HOUSE BILL No. 5547

May 7, 2014, Introduced by Reps. Tlaib, Geiss and Durhal and referred to the Committee on Tax Policy.

A bill to amend 1893 PA 206, entitled

"The general property tax act,"

by amending section 7cc (MCL 211.7cc), as amended by 2014 PA 40.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 7cc. (1) A principal residence is exempt from the tax

levied by a local school district for school operating purposes to

the extent provided under section 1211 of the revised school code,

1976 PA 451, MCL 380.1211, if an owner of that principal residence

claims an exemption as provided in this section. Notwithstanding

the tax day provided in section 2, the status of property as a

principal residence shall be determined on the date an affidavit

claiming an exemption is filed under subsection (2).

(2) Except as otherwise provided in subsection (5), an owner

of property may claim 1 exemption under this section by filing an

affidavit on or before May 1 for taxes levied before January 1,

2012 or, for taxes levied after December 31, 2011, on or before

June 1 for the immediately succeeding summer tax levy and all

subsequent tax levies or on or before November 1 for the

immediately succeeding winter tax levy and all subsequent tax

levies with the local tax collecting unit in which the property is

located. The affidavit shall state that the property is owned and

occupied as a principal residence by that owner of the property on

the date that the affidavit is signed. The affidavit shall be on a

form prescribed by the department of treasury. One copy of the

affidavit shall be retained by the owner, 1 copy shall be retained

by the local tax collecting unit until any appeal or audit period

under this act has expired, and 1 copy shall be forwarded to the

department of treasury pursuant to subsection (4), together with

all information submitted under subsection (28) for a cooperative

housing corporation. The affidavit shall require the owner claiming

the exemption to indicate if that owner or that owner's spouse has

claimed another exemption on property in this state that is not

rescinded or a substantially similar exemption, deduction, or

credit on property in another state that is not rescinded. If the

affidavit requires an owner to include a social security number,

that owner's number is subject to the disclosure restrictions in

1941 PA 122, MCL 205.1 to 205.31. If an owner of property filed an

affidavit for an exemption under this section before January 1,

2004, that affidavit shall be considered the affidavit required

under this subsection for a principal residence exemption and that

exemption shall remain in effect until rescinded as provided in

this section.

(3) Except as otherwise provided in subsection (5), a husband

and wife who are required to file or who do file a joint Michigan

income tax return are entitled to not more than 1 exemption under

this section. For taxes levied after December 31, 2002, a person is

not entitled to an exemption under this section if any of the

following conditions occur:

(a) That person has claimed a substantially similar exemption,

deduction, or credit on property in another state that is not

rescinded.

(b) Subject to subdivision (a), that person or his or her

spouse owns property in a state other than this state for which

that person or his or her spouse claims an exemption, deduction, or

credit substantially similar to the exemption provided under this

section, unless that person and his or her spouse file separate

income tax returns.

return, except active duty military personnel stationed in this

state with his or her principal residence in this state.

(d) That person has filed an income tax return in a state

other than this state as a resident, except active duty military

personnel stationed in this state with his or her principal

residence in this state.

(e) That person has previously rescinded an exemption under

this section for the same property for which an exemption is now

claimed and there has not been a transfer of ownership of that

property after the previous exemption was rescinded, if either of

the following conditions is satisfied:

(i) That person has claimed an exemption under this section for

any other property for that tax year.

(ii) That person has rescinded an exemption under this section

on other property, which exemption remains in effect for that tax

year, and there has not been a transfer of ownership of that

property.

(4) Upon receipt of an affidavit filed under subsection (2)

and unless the claim is denied under this section, the assessor

shall exempt the property from the collection of the tax levied by

a local school district for school operating purposes to the extent

provided under section 1211 of the revised school code, 1976 PA

451, MCL 380.1211, as provided in subsection (1) until December 31

of the year in which the property is transferred or, except as

otherwise provided in subsection (5), is no longer a principal

residence as defined in section 7dd. The local tax collecting unit

shall forward copies of affidavits to the department of treasury

according to a schedule prescribed by the department of treasury.

