DATE: February 28, 1997
TO: Assessors, Equalization Directors
FROM: Roland C. Andersen, Executive Secretary and Acting Commissioner

RE: SUPPLEMENT TO STC BULLETIN NO. 3 OF 1997

Attached is a Supplement to STC Bulletin No. 3 of 1997 caused by an amendment to the General Property Tax Act contained in PA 476 of 1996.

The attached Supplement should be attached to STC Bulletin No. 3 of 1997 and a copy should be made and attached to STC Bulletin No. 3 of 1995.

NOTE: While the materials which follow are a part of STC Bulletin No. 3 of 1997, they are labeled as a Supplement to STC Bulletin No. 3 of 1995 with the thought they will also be copied and added to STC Bulletin No. 3 of 1995 in order to keep all information regarding the formulas for Additions and Losses together in one place. It is important to note that the changes discussed in this Supplement shall be first implemented starting in 1997.

PA 476 of 1996 changes the method of calculating the Addition for property that was previously exempt under MCL 211.7k as an Industrial Facilities Tax (IFT) REPLACEMENT FACILITY but is now returning to the ad valorem assessment roll because the exemption has ended.

This addition is used in the formula for calculating Capped Value and in the calculation of the millage rollback for the "Headlee" and "Truth in Taxation" rollbacks.

The formula for calculating the amount of an addition for a previously exempt IFT REPLACEMENT FACILITY is contained on page 8 of STC Bulletin No. 3 of 1995. THAT FORMULA IS NO LONGER APPLICABLE.

The following formulas are the old formula and the new formula for calculating the addition for an IFT REPLACEMENT FACILITY that is no longer exempt and is returning to the ad valorem assessment roll.

Addition = TCV of Previously Exempt Property X 50%

Addition = Taxable Value that the Previously Exempt Property Would Have in the Current Year If It had Not Been Exempt

The New Formula above is also the formula that has been used in the past for IFT NEW FACILITIES coming back on the ad valorem roll when the exemption ends and this formula continues to be used for IFT NEW FACILITIES.

Please note that the NEW for equalization purposes is calculated by multiplying the TCV of the Previously Exempt Property by 50%