Bill Text: MI HB4882 | 2013-2014 | 97th Legislature | Engrossed
Bill Title: Property tax; delinquent taxes; interest imposed on delinquent taxes in distressed communities; revise. Amends sec. 78h of 1893 PA 206 (MCL 211.78h) & adds sec. 78q.
Spectrum: Partisan Bill (Democrat 4-0)
Status: (Passed) 2014-12-31 - Assigned Pa 499'14 With Immediate Effect 2014 Addenda [HB4882 Detail]
Download: Michigan-2013-HB4882-Engrossed.html
HB-4882, As Passed Senate, December 17, 2014
SENATE SUBSTITUTE FOR
HOUSE BILL NO. 4882
A bill to amend 1893 PA 206, entitled
"The general property tax act,"
by amending sections 78a and 78h (MCL 211.78a and 211.78h), section
78a as amended by 2008 PA 352 and section 78h as amended by 2001 PA
96, and by adding section 78q.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 78a. (1) For taxes levied after December 31, 1998, all
property returned for delinquent taxes, and upon which taxes,
interest, penalties, and fees remain unpaid after the property is
returned as delinquent to the county treasurers of this state under
this act, is subject to forfeiture, foreclosure, and sale for the
enforcement and collection of the delinquent taxes as provided in
section 78, this section, and sections 78b to 79a. As used in
section 78, this section, and sections 78b to 79a, "taxes" includes
interest, penalties, and fees imposed before the taxes become
delinquent and unpaid special assessments or other assessments that
are due and payable up to and including the date of the foreclosure
hearing under section 78k.
(2) On March 1 in each year, taxes levied in the immediately
preceding year that remain unpaid shall be returned as delinquent
for collection. However, if the last day in a year that taxes are
due and payable before being returned as delinquent is on a
Saturday, Sunday, or legal holiday, the last day taxes are due and
payable before being returned as delinquent is on the next business
day and taxes levied in the immediately preceding year that remain
unpaid shall be returned as delinquent on the immediately
succeeding business day. Except as otherwise provided in section 79
for certified abandoned property, property delinquent for taxes
levied in the second year preceding the forfeiture under section
78g or in a prior year to which this section applies shall be
forfeited to the county treasurer for the total of the unpaid
taxes, interest, penalties, and fees for those years as provided
under section 78g.
(3) A county property tax administration fee of 4% and, except
as provided in section 78g(3)(c), interest computed at a
noncompounded rate of 1% per month or fraction of a month on the
taxes that were originally returned as delinquent, computed from
the date that the taxes originally became delinquent, shall be
added to property returned as delinquent under this section. A
county property tax administration fee provided for under this
subsection shall not be less than $1.00.
(4) Any person with an unrecorded property interest or any
other person who wishes at any time to receive notice of the return
of delinquent taxes on a parcel of property may pay an annual fee
not to exceed $5.00 by February 1 to the county treasurer and
specify the parcel identification number, the address of the
property, and the address to which the notice shall be sent.
Holders of any undischarged mortgages wishing to receive notice of
the return of delinquent taxes on a parcel or parcels of property
may provide a list of such parcels in a form prescribed by the
county treasurer and pay an annual fee not to exceed $1.00 per
parcel to the county treasurer and specify for each parcel the
parcel identification number, the address of the property, and the
address to which the notice should be sent. The county treasurer
shall notify the person or holders of undischarged mortgages if
delinquent taxes on the property or properties are returned within
that year.
(5) Notwithstanding any charter provision to the contrary, the
governing body of a local governmental unit that collects
delinquent taxes may establish for any property, by ordinance,
procedures for the collection of delinquent taxes and the
enforcement of tax liens and the schedule for the forfeiture or
foreclosure of delinquent tax liens. The procedures and schedule
established by ordinance shall conform at a minimum to those
procedures and schedules established under sections 78a to 78l,
except that those taxes subject to a payment plan approved by the
treasurer of the local governmental unit as of July 1, 1999 shall
not be considered delinquent if payments are not delinquent under
that payment plan.
