Property tax; delinquent taxes; delinquent property tax

forfeiture and foreclosure process; revise.

PROPERTY TAX: Delinquent taxes

A bill to amend 1893 PA 206, entitled

"The general property tax act,"

by amending sections 78g, 78k, 78o, and 124 (MCL 211.78g,

211.78k, 211.78o, and 211.124), sections 78g, 78k, and 78o as

added by 1999 PA 123; and to repeal acts and parts of acts.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1 Sec. 78g. (1) On EXCEPT AS OTHERWISE PROVIDED IN THIS

2 SUBSECTION, ON March 1 in each tax year, certified abandoned

3 property and property that is delinquent for taxes, interest,

4 penalties, and fees for the immediately preceding 12 months or

5 more is forfeited to the county treasurer for the total amount of

6 those unpaid delinquent taxes, interest, fees, and penalties,

7 AND FEES. If property is forfeited to a county treasurer under

8 this subsection, the county treasurer does not have a right to

9 possession of the property until 21 days after a judgment of

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1 foreclosure is entered under section 78k. If property is

2 forfeited to a county treasurer under this subsection, the county

3 treasurer shall add a $175.00 fee, as adjusted under section 78p,

4 to each parcel of property for which those delinquent taxes,

5 interest, penalties, and fees remain unpaid. A COUNTY TREASURER

6 SHALL WITHHOLD A PARCEL OF PROPERTY FROM FORFEITURE IF THAT PROP-

7 ERTY IS THE SUBJECT OF AN APPEAL OF THE DENIAL OF A HOMESTEAD

8 EXEMPTION UNDER SECTION 7CC ON THE MARCH 1 FORFEITURE DATE FOR

9 TAXES TO BE FORFEITED ON THAT FORFEITURE DATE AND IF THE PROPERTY

10 OWNER CLAIMING THE HOMESTEAD EXEMPTION HAS NOT PREVIOUSLY

11 APPEALED THE DENIAL OF A HOMESTEAD EXEMPTION FOR THAT PROPERTY.

12 A COUNTY TREASURER MAY WITHHOLD A PARCEL OF PROPERTY FROM FORFEI-

13 TURE IF THAT PROPERTY IS THE SUBJECT OF AN APPEAL OF THE DENIAL

14 OF A HOMESTEAD EXEMPTION UNDER SECTION 7CC ON THE MARCH 1 FORFEI-

15 TURE DATE FOR TAXES TO BE FORFEITED ON THAT FORFEITURE DATE

16 WHETHER OR NOT THE PROPERTY OWNER CLAIMING THE HOMESTEAD EXEMP-

17 TION HAS PREVIOUSLY APPEALED THE DENIAL OF A HOMESTEAD EXEMPTION

18 FOR THAT PROPERTY OR FOR ANY OTHER REASON DETERMINED BY THE STATE

19 TAX COMMISSION. THE PROCEDURE FOR WITHHOLDING A PARCEL OF PROP-

20 ERTY FROM FORFEITURE UNDER THIS SUBSECTION SHALL BE DETERMINED BY

21 THE STATE TAX COMMISSION.

22 (2) Not more than 45 days after property is forfeited under

23 subsection (1), the county treasurer shall record with the county

24 register of deeds a certificate in a form determined by the state

25 treasurer for each parcel of property forfeited to the county

26 treasurer, specifying that the property has been forfeited to the

27 county treasurer and not redeemed and that absolute title to the

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1 property shall vest in the county treasurer 21 days after entry