(5) Except as otherwise provided in this subsection, not more

than 90 days after exempted property is no longer used as a

principal residence by the owner claiming an exemption, that owner

shall rescind the claim of exemption by filing with the local tax

collecting unit a rescission form prescribed by the department of

treasury. If an owner is eligible for and claims an exemption for

that owner's current principal residence, that owner may retain an

exemption for not more than 3 tax years on property previously

exempt as his or her principal residence if that property is not

occupied, is for sale, is not leased, and is not used for any

business or commercial purpose by filing a conditional rescission

form prescribed by the department of treasury with the local tax

collecting unit within the time period prescribed in subsection

(2). Beginning in the 2012 tax year, subject to the payment

requirement set forth in this subsection, if a land contract

vendor, bank, credit union, or other lending institution owns

property as a result of a foreclosure or forfeiture of a recorded

instrument under chapter 31, 32, or 57 of the revised judicature

act of 1961, 1961 PA 236, MCL 600.3101 to 600.3285 and MCL 600.5701

to 600.5759, or through deed or conveyance in lieu of a foreclosure

or forfeiture on that property and that property had been exempt

under this section immediately preceding the foreclosure, that land

contract vendor, bank, credit union, or other lending institution

may retain an exemption on that property at the same percentage of

exemption that the property previously had under this section if

that property is not occupied other than by the person who claimed

the exemption under this section immediately preceding the

foreclosure or forfeiture, is for sale, is not leased to any person

other than the person who claimed the exemption under this section

immediately preceding the foreclosure, and is not used for any

business or commercial purpose. A land contract vendor, bank,

credit union, or other lending institution may claim an exemption

under this subsection by filing a conditional rescission form

prescribed by the department of treasury with the local tax

collecting unit within the time period prescribed in subsection

(2). Property is eligible for a conditional rescission if that

property is available for lease and all other conditions under this

subsection are met. A copy of a conditional rescission form shall

be forwarded to the department of treasury according to a schedule

prescribed by the department of treasury. An owner or a land

contract vendor, bank, credit union, or other lending institution

that files a conditional rescission form shall annually verify to

the assessor of the local tax collecting unit on or before December

31 that the property for which the principal residence exemption is

retained is not occupied other than by the person who claimed the

exemption under this section immediately preceding the foreclosure

or forfeiture, is for sale, is not leased except as otherwise

provided in this section, and is not used for any business or

commercial purpose. The land contract vendor, bank, credit union,

or other lending institution may retain the exemption authorized

under this section for not more than 3 tax years. If an owner or a

land contract vendor, bank, credit union, or other lending

institution does not annually verify by December 31 that the

property for which the principal residence exemption is retained is

not occupied other than by the person who claimed the exemption

under this section immediately preceding the foreclosure or

forfeiture, is for sale, is not leased except as otherwise provided

in this section, and is not used for any business or commercial

purpose, the assessor of the local tax collecting unit shall deny

the principal residence exemption on that property. Except as

otherwise provided in this section, if property subject to a

conditional rescission is leased, the local tax collecting unit

shall deny that conditional rescission and that denial is

retroactive and is effective on December 31 of the year immediately

preceding the year in which the property subject to the conditional

rescission is leased. An owner who fails to file a rescission as

required by this subsection is subject to a penalty of $5.00 per

day for each separate failure beginning after the 90 days have

elapsed, up to a maximum of $200.00. This penalty shall be

collected under 1941 PA 122, MCL 205.1 to 205.31, and shall be

deposited in the state school aid fund established in section 11 of

article IX of the state constitution of 1963. This penalty may be

waived by the department of treasury. If a land contract vendor,

bank, credit union, or other lending institution retains an

exemption on property under this subsection, that land contract

vendor, bank, credit union, or other lending institution shall pay

an amount equal to the additional amount that land contract vendor,

bank, credit union, or other lending institution would have paid

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

380.1211, if an exemption had not been retained on that property,

together with an administration fee equal to the property tax

administration fee imposed under section 44. The payment required

under this subsection shall be collected by the local tax

collecting unit at the same time and in the same manner as taxes

collected under this act. The administration fee shall be retained

by the local tax collecting unit. The amount collected that the

land contract vendor, bank, credit union, or other lending

institution would have paid under section 1211 of the revised

school code, 1976 PA 451, MCL 380.1211, if an exemption had not

been retained on that property is an amount that is not captured by

any authority as tax increment revenues and shall be distributed to

the department of treasury monthly for deposit into the state

school aid fund established in section 11 of article IX of the

state constitution of 1963. If a land contract vendor, bank, credit

union, or other lending institution transfers ownership of property

for which an exemption is retained under this subsection, that land

contract vendor, bank, credit union, or other lending institution

shall rescind the exemption as provided in this section and shall

notify the treasurer of the local tax collecting unit of that

transfer of ownership. If a land contract vendor, bank, credit

union, or other lending institution fails to make the payment

required under this subsection for any property within the period

for which property taxes are due and payable without penalty, the

local tax collecting unit shall deny that conditional rescission

and that denial is retroactive and is effective on December 31 of

the immediately preceding year. If the local tax collecting unit

denies a conditional rescission, the local tax collecting unit

shall remove the exemption of the property and the amount due from

the land contract vendor, bank, credit union, or other lending

institution shall be a tax so that the additional taxes, penalties,

and interest shall be collected as provided for in this section. If

payment of the tax under this subsection is not made by the March 1

following the levy of the tax, the tax shall be turned over to the

county treasurer and collected in the same manner as delinquent

taxes under this act. A person who previously occupied property as

his or her principal residence but now resides in a nursing home or

assisted living facility may retain an exemption on that property

if the owner manifests an intent to return to that property by

satisfying all of the following conditions:

(a) The owner continues to own that property while residing in

the nursing home or assisted living facility.

(b) The owner has not established a new principal residence.

that property while residing in the nursing home or assisted living

facility.

(d) That property is not occupied, is not leased, and is not

used for any business or commercial purpose.

(6) Except as otherwise provided in subsection (5), if the

assessor of the local tax collecting unit believes that the

property for which an exemption is claimed is not the principal

residence of the owner claiming the exemption, the assessor may

deny a new or existing claim by notifying the owner and the

department of treasury in writing of the reason for the denial and

advising the owner that the denial may be appealed to the

residential and small claims division of the Michigan tax tribunal

within 35 days after the date of the notice. The assessor may deny

a claim for exemption for the current year and for the 3

immediately preceding calendar years. If the assessor denies an

existing claim for exemption, the assessor shall remove the

exemption of the property and, if the tax roll is in the local tax

collecting unit's possession, amend the tax roll to reflect the

denial and the local treasurer shall within 30 days of the date of

the denial issue a corrected tax bill for any additional taxes with

interest at the rate of 1.25% per month or fraction of a month and

penalties computed from the date the taxes were last payable

without interest or penalty. If the tax roll is in the county

treasurer's possession, the tax roll shall be amended to reflect

the denial and the county treasurer shall within 30 days of the

date of the denial prepare and submit a supplemental tax bill for

any additional taxes, together with interest at the rate of 1.25%

per month or fraction of a month and penalties computed from the

date the taxes were last payable without interest or penalty.

Interest on any tax set forth in a corrected or supplemental tax

bill shall again begin to accrue 60 days after the date the

corrected or supplemental tax bill is issued at the rate of 1.25%

per month or fraction of a month. Taxes levied in a corrected or

supplemental tax bill shall be returned as delinquent on the March

1 in the year immediately succeeding the year in which the

corrected or supplemental tax bill is issued. If the assessor

denies an existing claim for exemption, the interest due shall be

distributed as provided in subsection (25). However, if the

property has been transferred to a bona fide purchaser before

additional taxes were billed to the seller as a result of the

denial of a claim for exemption, the taxes, interest, and penalties

shall not be a lien on the property and shall not be billed to the

bona fide purchaser, and the local tax collecting unit if the local

tax collecting unit has possession of the tax roll or the county

treasurer if the county has possession of the tax roll shall notify

the department of treasury of the amount of tax due, interest, and

penalties through the date of that notification. The department of

treasury shall then assess the owner who claimed the exemption

under this section for the tax, interest, and penalties accruing as

a result of the denial of the claim for exemption, if any, as for

unpaid taxes provided under 1941 PA 122, MCL 205.1 to 205.31, and

shall deposit any tax or penalty collected into the state school

aid fund and shall distribute any interest collected as provided in

subsection (25). The denial shall be made on a form prescribed by

the department of treasury. If the property for which the assessor

has denied a claim for exemption under this subsection is located

in a county in which the county treasurer or the county

equalization director have elected to audit exemptions under

subsection (10), the assessor shall notify the county treasurer or

the county equalization director of the denial under this

subsection.

(7) If the assessor of the local tax collecting unit believes

that the property for which the exemption is claimed is not the

principal residence of the owner claiming the exemption and has not

denied the claim, the assessor shall include a recommendation for

denial with any affidavit that is forwarded to the department of

treasury or, for an existing claim, shall send a recommendation for

denial to the department of treasury, stating the reasons for the

recommendation.

(8) The department of treasury shall determine if the property

is the principal residence of the owner claiming the exemption.

Except as otherwise provided in subsection (21), the department of

treasury may review the validity of exemptions for the current

calendar year and for the 3 immediately preceding calendar years.

