Date: January 25, 2005
To: Boards of Review Assessing Officers
From: State Tax Commission (STC)

RE: 2005 BOARD OF REVIEW

The State Tax Commission (STC) has sent bulletins to Boards of Review whenever changes to the law have warranted an update of the previous year’s Board of Review bulletin. A standard format for these bulletins has evolved which will be retained as part II of this bulletin. Part I contains information about some of the changes which have occurred over the past several years which Boards of Review need to know about for the 2005 assessment year. Also included at the end of this year’s Board of Review Bulletin is a chart outlining Appeal Procedures which is STC Bulletin No. 2 of 2005.

IMPORTANT NOTE: Noted below are important matters that the STC wishes to bring to the attention of the 2005 Boards of Review.

1. The Exemption of Household Furnishings of a Fraternity, Sorority or Student Cooperative As Provided by MCL 211.9(g).
   PA 140 of 2003 changes the limit of the exemption for the household furnishings, provisions, and fuel of certain fraternities, sororities, and student cooperative houses. This new law changes the limit from $5,000 of State Equalized Value to $5,000 of Taxable Value. This change in the exemption occurs for the first time ON THE 2005 ASSESSMENT ROLL.

2. Exemption of the Working Tools of a Mechanic As Provided by MCL 211.9(h).
   PA 140 of 2003 changes the limit of the exemption for the working tools of a mechanic from $500 of State Equalized Value to $500 of Taxable Value. This change in the exemption occurs for the first time ON THE 2005 ASSESSMENT ROLL.
3. The Exemption of the Personal Property Used by a Householder in the Operation of a Business in the Householder's Dwelling or at One Other Location in the Unit Where the Householder Resides As Provided by MCL 211.9(k).
   PA 140 of 2003 changes the limit of the exemption for the personal property used by a householder in the operation of a business in the householder's dwelling or at one other location in the unit in which the householder resides. This new law changes the limit from $500 of State Equalized Value to $500 of Taxable Value. This change in the exemption occurs for the first time ON THE 2005 ASSESSMENT ROLL.
4. Exemption of Real and Personal Property of a Qualified Start-Up Business.

Public Acts 251, 252, 321, 323, and 324 of 2004 provide for certain exemptions for the real and personal property of Qualified Start-Up Businesses. Please see STC Bulletin 10 of 2004 for details. A business CANNOT qualify for this exemption in 2005.

5. Exemption of Certain Real and Personal Property Associated With an Innovations Center.

Public Acts 244 and 245 of 2004 provide for exemptions for certain real and personal property associated with an Innovations Center. Please see STC Bulletin 11 of 2004 for details.

6. Exemption of Property Owned or Sold by a Land Bank Fast Track Authority.
   Public Act 261 of 2003 provides for an exemption for certain property owned or conveyed by a Land Bank Fast Track Authority. Please see STC Bulletin 12 of 2004 for details regarding this exemption and the specific tax authorized by PA 260 of 2003.
7. Exemption of Certain Real Property Owned by a Qualified Conservation Organization.
   Public Act 576 of 2004 was signed by Governor Granholm on January 3, 2005 with an effective date of January 4, 2005. This law exempts certain real property owned by a Qualified Conservation Organization provided certain conditions are met. However, because the effective date of this law is after December 31, 2004 (tax day for 2005 assessments), this is not an exemption for the 2005 assessment roll. Instead, it first takes effect for the 2006 assessment roll.

The STC will issue a bulletin regarding this exemption later in 2005.

IMPORTANT NOTE: While the exemption provided by PA 576 of 2004 first takes effect in 2006, assessors and Boards of Review need to be aware that properties which will qualify for the Qualified Conservation Organization exemption in 2006 are likely to already qualify for exemption under the provisions of MCL 211.7o (the exemption for charitable organizations). For instance, in Michigan Nature Association v Township of Saugatuck (MTT Docket 283322), the Michigan Tax Tribunal ruled that a nature preserve used by the general public and members of the Michigan Nature Association for hiking and for the study and enjoyment of nature was exempt. You may access this decision on the Tribunal Web site at www.cis.state.mi.us/ham/tax/sr_recdec.asp.

A) Proposal A

On March 15, 1994 the voters of the State of Michigan approved Proposal A which made significant changes to the State Constitution. Most notably, for Boards of Review, Proposal A implemented a cap on the growth in Taxable Value. Taxable Value was a new term. Starting in 1995, property taxes have been calculated using Taxable Value rather than State Equalized Value which was used prior to 1995.

On December 29, 1994 the Governor signed into law Public Act (PA) No. 415 of 1994. PA 415 of 1994 contains many changes to the General Property Tax Act regarding the implementation of Proposal A. Significant additional changes were implemented by PA 476 of 1996 and other laws.

What has not changed is the method of computing Assessed Value and the system of county and state equalization. The "traditional" Assessed Value is still required to be 50% of market value. There shall still be a State Equalized Value (SEV) for each taxable property in the State of Michigan. Properties of similar value within a township or city must still have similar Assessed Values. In other words, the uniformity provisions of the 1963 Michigan Constitution still apply.

The biggest change, starting in 1995, was the requirement to calculate a Taxable Value for each non-exempt property in the State of Michigan. (Starting in 1995, property taxes were calculated using Taxable Value rather than State Equalized Value). It is Taxable Value, not assessed or equalized value, which is subject to the cap required by Proposal A. The calculation of Taxable Value will be discussed later in this bulletin. For many parcels of property (including parcels subject to a Transfer of Ownership in the prior year), the Taxable Value created by Proposal A will be the same as the SEV of the parcel. For other properties, the taxable value will be the "Capped Value" (another new term) established by Proposal A.

Prior to 1995, property tax bills were calculated using ONLY State Equalized Valuations (SEVs) as the property tax base for each parcel of property on the tax roll, as follows:

            (A)               times             (B)             equals                 (C)
State Equalized Value X Authorized Millage Rate = Parcel’s Property Tax Levy

The term Taxable Value was created by Proposal A and now Taxable Value always replaces State Equalized Value as item (A) in the property tax equation above (though Taxable Value is frequently the same as SEV for individual parcels). Taxable Value has become the single property tax base in Michigan used to calculate property taxes.

        (A)        times            (B)               equals             (C)
Taxable Value X Authorized Millage Rate = Parcel’s Property Tax Levy

1. Assessors shall prepare a 2005 assessment roll that contains "traditional" Assessed Valuations for each parcel of property, with uniformity according to the value of the parcel, and at 50 percent of true cash value, just as was done in past years.
   
   

2. Proposal A did not provide the authority to increase all "traditional" assessments across the board by the inflation rate. This would not have been good assessing practices prior to Proposal A and it is not prescribed this year. THIS IS NOT REQUIRED OR PERMITTED BY PROPOSAL A, AND DOES NOT SATISFY PROPOSAL A’S REQUIREMENT FOR A TAXABLE VALUATION CAP.
   
   

3. The cap on Taxable Value that was authorized by Proposal A has popularly been referred to as an assessment cap. A more technically accurate description of it would be to call it a Taxable Value Cap. Calling it by either name does not alter the fact that it effectively limits property taxes for capped properties. Knowing that it is a Taxable Value Cap and not an Assessed Value Cap accounts for the fact that 2005 assessments must be revised upwards or downwards where real estate values have increased or decreased, in the same manner that they were adjusted prior to Proposal A.
   
   "Traditional" assessments are to be uniform according to the value of the property and at 50 percent of market value for each parcel of property in your township or city, regardless of whether or not the Taxable Value is capped. The calculation of Taxable Value is separate from the "traditional" Assessed Value and will be discussed later in this bulletin.
   
   

4. County Equalization Studies (usually 24 month studies) are still required to be prepared by Equalization Departments and submitted by an Equalization Department to the State Tax Commission on or before December 31 annually. Single year or 12 month studies still are appropriate only where there are severely declining real estate markets. State Equalization data is still to be prepared by the Assessment and Certification Division staff that serves the State Tax Commission. Each County Board of Commissioners still must annually equalize assessments for each Township and City within each County during its April Equalization Session.
   