2 of a judgment of foreclosure under section 78k. IF A CERTIFICATE

3 OF FORFEITURE IS RECORDED IN ERROR, THE COUNTY TREASURER SHALL

4 RECORD WITH THE COUNTY REGISTER OF DEEDS A CERTIFICATE OF ERROR

5 IN A FORM PRESCRIBED BY THE DEPARTMENT OF TREASURY. A CERTIFI-

6 CATE SUBMITTED TO THE COUNTY REGISTER OF DEEDS FOR RECORDING

7 UNDER THIS SUBSECTION NEED NOT BE NOTARIZED AND MAY BE AUTHENTI-

8 CATED BY A DIGITAL SIGNATURE OF THE COUNTY TREASURER OR BY OTHER

9 ELECTRONIC MEANS. If the county has elected under section 78 to

10 have this state foreclose property under this act forfeited to

11 the county treasurer under this section, the county treasurer

12 shall immediately transmit to the state treasurer a copy of each

13 certificate recorded under this subsection. The county treasurer

14 shall upon collection transmit to the state treasurer within 30

15 days the fee added to each parcel under section 78g(1), which may

16 be paid from the county's delinquent tax revolving fund and shall

17 be deposited in the land reutilization fund created under

18 section 78n.

19 (3) Property forfeited to the county treasurer under subsec-

20 tion (1) may be redeemed at any time before 21 days after the

21 entry of judgment foreclosing the property under section 78k upon

22 payment to the county treasurer of all of the following:

23 (a) The total amount of unpaid delinquent taxes, interest,

24 penalties, and fees for which the property was forfeited.

25 (b) In addition to the interest calculated under sections

26 60a(1) or (2) and 78a(3), additional interest computed at a

27 noncompounded rate of 1/2% per month or fraction of a month on

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1 the taxes that were originally returned as delinquent, computed

2 from the March 1 preceding the forfeiture.

3 (c) All recording fees and all fees for service of process

4 or notice.

5 (4) IF PROPERTY IS REDEEMED BY A PERSON WITH A LEGAL INTER-

6 EST AS PROVIDED UNDER SUBSECTION (3), ANY UNPAID TAXES NOT

7 RETURNED AS DELINQUENT TO THE COUNTY TREASURER UNDER SECTION 78A

8 ARE NOT EXTINGUISHED.

9 (5) (4) If property is redeemed by a person with a legal

10 interest as provided under subsection (3), the person redeeming

11 does not acquire a title or interest in the property greater than

12 that person would have had if the property had not been forfeited

13 to the county treasurer, but the person redeeming, other than the

14 owner, is entitled to a lien for the amount paid to redeem the

15 property in addition to any other lien or interest the person may

16 have, which shall be recorded within 30 days with the register of

17 deeds BY THE PERSON ENTITLED TO THE LIEN. The lien acquired

18 shall have the same priority as the existing lien, title, or

19 interest.

20 (6) (5) If property is redeemed as provided under subsec-

21 tion (3), the county treasurer shall issue a redemption certifi-

22 cate in quadruplicate in a form prescribed by the department of

23 treasury. One of the quadruplicate certificates shall be deliv-

24 ered to the person making the redemption payment, 1 shall be

25 filed in the office of the county treasurer, 1 shall be recorded

26 in the office of the county register of deeds, and 1 shall be

27 immediately transmitted to the department of treasury IF THIS

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1 STATE IS THE FORECLOSING GOVERNMENTAL UNIT. The county treasurer