Except as otherwise provided in subsection (5), if the department

of treasury determines that the property is not the principal

residence of the owner claiming the exemption, the department shall

send a notice of that determination to the local tax collecting

unit and to the owner of the property claiming the exemption,

indicating that the claim for exemption is denied, stating the

reason for the denial, and advising the owner claiming the

exemption of the right to appeal the determination to the

department of treasury and what those rights of appeal are. The

department of treasury may issue a notice denying a claim if an

owner fails to respond within 30 days of receipt of a request for

information from that department. An owner may appeal the denial of

a claim of exemption to the department of treasury within 35 days

of receipt of the notice of denial. An appeal to the department of

treasury shall be conducted according to the provisions for an

informal conference in section 21 of 1941 PA 122, MCL 205.21.

Within 10 days after acknowledging an appeal of a denial of a claim

of exemption, the department of treasury shall notify the assessor

and the treasurer for the county in which the property is located

that an appeal has been filed. Upon receipt of a notice that the

department of treasury has denied a claim for exemption, the

assessor shall remove the exemption of the property and, if the tax

roll is in the local tax collecting unit's possession, amend the

tax roll to reflect the denial and the local treasurer shall within

30 days of the date of the denial issue a corrected tax bill for

any additional taxes with interest at the rate of 1.25% per month

or fraction of a month and penalties computed from the date the

taxes were last payable without interest and penalty. If the tax

roll is in the county treasurer's possession, the tax roll shall be

amended to reflect the denial and the county treasurer shall within

30 days of the date of the denial prepare and submit a supplemental

tax bill for any additional taxes, together with interest at the

rate of 1.25% per month or fraction of a month and penalties

computed from the date the taxes were last payable without interest

or penalty. Interest on any tax set forth in a corrected or

supplemental tax bill shall again begin to accrue 60 days after the

date the corrected or supplemental tax bill is issued at the rate

of 1.25% per month or fraction of a month. The department of

treasury may waive interest on any tax set forth in a corrected or

supplemental tax bill for the current tax year and the immediately

preceding 3 tax years if the assessor of the local tax collecting

unit files with the department of treasury a sworn affidavit in a

form prescribed by the department of treasury stating that the tax

set forth in the corrected or supplemental tax bill is a result of

the assessor's classification error or other error or the

assessor's failure to rescind the exemption after the owner

requested in writing that the exemption be rescinded. Taxes levied

in a corrected or supplemental tax bill shall be returned as

delinquent on the March 1 in the year immediately succeeding the

year in which the corrected or supplemental tax bill is issued. If

the department of treasury denies an existing claim for exemption,

the interest due shall be distributed as provided in subsection

(25). However, if the property has been transferred to a bona fide

purchaser before additional taxes were billed to the seller as a

result of the denial of a claim for exemption, the taxes, interest,

and penalties shall not be a lien on the property and shall not be

billed to the bona fide purchaser, and the local tax collecting

unit if the local tax collecting unit has possession of the tax

roll or the county treasurer if the county has possession of the

tax roll shall notify the department of treasury of the amount of

tax due and interest through the date of that notification. The

department of treasury shall then assess the owner who claimed the

exemption under this section for the tax and interest plus penalty

accruing as a result of the denial of the claim for exemption, if

any, as for unpaid taxes provided under 1941 PA 122, MCL 205.1 to

205.31, and shall deposit any tax or penalty collected into the

state school aid fund and shall distribute any interest collected

as provided in subsection (25).

(9) The department of treasury may enter into an agreement

regarding the implementation or administration of subsection (8)

with the assessor of any local tax collecting unit in a county that

has not elected to audit exemptions claimed under this section as

provided in subsection (10). The agreement may specify that for a

period of time, not to exceed 120 days, the department of treasury

will not deny an exemption identified by the department of treasury

in the list provided under subsection (11).

(10) A county may elect to audit the exemptions claimed under

this section in all local tax collecting units located in that

county as provided in this subsection. The election to audit

exemptions shall be made by the county treasurer, or by the county

equalization director with the concurrence by resolution of the

county board of commissioners. The initial election to audit

exemptions shall require an audit period of 2 years. Before 2009,

subsequent elections to audit exemptions shall be made every 2

years and shall require 2 annual audit periods. Beginning in 2009,

an election to audit exemptions shall be made every 5 years and

shall require 5 annual audit periods. An election to audit

exemptions shall be made by submitting an election to audit form to

the assessor of each local tax collecting unit in that county and

to the department of treasury not later than April 1 preceding the

October 1 in the year in which an election to audit is made. The

election to audit form required under this subsection shall be in a

form prescribed by the department of treasury. If a county elects

to audit the exemptions claimed under this section, the department

of treasury may continue to review the validity of exemptions as

provided in subsection (8). If a county does not elect to audit the

exemptions claimed under this section as provided in this

subsection, the department of treasury shall conduct an audit of

exemptions claimed under this section in the initial 2-year audit

period for each local tax collecting unit in that county unless the

department of treasury has entered into an agreement with the

assessor for that local tax collecting unit under subsection (9).