   Assessors and Boards of Review still have the obligation to turn over their assessment roll to the County Equalization Director immediately following adjournment of the Board of Review, but no later than the tenth day after adjournment of the Board of Review, or by the Wednesday following the first Monday in April, whichever is first. See Section 30(6) of the General Property Tax Act. The State Tax Commission will still hold a Preliminary State Equalization meeting on the Second Monday in May and a Final State Equalization meeting on the Fourth Monday in May regarding the six separately equalized classifications of real property plus personal property.
   
   THE DETERMINATION OF ASSESSMENTS (PREPARATION AND REVIEW OF AN ASSESSMENT ROLL) ARE STILL IMPORTANT AND REQUIRED PROJECTS FOR ASSESSORS AND BOARDS OF REVIEW, AND COUNTY AND STATE EQUALIZED VALUATIONS ARE STILL IMPORTANT AND REQUIRED BY CONSTITUTION AND STATUTE. State equalized values (when they are the same as Taxable Value) will still be used in the calculation of property taxes for many parcels throughout the state. State Equalized Value will also be used in the property taxation of properties which have experienced a "transfer of ownership" in 2004.
   
   

5. Proposal A did not change the State Tax Commission Rules and these rules still apply to the assessment/equalization activity of assessors, equalization departments and boards of review.
   
   

6. State Assessor’s Board rules still provide that if an assessing unit receives an equalization factor of more than 1.10, the factor shall be sufficient cause for the board to determine if the certification of the assessor who prepared the assessment roll shall be revoked or suspended.

Starting in 1995, Proposal A required that a Taxable Value shall be calculated for each parcel of real property in the State of Michigan (including any real property assessed on the personal property roll). Please see STC Bulletin 1 of 2000 regarding the calculation of Capped Value and Taxable Value for personal property. Each assessor made the calculations for their own city or township for the first time in 1995. The formula for calculating 2005 Taxable Value is as follows (provided there was NOT a "transfer of ownership" on the property in 2004 which will be discussed later in this bulletin).

The following example shows the calculation of Taxable Value for a property which had no physical changes during 2004 (meaning that the property’s land size was still the same and the buildings on the property were neither destroyed in whole or in part, nor improved, etc.).

EXAMPLE: for a property whose market value increased by 2% for 2005 and there was not a "transfer of ownership" in 2004.

Given: 2004 SEV = 50,000

2004 Taxable Value = 49,000

2005 SEV = 50,000 + 2% = 51,000

2005 Taxable Value is the LOWER of:

1) The 2005 SEV of 51,000

OR

2) The 2005 Capped Value which is calculated as follows:

(2004 Taxable Value - Losses) X (The lower of 1.05 or the inflation rate multiplier of 1.023) + Additions

Since there are no additions or losses for this example, the formula for Capped Value is:

(49,000 - 0) X 1.023 + 0 for Additions

It can be further simplified as:

49,000 X 1.023

2005 Capped Value = $50,127

The 2005 Taxable Value is $50,127 (since this is lower than the 2005 SEV of $51,000.)

Important Reminder: The 2005 Capped Value formula no longer contains the Value Change Multiplier (V.C.M.). The Value Change Multiplier was removed from section 27a of the General Property Tax Act by PA 476 of 1996.

One result of the removal of the VCM from the Capped Value Formula is that, in certain circumstances, the Taxable Value will increase in a year in which the State Equalized Value (SEV) remains the same (or decreases).

EXAMPLE: The Taxable Value of a property in 2004 was $100,000 and its 2004 SEV was $105,000. The property had no additions or losses. If the SEV correctly stays the same in 2005, the Taxable Value must increase by the rate of inflation (1.023 expressed as a multiplier) up to $102,300 even though the 2005 SEV is still $105,000.

In the example above, the Assessor and the Board of Review ARE REQUIRED BY LAW to increase the Taxable Value for 2005 by the applicable rate of inflation. It would be illegal, in the example above, for the Assessor or the Board of Review to set the Taxable Value at any figure other than $102,300. This example applies to Taxable Value NOT Assessed Value. This example is not intended to demonstrate that it is proper to raise assessed value by the inflation rate.

The calculation of Capped Value and Taxable Value are covered in detail in STC Bulletin No. 3 of 1995, STC Bulletin No. 18 of 1995, STC Bulletin No. 2 of 1996, and STC Bulletin No.3 of 1997.

The growth in Taxable Value of transferred properties will then be capped again in the second year following the "transfer of ownership".

THE TAXABLE VALUES OF PROPERTIES WHICH HAD A "TRANSFER OF OWNERSHIP" IN 2004 ARE SUBJECT TO BEING UNCAPPED IN 2005.

The assessor and the Board of Review shall follow the same procedures for determining the Assessed Value of properties which have experienced a "transfer of ownership" as are used for properties which have not experienced a "transfer of ownership".

In the year following a sale which is determined to be a "transfer of ownership", the SEV of the property will not automatically or necessarily equal 1/2 of the sale price of the parcel. An individual sale price is not always a good indicator of the true cash value of the property due to a variety of reasons such as an uninformed buyer, an uninformed seller, insufficient marketing time, buyer and seller are relatives, and other possible reasons.

Section 27(5) of the General Property Tax Act states the following: "Beginning December 31, 1994, the purchase price paid in a transfer of property is not the presumptive true cash value of the property transferred. In determining the true cash value of transferred property, an assessing officer shall assess that property using the same valuation method used to value all other property of that same classification in the assessing jurisdiction."

Therefore, a board of review does NOT have the authority to raise an assessment to 50% of sale price where that is not uniform with the level of assessment of properties of similar value in the unit.

The law requires that a buyer of property shall report the "transfer of ownership" and the dollar amount (if any) of the "transfer of ownership" to the assessing officer on STC Form L-4260 (Property Transfer Affidavit). While this function is not the responsibility of boards of review, boards of review may get questions regarding the filing of STC Form L-4260.

Prior to 1995, a taxpayer could appeal the Assessed Value, the exempt status, and the classification of properties to the March Board of Review. The Board of Review’s authority as regards Assessed Value, exempt status, and the classification of properties has not changed.

STC Bulletin No. 14 of 1994 states that the assessment roll shall have a Board of Review column large enough to accommodate changes to the assessed value, the capped value, and the tentative taxable value. The changes to each of these must be recorded separately on the roll. This may be accomplished by placing an "A" behind a revised assessed value, a "C" behind a revised capped value, and a "T" behind a revised tentative taxable value.

STARTING IN 1995, A TAXPAYER COULD ALSO APPEAL THE TENTATIVE TAXABLE VALUE TO THE MARCH BOARD OF REVIEW.

The Board of Review’s authority regarding each of these items is discussed below.

1) Assessed Values

The "traditional" Assessed Value is still required by law to be established at 50% of true cash value. The State Constitution still requires the "traditional" Assessed Value to be uniform with the assessments of other similar properties.

According to the Michigan Supreme Court, a Board of Review may not make wholesale or across the board adjustments to assessments. A Board of Review must consider each parcel and act upon it individually. A Board of Review did not have and does not now have the authority to make changes to alter, evade or defeat an equalization factor assigned by the county or the state.

If the Board of Review changes an Assessed Value, it must also consider whether this change has caused the tentative Taxable Value to also change. This could happen because tentative Taxable Value is the LOWER of the Assessed Value (after applying the tentative equalization factor) and the Capped Value.

The minutes of the 2005 Board of Review shall include a copy of Form L-4035a whenever the Board of Review makes a change which causes the Taxable Value to change. The use of Form L-4035a is discussed in paragraph D of this bulletin.

EXAMPLE: Using the same information from the example earlier in this bulletin for a property which did not include any additions or losses and for which there was NOT a "transfer of ownership" in 2004.

Given: 2004 SEV = $50,000

2004 Taxable Value = $49,000

2005 Assessed Value = $51,000 (Tentative Equalization Factor is 1.0000)

2005 Capped Value = $50,127
2005 Tentative Taxable Value = $50,127

If the Board of Review changed the 2005 Assessed Value from $51,000 to $49,000, the Tentative Taxable Value would also change to $49,000 because $49,000 is lower than the 2005 Capped Value of $50,127.

