HB-5844, As Passed House, August 4, 2004

SUBSTITUTE FOR

HOUSE BILL NO. 5844

                                                                             A bill to amend 1967 PA 281, entitled                                             

"Income tax act of 1967,"                                                   

by amending section 508 (MCL 206.508), as amended by 1990 PA                

283.                                                                        

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1       Sec. 508.  (1) "Gross rent" means the total rent contracted                 

2   to be paid by the renter or lessee of a homestead pursuant to               

3   dealing at arms' length with the landlord of the homestead.  When           

4   the landlord and tenant have not dealt with each other at arms'             

5   length and the department believes that the gross rent charged is           

6   excessive, the department may adjust the gross rent to a                    

7   reasonable amount for the purposes of this chapter.                         

8       (2) "Homestead" means a dwelling or unit in a multiple-unit                 

9   dwelling that is subject to ad valorem taxes, or a service charge           

10  in lieu of taxes as provided by section 15a of  Act No. 346 of              

1   the Public Acts of 1966, as amended, being section 125.1415a of             

2   the Michigan Compiled Laws 1966 PA 346, MCL 125.1415a, owned and           

3   occupied as a home by the owner of the dwelling or unit, or                 

4   occupied as the dwelling of the renter or lessee, including all             

5   unoccupied real property not classified for ad valorem tax                  

6   purposes as commercial, industrial, residential, or timber-cut              

7   over, owned by the owner of the homestead.  Beginning in the 1990           

8   tax year, a homestead does not include unoccupied real property             

9   that is leased or rented by the owner to another person and that            

10  is not adjacent and contiguous to the home of the owner.                    

11  Additionally, the following apply:                                          

12      (a) If a homestead is an integral part of a larger unit of                  

13  assessment such as commercial, industrial, residential,                     

14  timber-cut over, or a multipurpose or multidwelling building, the           

15  tax on the homestead shall be the same proportion of the total              

16  property tax as the proportion of the value of the homestead is             

17  to the total value of the assessed property.                                

18      (b) If the gross receipts of the agricultural or                            

19  horticultural operations do not exceed the household income, or             

20  if there are no gross receipts, the following apply:                        

21                                                                               (i) If the claimant has lived on the land 10 years or more,                         

22  all of the adjacent and contiguous agricultural or horticultural            

23  lands shall be considered a homestead and the credit is allowed             

24  for all the land.                                                           

25      (ii) If the claimant has lived on the land less than 10                      

26  years, not more than 5 acres of adjacent and contiguous                     

27  agricultural or horticultural land shall be considered a part of            

1   the homestead and the credit is allowed for that part of the                

2   land.                                                                       

3       (c) A mobile home or trailer coach in a trailer coach park is               

4   a homestead and the site rent for space is considered the rent of           

5   a homestead.  Both of the following are considered property                 

6   taxes:                                                                      

7                                                                                (i) The specific tax levied by section 41 of  Act No. 243 of                        

8   the Public Acts of 1959, being section 125.1041 of the Michigan             

9   Compiled Laws, is considered a property tax 1959 PA 243, MCL               

10  125.1041.                                                                   

11  (ii) The Michigan manufactured housing specific tax levied                   

12  under the Michigan manufactured housing specific tax act.

13      (3) "Household" means a claimant and spouse.                                

14      (4) "Household income" means all income received by all                     

15  persons of a household in a tax year while members of a                     

16  household.                                                                  

17      Enacting section 1.  This amendatory act does not take                      

18  effect unless House Bill No. 4880 of the 92nd Legislature is                

19  enacted into law.