2007 House Bill 4376 (Revise commercial rental property assessment occupancy formula )

Public Act 31 of 2007

[Comments on this legislation] [Text and Analysis] [Add to Watch List]
[Previous] [Next]

Introduced by Rep. Paul Condino on March 1, 2007, to eliminate a cap on the maximum amount that tax assessors can raise the assessment of rental property due to a higher occupancy rate, if the assessment had been previously lowered as a result of a lower occupancy rate. A 2002 Supreme Court ruling held that raising these assessments faster than inflation violates the Constitutional tax cap put in place by Proposal A in 1994, which limits assessment increases to five percent or the rate of inflation, whichever is less. Note: The effect of the of this bill and House Bill 4375 in some sense would be retroactive, requiring property owners to pay higher taxes in the future to compensate governments for past tax savings under the WPW ruling.
- Referred to the House Tax Policy Committee on March 1, 2007.
  - Reported in the House on March 28, 2007, without amendment and with the recommendation that the bill pass.
- Substitute offered by Rep. Paul Condino on April 17, 2007, to replace the previous version of the bill with one that revises details but does not change the substance of the bill as previously described. The substitute passed in the House by voice vote on April 17, 2007.
- Substitute offered by Rep. Fulton Sheen on April 17, 2007, to replace the previous version of the bill with one that eliminate the retroactive nature of the bill, which would require property owners to pay higher taxes in the future to compensate governments for past tax savings under the WPW ruling. The substitute failed in the House (50 to 58) on April 17, 2007. [Vote Details and Comments]
- Substitute offered by Rep. Fulton Sheen on April 17, 2007, to replace the previous version of the bill with one that eliminate the retroactive nature of the bill, which would require property owners to pay higher taxes in the future to compensate governments for past tax savings under the WPW ruling. Also, to require a vote of the people on jurisdiction-wide ad-valorem "special assessments" (which some say are no different from regualar property taxes for which a popular vote would be required under the Headlee amendment.) Also, to to revise the rules that local government property tax assessors use to establish the value of property. Under current law, assessors are able to base a property's value on "comparable sales" from the two years prior to the previous April. The amendment would change this to the one-year period prior to the previous Sept. 30. Note: The selling price of many homes in Michigan has fallen in the past year, but many assessments are still being raised because of higher-price sales in the earlier period. . The substitute failed in the House (49 to 59) on April 17, 2007. [Vote Details and Comments]
Passed in the House (59 to 49) on April 17, 2007. [Vote Details and Comments]
Received in the Senate on April 19, 2007.
- Referred to the Senate Finance Committee on April 19, 2007.
- Substitute offered in the Senate on June 28, 2007, to replace the previous version of the bill with one that does not revise commercial real estate assessments. Instead, the bill was used a "vehicle" to allow Detroit to essentially attach a new $300 solid waste collection fee it has adopted onto property tax bills. Unlike Senate Bill 313 (a similar measure that failed in the Senate on June 21), this version would not allow the city to foreclose on a parcel just because of nonpayment of the solid waste fee, but only if the property owner also was delinquent in property tax payments. The substitute passed in the Senate by voice vote on June 28, 2007.
- Amendment offered by Sen. Tupac Hunter on June 28, 2007, to allow a property owner to redeem from foreclosure without paying the unpaid garbage tax ("fee"), if the owner pays the delinquent property taxes. The amendment passed in the Senate (34 to 2) on June 28, 2007. [Vote Details and Comments]
Passed in the Senate (24 to 11) on June 28, 2007, to allow Detroit to essentially attach a new $300 solid waste collection fee it has adopted onto property tax bills. If a property owner was delinquent in both property tax payments and this fee, the city could enforce collection by foreclosing on and ultimately seizing a person's property. However, if property was foreclosed for delinquent taxes and this fee, the owner could redeem it by paying only the back taxes. The unpaid fee would remain a lien on the property, but the bill does not specify how it would be enforced. [Vote Details and Comments]
Received in the House on June 28, 2007, to allow Detroit to essentially attach a new $300 solid waste collection fee it has adopted onto property tax bills. If a property owner was delinquent in both property tax payments and this fee, the city could enforce collection by foreclosing on and ultimately seizing a person's property. However, if property was foreclosed for delinquent taxes and this fee, the owner could redeem it by paying only the back taxes. The unpaid fee would remain a lien on the property, but the bill does not specify how it would be enforced. Passed in the House (57 to 52) on June 28, 2007. [Vote Details and Comments]
Signed by Gov. Jennifer Granholm on June 29, 2007.

Line

Comments

Introduced by Rep. Paul Condino on March 1, 2007. Passed in the House (59 to 49) on April 17, 2007. New Comment

No comments have been posted yet.

Received in the Senate on April 19, 2007. Passed in the Senate (24 to 11) on June 28, 2007. New Comment

1) Sen. Hunter's "journal statement" [by Admin003 on June 29, 2007]
Senator Hunter's statement is as follows:

To my Senate colleagues, the Senator from the 4th District provided a lot of background concerning this legislation, so what I want to do is to take off from there and point out that one of the main issues that has been brought out concerning this legislation is that of can a homeowner's property be foreclosed because they didn't pay the solid waste fee? As a matter of fact, I received a letter from the Detroit City Council, which represents well over 800,000 citizens of the city of Detroit, and they say that they oppose any legislation that would lead to foreclosure of property for failure to pay the solid waste collection fee. As a matter of fact, in their own ordinance they say in section 4, "Properties with a fee delinquency only shall be placed in a separate file and red flagged prior to the submittal to the county of Wayne treasurer for the purpose of alerting the county of Wayne treasurer that these properties are not to be placed in the forfeiture process."