This example demonstrates that a change by the Board of Review in Assessed Value from $51,000 to $49,000 has also caused the Tentative Taxable Value to change from $50,127 to $49,000.

A completed copy of Form L-4035a, as it applies to this example, is included with this bulletin.

2) Capped Values

STC Bulletin No. 14 of 1994 states that the assessment roll must contain the Capped Value for each parcel of real property. Please see STC Bulletin 1 of 2000 regarding the calculation of Capped Value for personal property. The 2005 formula for Capped Value is calculated as follows:

2005 Capped Value = (2004 Taxable Value - Losses) X (The lower of 1.05 or the Inflation Rate Multiplier of 1.023) + Additions

Two elements of the formula above are typically matters of record and do not normally require any judgement decisions by the Board of Review. Those elements are the "2004 Taxable Value" and the "Inflation Rate Multiplier" of 1.023. If correct figures have been used in the formula, these two elements CANNOT be changed by the Board of Review.

For 2005 Capped Value calculations, the Board of Review SHALL NOT use a number other than 1.023 for the Inflation Rate Multiplier. The Inflation Rate will be recalculated for each year.

The amount of the Losses and Additions used in the Capped Value formula, if improper, may be changed by the Board of Review. Please see STC Bulletin No. 3 of 1995, No. 18 of 1995 and No. 3 of 1997 which address the procedures required by law for determining the amount of Losses and Additions for calculation of the cap on Taxable Value. Only factual information should be used to amend the losses or additions in the Capped Value formula. Such amendments, if any, by a Board of Review, shall be in accordance with the law and STC directives.

Please note that some additions used in the Capped Value formula are at 50% of true cash value and some may not be.

Three types of ADDITIONS must be at 50% of true cash value and 5 types could be less than 50% of true cash value. See page 7 of STC Bulletin No. 18 of 1995 for a listing of these types and see pages 6 to 11 of STC Bulletin No. 3 of 1995 (as amended by STC Bulletin No. 3 of 1997) for the formulas to calculate the amount of each type.

IMPORTANT NOTE: The Supreme Court ruled in WPW Acquisition Company v City of Troy (No. 118750) that an increase in value attributable to an increase in a property’s occupancy rate is not a legal addition in the capped value formula.

There are 4 types of LOSSES. Three of the types of LOSSES are at the level of Taxable Value in the prior year and there are special provisions for the 4th type, contaminated properties. See pages 11 and 12 of STC Bulletin No. 3 of 1995 for the formulas to calculate the amount of LOSSES.

If the Board of Review changes the Capped Value by changing the amount of an Addition (assuming it is one of the Additions required to be at 50% of True Cash Value), it must also include the effects of this change in the Assessed Value. This would also cause tentative Taxable Value to change because tentative Taxable Value shall be the LOWER of the Assessed Value (after applying the tentative equalization factor) and the Capped Value.

If the Board of Review changes the amount of an ADDITION or a LOSS, it must include a completed copy of Form L-4035a with the Board of Review minutes.

EXAMPLE: In this example a garage was constructed in 2004 with a true cash value of $8,000

Given: 2004 Taxable Value = $49,000

2004 SEV = $50,000

2005 Assessed Value = $55,000 (Tentative Equalization Factor is 1.0000). This assessment includes a 2% increase over the previous year because the value of this property has risen and it also includes $4,000 for the garage.

2005 Capped Value = $54,127 (Calculated as follows:)

(2004 Taxable Value - Losses) X 1.023 + Additions

($49,000 - 0) X (1.023) + $4,000 = $54,127

2005 Tentative Taxable Value = $54,127

If the Board of Review lowered the amount of the Addition in the Capped Value formula for the garage by $500 (from $4,000 to $3,500), it would also be necessary to lower the assessed value by $500 down to $54,500.

A completed copy of Form L-4035a, as it applies to this example, is included with this bulletin.

3) Tentative Taxable Value

Taxable Value is now the basis for property tax levies in Michigan. The law requires that the assessment roll must show the Tentative Taxable Value for each parcel of property. Once the Capped Value and the Assessed Value (with its tentative equalization factor) are properly calculated, the Tentative Taxable Value is the lower of the two (assuming there has not been a "transfer of ownership" on the property in 2004).

THE BOARD OF REVIEW SHALL NOT RAISE OR LOWER TENTATIVE TAXABLE VALUE UNLESS IT HAS ALSO RAISED OR LOWERED THE ASSESSED VALUE AND/OR THE CAPPED VALUE. (An exception to this rule could occur if there was a "transfer of ownership" on a property in 2004 and the assessor had not uncapped the Taxable Value for 2005 or if the opposite occurred.) Again, if either the Capped Value or the Assessed Value is changed by the Board of Review, the Board shall also determine whether the Tentative Taxable Value must also change. This could happen because Tentative Taxable Value is the LOWER of the Assessed Value (after applying the tentative equalization factor) and the Capped Value (assuming there has not been a "transfer of ownership" in 2004). See example under "Assessed Value" in paragraph #1 above.

4) "TRANSFERS OF OWNERSHIP": 2004 "TRANSFERS OF OWNERSHIP" UNCAP 2005 TAXABLE VALUES

The assessor of each township and city is required by law to review all of the transfers and conveyances which occurred in the prior year and determine which of these transfers and conveyances are "transfers of ownership" (Please See STC Bulletin No. 16 of 1995 (as amended by STC Bulletin No. 3 of 1997 and STC Bulletin No. 10 of 2000) for detailed information about "transfers of ownership").

If a particular 2004 transfer or conveyance is a "transfer of ownership", the assessor shall uncap the Taxable Value of that property in 2005. THIS MEANS THAT THE 2005 TAXABLE VALUE OF THIS PROPERTY SHALL BE THE SAME AS ITS 2005 SEV. (The Taxable Value of uncapped properties shall then be capped again in the second year following the "transfer of ownership", until the year following the next "transfer of ownership"). If a particular 2004 transfer or conveyance is NOT a "transfer of ownership", the Taxable Value of that property continues to be capped in 2005.

This determination by the assessor that a particular transfer or conveyance is a "transfer of ownership" and that the property’s Taxable Value should be uncapped is subject to review by the March Board of Review either on the Board’s own initiative or at the request of a property owner.

5) Property Tax Exemptions

Property tax exemptions are still to be granted only according to authorizing provisions of the law and the Constitution. Court cases pertinent to property tax exemptions have interpreted the Constitution and the law and some cases are precedential.

Generally, it still holds true that the Constitution requires a NARROW construction of exemptions. In order to qualify for exemption, a property must have the exact qualifications required by the specific authorizing statute.

Please note paragraphs C and F below which address the exemptions for homeowner’s principal residences, qualified agricultural properties and poverty exemptions.

6) Assessment Roll Property Classifications

Property classifications must still be made in accordance with section 211.34c of the Michigan Compiled Laws (Please See STC Bulletin No. 9 of 1995 (as amended by STC Bulletin No. 3 of 1997) for detailed information about property classification). See also STC Bulletins 8 of 2002 and 1 of 2003 regarding the classification of buildings and other improvements on leased land. When considering a property’s classification, Boards of Review must not be influenced by the effect that a particular classification might have on that property’s status as a homeowner’s principal residence or a qualified agricultural property. For example, a board of review has no authority to grant an agricultural classification just because it would qualify a property for exemption from the 18 mills of local school operating tax, as a qualified agricultural property.

MCL 211.34c, AS AMENDED BY PA 476 OF 1996, provides that an owner or assessor who is not satisfied with the decision of the March Board of Review regarding a property’s classification, may file a petition with the STC by June 30 of the current year.

It is necessary that each Board of Review notify a petitioning taxpayer of its decision regarding a classification matter.

It is also necessary to remember that the zoning of a particular property does not dictate the classification of a property for assessment purposes, though it may be an influencing factor.

Starting in 1994, properties which qualified as "homesteads" (now called homeowner’s principal residence) or "qualified agricultural property" were exempt from some school operating taxes (usually 18 mills). This is still true for 2005. This exemption does not apply to Taxable Value but applies to millages only.

