HB 6006

HOUSE BILL NO. 6006
A bill to amend 1893 PA 206, entitled
"The general property tax act,"
by amending section 9 (MCL 211.9), as amended by 2023
PA 109.
the people of the state of michigan enact:
Sec. 9. (1) The following personal property, and real
property described in subdivision (j)(i), is exempt from taxation:
(a) The personal
property of charitable, educational, and scientific institutions incorporated
under the laws of this state. This exemption does not apply to secret or
fraternal societies, but the personal property of all charitable homes of
secret or fraternal societies and nonprofit corporations that own and operate
facilities for the aged and chronically ill in which the net income from the
operation of the nonprofit corporations or secret or fraternal societies does
not inure to the benefit of a person other than the residents is exempt.
(b) The property of
all library associations, circulating libraries, libraries of reference, and
reading rooms owned or supported by the public and not used for gain.
(c) The property of
posts of the grand army of the republic, sons of veterans' unions, and of the
women's relief corps connected with them, of young men's Christian associations,
women's Christian temperance union associations, young people's Christian
unions, a boy or girl scout or camp fire girls organization, 4-H clubs, and
other similar associations.
(d) Pensions
receivable from the United States.
(e) The property of
Indians who are not citizens.
(f) The personal
property owned and used by a householder such as customary furniture, fixtures,
provisions, fuel, and other similar equipment, wearing apparel including
personal jewelry, family pictures, school books, library books of reference,
and allied items. Personal property is not exempt under this subdivision if it
is used to produce income, if it is held for speculative investment, or if it
constitutes an inventory of goods for sale in the regular course of trade.
(g) Household
furnishings, provisions, and fuel of not more than $5,000.00 in taxable value,
of each social or professional fraternity, sorority, and student cooperative
house recognized by the educational institution at which it is located.
(h) The working
tools of a mechanic of not more than $500.00 in taxable value.
"Mechanic", as used in this subdivision, means a person skilled in a
trade pertaining to a craft or in the construction or repair of machinery if
the person's employment by others requires the person to furnish the tools.
(i) Fire engines
and other implements used in extinguishing fires owned or used by an organized
or independent fire company.
(j) Property
actually used in agricultural operations and farm implements held for sale or
resale by retail servicing dealers for use in agricultural production. As used
in this subdivision, "agricultural operations" means farming in all
its branches, including cultivation of the soil, growing and harvesting of an
agricultural, horticultural, or floricultural commodity, dairying, raising of
livestock, bees, fur-bearing animals, or poultry, turf and tree farming,
raising and harvesting of fish, collecting, evaporating, and preparing maple
syrup if the owner of the property has $25,000.00 or less in annual gross
wholesale sales, and any practices performed by a farmer or on a farm as an
incident to, or in conjunction with, farming operations. , but excluding retail
sales and food processing operations. Property used in agricultural
operations includes all of the following:
(i) A methane digester and a methane
digester electric generating system if the person claiming the exemption
complies with all of the following:
(A) After the
construction of the methane digester or the methane digester electric
generating system is completed, the person claiming the exemption submits to
the local tax collecting unit an application for the exemption and a copy of
certification from the department of agriculture and rural development that it
has verified that the farm operation on which the methane digester or methane
digester electric generating system is located is in compliance with the
appropriate system of the Michigan agriculture environmental assurance program
in the year immediately preceding the year in which the affidavit is submitted.
Three years after an application for exemption is approved and every 3 years
thereafter, the person claiming the exemption shall submit to the local tax
collecting unit an affidavit attesting that the department of agriculture and
rural development has verified that the farm operation on which the methane
digester or methane digester electric generating system is located is in
compliance with the appropriate system of the Michigan agriculture
environmental assurance program. The application for the exemption under this
subparagraph must be in a form prescribed by the department of treasury and
must be provided to the person claiming the exemption by the local tax
collecting unit.