Sec. 78h. (1) Not later than June 15 in each tax year, the
foreclosing governmental unit shall file a single petition with the
clerk of the circuit court of that county listing all property
forfeited and not redeemed to the county treasurer under section
78g to be foreclosed under section 78k for the total of the
forfeited unpaid delinquent taxes, interest, penalties, and fees.
If available to the foreclosing governmental unit, the petition
shall include the street address of each parcel of property set
forth in the petition. The petition shall seek a judgment in favor
of the foreclosing governmental unit for the forfeited unpaid
delinquent taxes, interest, penalties, and fees listed against each
parcel of property. The petition shall request that a judgment be
entered vesting absolute title to each parcel of property in the
foreclosing governmental unit, without right of redemption.
(2) If property is redeemed after the petition for foreclosure
is filed under this section, the foreclosing governmental unit
shall request that the circuit court remove that property from the
petition for foreclosure before entry of judgment foreclosing the
property under section 78k.
(3) The foreclosing governmental unit may withhold the
following property from the petition for foreclosure filed under
this section:
(a) Property the title to which is held by minor heirs or
persons who are incompetent, persons without means of support, or
persons unable to manage their affairs due to age or infirmity,
until a guardian is appointed to protect that person's rights and
interests.
(b) Property the title to which is held by a person undergoing
substantial financial hardship, as determined under a written
policy developed and adopted by the foreclosing governmental unit.
The foreclosing governmental unit shall make available to the
public the written policy adopted under this subdivision. The
written policy adopted under this subdivision shall include, but is
not limited to, all of the following:
(i) The person requesting that the property be withheld from
the petition for foreclosure holds the title to the property.
(ii) The household income total household resources of the
person requesting that the property be withheld from the petition
for foreclosure meets the federal poverty income standards as
defined and determined annually by the United States office of
management and budget or alternative guidelines adopted by the
foreclosing governmental unit, provided that the alternative
guidelines include all persons who would otherwise meet the federal
poverty income standards under this subparagraph. As used in this
subparagraph,
"household income" "total
household resources" means
that term as defined in section 508 of the income tax act of 1967,
1967 PA 281, MCL 206.508.
(c) Property the title to which is held by a person subject to
a delinquent property tax installment payment plan or tax
foreclosure avoidance agreement under section 78q.
(4) If a foreclosing governmental unit withholds property from
the petition for foreclosure under subsection (3), a taxing unit's
lien for taxes due or the foreclosing governmental unit's right to
include the property in a subsequent petition for foreclosure is
not prejudiced.
(5) The clerk of the circuit court in which the petition is
filed shall immediately set the date, time, and place for a hearing
on the petition for foreclosure, which hearing shall be held not
more than 30 days before the March 1 immediately succeeding the
date the petition for foreclosure is filed.
Sec. 78q. (1) Notwithstanding any provision of this act or
charter to the contrary, a foreclosing governmental unit may create
a delinquent property tax installment payment plan for eligible
property, the title to which is held by a financially distressed
person.
(2) If a financially distressed person agrees to participate
in a delinquent property tax installment payment plan created under
subsection (1) and makes the initial payment required under that
delinquent property tax installment payment plan, the foreclosing
governmental unit may remove eligible property the title to which
is held by that financially distressed person from the petition for
foreclosure as provided in section 78h(3)(c).
(3) If a financially distressed person successfully completes
a delinquent property tax installment payment plan created under
subsection (1), interest under section 78g(3)(b) and any additional
interest otherwise applicable shall be waived.
(4) If a financially distressed person does not successfully
complete a delinquent property tax installment payment plan created
under subsection (1), both of the following shall occur:
(a) Interest under section 78g(3)(b) and any additional
interest otherwise applicable shall apply to any unpaid taxes on
the property.
(b) The eligible property shall be included in the immediately
succeeding petition for foreclosure under section 78h.
