2016, each member shall receive an
annual
salary as determined by law. and After
September 30, 2016,
each member who works for the tribunal full time, as determined by
the department of licensing and regulatory affairs, shall receive
an annual salary not less than the maximum salary paid to an
administrative law manager or equivalent civil service
classification. Each member who works for the tribunal part time,
as determined by the department of licensing and regulatory
affairs, shall receive an annual pro rata salary proportionate to
the salary of a member who works full time. In addition to his or
her annual salary, each member shall be reimbursed for his or her
actual and necessary expenses at the rate determined by the
administrative board. As used in this subsection, "actual and
necessary expenses" includes, but is not limited to, fees incurred
for the renewal of relevant and appropriate professional licenses
and memberships in associations located in this state.
(5) The governor may, with the advice and consent of the
senate, appoint not more than 3 members of the tribunal pro tempore
if it appears to the governor that the services of an added member
or members are advisable. A pro tempore member shall be qualified
for membership under this section and is subject to the duties and
limitations of a member of the tribunal under this act. A pro
tempore member shall be appointed for not more than 12 months, on a
full- or part-time basis, unless reappointed by the governor. Pro
tempore members appointed under this subsection do not count toward
the number of members appointed under section 21.
(6) On motion of a party to a proceeding or a tribunal member
assigned to the proceeding, or by order of the chairperson, a
member assigned to the proceeding may be disqualified for any
reason listed in MCR 2.003(C)(1). A motion for disqualification by
a party to the proceeding shall be reviewed and either approved or
denied by the tribunal member presiding over the proceeding. If the
motion is denied, the moving party may appeal to the chairperson
unless the chairperson is presiding over the proceeding. If the
chairperson is presiding over the proceeding, an appeal shall
instead be randomly assigned to another member who is qualified
under section 22 as an attorney. Disqualification may be waived
with the consent of all parties and shall be in writing or placed
on the record.
Sec. 25. (1) The principal office of the tribunal and its
chief
clerk shall be in the city of Lansing.
, and the department
of
administration In addition,
the tribunal may operate such
regional offices across this state as the chairperson considers
necessary. The department of technology, management, and budget
shall
furnish suitable accommodations and equipment there.in these
principal and regional offices.
(2)
Subject to appropriations, therefor, the tribunal shall
have
such the legal, technical, and secretarial assistance as that
the
chairman deems chairperson
considers necessary.
(3) A clerk or employee of the tribunal shall not provide
legal, accounting, or technical assistance relevant to a federal,
state, or local tax matter, or to any other matter of which the
tribunal may acquire jurisdiction.
(4) Salaries and expenses of the tribunal shall be paid as
provided by law.
Sec.
26. The tribunal may Only
for proceedings before the
residential property and small claims division created in section
61 may the tribunal appoint 1 or more hearing officers to hold
hearings.
Hearings, Those hearings, except as otherwise provided in
chapter 6, shall be conducted pursuant to chapter 4 of the
administrative procedures act of 1969, 1969 PA 306, MCL 24.271 to
24.287, and the open meetings act, 1976 PA 267, MCL 15.261 to
15.275. Public notice of the time, date, and place of the hearing
shall be given in the manner required by the open meetings act,
1976 PA 267, MCL 15.261 to 15.275. A proposed decision of a hearing
officer or referee shall be considered and decided by 1 or more
members of the tribunal.
Sec. 32. The tribunal's powers include, but are not limited
to, all of the following:
(a) Affirming, reversing, modifying, or remanding a final
decision, finding, ruling, determination, or order of an agency.
(b) Ordering the payment or refund of taxes in a matter over
which it may acquire jurisdiction.
(c) Granting other relief or issuing writs, orders, or
directives that it deems necessary or appropriate in the process of
disposition of a matter over which it may acquire jurisdiction.
(d)
Promulgating rules for the implementation of to implement
this
act , including rules for practice and procedure before
the
tribunal
and for mediation as provided in section 47, under
pursuant to the administrative procedures act of 1969, 1969 PA 306,
MCL
24.201 to 24.328, .including,
but not limited to, rules for the
following:
(i) Practice and procedure before the tribunal.
(ii) Mediation under section 47.
(iii) Ethical standards governing the conduct of tribunal
members. A tribunal member shall comply with these ethical
standards, in addition to all other laws, rules, and standards
applicable to his or her conduct professionally or otherwise.
(iv) Initial training requirements for newly appointed
tribunal members.
(v) Continuing training requirements for all tribunal members.
(vi) Guidelines and policies governing docket maintenance by
tribunal members, including, but not limited to, guidelines and
policies setting forth the method by which the chairperson assigns
cases under section 34(1) and (2). Unless these guidelines and
policies provide otherwise, the tribunal shall follow MCR 8.111.