(B) When the
application is submitted to the local tax collecting unit, the person claiming
the exemption also submits certification provided by the department of
environment, Great Lakes, and energy that the person is not currently being
investigated for a violation of part 31 of the natural resources and
environmental protection act, 1994 PA 451, MCL 324.3101 to 324.3134, that
within a 3-year period immediately preceding the date the application is
submitted to the local tax collecting unit, the person has not been found
guilty of a criminal violation under part 31 of the natural resources and
environmental protection act, 1994 PA 451, MCL 324.3101 to 324.3134, and that
within a 1-year period immediately preceding the date the application is
submitted to the local tax collecting unit, the person has not been found
responsible for a civil violation that resulted in a civil fine of $10,000.00
or more under part 31 of the natural resources and environmental protection
act, 1994 PA 451, MCL 324.3101 to 324.3134.
(C) The person
claiming an exemption cooperates by allowing access for not more than 2
universities to collect information regarding the effectiveness of the methane
digester and the methane digester electric generating system in generating
electricity and processing animal waste and production area waste. Information
collected under this sub-subparagraph must not be provided to the public in a
manner that would identify the owner of the methane digester or the methane
digester electric generating system or the farm operation on which where the
methane digester or the methane digester electric generating system is located.
The identity of the owner of the methane digester or the methane digester
electric generating system and the identity of the owner and location of the
farm operation on which where the methane digester or the methane digester
electric generating system is located are exempt from disclosure under the
freedom of information act, 1976 PA 442, MCL 15.231 to 15.246. As used in this
sub-subparagraph, "university" means a public 4-year institution of
higher education created under article VIII of the state constitution of 1963.
(D) The person
claiming the exemption ensures that the methane digester and methane digester
electric generating system are operated under the specific supervision and
control of persons certified by the department of agriculture and rural
development as properly qualified to operate the methane digester, methane
digester electric generating system, and related waste treatment and control
facilities. The department of agriculture and rural development shall consult
with the department of environment, Great Lakes, and energy and the Michigan
State University Cooperative Extension Service in developing the operator
certification program.
(ii) A biomass gasification system. As used
in this subparagraph, "biomass gasification system" means apparatus
and equipment that thermally decomposes agricultural, food, or animal waste at
high temperatures and in an oxygen-free or a controlled oxygen-restricted
environment into a gaseous fuel and the equipment used to generate electricity
or heat from the gaseous fuel or store the gaseous fuel for future generation
of electricity or heat.
(iii) A thermal depolymerization system. As
used in this subparagraph, "thermal depolymerization system" means
apparatus and equipment that use heat to break down natural and synthetic
polymers and that can accept only organic waste.
(iv) Machinery that is capable of
simultaneously harvesting grain or other crops and biomass and machinery used
for the purpose of harvesting biomass. As used in this subparagraph,
"biomass" means crop residue used to produce energy or agricultural
crops grown specifically for the production of energy.
(v) Machinery used to prepare the crop for
market operated incidental to a farming operation that does not substantially
alter the form, shape, or substance of the crop and is limited to cleaning,
cooling, washing, pitting, grading, sizing, sorting, drying, bagging, boxing,
crating, and handling if not less than 33% of the volume of the crops processed
in the year ending on the applicable tax day or in at least 3 of the
immediately preceding 5 years were grown by the farmer in this state that owns
or uses the crop processing machinery.
(vi) Machinery used to install land tile on
property exempt under section 7ee as qualified agricultural property. If
machinery is used to install land tile on property other than qualified
agricultural property, that machinery is exempt only to the extent that it is
used to install land tile on qualified agricultural property. A person claiming
an exemption under this section shall indicate the machinery's percentage of
exempt use in the statement submitted under section 19. As used in this
subparagraph, "land tile" means fired clay or perforated plastic
tubing used as part of a subsurface drainage system for land.
(vii) Machinery used to install or implement
soil and water conservation techniques on property exempt under section 7ee as
qualified agricultural property. If machinery is used to install or implement
soil and water conservation techniques on property other than qualified
agricultural property, that machinery is exempt only to the extent that it is
used to install or implement soil and water conservation techniques on
qualified agricultural property. A person claiming an exemption under this
section shall indicate the machinery's percentage of exempt use in the
statement submitted under section 19. As used in this subparagraph, "soil
and water conservation techniques" means techniques for the conservation
of soil and water described in the field office technical guide published by
the Natural Resources Conservation Service of the United States Department of
Agriculture.