I happen to agree with the City Council's wisdom. Therefore, I am offering an amendment for your consideration this evening which would amend the appropriate sections of this bill to reflect the following: If an owner redeems property that is his or her principal residence that is returned to the county treasurer for delinquent taxes and a delinquent solid waste fee is assessed to that owner's principal residence, the owner may redeem his or her principal residence without payment of the delinquent of the solid waste fee.

My colleagues, I want to be clear, let us be clear today when we cast our votes that we will not allow any homeowner in the city of Detroit to lose their home for having not paid the solid waste fee.

Reply New Comment

Line

2) Sen. Clarke's "no vote explanation" [by Admin003 on June 29, 2007]
Senator Clarke's statement is as follows:

You know, I'm here standing as a legislator, one who represents the city of Detroit, but also I'd like to comment on this as someone who in the past had aspired to be our state's largest city's chief executive. The city of Detroit is in a severe budget crisis and it's not due to the fact that the people don't pay their trash fee. Our structural deficit is due in large part because this state--this state government--reneged on a promise it made in law to the city of Detroit. It agreed to pay the city of Detroit a fixed amount every year for 10 years in revenue sharing in exchange for the city reducing its property tax rate, which it did. The city upheld its bargain, but the state did not. Right now if the state of Michigan had paid the city of Detroit the revenue sharing it was owed under law, the city would have received over the last few years a quarter of a billion dollars more in revenue sharing. My friends, that's the problem and that is really where the solution lies.

But on this issue of the trash fee, the trash fee in itself is not fair. It did replace a garbage tax, but many people in Detroit who own homes of a lower property value are now paying more money by virtue of paying the fee than they would have under the tax. If you own a smaller home, smaller value, usually means a homeowner makes less money. You pay more money now under this trash fee. This fee will also be added to the tax bill. As a matter of fact, this legislation states that this fee will now be considered a property tax for the purposes of this act. That means people in Detroit will have to pay more money in order to avoid foreclosure.

One last point, the freshman Senator from northwest Detroit has made a good-faith effort to protect Detroit homeowners. His amendment, which we adopted, would state that Detroit homeowners can redeem their property without having to pay the trash fee. My friends, though, it doesn't protect homeowners enough because in order to get to the point where you have to redeem your property, your property is already in foreclosure. Our effort should avoid homeowners of any city in this state from going into foreclosure. You see, under this bill, if it passes, Detroiters will have to pay more money in order to stop their homes from going into foreclosure.

I'm asking you this, the city is in a deficit and it's in a crisis--a grave crisis. This state, many have said, is in a one-state recession. If that's true, the city of Detroit is experiencing a deep, deep depression. People are losing their jobs. They're losing their income, while their insurance rates, as the Senator from Highland Park so eloquently states, increases more and more. They are being squeezed. They're losing their homes in the city of Detroit at record rates. Foreclosure is happening every day. While the city is in crisis, our homeowners are facing a graver crisis.

I'm asking you, with everything in me, to oppose this because we've got to save and protect our homeowners from their own government.

Reply New Comment

Line

3) Sen. Scott's "no vote explanation" [by Admin003 on June 29, 2007]
Senator Scott's statement is as follows:

I rise in opposition to this bill, as I did the other day. I'll basically make the same statements. I won't do it to you; don't you do it to me. We have just, if we pass this bill, changed a fee into a tax and that's unfair. Folks ought to have the opportunity to vote on a tax. I ask my colleagues to allow them to do just that.

Reply New Comment

Line

4) Sen. Clark-Coleman's "no vote explanation" [by Admin003 on June 29, 2007]
Senator Clark-Coleman's statement is as follows:

Colleagues, let's be real clear about what it is that you are being asked to do. This is an effort to do an end-run around the citizens of Detroit. This was passed--very controversial issue--by the Mayor and City Council, but the citizens object to this very strenuously. Now we are rubbing salt into the wound by taking this issue and codifying it into law, changing it from a fee to a tax. Let's be real clear what this is. This is a tax. They're taking a fee, tacking it onto the property tax, and this is indeed a tax. So when you vote for this, you are voting to increase the taxes on the citizens of Detroit. Be real clear.

Now when you do this, understand that people are having enough problems paying those property taxes as it is. To all of the sudden now tack on $300 to people who are struggling is certainly making it very difficult for people. Now $300 to many of you might be a very insignificant amount, but to people who do not have jobs and who are struggling, it is indeed a real struggle for them to be able to meet this obligation. You know, they say they won't take their property, but you and I know how that goes. There's always a way to get around it. Once it's turned over to the county treasurer, they've got to collect it. Believe me, people will lose their homes. No matter how they massage this language, no matter how they come back and rework it, it is still a tax increase for the people of the city of Detroit.

I urge you to vote "no" on this piece of legislation.

Reply New Comment

Line

Received in the House on June 28, 2007. Passed in the House (57 to 52) on June 28, 2007. New Comment

1) Up the foreclosures -- What stupidity!! [by inform4 on June 30, 2007]
One more means to have government steal property and equity from the suckered taxpayers!

Michigan is currently a very high foreclosure state. So, what's one more means to use legalized plunder to steal homesteads from the people.

Maybe you should just bulldoze the whole city of Detroit -- were there are no jobs to be garnered, and so many out of work. Let's turn the whole city into a commune.

Reply New Comment

Line

2) VypTGOcDnLKpKFa [by Anonymous Citizen on March 20, 2008]
3B6QFu Cool, bro!
Reply New Comment

Line

Home
Create an account
Legislation watch
Search Legislation
Search Voting Record
Reports
- Recent Laws
- Missed Votes Report
Links
About
Tell a friend about this site