THE MARCH BOARD OF REVIEW HAS NO AUTHORITY TO CONSIDER OR ACT UPON PROTESTS OR APPEALS OF "HOMEOWER’S PRINCIPAL RESIDENCE" EXEMPTIONS FOR 1994 OR ANY YEAR THEREAFTER, NO MATTER HOW THEY ARE CLASSIFIED UNDER MCL 211.34c. If the assessor denies a homeowner’s principal residence exemption, the owner may appeal to the Michigan Tax Tribunal within 35 days after the notice of denial, NOT TO THE MARCH BOARD OF REVIEW.

2) Qualified Agricultural Property Exemption

If an assessor believes that a property for which a qualified agricultural property exemption has been granted in 2004 will not be qualified agricultural property in 2005, the assessor may deny or modify the exemption. If so, the assessor must notify the owner in writing and mail the notice to the owner not less than 10 days before the second meeting of the Board of Review. A taxpayer may then appeal the assessor’s determination to the March Board of Review. The Board of Review’s decision may then be appealed to the Michigan Tax Tribunal. (Please see STC Bulletin No. 4 of 1997 (as amended by STC Bulletin No. 8 of 2001) for detailed information about the Qualified Agricultural Property exemption.)

Properties which meet the requirements of the qualified agricultural property exemption as of May 1, 2005 shall be exempted by the assessor from the 18 mills starting with 2005 tax bills. If the assessor denies a 2005 exemption because the property does not qualify as of May 1, 2005, the owner may appeal that denial to the JULY OR DECEMBER BOARD OF REVIEW. An owner of qualified agricultural property on May 1, 2004 or on May 1, 2005 that does not receive the exemption on the 2004 or 2005 tax roll may appeal to the 2005 JULY OR DECEMBER BOARD OF REVIEW.

Attached to this bulletin is a copy of STC form L-4035 (Petition to Board of Review) which is recommended by the State Tax Commission for use by the Board of Review. A description of the use of this form can be found in Part II of this bulletin under the heading "Board of Review Minutes". This form has changed slightly from 2004.

Also attached to this bulletin is a copy of form L-4035a. The minutes of the Board of Review shall include a completed copy of form L-4035a whenever the Board of Review makes a change which causes Taxable Value to change. The following are changes which could cause Taxable Value to change:

1) A change in the amount of a LOSS (used in the Capped Value formula).

2) A change in the amount of an ADDITION (used in the Capped Value formula).

3) A change in the amount of the 2005 Assessed Value.

MCL 211.30c requires that when the March Board of Review or the Michigan Tax Tribunal reduces the assessed value or taxable value of a property, that reduced amount must be used as the BASIS for calculating the assessment in the immediately succeeding year.

IMPORTANT NOTE: This only applies to MICHIGAN TAX TRIBUNAL CHANGES when the MTT hearing is held in the same calendar year as the year of the assessment being appealed. Therefore, if the MTT hearing for a 2004 assessment appeal isn’t held until 2005, the resulting assessment does not have to be used as the basis for the 2005 assessment.

Boards of review are cautioned that the "BASIS" for an assessment does not necessarily become the assessment. The dictionary defines basis as the base, foundation, or chief supporting factor of anything. Assessments still have to be at 50% of True Cash Value and uniform.

Attached to this bulletin is a copy of a letter opinion by Deputy Attorney General Stanley D. Steinborn, which indicates the importance of achieving fifty percent of true cash value and uniformity when annually establishing assessments, notwithstanding the provisions of MCL 211.30c as added by 1994 PA 297, and amended by 1994 PA 415 and 1996 PA 476.

This letter opinion stresses the importance of "harmonizing" the requirements of MCL 211.30c with the requirements of MCL 211.27a(1) and MCL 211.24(1).

MCL 211.27a(1) requires that "property shall be assessed at 50% of its true cash value."

MCL 211.24(1) requires an assessor to annually "estimate, according to his or her best information and judgment, the true cash value and assessed value" of each parcel of real and personal property.

Please note that the fact that an assessment reduced by a Board of Review may become the "basis" of the next year’s assessment is not, in and of itself, a legitimate reason for a Board of Review to reduce an assessment.

Public Act 390 of 1994 makes significant changes to the poverty exemption found in section 211.7u of the Michigan Compiled Laws. Please see STC Bulletins No. 5 of 1995 and No. 12 of 1998 for details.

G) Industrial Facilities Tax Roll (IFT) - "New" Certificates

A parcel of property holding a "New" Industrial Facilities Exemption Certificate will have two assessments. The land (and any improvements not covered by tax abatement exemption) will be assessed on the regular (ad valorem) assessment roll that the assessor has turned over to the March Board of Review. The building, land improvements and personal property (covered by the exemption certificate) will have an assessment on the Industrial Facilities Tax Roll.

P.A. 1 of 1996 requires the assessor to calculate a Capped Value and a Taxable Value for the building and land improvements of a parcel of real property holding a "New" Industrial Facilities Tax Exemption Certificate.

Taxes on a property holding a "New" Industrial Facilities Tax Exemption (IFT) Certificate shall be levied against the Taxable Value of the property, NOT the (equivalent) State Equalized Value. The Taxable Value of property which has a "New" IFT Exemption Certificate is calculated the same way that Taxable Value is calculated for the non IFT, ad valorem assessment roll.

The property’s land assessment on the ad valorem roll may be adjusted by the March Board of Review. The IFT roll assessment of a "New" Industrial Facilities Tax Certificate may also be adjusted by the March Board of Review.

A parcel of property holding a "Rehabilitation" Industrial Facilities Exemption Certificate will have two assessments. The land (and any improvements not covered by tax abatement exemption) will be assessed on the regular (ad valorem) assessment roll that the assessor has turned over to the March Board of Review. The building, land improvements and personal property (covered by the exemption certificate) will have an assessment on the Industrial Facilities Tax Roll. The taxes on properties holding a "Rehabilitation" or "Replacement" certificate shall be levied against Taxable Value.

The Taxable Value of a property on the IFT roll with a "Rehabilitation" or "Replacement" certificate is the amount of the Taxable Value of the real and/or personal property for the tax year immediately preceding the effective date of the IFT exemption certificate. That amount is "frozen" until the exemption certificate expires.

The Taxable Value of a property on the IFT roll covered by a "Rehabilitation" or "Replacement" certificate which began PRIOR TO 1995 will still be the same as the "frozen" SEV for the property until the exemption certificate expires. The Taxable Value of a property covered by a "Rehabilitation" or "Replacement" certificate which BEGAN IN 1995 OR AFTER will be the same as the "frozen" TAXABLE VALUE for the property until the exemption certificate expires.

The property’s land assessment on the ad valorem roll may be adjusted by the March Board of Review. The IFT Roll assessment of a property with a "Rehabilitation" certificate or "Replacement" certificate CANNOT have its assessment altered by a March Board of Review during the life of the certificate.

I. Downtown Development Authorities, Tax Increment Finance Authorities, and Local Development Finance Authorities

There are no separate assessment rolls for the authorities listed above. The March Board of Review has NO authority regarding initial assessments made in a PRIOR year for these authorities.

The March Board of Review has authority to consider and/or alter the assessed and taxable values for the CURRENT year for properties within one of the above districts.

Three, six, or nine electors of the township may be appointed by the township board. 211.28(1) and (2) MCL.

At least 2/3 of the members shall be property taxpayers of the township. If 6 or 9 are appointed, they shall be divided into committees of 3 for the purpose of hearing and deciding. Two of the 3 members of a board of review committee shall constitute a quorum for the transaction of the business of the committee.

Public Act No. 292 of 1993 states that a spouse, mother, father, sister, brother, son or daughter including an adopted child, of the assessor is not eligible to serve on the Board of Review or to fill any vacancy on the board.

The size, composition, and manner of appointment of the board of review of a city may be prescribed by the charter of a city. In the absence of or in place of such a charter provision, the governing body of the city, by ordinance, may establish the city board of review in the same manner and for the same purposes as for township boards of review.

FIRST MEETING

The board of review shall meet on the Tuesday immediately following the first Monday in March to receive the assessment roll for the current year and proceed to examine same. 211.29(1) MCL.