(k) Personal
property of not more than $500.00 in taxable value used by a householder in the
operation of a business in the householder's dwelling or at 1 other location in
the city, township, or village in which where the householder resides.
(l) The products, materials, or goods
processed or otherwise and in whatever form, but expressly excepting alcoholic
beverages, located in a public warehouse, United States Customs port of entry
bonded warehouse, dock, or port facility on December 31 of each year, if those
products, materials, or goods are designated as in transit to destinations
outside this state pursuant to the published tariffs of a railroad or common
carrier by filing the freight bill covering the products, materials, or goods
with the agency designated by the tariffs, entitling the shipper to
transportation rate privileges. Products in a United States Customs port of
entry bonded warehouse that arrived from another state or a foreign country,
whether awaiting shipment to another state or to a final destination within
this state, are considered to be in transit and temporarily at rest, and not
subject to the collection of taxes under this act. To obtain an exemption for
products, materials, or goods under this subdivision, the owner shall file a
sworn statement with, and in the form required by, the assessing officer of the
tax district in which collecting unit where the warehouse, dock, or port
facility is located, at a time between the tax day, December 31, and before the
assessing officer closes the assessment rolls describing the products,
materials, or goods, and reporting their cost and value as of December 31 of
each year. The status of persons and products, materials, or goods for which an
exemption is requested is determined as of December 31, which is the tax day.
Any property located in a public warehouse, dock, or port facility on December
31 of each year that is exempt from taxation under this subdivision but that is
not shipped outside this state pursuant to the particular tariff under which
the transportation rate privilege was established must be assessed upon the
immediately succeeding or a subsequent assessment roll by the assessing officer
and taxed at the same rate of taxation as other taxable property for the year
or years for which the property was exempted to the owner at the time of the
omission unless the owner or person entitled to possession of the products,
materials, or goods is a resident of, or authorized to do business in, this
state and files with the assessing officer, with whom statements of taxable
property are required to be filed, a statement under oath that the products,
materials, or goods are not for sale or use in this state and will be shipped
to a point or points outside this state. If a person, firm, or corporation
claims exemption by filing a sworn statement, the person, firm, or corporation
shall append to the statement of taxable property required to be filed in the
immediately succeeding year or, if a statement of taxable property is not filed
for the immediately succeeding year, to a sworn statement filed on a form
required by the assessing officer, a complete list of the property for which
the exemption was claimed with a statement of the manner of shipment and of the
point or points to which the products, materials, or goods were shipped from
the public warehouse, dock, or port facility. The assessing officer shall
assess the products, materials, or goods not shipped to a point or points
outside this state upon the immediately succeeding assessment roll or on a
subsequent assessment roll and the products, materials, or goods must be taxed
at the same rate of taxation as other taxable property for the year or years
for which the property was exempted to the owner at the time of the omission. The
records, accounts, and books of warehouses, docks, or port facilities,
individuals, partnerships, corporations, owners, or those in possession of
tangible personal property must be open to and available for inspection,
examination, or auditing by assessing officers. A warehouse, dock, port
facility, individual, partnership, corporation, owner, or person in possession
of tangible personal property shall report within 90 days after shipment of
products, materials, or goods in transit, for which an exemption under this
section was claimed or granted, the destination of shipments or parts of
shipments and the cost value of those shipments or parts of shipments to the
assessing officer. A warehouse, dock, port facility, individual, partnership,
corporation, or owner is subject to a fine of $100.00 for each failure to
report the destination and cost value of shipments or parts of shipments as
required in this subdivision. A person, firm, individual, partnership,
corporation, or owner failing to report products, materials, or goods located
in a warehouse, dock, or port facility to the assessing officer is subject to a
fine of $100.00 and a penalty of 50% of the final amount of taxes found to be
assessable for the year on property not reported, the assessable taxes and
penalty to be spread on a subsequent assessment roll in the same manner as
general taxes on personal property. For the purpose of this subdivision, a
public warehouse, dock, or port facility means a warehouse, dock, or port
facility owned or operated by a person, firm, or corporation engaged in the
business of storing products, materials, or goods for hire for profit that
issues a schedule of rates for storage of the products, materials, or goods and
that issues warehouse receipts under 1909 PA 303, MCL 443.50 to 443.55. A
United States Customs port of entry bonded warehouse means a customs warehouse
within a classification designated by 19 CFR 19.1 and that is located in a port
of entry, as defined by 19 CFR 101.1. A portion of a public warehouse, United States
Customs port of entry bonded warehouse, dock, or port facility leased to a
tenant or a portion of any premises owned or leased or operated by a consignor
or consignee or an affiliate or subsidiary of the consignor or consignee is not
a public warehouse, dock, or port facility.
