HB-4121, As Passed Senate, June 19, 2019

 

 

 

 

 

 

 

 

 

 

 

SENATE SUBSTITUTE FOR

 

HOUSE BILL NO. 4121

 

 

 

 

 

 

 

 

 

 

 

     A bill to amend 1893 PA 206, entitled

 

"The general property tax act,"

 

by amending section 78q (MCL 211.78q), as amended by 2016 PA 518.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 78q. (1) Notwithstanding any provision of this act or

 

charter to the contrary, a foreclosing governmental unit may create

 

a delinquent property tax installment payment plan for eligible

 

property, the title to which is held by a financially distressed

 

person.

 

     (2) If a financially distressed person agrees to participate

 

in a delinquent property tax installment payment plan created under

 

subsection (1) and makes the initial payment required under that

 

delinquent property tax installment payment plan, the foreclosing

 

governmental unit may remove eligible property the title to which

 

is held by that financially distressed person from the petition for

 

foreclosure as provided in section 78h(3)(c).

 

     (3) If a financially distressed person successfully completes

 

a delinquent property tax installment payment plan created under

 

subsection (1), interest under section 78g(3)(b) and any additional

 

interest otherwise applicable shall be waived.

 

     (4) If a financially distressed person does not successfully

 

complete a delinquent property tax installment payment plan created

 

under subsection (1), both of the following shall occur:apply:

 

     (a) Interest under section 78g(3)(b) and any additional

 

interest otherwise applicable shall apply to any unpaid taxes on

 

the property.

 

     (b) The eligible property shall be included in the immediately

 

succeeding petition for foreclosure under section 78h.

 

     (5) Notwithstanding any provision of this act or charter to

 

the contrary, until June 30, 2019, 2026, a county treasurer may

 

enter into a tax foreclosure avoidance agreement for a term of up

 

to 5 years with an owner of property returned as delinquent to the

 

county treasurer under this act or forfeited to the county

 

treasurer under section 78g if the property is classified as

 

residential real property under section 34c, if the property is

 

eligible property, and if the owner makes an initial payment of at

 

least 10% of the delinquent taxes owed on the property. While a tax

 

foreclosure avoidance agreement is effective, the property shall be

 

withheld or removed from the petition for foreclosure as provided

 

under section 78h(3)(c), interest at the rate provided in section

 

78g(3)(c)(ii) shall apply, applies, and the owner shall make timely

payments as provided under the tax foreclosure avoidance agreement,

 

including timely payment of all nondelinquent taxes on the

 

property. A tax foreclosure avoidance agreement shall must require

 

regular periodic installment payments. The final payment shall must

 

not be disproportionately larger than a regular periodic

 

installment payment and regular periodic installment payments in

 

the final year shall must not be disproportionately larger than

 

regular periodic installment payments in prior years. A county

 

treasurer may refuse to enter into a tax foreclosure avoidance

 

agreement with an owner under this subsection if that owner is not

 

in compliance with another tax foreclosure avoidance agreement with

 

the county treasurer or with a delinquent property tax installment

 

plan with the county treasurer under this section. A county

 

treasurer may not enter into more than 2 tax foreclosure avoidance

 

agreements with an owner. If an owner fails to comply with a tax

 

foreclosure avoidance agreement or if the tax foreclosure avoidance

 

agreement is no longer effective, all of the following shall

 

occur:apply:

 

     (a) Interest under section 78g(3)(b) and any additional

 

interest otherwise applicable shall apply to any unpaid taxes on

 

the property.

 

     (b) The property shall be included in the immediately

 

succeeding petition for foreclosure under section 78h.

 

     (c) The owner shall not bid on property subject to sale under

 

section 78m, if that property was subject to the tax foreclosure

 

avoidance agreement.

 

     (6) A delinquent property tax installment payment plan or a

tax foreclosure avoidance agreement may not be approved under this

 

section if the delinquent property tax installment payment plan or

 

tax foreclosure avoidance agreement would impermissibly impair an

 

outstanding debt of the county.

 

     (7) If a foreclosing governmental unit has created a

 

delinquent property tax installment payment plan under this

 

section, the department of treasury may audit the books and records

 

of that foreclosing governmental unit concerning the details of

 

that delinquent property tax installment payment plan.

 

     (8) Property classified as industrial real property under

 

section 34c that is occupied at less than 10% of its facility

 

capacity for more than 3 years and that is located in a county with

 

a population of more than 1,500,000 according to the most recent

 

federal decennial census is not eligible to participate in a

 

delinquent property tax installment payment plan and shall proceed

 

under is subject to section 78m, including sale under section

 

78m(2) to the person bidding the highest amount above the minimum

 

bid. as required under section 78m(2).

 

     (9) If a delinquent property tax installment payment plan is

 

in effect for property for which a county has issued notes under

 

this act that are secured by the delinquent taxes and interest on

 

that property, at any time 2 years after the date that those taxes

 

were returned as delinquent, the county treasurer may charge back

 

to any taxing unit the face amount of the delinquent taxes that

 

were owed to that taxing unit on the date those taxes were returned

 

as delinquent, less the amount of any principal installments

 

received by the county treasurer on that property under the

delinquent property tax installment payment plan. All subsequent

 

payments of delinquent taxes and interest on that property shall be

 

retained by the county treasurer in a separate account and either

 

paid to or credited to the account of that taxing unit.

 

     (10) As used in this section:

 

     (a) "Eligible property" means property that is a principal

 

residence exempt from the tax levied by a local school district for

 

school operating purposes under section 7cc.

 

     (b) "Financially distressed person" means a person who meets

 

all of the following conditions:

 

     (i) Is eligible to have property to which he or she holds

 

title withheld from a petition for foreclosure under section

 

78h(3)(b).

 

     (ii) Is not delinquent in satisfying a delinquent property tax

 

installment payment plan or tax foreclosure avoidance agreement

 

under this section for any other property within the foreclosing

 

governmental unit.