The board on its own motion or for cause shown by any person shall change and correct the roll to insure that the assessments in the roll comply with this act (Act 206, P.A. 1893, the General Property Tax Act). 211.29(2) MCL.

The board shall review the roll according to facts existing on tax day. 211.29(3) MCL.

The board shall pass on each valuation and each interest and enter the valuation of each, as fixed by the board, in a separate column. 211.29(4) MCL. The board of review is authorized to correct the assessed value and/or the tentative taxable value and/or the property classification and/or the qualified agricultural property exemption.

All the statements (personal and real property statements) required to be made and received by the supervisor or assessor shall be filed by same and shall be presented to the board of review for the use of said board. 211.23 MCL. (Statements are confidential with penalties for divulging information.)

The business which the board may perform shall be conducted at an open public meeting as provided in Act 267, P.A. 1976, Open Meetings Act.

Notice of the meeting of the board of review shall be given at least one week before in a generally circulated newspaper serving the area in 3 successive issues. If a newspaper is not available, the notice shall be posted in 5 conspicuous places in the township. (211.29(6) MCL) (Note: Sec. 211.34a, M.C.L. requires that the notice of board of review meetings shall give the tentative ratios and estimated multipliers for each class of property in the assessing unit. Sec. 211.30(7) states that if a township or city authorized a resident taxpayer to file a board of review protest by letter, the notice or publication of the board of review meeting must include a statement notifying taxpayers of this option.)

A notice of any change by the board of review shall be given to the person chargeable with the assessment in such manner as will assure that the person has an opportunity to attend the second meeting of the board of review. 211.29(7) MCL.

SECOND MEETING

The board of review shall meet on the second Monday in March starting not earlier than 9 a.m. and not later than 3 p.m. to continue in session during the day for not less than 6 hours. The governing body of a city or township may authorize an alternative starting date for the second meeting of the Board of Review. The alternative starting date can be either the Tuesday or the Wednesday following the second Monday in March. The board shall also meet for not less than 6 hours during the remainder of that week.

The board shall hold at least 3 hours of its required sessions after 6 P.M.

Persons or their agents who have appeared to file a protest at a scheduled meeting or at a scheduled appointment shall be afforded an opportunity to be heard. 211.30 MCL.

The board of review shall listen to protests and correct the assessed value or the tentative taxable value as will make the valuation just and equal.

The board may examine under oath the person making the application, or any other person, touching the matter. Any member of the board may administer the oath.

The board of review has full authority, upon its own motion, to change assessments, to add to the roll omitted property which is liable to assessment if the person who is assessed shall be promptly notified and granted an opportunity to object.

Every person who makes a request, protest or application to the board of review for the correction of the assessed value or the tentative taxable value of the person’s property shall be notified in writing of the board of review’s action, not later than the first Monday in June. The notice shall set forth the state equalized valuation or the tentative taxable value of the property, information regarding the right of appeal to the Michigan Tax Tribunal, the address of the Michigan Tax Tribunal and final date for appealing to the Michigan Tax Tribunal.
211.30(4) MCL.

A non-resident taxpayer may file a protest in writing and shall not be required to make a personal appearance. The governing body of a township or city may by ordinance or resolution permit resident taxpayers to file a protest to the board of review in writing without personal appearance. If an ordinance or resolution is adopted to permit residents to file protests in writing, this fact must be contained in the assessment notice required by Sec. 211.24c and on each notice or publication of the meeting of the board of review as required by MCL 211.30(7) MCL.

After the board of review completes its review of the assessment roll, a majority of the entire board membership shall indorse a statement that the roll is the assessment roll of the township for the year in which it was prepared and approved by the board of review. 211.30(5) MCL. Upon completion and the indorsement of the roll, it shall be presumed by all courts to be valid and shall not be set aside except for causes hereinafter mentioned. The omission of the indorsement shall not affect the validity of such roll. 211.31 MCL.

If a quorum of the board of review or a quorum of a committee of the board is not present at any meeting, the supervisor or any member present shall notify the absent member to attend at once. The member so notified shall attend without delay.

If the second meeting is not held at the time fixed, then the board will meet on the next Monday and proceed as though the meeting had been timely held. 211.32 MCL.

The supervisor shall be secretary of the full board of review and keep a record of proceedings and changes made in the roll and file the record with the township or city clerk. If the supervisor is absent, the board shall appoint one of its members to serve as secretary.

The state tax commission may prescribe the form of the record when necessary. 211.33 MCL.

The review of assessments by the boards of review shall be completed on or before the first Monday in April. 211.30a MCL.

Note: References on this page to the board of review will apply to the committees of 3 if the board consists of 6 or 9 members.

BOARD OF REVIEW ACTIONS-PERMITTED AND PROHIBITED

If the board of review consists of 6 or 9 members in townships or cities, the three member committees originally formed must remain intact. There shall be no transfer of a member or members to another committee. Each committee of three members may hear protests and decide issues.

At the first meeting the full board of review shall meet for the purpose of reviewing the roll. The board of review is not required to receive and hear taxpayers at this meeting; however, it may receive and consider written protests for assessment change. The public shall be permitted to be present as provided in the open meetings act.

The board of review or the committees of 3 must pass on each valuation (both assessed value and tentative taxable value) and each interest. Across the board adjustments by the board have been rejected by the Michigan Supreme Court in ruling in Hayes v City of Jackson, 267 Mich 523 and Negaunee v State Tax Commission, 337 Mich 169.

The board of review shall not reject or prepare an assessment roll but must consider only the assessment roll prepared by the assessor.

If the board of review receives an appeal from the classification of a parcel of property, it should give written notice of its action to the person who filed the appeal in order that the person has time to protest to the State Tax Commission. A classification appeal must be filed with the State Tax Commission no later than June 30 of the current year.

BOARD OF REVIEW MINUTES

A. Minutes should include the following:

1. Each protesting property owner or agent shall be required to file a completed STC form L-4035 with the Board of Review for each disputed assessed value and/or tentative taxable valuation and/or disputed classification and/or qualified agricultural property exemption.

2. The action and vote of the Board of Review shall be noted directly on the form L-4035 in the space provided for BOARD OF REVIEW USE ONLY.

3. The minutes of the Board of Review shall also include a completed copy of form L-4035a whenever the Board of Review makes a change which causes Taxable Value to change. The following are changes which could cause Taxable Value to change:

1. A change in the amount of a LOSS.
2. A change in the amount of an ADDITION.
3. A change in the amount of the 2005 Assessed Value.

4. The State Tax Commission form L-4035 (and form L-4035a when needed) provide the minimum acceptable format for Board of Review records. Boards of Review using more extensive forms, that meet all the requirements indicated in this text, may continue to do so.

5. State Tax Commission form L-4035 (and form L-4035a when needed) are to be incorporated as an integral part of the Board of Review minutes. Each assessed value and tentative taxable value and classification and qualified agricultural property exemption which is protested by a taxpayer or agent to the Board of Review, or altered by the Board of Review, shall be documented by a completed form L-4035 which records the action and vote of the Board (and by form
   L-4035a when needed).

a. Each STC form L-4035, whether or not a change is made by the Board of Review, shall be incorporated into the minutes by the Board of Review by notation of the petition number as recorded on each form L-4035. This same petition number shall also be recorded on each completed form
L-4035a.

b. Each form L-4035 and form L-4035a shall be attached to and retained with the minutes to provide the necessary historic record.

6. Additionally the minutes shall include references to:

a. Place, day, and time of meeting.

b. Members present and members absent; correspondence or telephone calls, made or received, and discussion recorded regarding each petition.

c. Actual hours in session should be recorded daily, and time of daily adjournments recorded.

d. Date and time of closing of the final annual session should be recorded.

7. A written record of the annual Board of Review proceedings is necessary because:

a. Petitions may be filed by taxpayers with the Tax Tribunal regarding assessed value, tentative taxable value, or exemption issued or with the Tax Commission regarding non-valuation classification disputes.

b. A complete record eliminates misunderstandings and provides a year to year record.