2 shall also make a note of the redemption certificate in the tax

3 record kept in his or her office, with the name of the person

4 making the FINAL redemption payment, the date of the payment, and

5 the amount paid. IF THE COUNTY TREASURER ACCEPTS PARTIAL REDEMP-

6 TION PAYMENTS, THE COUNTY TREASURER SHALL INCLUDE IN THE TAX

7 RECORD KEPT IN HIS OR HER OFFICE THE NAME OF THE PERSON OR PER-

8 SONS MAKING EACH PARTIAL REDEMPTION PAYMENT, THE DATE OF EACH

9 PARTIAL REDEMPTION PAYMENT, THE AMOUNT OF EACH PARTIAL REDEMPTION

10 PAYMENT, AND THE TOTAL AMOUNT OF ALL REDEMPTION PAYMENTS. A cer-

11 tificate and the entry of the certificate in the tax record by

12 the county treasurer is prima facie evidence of a redemption pay-

13 ment in the courts of this state. A CERTIFICATE SUBMITTED TO THE

14 COUNTY REGISTER OF DEEDS FOR RECORDING UNDER THIS SUBSECTION NEED

15 NOT BE NOTARIZED AND MAY BE AUTHENTICATED BY A DIGITAL SIGNATURE

16 OF THE COUNTY TREASURER OR BY OTHER ELECTRONIC MEANS. IF A

17 REDEMPTION CERTIFICATE IS RECORDED IN ERROR, THE COUNTY TREASURER

18 SHALL RECORD WITH THE COUNTY REGISTER OF DEEDS A CERTIFICATE OF

19 ERROR IN A FORM PRESCRIBED BY THE DEPARTMENT OF TREASURY. A COPY

20 OF A CERTIFICATE OF ERROR RECORDED UNDER THIS SECTION SHALL BE

21 IMMEDIATELY TRANSFERRED TO THE DEPARTMENT OF TREASURY IF THIS

22 STATE IS THE FORECLOSING GOVERNMENTAL UNIT.

23 Sec. 78k. (1) If a petition for foreclosure is filed under

24 section 78h, before the date of the hearing, the foreclosing gov-

25 ernmental unit shall file with the clerk of the circuit court

26 proof of any notice, service, or publication required under this

27 act SERVICE OF THE NOTICE OF THE SHOW CAUSE HEARING UNDER

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1 SECTION 78J, PROOF OF SERVICE OF THE NOTICE OF THE FORECLOSURE

2 HEARING UNDER THIS SECTION, AND PROOF OF THE PERSONAL VISIT TO

3 THE PROPERTY AND PUBLICATION UNDER SECTION 78I.

4 (2) A person claiming an interest in a parcel of property

5 set forth in the petition for foreclosure may contest the valid-

6 ity or correctness of the forfeited unpaid delinquent taxes,

7 interest, penalties, and fees for 1 or more of the following

8 reasons:

9 (a) No law authorizes the tax.

10 (b) The person appointed to decide whether a tax shall be

11 levied under a law of this state acted without jurisdiction, or

12 did not impose the tax in question.

13 (c) The property was exempt from the tax in question, or the

14 tax was not legally levied.

15 (d) The tax has been paid within the time limited by law for

16 payment or redemption.

17 (e) The tax was assessed fraudulently.

18 (f) The description of the property used in the assessment

19 was so indefinite or erroneous that the forfeiture was void.

20 (3) A person claiming an interest in a parcel of property

21 set forth in the petition for foreclosure who desires to contest

22 that petition shall file written objections with the clerk of the

23 circuit court and serve those objections on the foreclosing gov-

24 ernmental unit.

25 (4) If the court determines that the owner of property

26 subject to foreclosure is a minor heir, is incompetent, or is

27 without means of support, OR IS UNDERGOING A SUBSTANTIAL

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1 FINANCIAL HARDSHIP, the court may withhold that property from

2 foreclosure for 1 year or may enter an order extending the

3 redemption period as the court determines to be equitable. If

4 the court withholds property from foreclosure under this subsec-

5 tion, a taxing unit's lien for taxes due is not prejudiced and

6 that property shall be included in the immediately succeeding

7 year's tax foreclosure proceeding.

8 (5) The circuit court shall enter judgment on a petition for

9 foreclosure filed under section 78h not more than 10 days after

10 the March 1 immediately succeeding the date the petition for

11 foreclosure is filed for uncontested cases or 10 days after the

12 conclusion of the hearing for contested cases. All redemption

13 rights to the property expire 21 days after the circuit court

14 enters a judgment foreclosing the property as requested in the

15 petition for foreclosure. The circuit court's judgment shall

16 specify all of the following:

17 (a) The legal description and, if known, the street address

18 of the property foreclosed and the forfeited unpaid delinquent

19 taxes, interest, penalties, and fees due on each parcel of

20 property.

