CHANGES FOR 2002

DATE: October 22, 2001

TO: Assessors
Equalization Directors

FROM: State Tax Commission (STC)

RE: PROCEDURAL CHANGES TO BE IMPLEMENTED STARTING IN THE 2002
ASSESSMENT YEAR

Starting with the 2002 assessment year, there are several procedural changes which assessment administrators must be aware of. The purpose of this bulletin is to provide instruction for the procedural changes in the following five subjects labeled A through E. Each of these subjects will be treated separately in this bulletin. The subjects are:

The inflation rate, expressed as a multiplier, to be used in the 2002 Capped Value formula is 1.032. (The inflation rate for 2001 calculations was also1.032.)

The 2002 Capped Value Formula is as follows:

2002 CAPPED VALUE = (2001 Taxable Value - LOSSES) X 1.032 + ADDITIONS

The preceding formula does not include 1.05 because the inflation rate of 1.032 is lower than 1.05.

Attached to this bulletin is a copy of STC (revised) Form L-4400 which is the 2002 Notice of Assessment, Taxable Valuation, and Property Classification. The only changes to the form are those required when going from one year to the next.

MCL 211.7u, which deals with poverty exemptions, was significantly altered by PA 390 of 1994. These changes were explained to assessors in STC Bulletin No. 5 of 1995.

One of the provisions of PA 390 of 1994 is that local governing bodies are required to set income levels for their poverty exemption guidelines and that those income levels SHALL NOT BE SET LOWER by a city or township than the federal poverty income standards as defined and determined annually by the United States Office of Management and Budget. This means, for example, that the income level for a household of 3 persons SHALL NOT be set lower than $13,470 which is the amount shown on the following page for 3 persons. The income level for 3 persons may be set higher than $13,470.

The following are the federal poverty income standards as of 12-31-01 for use in setting poverty exemption guidelines for 2002 assessments. Please see STC Bulletin No. 5 of 1995 for additional information regarding the use of these standards.

No. Of Persons Residing in Homestead	Poverty Threshold
1 person Under 65 years 1 person 65 years and over 2 persons with householder being under 65 years 2 persons with householder being 65 years and over 3 persons 4 persons 5 persons 6 persons 7 persons 8 persons 9 persons	8,959 8,259 11,531 10,409 13,470 17,761 21,419 24,636 28,347 31,704 38,138

IMPORTANT NOTE: PA 390 of 1994 states that the poverty exemption guidelines established by the governing body of the local assessing unit SHALL also include an asset level test.

4. Updated Multipliers for the Valuation of Free-Standing Communication Towers

State Tax Commission Bulletin 3 of 2000 contains guidance to assessors regarding the valuation of free-standing communication towers (See pages 7 to 9 of STC Bulletin 3 of 2000.)

Listed below are updated multipliers for the valuation of free-standing communication towers by the cost approach to value for assessment year 2002.

Multipliers for Free-Standing
Communication Towers

AGE	MULTIPLIER	AGE	MULTIPLIER
1	.97	21	.94
2	.97	22	.97
3	.97	23	1.07
4	.97	24	1.11
5	.97	25	1.16
6	.96	26	1.16
7	.96	27	1.28
8	.96	28	1.36
9	.95	29	1.43
10	.95	30	1.50
11	.93	31	1.60
12	.89	32	1.70
13	.89	33	1.79
14	.89	34	1.85
15	.89	35	1.85
16	.89	36	1.85
17	.89	37	1.86
18	.89	38	1.91
19	.90	39	1.93
20	.92	40	1.93

 
4. Changes to the Personal Property Multipliers for Cable Television Equipment

The State Tax Commission, at its meeting held on October 16, 2001, revised the personal property multiplier tables used to value cable television equipment. The following are the revised multipliers for Tables G-1, G-2, and G-3: