Bill Text: MI HB4397 | 2017-2018 | 99th Legislature | Introduced

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Bill Title: Property tax; tax tribunal; certain tribunal determinations in assessment disputes as to the valuation of property; require. Amends sec. 3 of 1973 PA 186 (MCL 205.703) & adds sec. 38.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2017-03-23 - Bill Electronically Reproduced 03/22/2017 [HB4397 Detail]

Download: Michigan-2017-HB4397-Introduced.html

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HOUSE BILL No. 4397

 

 

March 22, 2017, Introduced by Reps. Maturen, Chatfield, Miller, Hauck, Crawford, Pagel, LaFave, Ellison, Kivela, Phelps, Schor, Moss, Byrd, Wittenberg, Hoadley, Pagan, Dianda, Webber, Elder, Roberts, Inman, Howell, Howrylak, Sabo, Lucido, Bellino, Robinson, Chirkun, Faris, LaGrand, Victory, Vaupel, Canfield, Runestad, Barrett, Singh, Greig, Guerra, Camilleri, Brinks, Green, Kosowski, Yanez, Geiss, Cochran, Hammoud, Lasinski, Zemke, Kelly, LaSata, Calley, Leutheuser and Alexander and referred to the Committee on Tax Policy.

 

     A bill to amend 1973 PA 186, entitled

 

"Tax tribunal act,"

 

by amending section 3 (MCL 205.703), as amended by 2008 PA 125, and

 

by adding section 38.

 

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. 38. (1) Subject to subsection (2), in an assessment

 

dispute before the entire tribunal as to the true cash value of

 

real or personal property, the tribunal shall, in accordance with

 

section 35a(2), make an independent determination of and separately

 

state its findings of fact and conclusions of law as to all of the

 

following, in the following order:

 

     (a) The market in which the property subject to assessment

 

competes, the supply and demand for the property, the demand for

 

potential uses of the property, and the economic viability of the

 

property at the specific location within the market in which it

 

competes.

 

     (b) The reasonably probable use to which the property subject

 

to assessment can be put in the immediate future and the present

 

use of the property that results in the highest and best use,

subject to all of the following:

 

     (i) The tribunal shall state its findings of fact and

 

conclusions of law as to the uses that are physically possible.

 

     (ii) The tribunal shall state its findings of fact and

 

conclusions of law as to the uses that are legally permissible

 

under applicable land use legislation, regulations, easements,

 

ordinances, or other encumbrances existing on the tax day.

 

     (iii) The tribunal shall state its findings of fact and

 

conclusions of law as to the uses that are financially feasible.

 

For purposes of this subparagraph, a use is financially feasible if

 

it will produce income from or value to the property after

 

considering all risks and costs necessary to create and maintain

 

the use. In determining financial feasibility, the tribunal shall

 

determine the value of the land in the market area, the value of

 

all improvements to the land, the cost to convert or renovate the

 

land, and existing improvements to support the use.

 

     (iv) The tribunal shall state its findings of fact and

 

conclusions of law as to the maximally productive use that meets

 

the requirements of subparagraphs (i) to (iii) and results in the

 

highest value that can be appropriately supported.

 

     (c) The calculation of a replacement or reproduction

 

construction cost for property that has the same highest and best

 

use and the same utility, features, and age as the property subject

 

to assessment.

 

     (d) The comparable properties in the market in which the

 

property subject to assessment competes that have the same highest

 

and best use as the property subject to assessment. In determining

comparable properties, the tribunal shall do all of the following:

 

     (i) Determine that the information for each property

 

considered to be comparable has been verified and accurately and

 

completely discloses all private restrictions and covenants on the

 

use of the property, the impact of those private restrictions and

 

covenants, the terms of the sale, the method of financing, and

 

market information.

 

     (ii) Include only property considered to be comparable with a

 

use that is the same as the highest and best use of the property

 

subject to assessment in accordance with subdivision (b).

 

     (iii) Include property considered to be comparable only if the

 

sale or rental of the property occurred under economic conditions

 

that were not substantially different from the highest and best use

 

of the property subject to assessment unless there is substantial

 

evidence that the economic conditions are common at the location of

 

the property subject to assessment.

 

     (iv) Include property considered to be comparable that was

 

vacant at the time of sale only if there is substantial evidence to

 

support all of the following:

 

     (A) The cause of the vacancy is typical for marketing

 

properties of the same class or there is substantial evidence to

 

support a method of adjusting the value of the vacant comparable

 

property, to support the extent of the adjustment, and to support a

 

conclusion that the final adjusted value for the vacant property is

 

not speculative.

 

     (B) The time of the vacancy is within the marketing exposure

 

time period typical for properties of the same class or there is

substantial evidence to support a method of adjusting the value of

 

the vacant comparable property, to support the extent of the

 

adjustment, and to support a conclusion that the final adjusted

 

value for the vacant property is not speculative.

 

     (C) The vacancy does not reflect a use different from the

 

highest and best use of the property subject to assessment.

 

     (D) The vacancy is not the result of economic or market

 

conditions that are different from the property subject to

 

assessment or there is substantial evidence to support a method of

 

adjusting the value of the vacant comparable property, to support

 

the extent of the adjustment, and to support a conclusion that the

 

final adjusted value for the vacant property is not speculative.

 

     (v) Exclude property considered to be comparable that was made

 

subject to a private restriction or covenant in connection with the

 

sale or rental of the property if that private restriction or

 

covenant causes the comparable property to have a substantially

 

impaired highest and best use as compared to the property subject

 

to assessment or if that private restriction or covenant does not

 

assist in the economic development of the property, does not

 

provide a continuing benefit to the property, or materially

 

increases the likelihood of vacancy or inactivity on the property.

 

     (e) The basis for all of the following:

 

     (i) Selecting the most relevant units and basis for comparison

 

consistent with the treatment in the market of comparable property.

 

     (ii) Adjusting the comparable properties for differences in

 

location, age, size, physical condition and characteristics,

 

function, rental terms, financing and other income use, economic

characteristics, legal characteristics, and other components that

 

influence the value.

 

     (iii) Excluding any comparable property pursuant to

 

subdivision (d).

 

     (f) The method of valuation, subject to all of the following:

 

     (i) In determining the method of valuation, the tribunal shall

 

use, weigh, and reconcile all of the following:

 

     (A) The method of valuation used by the assessor.

 

     (B) All of the following methods of valuation:

 

     (I) Comparable sales.

 

     (II) Capitalization of income.

 

     (III) Cost less depreciation.

 

     (ii) In using, weighing, and reconciling the methods of

 

valuation under subparagraph (i), the tribunal shall state whether

 

the information supporting each method of valuation is accurate and

 

reliable and shall, as it considers necessary, require additional

 

information from the parties to determine a value that is credible

 

and not speculative.

 

     (iii) The tribunal shall not disregard any method of valuation

 

identified in subparagraph (i) absent a reasonable justification

 

supported by substantial evidence or a stipulation that complies

 

with the requirements of subsection (2)(a).

 

     (2) The tribunal's determinations under subsection (1) are

 

subject to all of the following:

 

     (a) The tribunal may consider the parties' stipulation to a

 

finding of fact or conclusion of law under subsection (1) only if

 

the parties further provide a stipulated explanation of the

evidentiary basis for that finding of fact or conclusion of law

 

that comports with the evidentiary basis required for an

 

independent tribunal determination under subsection (1).

 

     (b) For each finding of fact under subsection (1), the

 

tribunal shall separately identify supporting evidence that is

 

substantial and reliable and has been verified.

 

     (c) If the evidence on the record does not constitute

 

substantial evidence, the tribunal shall require additional

 

evidence from the parties sufficient to support a conclusion that

 

the tribunal has reached an independent determination.

 

     (d) All of the tribunal's determinations under subsection (1)

 

shall be made in accordance with generally accepted appraisal

 

principles, including the "Uniform Standards of Professional

 

Appraisal Practice" promulgated by the Appraisal Foundation.

 

     (3) As used in this section:

 

     (a) "Private restriction or covenant" means a requirement,

 

provision, or statement in a deed, lease, or contract that

 

restrains or limits the use of the property or requires a use of

 

the property.

 

     (b) "Tax day" means that term as provided in section 2 of the

 

general property tax act, 1893 PA 206, MCL 211.2.

 

     (c) "True cash value" means that term as defined in section 27

 

of the general property tax act, 1893 PA 206, MCL 211.27.