HB-4649, As Passed House, March 16, 2004

SUBSTITUTE FOR

HOUSE BILL NO. 4649

(As amended March 16, 2004)                              

                                                                             A bill to amend 1893 PA 206, entitled                                             

"The general property tax act,"                                             

(MCL 211.1 to 211.157) by adding section 7hh.                               

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1   Sec. 7hh.  (1) The governing body of a local [governmental]

2   unit may by resolution exempt from the collection of taxes under            

3   this act new construction on eligible [principal residence] property used as    

4   a living area to the extent provided in subsection (5) and for              

5   the period provided in subsection (6).  [The resolution may include all or portions of the local governmental unit.]

6       (2) Before acting on the resolution, the clerk of the local                 

7   [governmental] unit shall notify in writing the assessor of [each]

8   local tax collecting unit [in the local governmental unit] and the legislative body of each taxing                                                             

9   [jurisdiction] that levies ad valorem property taxes in the local [

10  governmental] unit and shall set a date for a public hearing on the         

11  adoption of the resolution.  Notice of the public hearing shall             

House Bill No. 4649 (H-4) as amended March 16, 2004

1   be published twice in a newspaper of general circulation in the             

2   local [governmental] unit, not less than 20 nor more than 40 days           

3   before the date of the hearing.  The notice shall state the date,           

4   time, and place of the hearing.  At that hearing, a citizen,                

5   taxpayer, official from a taxing jurisdiction that levies ad                

6   valorem property taxes in the local [governmental] unit, or a               

7   property owner of the local [governmental] unit has the right to            

8   be heard in regard to the exemption under this section.                     

9       (3) Not more than 30 days after the public hearing, if the                  

10  governing body of the local [governmental] unit intends to                  

11  proceed with the exemption, the governing body shall adopt, by              

12  majority vote of its members elected and serving, a resolution              

13  granting the exemption.  The adoption of the resolution is                  

14  subject to all applicable statutory or charter provisions with              

15  respect to the approval or disapproval by the chief executive or            

16  other officer of the local [governmental] unit and the adoption             

17  of a resolution over his or her veto.  This resolution shall be             

18  filed with the secretary of state promptly after its adoption.              

19      (4) The proceedings establishing the exemption shall be                     

20  presumptively valid unless contested in a court of competent                

21  jurisdiction within 60 days after the filing of the resolution              

22  with the secretary of state and the state tax commission.                   

23      (5) New construction eligible for exemption under this                      

24  section is limited as follows:                                              

25      (a) For eligible [principal residence] property less than 3,000 square      

26  feet in area, living area new construction of not more than 50%             

27  of the existing living area of that eligible [principal residence] property.    

House Bill No. 4649 (H-4) as amended March 16, 2004

1   (b) For eligible [principal residence] property 3,000 square feet or        

2   greater in area, living area new construction of not more than              

3   25% of the existing living area of that eligible [principal residence]

4   property.                                                                   

5       (6) The exemption under this section is effective on the                    

6   December 31 immediately succeeding the adoption of the resolution           

7   by the governing body of the local [governmental] unit under                

8   subsection (3).  The exemption shall continue in effect until the           

9   eligible [principal residence] property is transferred or for a period      

10  specified in the resolution which shall not be more than 5 years,           

11  whichever is sooner.  If the eligible [principal residence] property is     

12  transferred, the taxable value shall be adjusted under section              

13  27a(3).  If the eligible [principal residence] property has not been        

14  transferred and the period specified in the resolution has                  

15  expired, the property's taxable value shall be adjusted as                  

16  provided in section 34d(1)(b)(i).                                           

17      (7) As used in this section:                                                

18      (a) "Eligible [principal residence] property" means a [principal residence] exempt                                                                          

19  under section 7cc from the tax levied by a local school district            

20  for school operating purposes to the extent provided under                  

21  section 1211 of the revised school code, 1976 PA 451, MCL                   

22  380.1211, in the year immediately preceding the first year in               

23  which living area new construction is exempt under this section.            

24                                                                               [

25 

26      (b)] "Living area" means an area of [principal residence] property used by  

27  1 or more persons for domestic residential purposes.  Living area           

House Bill No. 4649 (H-4) as amended March 16, 2004

1   includes, but is not limited to, a bedroom, kitchen, bathroom,              

2   living room, family room, den, or enclosed porch.                           

3   [(c)] "New construction" means that term as defined in section              

4   34d(1)(b)(iii).                                                              

     [(d) "Principal residence" means that term as defined under section 7dd.

5                                                                                (e)] "Transferred" means a transfer of ownership as that term                   

6   is described in section 27a.