(11) If a county elects to audit the exemptions claimed under

this section as provided in subsection (10) and the county

treasurer or his or her designee or the county equalization

director or his or her designee believes that the property for

which an exemption is claimed is not the principal residence of the

owner claiming the exemption, the county treasurer or his or her

designee or the county equalization director or his or her designee

may, except as otherwise provided in subsection (5), deny an

existing claim by notifying the owner, the assessor of the local

tax collecting unit, and the department of treasury in writing of

the reason for the denial and advising the owner that the denial

may be appealed to the residential and small claims division of the

Michigan tax tribunal within 35 days after the date of the notice.

The county treasurer or his or her designee or the county

equalization director or his or her designee may deny a claim for

exemption for the current year and for the 3 immediately preceding

calendar years. If the county treasurer or his or her designee or

the county equalization director or his or her designee denies an

existing claim for exemption, the county treasurer or his or her

designee or the county equalization director or his or her designee

shall direct the assessor of the local tax collecting unit in which

the property is located to remove the exemption of the property

from the assessment roll and, if the tax roll is in the local tax

collecting unit's possession, direct the assessor of the local tax

collecting unit to amend the tax roll to reflect the denial and the

treasurer of the local tax collecting unit shall within 30 days of

the date of the denial issue a corrected tax bill for any

additional taxes with interest at the rate of 1.25% per month or

fraction of a month and penalties computed from the date the taxes

were last payable without interest and penalty. If the tax roll is

in the county treasurer's possession, the tax roll shall be amended

to reflect the denial and the county treasurer shall within 30 days

of the date of the denial prepare and submit a supplemental tax

bill for any additional taxes, together with interest at the rate

of 1.25% per month or fraction of a month and penalties computed

from the date the taxes were last payable without interest or

penalty. Interest on any tax set forth in a corrected or

supplemental tax bill shall again begin to accrue 60 days after the

date the corrected or supplemental tax bill is issued at the rate

of 1.25% per month or fraction of a month. Taxes levied in a

corrected or supplemental tax bill shall be returned as delinquent

on the March 1 in the year immediately succeeding the year in which

the corrected or supplemental tax bill is issued. If the county

treasurer or his or her designee or the county equalization

director or his or her designee denies an existing claim for

exemption, the interest due shall be distributed as provided in

subsection (25). However, if the property has been transferred to a

bona fide purchaser before additional taxes were billed to the

seller as a result of the denial of a claim for exemption, the

taxes, interest, and penalties shall not be a lien on the property

and shall not be billed to the bona fide purchaser, and the local

tax collecting unit if the local tax collecting unit has possession

of the tax roll or the county treasurer if the county has

possession of the tax roll shall notify the department of treasury

of the amount of tax due and interest through the date of that

notification. The department of treasury shall then assess the

owner who claimed the exemption under this section for the tax and

interest plus penalty accruing as a result of the denial of the

claim for exemption, if any, as for unpaid taxes provided under

1941 PA 122, MCL 205.1 to 205.31, and shall deposit any tax or

penalty collected into the state school aid fund and shall

distribute any interest collected as provided in subsection (25).

The department of treasury shall annually provide the county

treasurer or his or her designee or the county equalization

director or his or her designee a list of parcels of property

located in that county for which an exemption may be erroneously

claimed. The county treasurer or his or her designee or the county

equalization director or his or her designee shall forward copies

of the list provided by the department of treasury to each assessor

in each local tax collecting unit in that county within 10 days of

receiving the list.

(12) If a county elects to audit exemptions claimed under this

section as provided in subsection (10), the county treasurer or the

county equalization director may enter into an agreement with the

assessor of a local tax collecting unit in that county regarding

the implementation or administration of this section. The agreement

may specify that for a period of time, not to exceed 120 days, the

county will not deny an exemption identified by the department of

treasury in the list provided under subsection (11).

