Bill Text: MI SB0882 | 2011-2012 | 96th Legislature | Introduced
Bill Title: Property tax; delinquent taxes; procedure for land banks to purchase delinquent tax property; provide for. Amends sec. 78m of 1893 PA 206 (MCL 211.78m).
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2011-12-14 - Referred To Committee On Economic Development [SB0882 Detail]
Download: Michigan-2011-SB0882-Introduced.html
SENATE BILL No. 882
December 14, 2011, Introduced by Senator HUNTER and referred to the Committee on Economic Development.
A bill to amend 1893 PA 206, entitled
"The general property tax act,"
by amending section 78m (MCL 211.78m), as amended by 2006 PA 498.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 78m. (1) Not later than the first Tuesday in July,
immediately succeeding the entry of judgment under section 78k
vesting absolute title to tax delinquent property in the
foreclosing governmental unit, this state is granted the right of
first refusal to purchase property at the greater of the minimum
bid or its fair market value by paying that amount to the
foreclosing governmental unit if the foreclosing governmental unit
is not this state. If this state elects not to purchase the
property under its right of first refusal, a city, village, or
township may purchase for a public purpose any property located
within that city, village, or township set forth in the judgment
and subject to sale under this section by payment to the
foreclosing governmental unit of the minimum bid. If a city,
village, or township does not purchase that property, the county in
which that property is located may purchase that property under
this section by payment to the foreclosing governmental unit of the
minimum bid. If a city, village, township, or county does not
purchase that property, that property may be purchased by a land
bank fast track authority created under section 23(5) of the land
bank fast track act, 2003 PA 258, MCL 124.773, by paying the
minimum bid to the foreclosing governmental unit. If a land bank
fast track authority created under section 23(5) of the land bank
fast track act, 2003 PA 258, MCL 124.773, does not purchase that
property, that property may be purchased by a land bank fast track
authority created under section 23(4) of the land bank fast track
act, 2003 PA 258, MCL 124.773, by paying the minimum bid to the
foreclosing governmental unit. If a land bank fast track authority
created under section 23(4) of the land bank fast track act, 2003
PA 258, MCL 124.773, does not purchase that property, that property
may be purchased by a land bank fast track authority created under
section 15 of the land bank fast track act, 2003 PA 258, MCL
124.765, by paying the minimum bid to the foreclosing governmental
unit.
If property is purchased by a city,
village, township, or
county, or land bank fast track authority under this subsection,
the foreclosing governmental unit shall convey the property to the
purchasing
city, village, township, or county, or land bank fast
track authority within 30 days. If property purchased by a city,
village,
township, or county, or
land bank fast track authority
under this subsection is subsequently sold for an amount in excess
of the minimum bid and all costs incurred relating to demolition,
renovation, improvements, or infrastructure development, the excess
amount shall be returned to the delinquent tax property sales
proceeds account for the year in which the property was purchased
by
the city, village, township, or county, or land bank fast track
authority or, if this state is the foreclosing governmental unit
within a county, to the land reutilization fund created under
section 78n. Upon the request of the foreclosing governmental unit,
a
city, village, township, or county, or land bank fast track
authority that purchased property under this subsection shall
provide to the foreclosing governmental unit without cost
information regarding any subsequent sale or transfer of the
property. This subsection applies to the purchase of property by
this
state, a city, village, or township, or a county, or land bank
fast track authority prior to a sale held under subsection (2).
(2) Subject to subsection (1), beginning on the third Tuesday
in July immediately succeeding the entry of the judgment under
section 78k vesting absolute title to tax delinquent property in
the foreclosing governmental unit and ending on the immediately
succeeding first Tuesday in November, the foreclosing governmental
unit, or its authorized agent, at the option of the foreclosing
governmental unit, shall hold at least 2 property sales at 1 or
more convenient locations at which property foreclosed by the
judgment entered under section 78k shall be sold by auction sale,
which may include an auction sale conducted via an internet
website. Notice of the time and location of the sales shall be
published not less than 30 days before each sale in a newspaper
published and circulated in the county in which the property is
located, if there is one. If no newspaper is published in that
county, publication shall be made in a newspaper published and
circulated in an adjoining county. Each sale shall be completed
before the first Tuesday in November immediately succeeding the
entry of judgment under section 78k vesting absolute title to the
tax delinquent property in the foreclosing governmental unit.
Except as provided in subsection (5), property shall be sold to the
person bidding the highest amount above the minimum bid. The
foreclosing governmental unit may sell parcels individually or may
offer 2 or more parcels for sale as a group. The minimum bid for a
group of parcels shall equal the sum of the minimum bid for each
parcel included in the group. The foreclosing governmental unit may
adopt procedures governing the conduct of the sale and may cancel
the sale prior to the issuance of a deed under this subsection if
authorized under the procedures. The foreclosing governmental unit
may require full payment by cash, certified check, or money order
at the close of each day's bidding. Not more than 30 days after the
date of a sale under this subsection, the foreclosing governmental
unit shall convey the property by deed to the person bidding the
highest amount above the minimum bid. The deed shall vest fee
simple title to the property in the person bidding the highest
amount above the minimum bid, unless the foreclosing governmental
unit discovers a defect in the foreclosure of the property under
sections 78 to 78l. If this state is the foreclosing governmental
unit within a county, the department of natural resources shall
conduct the sale of property under this subsection and subsections
(4) and (5) on behalf of this state.