(m) Personal
property owned by a bank or trust company organized under the laws of this
state, a national banking association, or an incorporated bank holding company
as defined in section 1841 of the bank holding company act of 1956, 12 USC
1841, that controls a bank, national banking association, trust company, or
industrial bank subsidiary located in this state. Buildings owned by a state or
national bank, trust company, or incorporated bank holding company and situated
upon real property that the state or national bank, trust company, or
incorporated bank holding company is not the owner of the fee are considered
real property and are not exempt under this section. Personal property owned by
a state or national bank, trust company, or incorporated bank holding company
that is leased, loaned, or otherwise made available to and used by a private
individual, association, or corporation in connection with a business conducted
for profit is not exempt under this section.
(n) Farm products,
processed or otherwise, the ultimate use of which is for human or animal
consumption as food, except wine, beer, and other alcoholic beverages regularly
placed in storage in a public warehouse, dock, or port facility while in
storage are considered in transit and only temporarily at rest and are not
subject to the collection of taxes under this act. The assessing officer is the
determining authority as to what constitutes, is defined as, or classified as,
farm products as used in this subdivision. The records, accounts, and books of
warehouses, docks, or port facilities, individuals, partnerships, corporations,
owners, or those in possession of farm products must be open to and available
for inspection, examination, or auditing by assessing officers.
(o) Sugar, in solid
or liquid form, produced from sugar beets, dried beet pulp, and beet molasses
if owned or held by processors.
(p) The personal
property of a parent cooperative preschool. As used in this subdivision and
section 7z, "parent cooperative preschool" means a nonprofit,
nondiscriminatory educational institution maintained as a community service and
administered by parents of children currently enrolled in the preschool, that
provides an educational and developmental program for children younger than
compulsory school age, that provides an educational program for parents,
including active participation with children in preschool activities, that is
directed by qualified preschool personnel, and that is licensed under 1973 PA
116, MCL 722.111 to 722.128.
(q) All equipment
used exclusively in wood harvesting, but not including portable or stationary
sawmills or other equipment used in secondary processing operations. As used in
this subdivision, "wood harvesting" means clearing land for forest management
purposes, planting trees, all forms of cutting or chipping trees, and loading
trees on trucks for removal from the harvest area.
(r) Liquefied
petroleum gas tanks located on residential or agricultural property used to
store liquefied petroleum gas for residential or agricultural property use.
(s) Water
conditioning systems used for a residential dwelling.
(t) For taxes
levied after December 31, 2000, aircraft excepted from the registration
provisions of the aeronautics code of the state of Michigan, 1945 PA 327, MCL
259.1 to 259.208, and all other aircraft operating under the provisions of a
certificate issued under 14 CFR part 121, and all spare parts for such
aircraft.
(u) A facility for
which a solar energy facility exemption certificate has been issued under the
solar energy facilities taxation act, 2023 PA 108, MCL
211.1151 to 211.1165, but not the land on which the facility is or will
be located, for the period beginning on the effective date of the solar energy
facility exemption certificate and continuing as long as the certificate is in
force.
(2) As used in this
section:
(a)
"Biogas" means a mixture of gases composed primarily of methane and
carbon dioxide.
(b) "Methane
digester" means a system designed to facilitate the production, recovery,
and storage of biogas from the anaerobic microbial digestion of animal or food
waste.
(c) "Methane
digester electric generating system" means a methane digester and the
apparatus and equipment used to generate electricity or heat from biogas or to
store biogas for the future generation of electricity or heat.