(13) An owner may appeal a denial by the assessor of the local

tax collecting unit under subsection (6), a final decision of the

department of treasury under subsection (8), or a denial by the

county treasurer or his or her designee or the county equalization

director or his or her designee under subsection (11) to the

residential and small claims division of the Michigan tax tribunal

within 35 days of that decision. An owner is not required to pay

the amount of tax in dispute in order to appeal a denial of a claim

of exemption to the department of treasury or to receive a final

determination of the residential and small claims division of the

Michigan tax tribunal. However, interest at the rate of 1.25% per

month or fraction of a month and penalties shall accrue and be

computed from the date the taxes were last payable without interest

and penalty. If the residential and small claims division of the

Michigan tax tribunal grants an owner's appeal of a denial and that

owner has paid the interest due as a result of a denial under

subsection (6), (8), or (11), the interest received after a

distribution was made under subsection (25) shall be refunded.

(14) For taxes levied after December 31, 2005, for each county

in which the county treasurer or the county equalization director

does not elect to audit the exemptions claimed under this section

as provided in subsection (10), the department of treasury shall

conduct an annual audit of exemptions claimed under this section

for the current calendar year.

(15) Except as otherwise provided in subsection (5), an

affidavit filed by an owner for the exemption under this section

rescinds all previous exemptions filed by that owner for any other

property. The department of treasury shall notify the assessor of

the local tax collecting unit in which the property for which a

previous exemption was claimed is located if the previous exemption

is rescinded by the subsequent affidavit. When an exemption is

rescinded, the assessor of the local tax collecting unit shall

remove the exemption effective December 31 of the year in which the

affidavit was filed that rescinded the exemption. For any year for

which the rescinded exemption has not been removed from the tax

roll, the exemption shall be denied as provided in this section.

However, interest and penalty shall not be imposed for a year for

which a rescission form has been timely filed under subsection (5).

(16) Except as otherwise provided in subsection (30), if the

principal residence is part of a unit in a multiple-unit dwelling

or a dwelling unit in a multiple-purpose structure, an owner shall

claim an exemption for only that portion of the total taxable value

of the property used as the principal residence of that owner in a

manner prescribed by the department of treasury. If a portion of a

parcel for which the owner claims an exemption is used for a

purpose other than as a principal residence, the owner shall claim

an exemption for only that portion of the taxable value of the

property used as the principal residence of that owner in a manner

prescribed by the department of treasury.

(17) When a county register of deeds records a transfer of

ownership of a property, he or she shall notify the local tax

collecting unit in which the property is located of the transfer.

(18) The department of treasury shall make available the

affidavit forms and the forms to rescind an exemption, which ~~may~~

shall be on the same form, to all city and township assessors,

county equalization officers, county registers of deeds, and

closing agents. A person who prepares a closing statement for the

sale of property shall provide affidavit and rescission forms to

the buyer and seller at the closing and, if requested by the buyer

or seller after execution by the buyer or seller, shall file the

forms with the local tax collecting unit in which the property is

located. If a closing statement preparer fails to provide exemption

affidavit and rescission forms to the buyer and seller, or fails to

file the affidavit and rescission forms with the local tax

collecting unit if requested by the buyer or seller, the buyer may

appeal to the department of treasury within 30 days of notice to

the buyer that an exemption was not recorded. If the department of

treasury determines that the buyer qualifies for the exemption, the

department of treasury shall notify the assessor of the local tax

collecting unit that the exemption is granted and the assessor of

the local tax collecting unit or, if the tax roll is in the

possession of the county treasurer, the county treasurer shall

correct the tax roll to reflect the exemption. This subsection does

not create a cause of action at law or in equity against a closing

statement preparer who fails to provide exemption affidavit and

rescission forms to a buyer and seller or who fails to file the

affidavit and rescission forms with the local tax collecting unit

when requested to do so by the buyer or seller.

(19) An owner who owned and occupied a principal residence on

May 1 for taxes levied before January 1, 2012 for which the

exemption was not on the tax roll may file an appeal with the July

board of review or December board of review in the year for which

the exemption was claimed or the immediately succeeding 3 years.

For taxes levied after December 31, 2011, an owner who owned and

occupied a principal residence on June 1 or November 1 for which

the exemption was not on the tax roll may file an appeal with the

July board of review or December board of review in the year for

which the exemption was claimed or the immediately succeeding 3

years. If an appeal of a claim for exemption that was not on the

tax roll is received not later than 5 days prior to the date of the

December board of review, the local tax collecting unit shall

convene a December board of review and consider the appeal pursuant

to this section and section 53b.

(20) An owner who owned and occupied a principal residence

within the time period prescribed in subsection (2) in any year

before the 3 immediately preceding tax years for which the

exemption was not on the tax roll as a result of a qualified error

on the part of the local tax collecting unit may file a request for

the exemption for those tax years with the department of treasury.