21 (b) That fee simple title to property foreclosed by the

22 judgment will vest absolutely in the foreclosing governmental

23 unit, EXCEPT AS OTHERWISE PROVIDED IN SUBDIVISIONS (C) AND (E),

24 without any further rights of redemption, if all forfeited delin-

25 quent taxes, interest, penalties, and fees are not paid within 21

26 days after entry of the judgment.

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1 (c) That all liens against the property, INCLUDING ANY LIEN

2 FOR UNPAID TAXES OR SPECIAL ASSESSMENTS, except future

3 installments of special assessments and liens recorded by this

4 state or the foreclosing governmental unit pursuant to the natu-

5 ral resources and environmental protection act, 1994 PA 451,

6 MCL 324.101 to 324.90106, are extinguished, if all forfeited

7 delinquent taxes, interest, penalties, and fees are not paid

8 within 21 days after entry of the judgment.

9 (d) That, EXCEPT AS OTHERWISE PROVIDED IN SUBDIVISIONS (C)

10 AND (E), the foreclosing governmental unit has good and market-

11 able fee simple title to the property, if all forfeited delin-

12 quent taxes, interest, penalties, and fees are not paid within 21

13 days after entry of the judgment.

14 (e) That all existing recorded and unrecorded interests in

15 that property are extinguished, except a visible or recorded

16 easement or right-of-way, private deed restrictions,

17 restrictions OR RESTRICTIONS OR OTHER GOVERNMENTAL INTERESTS

18 imposed pursuant to the natural resources and environmental pro-

19 tection act, 1994 PA 451, MCL 324.101 to 324.90106, or other

20 governmental interests, if all forfeited delinquent taxes,

21 interest, penalties, and fees are not paid within 21 days after

22 entry of the judgment.

23 (f) A finding that those ALL PERSONS entitled to notice

24 and an opportunity to be heard have been provided that notice and

25 opportunity.

26 (6) Fee EXCEPT AS OTHERWISE PROVIDED IN SUBSECTION (5)(C)

27 AND (E), FEE simple title to property set forth in a petition for

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1 foreclosure filed under section 78h on which forfeited delinquent

2 taxes, interest, penalties, and fees are not paid within 21 days

3 after the entry of judgment shall vest absolutely in the fore-

4 closing governmental unit, and the foreclosing governmental unit

5 shall have absolute title to the property. The foreclosing gov-

6 ernmental unit's title is not subject to any recorded or unre-

7 corded lien and shall not be stayed or held invalid except as

8 provided in subsection (7).

9 (7) The foreclosing governmental unit or a person claiming

10 to have a property interest under section 78i in property fore-

11 closed under this section may appeal the circuit court's ORDER OR

12 THE CIRCUIT COURT'S judgment foreclosing property to the court of

13 appeals. An appeal under this subsection is limited to the

14 record of the proceedings in the circuit court under this section

15 and shall not be de novo. The circuit court's judgment foreclos-

16 ing property shall be stayed until the court of appeals has

17 reversed, modified, or affirmed that judgment. IF AN APPEAL

18 UNDER THIS SUBSECTION STAYS THE CIRCUIT COURT'S JUDGMENT FORE-

19 CLOSING PROPERTY, THE CIRCUIT COURT'S JUDGMENT IS STAYED ONLY AS

20 TO THE PROPERTY THAT IS THE SUBJECT OF THAT APPEAL AND THE CIR-

21 CUIT COURT'S JUDGMENT FORECLOSING OTHER PROPERTY THAT IS NOT THE

22 SUBJECT OF THAT APPEAL IS NOT STAYED. To appeal the circuit

23 court's judgment foreclosing property, a person appealing the

24 judgment shall pay to the county treasurer the amount determined

25 to be due to the county treasurer under the judgment within 21

26 days after the circuit court's judgment is entered, together with

27 a notice of appeal. If the circuit court's judgment FORECLOSING

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1 THE PROPERTY is affirmed on appeal, the amount determined to be

2 due shall be refunded to the person who appealed the judgment.

