BillCam

SENATE BILL No. 386

May 18, 2017, Introduced by Senators EMMONS and BRANDENBURG and referred to the Committee on Finance.

A bill to amend 1893 PA 206, entitled

"The general property tax act,"

by amending section 78k (MCL 211.78k), as amended by 2016 PA 433.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 78k. (1) If a petition for foreclosure is filed under

section 78h, not later than the date of the hearing, the

foreclosing governmental unit shall file with the clerk of the

circuit court proof of service of the notice of the show cause

hearing under section 78j, proof of service of the notice of the

foreclosure hearing under this section, and proof of the personal

visit to the property and publication under section 78i.

(2) A person claiming an interest in a parcel of property set

forth in the petition for foreclosure may contest the validity or

correctness of the forfeited unpaid delinquent taxes, interest,

penalties, and fees for 1 or more of the following reasons:

(a) No law authorizes the tax.

(b) The person appointed to decide whether a tax shall be

levied under a law of this state acted without jurisdiction, or did

not impose the tax in question.

tax was not legally levied.

(d) The tax has been paid within the time limited by law for

payment or redemption.

(e) The tax was assessed fraudulently.

(f) The description of the property used in the assessment was

so indefinite or erroneous that the forfeiture was void.

(3) A person claiming an interest in a parcel of property set

forth in the petition for foreclosure who desires to contest that

petition shall file written objections with the clerk of the

circuit court and serve those objections on the foreclosing

governmental unit before the date of the hearing required under

this section.

(4) If the court determines that the owner of property subject

to foreclosure is a minor heir, is incompetent, is without means of

support, or is undergoing a substantial financial hardship, the

court may withhold that property from foreclosure for 1 year or may

enter an order extending the redemption period as the court

determines to be equitable. If the court withholds property from

foreclosure under this subsection, a taxing unit's lien for taxes

due is not prejudiced and that property shall be included in the

immediately succeeding year's tax foreclosure proceeding.

(5) The circuit court shall enter final judgment on a petition

for foreclosure filed under section 78h at any time after the

hearing under this section but not later than the March 30

immediately succeeding the hearing with the judgment effective on

the March 31 immediately succeeding the hearing for uncontested

cases or 10 days after the conclusion of the hearing for contested

cases. All redemption rights to the property expire on the March 31

immediately succeeding the entry of a judgment foreclosing the

property under this section, or in a contested case 21 days after

the entry of a judgment foreclosing the property under this

section. The circuit court's judgment shall specify all of the

following:

(a) The legal description and, if known, the street address of

the property foreclosed and the forfeited unpaid delinquent taxes,

interest, penalties, and fees due on each parcel of property.

(b) That fee simple title to property foreclosed by the

judgment will vest absolutely in the foreclosing governmental unit,

except as otherwise provided in subdivisions (c) and (e), without

any further rights of redemption, if all forfeited delinquent

taxes, interest, penalties, and fees are not paid on or before the

March 31 immediately succeeding the entry of a judgment foreclosing

the property under this section, or in a contested case within 21

days of the entry of a judgment foreclosing the property under this

section.

for unpaid taxes or special assessments, except future installments

of special assessments and liens recorded by this state or the

foreclosing governmental unit pursuant to the natural resources and

environmental protection act, 1994 PA 451, MCL 324.101 to

324.90106, are extinguished, if all forfeited delinquent taxes,

interest, penalties, and fees are not paid on or before the March

31 immediately succeeding the entry of a judgment foreclosing the

property under this section, or in a contested case within 21 days

of the entry of a judgment foreclosing the property under this

section.

(d) That, except as otherwise provided in subdivisions (c) and

(e), the foreclosing governmental unit has good and marketable fee

simple title to the property, if all forfeited delinquent taxes,

interest, penalties, and fees are not paid on or before the March

31 immediately succeeding the entry of a judgment foreclosing the

property under this section, or in a contested case within 21 days

of the entry of a judgment foreclosing the property under this

section.

(e) That all existing recorded and unrecorded interests in

that property are extinguished, except a visible or recorded

easement or right-of-way, private deed restrictions, interests of a

lessee or an assignee of an interest of a lessee under a recorded

oil or gas lease, interests in oil or gas in that property that are

owned by a person other than the owner of the surface that have

been preserved as provided in section 1(3) of 1963 PA 42, MCL

554.291, interests in property assessable as personal property

under section 8(g), or restrictions or other governmental interests

imposed pursuant to the natural resources and environmental

protection act, 1994 PA 451, MCL 324.101 to 324.90106, if all

forfeited delinquent taxes, interest, penalties, and fees are not

paid on or before the March 31 immediately succeeding the entry of

a judgment foreclosing the property under this section, or in a

contested case within 21 days of the entry of a judgment

foreclosing the property under this section.

(f) A finding that all persons entitled to notice and an

opportunity to be heard have been provided that notice and

opportunity. A person shall be deemed to have been provided notice

and an opportunity to be heard if the foreclosing governmental unit

followed the procedures for provision of notice by mail, for visits

to forfeited property, and for publication under section 78i, or if

1 or more of the following apply:

(i) The person had constructive notice of the hearing under

this section by acquiring an interest in the property after the

date the notice of forfeiture is recorded under section 78g.

