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HB 4041

Property tax: exemptions; continuation of poverty exemption, without subsequent application, for homeowner who previously established eligibility; provide for in certain circumstances. Amends sec. 7u of 1893 PA 206 (MCL 211.7u).

2025-2026 Regular Session Introduced by Tyrone Carter

Gives local units the option to auto-continue poverty exemptions for eligible owner-occupied homes with fixed public-assistance income, if they adopt a resolution.

referred to second reading
#propertytax:exemptions
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Bill Summary · HB 4041

HB 4041 — Property tax: poverty exemption; automatic continuation (MCL 211.7u)

Status: Referred to Second Reading. Introduced: March 7, 2025.

Purpose / Intent

HB 4041 would amend section 7u of the General Property Tax Act (MCL 211.7u) to give local assessing units the option to allow certain homeowners who previously qualified for the statutory poverty exemption to remain exempt in subsequent tax years without filing a new annual application — provided specified conditions are met. The change is intended to reduce re‑application burden for very-low-income, fixed-income homeowners.

Key provisions

  • Permissive authority: A local assessing unit (e.g., city, township, village) may adopt a resolution permitting an eligible principal residence that received a poverty exemption in a prior tax year to remain exempt in later years without a new application.
  • Eligibility conditions for automatic continuation:
    • No change in ownership or occupancy of the principal residence; and
    • The person who established eligibility receives a fixed income solely from public assistance that is not subject to significant annual increases beyond inflation (examples cited: federal Supplemental Security Income (SSI), Social Security disability, or Social Security retirement benefits).
  • Retains existing framework: The bill does not eliminate the underlying poverty exemption process. Under MCL 211.7u, the board of review still grants poverty exemptions (full or partial) and annual applications and supporting documentation remain the default requirement unless the local unit adopts the permissive resolution.
  • Compliance and rescission: The bill incorporates (consistent with prior practice) requirements for the homeowner to notify the assessing unit if ownership, occupancy, assets, or income change such that the exemption is no longer warranted; failure to timely rescind or report can trigger repayment of additional taxes with interest when ineligible status is later discovered.
  • Cross-reference: The bill builds on earlier (2023) limited reapplication relief that allowed exemptions from tax years 2019–2020 to continue through 2021–2023 under similar conditions.

Who would be affected

  • Primary beneficiaries: Low-income homeowners who previously qualified for the poverty exemption and who (1) remain the owner-occupant and (2) have unchanged, fixed public-assistance income streams — they may avoid annual paperwork if their local assessing unit adopts the resolution.
  • Local assessing units and boards of review: Gain a discretionary tool to streamline administration of poverty exemptions.
  • Local tax administration/treasurers: May see reduced application-processing workload; potential (likely small) changes in property tax revenue if local units relax reapplication requirements.
  • State: No direct state revenue effect anticipated because the change is permissive and locally adopted.

Fiscal/economic impact

  • House Fiscal Agency analysis: Because the bill is permissive, it would have no direct statewide fiscal impact. Local units that adopt the policy could realize administrative cost savings from reduced re‑application processing. Any local revenue loss (if continuation materially increases the number of exemptions maintained) is expected to be minor.

Procedural / timeline notes

  • The bill amends MCL 211.7u, the statute governing poverty exemptions for principal residences.
  • Local assessing units must take affirmative action (adopt a resolution) to enable the reapplication waiver; absent such a resolution, current annual application requirements remain in force.
  • Existing safeguards (filing deadlines, documentation, board of review authority) remain applicable; the bill specifies reporting/rescission requirements and remedies when ineligibility is later discovered.

If you want, I can:
- Draft sample language for a local unit resolution to implement the continuation option; or
- Compare this bill’s language to the 2023 amendment in more detail.

Compiled from official sources — confirm details with the bill’s official record.

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