STATUTORY REFERENCES

211.2 Michigan Compiled Laws (MCL) Tax Day, preparation of assessment roll, examination of properties

The taxable status of persons and real and personal property for a tax year shall be determined as of each December 31 of the immediately preceding year, which is considered the tax day, any provisions in the charter of any city or village to the contrary notwithstanding. An assessing officer is not restricted to any particular period in the preparation of the assessment roll but may survey, examine, or review property at any time before or after the tax day. (This section last amended 2002, Act 620.)

(2) Notwithstanding any provision to the contrary in the act of incorporation or charter of a village, an assessment for village taxes shall be identical to the assessment made by the applicable assessing officer of the township in which the village is located, and tax statements shall set forth clearly the state equalized value and the taxable value of the individual properties in the village upon which authorized millages are levied.

NOTE: Act 288, PA 1966 amended Sec. 10 of the General Property Tax Act to provide that assessments for village taxes shall be identical to assessments made by the supervisor of the township in which the village is located. Thus the assessments made by the township supervisor automatically become the village assessments. (The village boards of review were abolished by Act 84 of 1967. This section last amended 1994, Act 415.)

Sec. 10a. All property assessment rolls and property appraisal cards shall be available for inspection and copying during the customary business hours. (This section added 1973, Act 177, Immediate Effect December 28, 1973.)

Sec. 23. All the statements herein required to be made and received by the supervisor or assessor shall be filed by him, and shall be presented to the board of review hereinafter provided for, or provided for in any act incorporating any village or city, for the use of said board, and after the assessment is reviewed and completed by such board of review, all of the statements shall be deposited in the office of the township or city clerk, and shall be preserved until after the next assessment is made and completed, after which they may be destroyed upon the order of the township board or city or village council, but no such statement shall be used for any other purpose except the making of an assessment for taxes as herein provided, or for enforcing the provisions of this act, and any officer or person who shall make or allow to be made willfully or knowingly, any other or unlawful use of any such statement, shall be liable to the person making such statement for all damages resulting from such unauthorized or unlawful use of such statement. All the statements received by the supervisor or assessor shall be made available to the county tax or equalization department mandatorily established under section 34 of this act and use of such statements by such county tax or equalization department shall be deemed a use for the purpose of enforcing the provisions of this act. (This section last amended 1964, Act 275, Effective August 28, 1964.)

Sec. 24c. (1) The assessor shall give to each owner or person or persons listed on the assessment roll of the property a notice by first-class mail of an increase in the tentative state equalized valuation or the tentative taxable value for the year. The notice shall specify each parcel of property, the tentative taxable value for the current year, and the taxable value for the immediately preceding year. The notice shall also specify the time and place of the meeting of the board of review. The notice shall also specify the difference between the property’s tentative taxable value in the current year and the property’s taxable value in the immediately preceding year.

(2) The notice shall include, in addition to the information required by subsection (1), all of the following:

(a) The state equalized valuation for the immediately preceding year.

(b) The tentative state equalized valuation for the current year.

(c) The net change between the tentative state equalized valuation for the current year and the state equalized valuation for the immediately preceding year.

(d) The classification of the property as defined by section 34c.

(e) The inflation rate for the immediately preceding year as defined in section 34d.

(f) A statement provided by the state tax commission explaining the relationship between state equalized valuation and taxable value. If the assessor believes that a transfer of ownership has occurred in the immediately preceding year, the statement shall state that the ownership was transferred and that the taxable value of that property is the same as the state equalized valuation of that property.

(3) When required by the income tax act of 1967, 1967 PA 281, MCL 206.1 to 206.532, the assessment notice shall include or be accompanied by information or forms prescribed by the income tax act of 1967, 1967 PA 281, MCL 206.1 to 206.532.

(4) The assessment notice shall be addressed to the owner according to the records of the assessor and mailed not less than 10 days before the meeting of the board of review. The failure to send or receive an assessment notice does not invalidate an assessment roll or an assessment on that property.

(5) The tentative state equalized valuation shall be calculated by multiplying the assessment by the tentative equalized valuation multiplier. If the assessor has made assessment adjustments that would have changed the tentative multiplier, the assessor may recalculate the multiplier for use in the notice.

(6) The state tax commission shall prepare a model assessment notice form that shall be made available to local units of government.

(7) The assessment notice under subsection (1) shall include the following statement:

"If you purchased your principal residence after May 1 last year, to claim the principal residence exemption, if you have not already done so, you are required to file an affidavit before May 1.".

(8) For taxes levied after December 31, 2003, the assessment notice under subsection (1) shall separately state the state equalized valuation for any leasehold improvements.

(This section last amended 2003, Act 247.)

Sec. 28. (1) Those electors of the township appointed by the township board shall constitute a board of review for the township. At least 2/3 of the members shall be property taxpayers of the township. Members appointed to the board of review shall serve for terms of 2 years beginning at noon on January 1 of each odd-numbered year. Each member of the board of review shall qualify by taking the constitutional oath of office within 10 days after appointment. The township board may fill any vacancy that occurs in the membership of the board of review. A member of the township board is not eligible to serve on the board or to fill any vacancy. A spouse, mother, father, sister, brother, son, or daughter, including an adopted child, of the assessor is not eligible to serve on the board or to fill any vacancy. A majority of the board of review constitutes a quorum for the transaction of business, but a lesser number may adjourn and a majority vote of those present shall decide all questions. At least 2 members of a 3-member board of review shall be present to conduct any business or hearings of the board of review.

(2) The township board may appoint 3, 6, or 9 electors of the township, who shall constitute a board of review for the township. If 6 or 9 members are appointed as provided in this subsection, the membership of the board of review shall be divided into board of review committees consisting of 3 members each for the purpose of hearing and deciding issues protested pursuant to section 30. Two of the 3 members of a board of review committee constitutes a quorum for the transaction of the business of the committee. All meetings of the members of the board of review and committee shall be held during the same hours of the same day and at the same location. The size, composition, and manner of appointment of the board of review of a city may be prescribed by the charter of a city. In the absence of or in place of a charter provision, the governing body of the city, by ordinance, may establish the city board of review in the same manner and for the same purposes as provided by this subsection for townships. A majority of the entire board of review membership shall indorse the assessment roll as provided in section 30. The duties and responsibilities of the board contained in section 29 shall be carried out by the entire membership of the board of review and a majority of the membership constitutes a quorum for those purposes. (This section last amended 1993, Act 292.)

Sec. 29. (1) On the Tuesday immediately following the first Monday in March, the board of review of each township shall meet at the office of the supervisor, at which time the supervisor shall submit to the board the assessment roll for the current year, as prepared by the supervisor, and the board shall proceed to examine and review the assessment roll.

(2) During that day, and the day following, if necessary, the board, of its own motion, or on sufficient cause being shown by a person, shall add to the roll the names of persons, the value of personal property, and the description and value of real property liable to assessment in the township, omitted from the assessment roll. The board shall correct errors in the names of persons, in the descriptions of property upon the roll, and in the assessment and valuation of property. The board shall do whatever else is necessary to make the roll comply with this act.

(3) The roll shall be reviewed according to the facts existing on the tax day. The board shall not add to the roll property not subject to taxation on the tax day, and the board shall not remove from the roll property subject to taxation on that day regardless of a change in the taxable status of the property since that day.

(4) The board shall pass upon each valuation and each interest, and shall enter the valuation of each, as fixed by the board, in a separate column.

(5) The roll as prepared by the supervisor shall stand as approved and adopted as the act of the board of review, except as changed by a vote of the board. If for any cause a quorum does not assemble during the days above mentioned, the roll as prepared by the supervisor shall stand as if approved by the board of review.

(6) The business which the board may perform shall be conducted at a public meeting of the board held in compliance with Act No. 267 of the Public Acts of 1976, being sections 15.261 to 15.275 of the Michigan Compiled Laws. Public notice of the time, date, and place of the meeting shall be given in the manner required by Act No. 267 of the Public Acts of 1976. Notice of the date, time, and place of the meeting of the board of review shall be given at least 1 week before the meeting by publication in a generally circulated newspaper serving the area. The notice shall appear in 3 successive issues of the newspaper where available; otherwise, by the posting of the notice in 5 conspicuous places in the township. (Note: Sec. 211.34a, MCL requires that the notice of board of review meetings shall give the tentative ratios and estimated multipliers for each class of property in the assessing unit. Sec. 211.30(7) states that if a township or city authorizes a resident taxpayer to file a board of review protest by letter, the notice or publication of the board of review meeting must include a statement notifying taxpayers of this option.)