(ii) The person appeared at the hearing under this section or

filed written objections with the clerk of the circuit court under

subsection (3) before the hearing.

(iii) Before the hearing under this section, the person had

actual notice of the hearing.

(g) A judgment entered under this section is a final order

with respect to the property affected by the judgment and except as

provided in subsection (7) shall not be modified, stayed, or held

invalid after the March 31 immediately succeeding the entry of a

judgment foreclosing the property under this section, or for

contested cases 21 days after the entry of a judgment foreclosing

the property under this section, except that a person claiming to

have a property interest under section 78i in property foreclosed

under this section may seek to invalidate the foreclosure on any of

the grounds described in MCR 2.612, so long as the property has not

been transferred under section 78m to a person other than the

foreclosing governmental unit.

(6) Except as otherwise provided in subsection (5)(c) and (e),

fee simple title to property set forth in a petition for

foreclosure filed under section 78h on which forfeited delinquent

taxes, interest, penalties, and fees are not paid on or before the

March 31 immediately succeeding the entry of a judgment foreclosing

the property under this section, or in a contested case within 21

days of the entry of a judgment foreclosing the property under this

section, shall vest absolutely in the foreclosing governmental

unit, and the foreclosing governmental unit shall have absolute

title to the property, including all interests in oil or gas in

that property except the interests of a lessee or an assignee of an

interest of a lessee under an oil or gas lease in effect as to that

property or any part of that property if the lease was recorded in

the office of the register of deeds in the county in which the

property is located before the date of filing the petition for

foreclosure under section 78h, and interests preserved as provided

in section 1(3) of 1963 PA 42, MCL 554.291. The foreclosing

governmental unit's title is not subject to any recorded or

unrecorded lien and shall not be stayed or held invalid except as

provided in subsection (5)(g), (7), or (9).

(7) The foreclosing governmental unit or a person claiming to

have a property interest under section 78i in property foreclosed

under this section may appeal the circuit court's order or the

circuit court's judgment foreclosing property to the court of

appeals. An Except as otherwise provided in subsection (5)(g), an

appeal under this subsection is limited to the record of the

proceedings in the circuit court under this section and shall not

be de novo. The circuit court's judgment foreclosing property shall

be stayed until the court of appeals has reversed, modified, or

affirmed that judgment. If an appeal under this subsection stays

the circuit court's judgment foreclosing property, the circuit

court's judgment is stayed only as to the property that is the

subject of that appeal and the circuit court's judgment foreclosing

other property that is not the subject of that appeal is not

stayed. To appeal the circuit court's judgment foreclosing

property, a person appealing the judgment shall pay to the county

treasurer the amount determined to be due to the county treasurer

under the judgment on or before the March 31 immediately succeeding

the entry of a judgment foreclosing the property under this

section, or in a contested case within 21 days of the entry of a

judgment foreclosing the property under this section, together with

a notice of appeal. If the circuit court's judgment foreclosing the

property is affirmed on appeal, the amount determined to be due

shall be refunded to the person who appealed the judgment. If the

circuit court's judgment foreclosing the property is reversed or

modified on appeal, the county treasurer shall refund the amount

determined to be due to the person who appealed the judgment, if

any, and retain the balance in accordance with the order of the

court of appeals.

(8) The foreclosing governmental unit shall record a notice of

judgment for each parcel of foreclosed property in the office of

the register of deeds for the county in which the foreclosed

property is located in a form prescribed by the department of

treasury.

(9) After the entry of a judgment foreclosing the property

under this section, if the property has not been transferred under

section 78m to a person other than the foreclosing governmental

unit, a foreclosing governmental unit may shall cancel the

foreclosure by recording with the register of deeds for the county

in which the property is located a certificate of error in a form

prescribed by the department of treasury, if the foreclosing

governmental unit discovers or a court of competent jurisdiction

determines any of the following:

(a) The foreclosed property was not subject to taxation on the

date of the assessment of the unpaid taxes for which the property

was foreclosed.

(b) The description of the property used in the assessment of

the unpaid taxes for which the property was foreclosed was so

indefinite or erroneous that the forfeiture of the property was

void.

paid to the proper officer within the time provided under this act

for the payment of the taxes or the redemption of the property.

(d) A certificate, including a certificate issued under

section 135, or other written verification authorized by law was

issued by the proper officer within the time provided under this

act for the payment of the taxes for which the property was

foreclosed or for the redemption of the property.

(e) An owner of an interest in the property entitled to notice

under section 78i was not provided notice sufficient to satisfy the

minimum requirements of due process required under the state

constitution of 1963 and the constitution Constitution of the

United States.

(f) A judgment of foreclosure was entered under this section

in violation of an order issued by a United States Bankruptcy

Court.

(10) A certificate of error submitted to the county register

of deeds for recording under subsection (9) need not be notarized

and may be authenticated by a digital signature of the foreclosing

governmental unit or by other electronic means.

Enacting section 1. This amendatory act is retroactive and is

effective January 1, 2015.