SENATE BILL NO. 1170

October 01, 2020, Introduced by Senator CHANG and referred to the Committee on Finance.

"The general property tax act,"

by amending section 7u (MCL 211.7u), as amended by 2012 PA 135.

the people of the state of michigan enact:

Sec. 7u. (1) The principal residence of persons a person who, in the judgment of the supervisor and board of review, by reason of poverty, are is unable to contribute toward the public charges is eligible for exemption in whole or in part from taxation the collection of taxes 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, subject to subsection (6), do all of the following on an annual basis:

(a) Be an owner of Own and occupy as a principal residence the property for which an exemption is requested. The person shall affirm this ownership and occupancy status in writing by filing a form prescribed by the state tax commission with the local tax collecting unit.

(b) File a claim with the supervisor or board of review on a form provided by the local assessing tax collecting 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.

(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 published annually in the federal register Federal Register by the United States department Department of health Health and human services Human Services under its authority of section 673 of subtitle B of title VI of the omnibus budget reconciliation act of 1981, Public Law 97-35, to revise the poverty line under 42 USC 9902, or alternative guidelines adopted by the governing body of the local assessing tax collecting 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 must be filed after January 1 but before the day prior to the last day of the board of review.

(4) The governing body of the local assessing tax collecting unit shall determine and make available to the public the policy and guidelines the local assessing unit uses used for the granting of exemptions under this section. The guidelines shall must include but are 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 tax collecting 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) Notwithstanding any provision of this section to the contrary, subject to subsection (7), a local tax collecting unit may permit a principal residence exempt from the collection of taxes under this section to remain exempt under this section for up to 3 years after the year for which the exemption was initially granted, without subsequent reapplication for the exemption, if the person who establishes initial eligibility under subsection (2) meets either of the following:

(a) Receives a fixed income solely from public assistance that is not subject to significant annual increases beyond the rate of inflation, such as federal Supplemental Security Income or Social Security disability or retirement benefits.

(b) Has 1 of the following:

(i) A permanent physical or mental disability, as determined under federal or state guidelines, that substantially impedes his or her activities of daily living.

(ii) A disability, as that term is defined in section 216 of title II of the social security act, 42 USC 416, that substantially impedes his or her activities of daily living.

(7) Both of the following apply to a person who obtains the extended exemption described in subsection (6):

(a) The person shall file with the local tax collecting unit, in a form and manner prescribed by the state tax commission, an affidavit rescinding the exemption as extended under subsection (6) within 30 days after either of the following, if applicable:

(i) The person ceases to own or occupy the principal residence for which the exemption was extended.

(ii) The person experiences a change in household assets or income that defeats eligibility for the exemption under subsection (2).

(b) If the person fails to file a rescission as required under subdivision (a) and the property is later determined to be ineligible for the exemption under this section, the person is subject to repayment of any additional taxes with interest as described in this subdivision. Upon discovery that the property is no longer eligible for the exemption under this section, the assessor shall remove the exemption of that property and, if the tax roll is in the local tax collecting unit's possession, amend the tax roll to reflect the removal of the exemption, and the local treasurer shall, within 30 days of the date of the discovery, issue a corrected tax bill for any additional taxes with interest at the rate of 1% per month or fraction of a month computed from the date the taxes were last payable without interest. If the tax roll is in the county treasurer's possession, the tax roll must be amended to reflect the removal of the exemption and the county treasurer shall, within 30 days of the date of the removal, 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 computed from the date the taxes were last payable without interest. Interest on any tax set forth in a corrected or supplemental tax bill again begins 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 must 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.

(8) (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.

(9) (7) As used in this section, "principal residence" means principal residence or qualified agricultural property as those terms are defined in section 7dd.