(3) For sales held under subsection (2), after the conclusion
of that sale, and prior to any additional sale held under
subsection (2), a city, village, or township may purchase any
property not previously sold under subsection (1) or (2) by paying
the minimum bid to the foreclosing governmental unit. If a city,
village, or township does not purchase that property, the county in
which that property is located may purchase that property under
this section by payment to the foreclosing governmental unit of the
minimum bid.
(4) If property is purchased by a city, village, township, or
county under subsection (3), the foreclosing governmental unit
shall convey the property to the purchasing city, village, or
township within 30 days.
(5) All property subject to sale under subsection (2) shall be
offered for sale at not less than 2 sales conducted as required by
subsection (2). The final sale held under subsection (2) shall be
held
not less than 28 days after the previous immediately preceding
sale under subsection (2). At the final sale held under subsection
(2), the sale is subject to the requirements of subsection (2),
except that the minimum bid shall not be required. However, the
foreclosing governmental unit may establish a reasonable opening
bid at the sale to recover the cost of the sale of the parcel or
parcels.
(6) On or before December 1 immediately succeeding the date of
the sale under subsection (5), a list of all property not
previously sold by the foreclosing governmental unit under this
section shall be transferred to the clerk of the city, village, or
township in which the property is located. The city, village, or
township may object in writing to the transfer of 1 or more parcels
of property set forth on that list. On or before December 30
immediately
succeeding the date of the sale under subsection (5),
all property not previously sold by the foreclosing governmental
unit under this section shall be transferred to the city, village,
or township in which the property is located, except those parcels
of property to which the city, village, or township has objected.
Property located in both a village and a township may be
transferred under this subsection only to a village. The city,
village, or township may make the property available under the
urban homestead act, 1999 PA 127, MCL 125.2701 to 125.2709, or for
any other lawful purpose.
(7) If property not previously sold is not transferred to the
city, village, or township in which the property is located under
subsection (6), the foreclosing governmental unit shall retain
possession of that property. If the foreclosing governmental unit
retains possession of the property and the foreclosing governmental
unit is this state, title to the property shall vest in the land
bank fast track authority created under section 15 of the land bank
fast track act, 2003 PA 258, MCL 124.765.
(8) A foreclosing governmental unit shall deposit the proceeds
from the sale of property under this section into a restricted
account designated as the "delinquent tax property sales proceeds
for the year ______". The foreclosing governmental unit shall
direct the investment of the account. The foreclosing governmental
unit shall credit to the account interest and earnings from account
investments. Proceeds in that account shall only be used by the
foreclosing governmental unit for the following purposes in the
following order of priority:
(a) The delinquent tax revolving fund shall be reimbursed for
all taxes, interest, and fees on all of the property, whether or
not all of the property was sold.
(b) All costs of the sale of property for the year shall be
paid.
(c) Any costs of the foreclosure proceedings for the year,
including, but not limited to, costs of mailing, publication,
personal service, and outside contractors shall be paid.
(d) Any costs for the sale of property or foreclosure
proceedings for any prior year that have not been paid or
reimbursed from that prior year's delinquent tax property sales
proceeds shall be paid.
(e) Any costs incurred by the foreclosing governmental unit in
maintaining property foreclosed under section 78k before the sale
under this section shall be paid, including costs of any
environmental remediation.
(f) If the foreclosing governmental unit is not this state,
any of the following:
(i) Any costs for the sale of property or foreclosure
proceedings for any subsequent year that are not paid or reimbursed
from that subsequent year's delinquent tax property sales proceeds
shall be paid from any remaining balance in any prior year's
delinquent tax property sales proceeds account.
(ii) Any costs for the defense of title actions.
(iii) Any costs incurred in administering the foreclosure and
disposition of property forfeited for delinquent taxes under this
act.
(g) If the foreclosing governmental unit is this state, any
remaining balance shall be transferred to the land reutilization
fund created under section 78n.
(h) In 2008 and each year after 2008, if the foreclosing
governmental unit is not this state, not later than June 30 of the
second calendar year after foreclosure, the foreclosing
governmental unit shall submit a written report to its board of
commissioners identifying any remaining balance and any contingent
costs of title or other legal claims described in subdivisions (a)
through (f). All or a portion of any remaining balance, less any
contingent costs of title or other legal claims described in
subdivisions (a) through (f), may subsequently be transferred into
the general fund of the county by the board of commissioners.
(9) Two or more county treasurers of adjacent counties may
elect to hold a joint sale of property as provided in this section.
If 2 or more county treasurers elect to hold a joint sale, property
may be sold under this section at a location outside of the county
in which the property is located. The sale may be conducted by any
county treasurer participating in the joint sale. A joint sale held
under this subsection may include or be an auction sale conducted
via an internet website.