The request for the exemption shall be in a form prescribed by the

department of treasury and shall include all documentation the

department of treasury considers necessary to consider the request

and to correct any affected official records if a qualified error

on the part of the local tax collecting unit is recognized and an

exemption is granted. If the department of treasury denies a

request for the exemption under this subsection, the owner is

responsible for all costs related to the request as determined by

the department of treasury. If the department of treasury grants a

request for the exemption under this subsection and the exemption

results in an overpayment of the tax in the years under

consideration, the department of treasury shall notify the

treasurer of the local tax collecting unit, the county treasurer,

and other affected officials of the error and the granting of the

request for the exemption and all affected official records shall

be corrected consistent with guidance provided by the department of

treasury. If granting the request for the exemption results in an

overpayment, a rebate, including any interest paid by the owner,

shall be paid to the owner within 30 days of the receipt of the

notice. A rebate shall be without interest. The treasurer in

possession of the appropriate tax roll may deduct the rebate from

the appropriate tax collecting unit's subsequent distribution of

taxes. The treasurer in possession of the appropriate tax roll

shall bill to the appropriate tax collecting unit the tax

collecting unit's share of taxes rebated. A local tax collecting

unit responsible for a qualified error under this subsection shall

reimburse each county treasurer and other affected local official

required to correct official records under this subsection for the

costs incurred in complying with this subsection.

(21) If an owner of property received a principal residence

exemption to which that owner was not entitled in any year before

the 3 immediately preceding tax years, as a result of a qualified

error on the part of the local tax collecting unit, the department

of treasury may deny the principal residence exemption as provided

in subsection (8). If the department of treasury denies an

exemption under this subsection, the owner shall be issued a

corrected or supplemental tax bill as provided in subsection (8),

except interest shall not accrue until 60 days after the date the

corrected or supplemental tax bill is issued. A local tax

collecting unit responsible for a qualified error under this

subsection shall reimburse each county treasurer and other affected

local official required to correct official records under this

subsection for the costs incurred in complying with this

subsection.

(22) If the assessor or treasurer of the local tax collecting

unit believes that the department of treasury erroneously denied a

claim for exemption, the assessor or treasurer may submit written

information supporting the owner's claim for exemption to the

department of treasury within 35 days of the owner's receipt of the

notice denying the claim for exemption. If, after reviewing the

information provided, the department of treasury determines that

the claim for exemption was erroneously denied, the department of

treasury shall grant the exemption and the tax roll shall be

amended to reflect the exemption.

(23) If granting the exemption under this section results in

an overpayment of the tax, a rebate, including any interest paid,

shall be made to the taxpayer by the local tax collecting unit if

the local tax collecting unit has possession of the tax roll or by

the county treasurer if the county has possession of the tax roll

within 30 days of the date the exemption is granted. The rebate

shall be without interest. If an exemption for property classified

as timber-cutover real property is granted under this section for

the 2008 or 2009 tax year, the tax roll shall be corrected and any

delinquent and unpaid penalty, interest, and tax resulting from

that property not having been exempt under this section for the

2008 or 2009 tax year shall be waived.

(24) If an exemption under this section is erroneously granted

for an affidavit filed before October 1, 2003, an owner may request

in writing that the department of treasury withdraw the exemption.

The request to withdraw the exemption shall be received not later

than November 1, 2003. If an owner requests that an exemption be

withdrawn, the department of treasury shall issue an order

notifying the local assessor that the exemption issued under this

section has been denied based on the owner's request. If an

exemption is withdrawn, the property that had been subject to that

exemption shall be immediately placed on the tax roll by the local

tax collecting unit if the local tax collecting unit has possession

of the tax roll or by the county treasurer if the county has

possession of the tax roll as though the exemption had not been

granted. A corrected tax bill shall be issued for the tax year

being adjusted by the local tax collecting unit if the local tax

collecting unit has possession of the tax roll or by the county

treasurer if the county has possession of the tax roll. Unless a

denial has been issued prior to July 1, 2003, if an owner requests

that an exemption under this section be withdrawn and that owner

pays the corrected tax bill issued under this subsection within 30

days after the corrected tax bill is issued, that owner is not

liable for any penalty or interest on the additional tax. An owner

who pays a corrected tax bill issued under this subsection more

than 30 days after the corrected tax bill is issued is liable for

the penalties and interest that would have accrued if the exemption

had not been granted from the date the taxes were originally

levied.

(25) Subject to subsection (26), interest at the rate of 1.25%

per month or fraction of a month collected under subsection (6),

(8), or (11) shall be distributed as follows:

(a) If the assessor of the local tax collecting unit denies

the exemption under this section, as follows:

(i) To the local tax collecting unit, 70%.

