Taxation: specific tax; application of tax reverted property specific tax to certain tax delinquent property sold or otherwise conveyed by a foreclosing governmental unit; provide for. Amends secs. 4 & 5 of 2003 PA 260 (MCL 211.1024 & 211.1025). TIE BAR WITH: SB 484'25
Senate Bill 485 would amend Michigan’s Tax Reverted Clean Title Act to extend the eligible tax reverted property specific tax to certain tax-delinquent properties that are sold or otherwise conveyed by a foreclosing governmental unit, not just those handled through a land bank authority. The bill requires annual reporting by authorities and foreclosing governmental units to local assessors, and it directs assessors to determine the value and taxable value of eligible tax reverted property each year.
The bill also establishes how the specific tax is calculated, collected, and distributed. The tax would generally equal the amount that would have been collected under the General Property Tax Act if the property were not exempt, and it would be paid on the same schedule and with the same collection rules as other property taxes. Half of the revenue would go to state and local taxing units, while the other half would go to the authority connected to the property’s sale or conveyance, to be used for land bank purposes such as clearing title or repaying certain loans. The bill also preserves existing exemptions and special treatment for principal residences, renaissance zones, and school aid funding.
In practical terms, the bill would expand the reach of the tax reverted property specific tax to more categories of formerly tax-delinquent property and create a clearer revenue stream for land banks and related authorities. It would also affect county treasurers, local assessors, school districts, intermediate school districts, and other taxing units by setting out new reporting, lien, delinquency, forfeiture, and foreclosure procedures tied to these properties.
The overall sentiment appears procedural and supportive rather than controversial, based on the bill’s narrow technical purpose and the absence of recorded committee debate or votes in the provided materials. The bill is also tied to Senate Bill 484, indicating it is part of a coordinated legislative package rather than a standalone policy fight.
The main point of contention, based on the bill text itself, is likely the redistribution of tax revenue: half of the tax would be diverted to the authority associated with the property instead of going entirely to traditional taxing units. That structure benefits land banks and similar entities, while local governments and school systems may be concerned about how much revenue is redirected and how the new tax interacts with existing delinquency and foreclosure processes.
SB 485 would amend MCL 211.1024 and 211.1025 to broaden and clarify the eligible tax reverted property specific tax, including its application to property sold or conveyed by foreclosing governmental units. It would impose new annual reporting duties on authorities and foreclosing governmental units, require assessors to value eligible tax reverted property each year, and establish detailed rules for assessment, collection, disbursement, liens, delinquency, forfeiture, and foreclosure. The bill would also direct portions of the tax to the state school aid fund, local taxing units, and land bank-related authorities, affecting revenue flows for counties, schools, municipalities, and land banks.
The available context suggests the bill was treated as a technical, administrative tax measure rather than a high-profile or ideologically divisive proposal. There are no committee transcripts or recorded votes provided, and the bill’s tie-bar to SB 484 indicates it was part of a package. The tone of the legislation is generally supportive of land bank operations and tax collection administration, with no explicit evidence of opposition in the supplied materials.
The most notable policy tension is between revenue retention by local taxing units and revenue diversion to the authority that sold or conveyed the property. Supporters of land banks and property-reuse efforts would likely favor the dedicated funding for title clearing, property management, and loan repayment, while local governments, school districts, and other taxing units may be wary of losing a portion of tax revenue. Another possible point of concern is the expanded use of delinquency, forfeiture, and foreclosure procedures for these properties, which could raise questions for property owners and county treasurers about administration and enforcement.