(10) The foreclosing governmental unit shall record a deed for
any property transferred under this section with the county
register of deeds. The foreclosing governmental unit may charge a
fee in excess of the minimum bid and any sale proceeds for the cost
of recording a deed under this subsection.
(11)
As used in this section, "minimum bid" is the minimum
amount
established by the foreclosing governmental unit for which
property
may be sold under this section. The minimum bid shall
include
all of the following:
(a)
All delinquent taxes, interest, penalties, and fees due on
the
property. If a city, village, or township purchases the
property,
the minimum bid shall not include any taxes levied by
that
city, village, or township and any interest, penalties, or
fees
due on those taxes.
(b)
The expenses of administering the sale, including all
preparations
for the sale. The foreclosing governmental unit shall
estimate
the cost of preparing for and administering the annual
sale
for purposes of prorating the cost for each property included
in
the sale.
(11) (12)
For property transferred to this
state under
subsection (1), a land bank fast track authority under subsection
(1), or a city, village, or township under subsection (6) or
retained by a foreclosing governmental unit under subsection (7),
all taxes due on the property as of the December 31 following the
transfer or retention of the property are canceled effective on
that December 31.
(12) (13)
For property sold under this
section, transferred to
this state under subsection (1), a land bank fast track authority
under subsection (1), a city, village, or township under subsection
(6), or retained by a foreclosing governmental unit under
subsection (7), all liens for costs of demolition, safety repairs,
debris removal, or sewer or water charges due on the property as of
the December 31 immediately succeeding the sale, transfer, or
retention of the property are canceled effective on that December
31. This subsection does not apply to liens recorded by the
department
of environmental quality natural
resources under this
act or the land bank fast track act, 2003 PA 258, MCL 124.751 to
124.774.
(13) (14)
If property foreclosed under
section 78k and held by
or under the control of a foreclosing governmental unit is a
facility
as defined under section 20101(1)(o) 20101(1)(r) of the
natural resources and environmental protection act, 1994 PA 451,
MCL 324.20101, prior to the sale or transfer of the property under
this section, the property is subject to all of the following:
(a) Upon reasonable written notice from the department of
environmental
quality natural resources, the foreclosing
governmental unit shall provide access to the department of
environmental
quality natural resources, its employees,
contractors, and any other person expressly authorized by the
department
of environmental quality natural
resources to conduct
response activities at the foreclosed property. Reasonable written
notice under this subdivision may include, but is not limited to,
notice by electronic mail or facsimile, if the foreclosing
governmental unit consents to notice by electronic mail or
facsimile prior to the provision of notice by the department of
environmental
quality natural resources.
(b)
If requested by the department of environmental quality
natural resources to protect public health, safety, and welfare or
the environment, the foreclosing governmental unit shall grant an
easement for access to conduct response activities on the
foreclosed property as authorized under chapter 7 of the natural
resources and environmental protection act, 1994 PA 451, MCL
324.20101
to 324.20519 324.20302.
(c)
If requested by the department of environmental quality
natural resources to protect public health, safety, and welfare or
the environment, the foreclosing governmental unit shall place and
record deed restrictions on the foreclosed property as authorized
under chapter 7 of the natural resources and environmental
protection
act, 1994 PA 451, MCL 324.20101 to 324.20519.324.20302.
(d)
The department of environmental quality natural resources
may place an environmental lien on the foreclosed property as
authorized under section 20138 of the natural resources and
environmental protection act, 1994 PA 451, MCL 324.20138.
(14) (15)
If property foreclosed under
section 78k and held by
or under the control of a foreclosing governmental unit is a
facility
as defined under section 20101(1)(o) 20101(1)(r) of the
natural resources and environmental protection act, 1994 PA 451,
MCL 324.20101, prior to the sale or transfer of the property under
this
section, the department of environmental quality natural
resources shall request and the foreclosing governmental unit shall
transfer the property to the state land bank fast track authority
created under section 15 of the land bank fast track act, 2003 PA
258, MCL 124.765, if all of the following apply:
(a)
The department of environmental quality natural resources
determines that conditions at a foreclosed property are an acute
threat to the public health, safety, and welfare, to the
environment, or to other property.
(b)
The department of environmental quality natural resources
proposes to undertake or is undertaking state-funded response
activities at the property.
(c)
The department of environmental quality natural resources
determines that the sale, retention, or transfer of the property
other than under this subsection would interfere with response
activities
by the department of environmental quality natural
resources.
(15) As used in this section:
(a) "Land bank fast track authority" means a land bank fast
track authority created under the land bank fast track act, 2003 PA
258, MCL 124.751 to 124.774.
(b) "Minimum bid" is the minimum amount established by the
foreclosing governmental unit for which property may be sold under
this section. The minimum bid shall include all of the following:
(i) All delinquent taxes, interest, penalties, and fees due on
the property. If a city, village, or township purchases the
property, the minimum bid shall not include any taxes levied by
that city, village, or township and any interest, penalties, or
fees due on those taxes.
(ii) The expenses of administering the sale, including all
preparations for the sale. The foreclosing governmental unit shall
estimate the cost of preparing for and administering the annual
sale for purposes of prorating the cost for each property included
in the sale.