(ii) To the department of treasury, 10%.

(iii) To the county in which the property is located, 20%.

(b) If the department of treasury denies the exemption under

this section, as follows:

(i) To the local tax collecting unit, 20%.

(ii) To the department of treasury, 70%.

(iii) To the county in which the property is located, 10%.

county equalization director or his or her designee denies the

exemption under this section, as follows:

(i) To the local tax collecting unit, 20%.

(ii) To the department of treasury, 10%.

(iii) To the county in which the property is located, 70%.

(26) Interest distributed under subsection (25) is subject to

the following conditions:

(a) Interest distributed to a county shall be deposited into a

restricted fund to be used solely for the administration of

exemptions under this section. Money in that restricted fund shall

lapse to the county general fund on the December 31 in the year 3

years after the first distribution of interest to the county under

subsection (25) and on each succeeding December 31 thereafter.

(b) Interest distributed to the department of treasury shall

be deposited into the principal residence property tax exemption

audit fund, which is created within the state treasury. The state

treasurer may receive money or other assets from any source for

deposit into the fund. The state treasurer shall direct the

investment of the fund. The state treasurer shall credit to the

fund interest and earnings from fund investments. Money in the fund

shall be considered a work project account and at the close of the

fiscal year shall remain in the fund and shall not lapse to the

general fund. Money from the fund shall be expended, upon

appropriation, only for the purpose of auditing exemption

affidavits.

(27) Interest distributed under subsection (25) is in addition

to and shall not affect the levy or collection of the county

property tax administration fee established under this act.

(28) A cooperative housing corporation is entitled to a full

or partial exemption under this section for the tax year in which

the cooperative housing corporation files all of the following with

the local tax collecting unit in which the cooperative housing

corporation is located if filed within the time period prescribed

in subsection (2):

(a) An affidavit form.

(b) A statement of the total number of units owned by the

cooperative housing corporation and occupied as the principal

residence of a tenant stockholder as of the date of the filing

under this subsection.

security number of each tenant stockholder of the cooperative

housing corporation occupying a unit in the cooperative housing

corporation as his or her principal residence as of the date of the

filing under this subsection.

(d) A statement of the total number of units of the

cooperative housing corporation on which an exemption under this

section was claimed and that were transferred in the tax year

immediately preceding the tax year in which the filing under this

section was made.

(29) Before May 1, 2004 and before May 1, 2005, the treasurer

of each county shall forward to the department of education a

statement of the taxable value of each school district and fraction

of a school district within the county for the preceding 4 calendar

years. This requirement is in addition to the requirement set forth

in section 151 of the state school aid act of 1979, 1979 PA 94, MCL

388.1751.

(30) For a parcel of property open and available for use as a

bed and breakfast, the portion of the taxable value of the property

used as a principal residence under subsection (16) shall be

calculated in the following manner:

(a) Add all of the following:

(i) The square footage of the property used exclusively as that

owner's principal residence.

(ii) 50% of the square footage of the property's common area.

(iii) If the property was not open and available for use as a

bed and breakfast for 90 or more consecutive days in the

immediately preceding 12-month period, the result of the following

calculation:

(A) Add the square footage of the property that is open and

available regularly and exclusively as a bed and breakfast, and 50%

of the square footage of the property's common area.

(B) Multiply the result of the calculation in sub-subparagraph

(A) by a fraction, the numerator of which is the number of

consecutive days in the immediately preceding 12-month period that

the property was not open and available for use as a bed and

breakfast and the denominator of which is 365.

(b) Divide the result of the calculation in subdivision (a) by

the total square footage of the property.

(31) The owner claiming an exemption under this section for

property open and available as a bed and breakfast shall file an

affidavit claiming the exemption within the time period prescribed

in subsection (2) with the local tax collecting unit in which the

property is located. The affidavit shall be in a form prescribed by

the department of treasury.

(32) As used in this section:

(a) "Bed and breakfast" means property classified as

residential real property under section 34c that meets all of the

following criteria:

(i) Has 10 or fewer sleeping rooms, including sleeping rooms

occupied by the owner of the property, 1 or more of which are

available for rent to transient tenants.

(ii) Serves meals at no extra cost to its transient tenants.

(iii) Has a smoke detector in proper working order in each

sleeping room and a fire extinguisher in proper working order on

each floor.

(b) "Common area" includes, but is not limited to, a kitchen,

dining room, living room, fitness room, porch, hallway, laundry

room, or bathroom that is available for use by guests of a bed and

breakfast or, unless guests are specifically prohibited from access