(e) Mediating a proceeding before the tribunal.
(f) Certifying mediators to facilitate claims in the court of
claims and in the tribunal.
Sec.
34. (1) One Subject to
subsection (2), 1 or more members
of the tribunal may hear and decide proceedings.
(2) A proceeding before the entire tribunal filed after
December 31, 2016 is subject to the following:
(a) The chairperson shall assign at least 1 tribunal member to
the proceeding.
(b) Subject to subdivision (c), the chairperson shall assign 2
additional tribunal members to the proceeding so that a panel of 3
will hear and decide the proceeding, in any of the following
circumstances:
(i) At the discretion of the chairperson.
(ii) At the request of both parties to the proceeding if the
request is made before a hearing.
(iii) As otherwise provided for by tribunal rules.
(c) A 3-member panel under subdivision (b) shall consist of
all of the following:
(i) One tribunal member who is qualified under section 22 as
an attorney.
(ii) One tribunal member who is qualified under section 22 on
a basis that does not require being an attorney.
(iii) One tribunal member randomly chosen by lot.
(3) (2)
The tribunal shall sit at places
throughout the this
state as the tribunal determines. The county board of commissioners
for the county in which the tribunal is sitting, except when the
tribunal is sitting in the city of Lansing or in a regional office
established under section 25(1), shall provide the tribunal with
suitable accommodations and equipment on request of the
chairperson.
(4)
The business which that the
tribunal may perform shall be
conducted
at a public meeting on of the tribunal held in compliance
with
Act No. 267 of the Public Acts of 1976, as amended. 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, as
amended.the open meetings act, 1976 PA 267, MCL 15.261
to 15.275.
Sec.
35a. (1) The provisions of this This
section apply
applies 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).
(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).
(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), 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).
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 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.
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) 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 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. In Before
October 1, 2016, in all other
matters, the jurisdiction of the tribunal is invoked by a party in
interest, as petitioner, filing a written petition within 35 days
after
the final decision, ruling, or determination. An After
September 30, 2016, in all other matters, the jurisdiction of the
tribunal is invoked by a party in interest, as petitioner, filing a
written petition within 90 days after the final decision, ruling,
or determination. Before October 1, 2016, an appeal of a contested
tax bill shall be made within 60 days after mailing by the
assessment
district treasurer. and the appeal After September 30,
2016, an appeal of a contested tax bill shall be made within 90
days after mailing by the assessment district treasurer. In all
cases, the appeal of a contested tax bill 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.
(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
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.
(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.
(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.
(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.
(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.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. 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 of principal
residence property as defined in rules promulgated by the tax
tribunal.
(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. In addition, subject to appropriation, beginning in
fiscal year 2017 and each year thereafter, an amount sufficient to
maintain the operation of the tribunal consistent with this act
shall be deposited in the 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. 51. (1) A decision and opinion of the tribunal shall be
made within a reasonable period, shall be in writing or stated in
the record, and shall include a concise statement of facts and
conclusions of law, stated separately and, upon order of the
tribunal, shall be officially reported and published. After
December 31, 2016, a decision and opinion is not timely for
purposes of this subsection if, absent good cause, it is issued
more than 120 days after the date that the last brief was filed
following completion of the hearing or, if briefs were not filed
following completion of the hearing, the date that the hearing was
completed. A tribunal member's repeated failure to issue timely
decisions may be considered for purposes of a removal decision
under section 21(6).
(2) If the implementation of a decision of the tribunal would
have the effect of delaying collection of taxes in a taxing unit
due to the time of the year in which the decision is rendered, the
tribunal shall not order immediate implementation of the decision
without consent of all the taxing units involved, but shall order
any required adjustment in rate by the taxing unit or units be made
in the following tax year.
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 Before
January 1, 2017, 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. The Also before
January 1, 2017, the residential property and small claims division
also
has jurisdiction over a proceeding
involving an appeal of any
other
nonproperty tax or
special assessment over which the
tribunal
has jurisdiction if the amount of the tax in dispute is $20,000.00
or less, adjusted annually by the inflation rate. After December
31, 2016, 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 $250,000.00. Also
after December 31, 2016, the residential property and small claims
division has jurisdiction over a proceeding involving an appeal of
any nonproperty tax or special assessment over which the tribunal
has jurisdiction if the amount of the tax in dispute is $100,000.00
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 21
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.
Enacting section 1. Section 23 of the tax tribunal act, 1973
PA 186, MCL 205.723, is repealed.
Enacting section 2. This amendatory act takes effect October
1, 2016.