(7) When the board of review makes a change in the assessment of property or adds property to the assessment roll, the person chargeable with the assessment shall be promptly notified in such a manner as will assure the person opportunity to attend the second meeting of the board of review provided in section 30. (This section last amended 1978, Act 124, Effective April 25, 1978.)

Sec. 30. (1) Except as otherwise provided in subsection (2), the board of review shall meet on the second Monday in March.

(2) The governing body of the city or township may authorize, by adoption of an ordinance or resolution, alternative starting dates in March when the board of review shall initially meet, which alternative starting dates shall be the Tuesday or Wednesday following the second Monday in March.

(3) The first meeting of the board of review shall start not earlier than 9 a.m. and not later than 3 p.m. and last for not less than 6 hours. The board of review shall also meet for not less than 6 hours during the remainder of that week. Persons or their agents who have appeared to file a protest before the board of review at a scheduled meeting or at a scheduled appointment shall be afforded an opportunity to be heard by the board of review. The board of review shall schedule a final meeting after the board of review makes a change in the assessed value or tentative taxable value of property or adds property to the assessment roll. The board of review shall hold at least 3 hours of its required sessions for review of assessment rolls during the week of the second Monday in March after 6 p.m.

(4) A board of review shall meet a total of at least 12 hours during the week beginning the second Monday in March to hear protests. At the request of a person whose property is assessed on the assessment roll or of his or her agent, and if sufficient cause is shown, the board of review shall correct the assessed value or tentative taxable value of the property in a manner that will make the valuation of the property relatively just and proper under this act. The board of review may examine under oath the person making the application, or any other person concerning the matter. A member of the board of review may administer the oath. A nonresident taxpayer may file his or her appearance, protest, and papers in support of the protest by letter, and his or her personal appearance is not required. The board of review, on its own motion, may change assessed values or tentative taxable values or add to the roll property omitted from the roll that is liable to assessment if the person who is assessed for the altered valuation or for the omitted property is promptly notified and granted an opportunity to file objections to the change at the meeting or at a subsequent meeting. An objection to a change in assessed value or tentative taxable value or to the addition of property to the tax roll shall be promptly heard and determined. Each person who makes a request, protest, or application to the board of review for the correction of the assessed value or tentative taxable value of the person’s property shall be notified in writing, not later than the first Monday in June, of the board of review’s action on the request, protest, or application, of the state equalized valuation or tentative taxable value of the property, and of information regarding the right of further appeal to the tax tribunal. Information regarding the right of further appeal to the tax tribunal shall include, but is not limited to, a statement of the right to appeal to the tax tribunal, the address of the tax tribunal, and the final date for filing an appeal with the tax tribunal.

(5) After the board of review completes the review of the assessment roll, a majority of the board of review shall indorse the roll and sign a statement to the effect that the roll is the assessment roll for the year in which it has been prepared and approved by the board of review.

(6) The completed assessment roll shall be delivered by the appropriate assessing officer to the county equalization director not later than the tenth day after the adjournment of the board of review, or the Wednesday following the first Monday in April, whichever date occurs first.

(7) The governing body of the township or city may authorize, by adoption of an ordinance or resolution, a resident taxpayer to file his or her protest before the board of review by letter without a personal appearance by the taxpayer or his or her agent. If that ordinance or resolution is adopted, the township or city shall include a statement notifying taxpayers of this option in each assessment notice under section 24c and on each notice or publication of the meeting of the board of review. (This section last amended 2003, Act 194, effective November 10, 2003.)

Sec. 30a. In the year 1950 and thereafter the review of assessments by boards of review in all cities and townships shall be completed on or before the first Monday in April, any provisions of the charter of any city or township to the contrary notwithstanding: Provided, that the legislative body of any city or township, in order to comply with the provisions hereof, may, by ordinance, fix the period or periods for preparing the budget and for making, completing and reviewing the assessment roll, any provisions of the charter of such city or township or any law to the contrary notwithstanding. (This section added 1949, Act 285, Effective September 23, 1949.)

Sec. 30c. (1) If a taxpayer has the assessed value or taxable value reduced on his or her property as a result of a protest to the board of review under section 30, the assessor shall use that reduced amount as the basis for calculating the assessment in the immediately succeeding year. However, the taxable value of that property in a tax year immediately succeeding a transfer of ownership of that property is that property’s state equalized valuation in the year following the transfer as calculated under this section.

(2) If a taxpayer appears before the tax tribunal during the same tax year for which the state equalized valuation, assessed value, or taxable value is appealed and has the state equalized valuation, assessed value, or taxable value of his or her property reduced pursuant to a final order of the tax tribunal, the assessor shall use the reduced state equalized valuation, assessed value, or taxable value as the basis for calculating the assessment in the immediately succeeding year. However, the taxable value of that property in a tax year immediately succeeding a transfer of ownership of that property is that property’s state equalized valuation in the year following the transfer as calculated under this section.

(3) This section applies to an assessment established for taxes levied after January 1, 1994. This section does not apply to a change in assessment due to a protest regarding a claim of exemption. (This section last amended 1996, Act 476.)

Sec. 31. Upon the completion of said roll and its endorsement in manner aforesaid, the same shall be conclusively presumed by all courts and tribunals to be valid, and shall not be set aside except for causes hereinafter mentioned. The omission of such indorsement shall not affect the validity of such roll.

Sec. 32. If from any cause a quorum shall not be present at any meeting of the board of review, it shall be the duty of the supervisor, or, in his absence, any other member of the board present, to notify each absent member to attend at once, and it shall be the duty of the member so notified to attend without delay. If from any cause the second meeting of such board of review herein provided for is not held at the time fixed therefor, then and in that case it shall meet on the next Monday thereafter, and proceed in the same manner and with like powers as if such meeting had been held as herein before provided.

Sec. 33. The supervisor shall be the secretary of said board of review and shall keep a record of the proceedings of the board and of all the changes made in such assessment roll, and shall file the same with the township or city clerk with the statements made by persons assessed. In the absence of the supervisor, the board shall appoint 1 of its members to serve as secretary. The state tax commission may prescribe the form of the record whenever deemed necessary. (This section last amended 1964, Act 275, Effective August 28, 1964.)

Sec. 34a. (1) The equalization director of each county shall prepare a tabular statement each year, by the several cities and townships of the county, showing the tentative recommended equalization ratios and estimated multipliers necessary to compute individual state equalized valuation of real property and of personal property. The county shall publish the tabulation in a newspaper of general circulation within the county on or before the third Monday in February each year and furnish a copy to each assessor and to each of the boards of review in the county and to the state tax commission. All notices of meetings of the boards of review shall give the tentative ratios and estimated multipliers pertaining to their jurisdiction. The tentative recommended equalization ratios and multiplying figures shall not prejudice the equalization procedures of the county board of commissioners or the state tax commission. (Subsection 2 of 34a not relevant-omitted.)

Sec. 34c. (1) Not later than the first Monday in March in each year, the assessor shall classify every item of assessable property according to the definitions contained in this section. Following the March board of review, the assessor shall tabulate the total number of items and the valuations as approved by the board of review for each classification and for the totals of real and personal property in the local tax collecting unit. The assessor shall transmit to the county equalization department and to the state tax commission the tabulation of assessed valuations and other statistical information the state tax commission considers necessary to meet the requirements of this act and 1911 PA 44, MCL 209.1 to 209.8.

(2) The classifications of assessable real property are described as follows:

(a) Agricultural real property includes parcels used partially or wholly for agricultural operations, with or without buildings, and parcels assessed to the department of natural resources and valued by the state tax commission. For taxes levied after December 31, 2002, agricultural real property includes buildings on leased land used for agricultural operations. As used in this subdivision, "agricultural operations" means the following:

(i) Farming in all its branches, including cultivating soil.