(5) Notwithstanding any provision of this act or charter to
the contrary, until June 30, 2016, a county treasurer may enter
into a tax foreclosure avoidance agreement for a term of up to 5
years with an owner of property returned as delinquent to the
county treasurer under this act or forfeited to the county
treasurer under section 78g if the property is classified as
residential real property under section 34c, if the property is
eligible property, and if the owner makes an initial payment of at
least 10% of the delinquent taxes owed on the property. While a tax
foreclosure avoidance agreement is effective, the property shall be
withheld or removed from the petition for foreclosure as provided
under section 78h(3)(c), interest at the rate provided in section
78g(3)(c)(ii) shall apply, and the owner shall make timely payments
as provided under the tax foreclosure avoidance agreement,
including timely payment of all nondelinquent taxes on the
property. A tax foreclosure avoidance agreement shall require
regular periodic installment payments. The final payment shall not
be disproportionately larger than a regular periodic installment
payment and regular periodic installment payments in the final year
shall not be disproportionately larger than regular periodic
installment payments in prior years. A county treasurer may refuse
to enter into a tax foreclosure avoidance agreement with an owner
under this subsection if that owner is not in compliance with
House Bill No. 4882 as amended December 17, 2014
another tax foreclosure avoidance agreement with the county
treasurer or with a delinquent property tax installment plan with
the county treasurer under this section. A county treasurer may not
enter into more than 2 tax foreclosure avoidance agreements with an
owner. If an owner fails to comply with a tax foreclosure avoidance
agreement or if the tax foreclosure avoidance agreement is no
longer effective, all of the following shall occur:
(a) Interest under section 78g(3)(b) and any additional
interest otherwise applicable shall apply to any unpaid taxes on
the property.
(b) The property shall be included in the immediately
succeeding petition for foreclosure under section 78h.
(c) The owner shall not bid on property subject to sale under
section 78m, if that property was subject to the tax foreclosure
avoidance agreement.
(6) A delinquent property tax installment payment plan or a
tax foreclosure avoidance agreement may not be approved under this
section if the delinquent property tax installment payment plan or
tax foreclosure avoidance agreement would impermissibly impair an
outstanding debt of the county.
(7) If a foreclosing governmental unit has created a
delinquent property tax installment payment plan under this
section, the department of treasury may audit the books and records
of that foreclosing governmental unit concerning the details of
that delinquent property tax installment payment plan.
<<(8) Property classified as industrial real property under section 34c that is occupied at less than 10% of its facility capacity for more than 3 years and that is located in a county with a population of more than 1,500,000 according to the most recent federal decennial census is not eligible to participate in a delinquent property tax installment payment plan and shall proceed under section 78m, including sale to the person bidding the highest amount above the minimum bid as required under section 78m(2).
(9) If a delinquent property tax installment payment plan is in effect for property for which a county has issued notes under this act that are secured by the delinquent taxes and interest on that property, at any time 2 years after the date that those taxes were returned as delinquent, the county treasurer may charge back to any taxing unit the face amount of the delinquent taxes that were owed to that taxing unit on the date those taxes were returned as delinquent, less the amount of any principal installments received by the county treasurer on that property under the delinquent property tax installment payment plan. All subsequent payments of delinquent taxes and interest on that property shall be retained by the county treasurer in a separate account and either paid to or credited to the account of that taxing unit.
(10)>> As used in this section:
(a) "Eligible property" means property that is a principal
residence exempt from the tax levied by a local school district for
school operating purposes under section 7cc.
(b) "Financially distressed person" means a person who meets
all of the following conditions:
(i) Is eligible to have property to which he or she holds title
withheld from a petition for foreclosure under section 78h(3)(b).
(ii) Is not delinquent in satisfying a delinquent property tax
installment payment plan or tax foreclosure avoidance agreement
under this section for any other property within the foreclosing
governmental unit.
Enacting section 1. This amendatory act does not take effect
unless House Bill No. 5421 of the 97th Legislature is enacted into
law.