3 If the circuit court's judgment FORECLOSING THE PROPERTY is

4 reversed or modified on appeal, the county treasurer shall refund

5 the amount determined to be due to the person who appealed the

6 judgment, if any, and retain the balance in accordance with the

7 order of the court of appeals.

8 (8) The foreclosing governmental unit shall record either

9 the judgment or a notice of judgment FOR EACH PARCEL OF FORE-

10 CLOSED PROPERTY in the office of the register of deeds for the

11 county in which the foreclosed property is located IN A FORM PRE-

12 SCRIBED BY THE DEPARTMENT OF TREASURY.

13 Sec. 78o. (1) Not later than 1 year after the effective

14 date of the amendatory act that added this section OCTOBER 1,

15 2000, the state treasurer shall prescribe the form of all of the

16 following to be used in the administration of the collection of

17 taxes under sections 78 to 78n:

18 (a) The notice and the proof of service required under sec-

19 tion 78i. , which shall include the steps taken to identify the

20 addresses of those persons entitled to notice under this act.

21 (b) The affidavit of publication required under section

22 78i.

23 (B) (c) The judgment of foreclosure required under section

24 78k.

25 (2) In prescribing the forms required under subsection (1),

26 the state treasurer shall actively solicit recommendations from

27 the county treasurers and other interested parties.

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1 Sec. 124. (1) From and after the passage of this act the

2 auditor general SUBJECT TO SUBSECTION (5), THE DEPARTMENT OF

3 TREASURY shall perform all the duties in relation to taxes

4 levied, assessed, collected, and returned AS delinquent, AND

5 sold or to be sold as required by this act: Provided, UNDER

6 SECTION 60.

7 (2) It shall IS not be necessary for him THE DEPART-

8 MENT OF TREASURY to sell or order resold, advertise or

9 re-advertise, and OR revise or renew any act done by any offi-

10 cer or court under and by virtue of the said act heretofore men-

11 tioned in the preceding section, but all THIS ACT. ALL such

12 proceedings and acts shall be recognized and held to be legal and

13 valid under this act, subject , however, to the provisions of

14 section 98. of this act.

15 (3) In all cases where IN WHICH deeds have been issued by

16 county treasurers, any such deeds ISSUED shall be valid, and

17 of such WITH THE SAME force and effect as if issued by the

18 auditor general, but the auditor general DEPARTMENT OF

19 TREASURY. THE DEPARTMENT OF TREASURY may cancel any deed so

20 made ISSUED by any county treasurer , on the request of the

21 holder thereof, OF THE DEED and issue a new deed signed by the

22 auditor general or his deputy as DEPARTMENT OF TREASURY AS

23 PROVIDED in this act. provided. And for

24 (4) FOR all lands PROPERTY advertised and sold by any

25 county treasurer under the authority granted in said act before

26 mentioned, such SECTION 60, THE advertisement and sale shall be

27 held legal and valid. , but all such proceedings and all ALL

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1 SUBSEQUENT proceedings necessary to be had hereafter in relation

2 to such lands and taxes shall be had under the provisions of

3 SUBJECT TO this act.

4 (5) THIS SECTION ONLY APPLIES TO TAXES LEVIED PRIOR TO

5 JANUARY 1, 1999 AND PROPERTY OFFERED FOR SALE PURSUANT TO SECTION

6 60.

7 Enacting section 1. Sections 61a, 62, 63, 64, 65, 66, 88,

8 95, 104, 106, 115, 124, 130, and 140 of the general property tax

9 act, 1893 PA 206, MCL 211.61a, 211.62, 211.63, 211.64, 211.65,

10 211.66, 211.88, 211.95, 211.104, 211.106, 211.115, 211.124,

11 211.130, and 211.140, are repealed effective December 31, 2003.

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