(ii) Growing and harvesting any agricultural, horticultural, or floricultural commodity.

(iii) Dairying.

(iv) Raising livestock, bees, fish, fur-bearing animals, or poultry.

(v) Turf and tree farming.

(vi) Performing any practices on a farm incident to, or in conjunction with, farming operations. A commercial storage, processing, distribution, marketing, or shipping operation is not part of agricultural operations.

(b) Commercial real property includes the following:

(i) Platted or unplatted parcels used for commercial purposes, whether wholesale, retail, or service, with or without buildings.

1. Parcels used by fraternal society.

(iii) Parcels used as golf courses, boat clubs, ski areas, or apartment buildings with more than 4 units.

(iv) For taxes levied after December 31, 2002, buildings on leased land used for commercial purposes.

(c) Developmental real property includes parcels containing more than 5 acres without buildings, or more than 15 acres with a market value in excess of its value in use. Developmental real property may include farm land or open space land adjacent to a population center, or farm land subject to several competing valuation influence.

(d) Industrial real property includes the following:

(i) Platted or unplatted parcels used for manufacturing and processing purposes, with or without buildings.

(ii) Parcels used for utilities sites for generating plants, pumping stations, switches, substations, compressing stations, warehouses, rights-of-way, flowage land, and storage areas.

(iii) Parcels used for removal or processing of gravel, stone, or mineral ores, whether valued by the local assessor or by the state geologist.

(iv) For taxes levied after December 31, 2002, buildings on leased land used for industrial purposes.

(v) For taxes levied after December 31, 2002, buildings on leased land for utility purposes.

(e) Residential real property includes the following:

(i) Platted or unplatted parcels, with or without buildings, and condominium apartments located within or outside a village or city, which are used for, or probably will be used for, residential purposes.

(ii) Parcels that are used for, or probably will be used for, recreational purposes, such as lake lots and hunting lands, located in an area used predominantly for recreational purposes.

(iii) For taxes levied after December 31, 2002, a home, cottage, or cabin on leased land, and a mobile home that would be assessable as real property under section 2a except that the land on which it is located is not assessable because the land is exempt.

(f) Timber-cutover real property includes parcels that are stocked with forest products of merchantable type and size, cutover forest land with little or no merchantable products, and marsh lands or other barren land. However, when a typical purchase of this type of land is for residential or recreational uses, the classification shall be changed to residential.

(3) The classifications of assessable personal property are described as follows:

(a) Agricultural personal property includes any agricultural equipment and produce not exempt by law.

(b) Commercial personal property includes the following:

(i) All equipment, furniture, and fixtures on commercial parcels, and inventories not exempt by law.

(ii) All outdoor advertising signs and billboards.

(iii) Well drilling rigs and other equipment attached to a transporting vehicle but not designed for operation while the vehicle is moving on the highway.

(iv) Unlicensed commercial vehicles or commercial vehicles licensed as special mobile equipment or by temporary permits.

(c) Industrial personal property includes the following:

(i) All machinery and equipment, furniture and fixtures, and dies on industrial parcels, and inventories not exempt by law.

(ii) Personal property of mining companies valued by the state geologist.

(d) For Taxes levied before January 1, 2003, residential personal property includes a home, cottage, or cabin on leased land, and a mobile home that would be assessable as real property under section 2a except that the land on which it is located is not assessable because the land is exempt.

(e) Utility personal property includes the following:

(i) Electric transmission and distribution systems, substation equipment, spare parts, gas distribution systems, and water transmission and distribution systems.

(ii) Oil wells and allied equipment such as tanks, gathering lines, field pump units, and buildings.

(iii) Inventories not exempt by law.

(iv) Gas wells with allied equipment and gathering lines.

(v) Oil or gas field equipment stored in the open or in warehouses such as drilling rigs, motors, pipes, and parts.

(vi) Gas storage equipment.

(vii) Transmission lines of gas or oil transporting companies.

(4) For taxes levied before January 1, 2003, buildings on leased land of any classification are improvements where the owner of the improvement is not the owner of the land or fee, the value of the land is not assessed to the owner of the building, and the improvement has been assessed as personal property pursuant to section 14(6).

(5) If the total usage of a parcel includes more than 1 classification, the assessor shall determine the classification that most significantly influences the total valuation of the parcel.

(6) An owner of any assessable property who disputes the classification of that parcel shall notify the assessor and may protest the assigned classification to the March board of review. An owner or assessor may appeal the decision of the March board of review by filing a petition with the state tax commission not later than June 30 in that tax year. The state tax commission shall arbitrate the petition based on the written petition and the written recommendations of the assessor and the state tax commission staff. An appeal may not be taken from the decision of the state tax commission regarding classification complaint petitions and the state tax commission’s determination is final and binding for the year of the petition.

(7) The department of treasury may appeal the classification of any assessable property to the residential and small claims division of the Michigan tax tribunal not later than December 31 in the tax year for which the classification is appealed.

(8) This section shall not be construed to encourage the assessment of property at other than the uniform percentage of true cash value prescribed by this act. (This section last amended 2002, Act 620.)

Sec. 53b. (1) If there has been a clerical error or a mutual mistake of fact relative to the correct assessment figures, the rate of taxation, or the mathematical computation relating to the assessing of taxes, the clerical error or mutual mistake of fact shall be verified by the local assessing officer and approved by the board of review at a meeting held for the purposes of this section on Tuesday following the second Monday in December and, for summer property taxes, on Tuesday following the third Monday in July. If there is not a levy of summer property taxes, the board of review may meet for the purposes of this section on Tuesday following the third Monday in July. If approved, the board of review shall file an affidavit within 30 days relative to the clerical error or mutual mistake of fact with the proper officials who are involved with the assessment figures, rate of taxation, or mathematical computation and all affected official records shall be corrected.  If the clerical error or mutual mistake of fact results in an overpayment or underpayment, the rebate, including any interest paid, shall be made to the taxpayer or the taxpayer shall be notified and payment made within 30 days of the notice. A rebate shall be without interest. The county treasurer may deduct the rebate from the appropriate tax collecting unit’s subsequent distribution of taxes. The county treasurer shall bill to the appropriate tax collecting unit the tax collecting unit’s share of taxes rebated. Except as otherwise provided in subsection (6), a correction under this subsection may be made in the year in which the error was made or in the following year only.

(2) Action pursuant to this section may be initiated by the taxpayer or the assessing officer.

(3) The board of review meeting in July and December shall meet only for the purpose described in subsection (1) and to hear appeals provided for in sections 7u, 7cc, and 7ee. If an exemption under section 7u is approved, the board of review shall file an affidavit with the proper officials involved in the assessment and collection of taxes and all affected official records shall be corrected. If an appeal under section 7cc or 7ee results in a determination that an overpayment has been made, the board of review shall file an affidavit and a rebate shall be made at the times and in the manner provided in subsection (1). Except as otherwise provided in section 7cc and 7ee, a correction under this subsection shall be made for the year in which the appeal is made only. If the board of review grants an exemption or provides a rebate for property under section 7cc or 7ee as provided in this subsection, the board of review shall require the owner to execute the affidavit provided for in section 7cc or 7ee and shall forward a copy of any section 7cc affidavits to the department of treasury.

(4) If an exemption under section 7cc is granted by the board of review under this section, the provisions of section 7cc(6) through (11) apply. If an exemption under section 7cc is not granted by the board of review under this section, the owner may appeal that decision in writing to the department of treasury within 35 days of the board of review’s denial and the appeal shall be conducted as provided in section 7cc(7).

(5) An owner or assessor may appeal a decision of the board of review under this section regarding an exemption under section 7ee to the residential and small claims division of the Michigan tax tribunal. An owner is not required to pay the amount of tax in dispute in order to receive a final determination of the residential and small claims division of the Michigan tax tribunal. However, interest and penalties, if any, shall accrue and be computed based on interest and penalties that would have accrued from the date the taxes were originally levied as if there had not been an exemption.

(6) A correction under this section that grants a homestead exemption pursuant to section 7cc(21) may be made for the year in which the appeal was filed and the 3 immediately preceding tax years. (This section last amended 2003, Act 105, effective July 24, 2003.)