Bill
SB 196
SB 196 expands a full homestead property tax exemption to eligible disabled veterans and certain surviving spouses, with defined eligibility, applications, and prorated rules.
Status
- Introduced January 23, 2025.
- Referred to the Senate Committee on Finance, Insurance, and Consumer Protection.
Summary / main purpose
- SB 196 amends section 7b of Michigan’s General Property Tax Act (MCL 211.7b) to set out the rules for the homestead property tax exemption available to disabled veterans and certain surviving spouses. The bill defines eligibility, application timing and documentation, how exemptions are applied or prorated, and related administrative duties.
Key provisions and changes (plain-language overview)
- Eligible recipients
- A homestead owned and used by either:
- a disabled veteran; or
- a surviving spouse of a disabled veteran who immediately before death was eligible for the exemption. The surviving-spouse exemption continues while the spouse does not remarry.
- Definitions
- “Disabled veteran” includes a Michigan resident who meets one of:
- VA determination of permanent and total disability from service (entitled to benefits at 100% rate);
- VA certification of receiving pecuniary assistance for specially adapted housing; or
- VA rating of individual unemployability.
- “Own/owned” covers legal title held solely or jointly by the eligible person; it expressly includes the interest of a tenant-stockholder in a cooperative housing corporation that holds legal title.
- “Veteran” is someone who served in U.S. armed forces and was discharged/released under honorable conditions.
- Application process and timing
- To claim the exemption, the eligible person (or legal designee) must file an application in the form/manner prescribed by the State Tax Commission with the local assessing officer after January 1 and before December 31 of the calendar year the exemption is claimed.
- The assessing officer may require additional information when the property interest is held via a tenant-stockholder/cooperative arrangement; cooperative corporations may need to supply information.
- The application is open to inspection.
- Duration and reapplication
- An exemption granted for taxes levied on or after Jan 1, 2025 remains in effect without subsequent reapplication until the owner rescinds it or it is denied per section 7c (assessor authority).
- Effect on tax collections and refunds
- When an eligible individual acquires title to property that qualifies, taxes subject to collection under the Act “must be canceled” for any year in which the exemption applies.
- Local taxing units bear the loss of revenue for any exempted taxes.
- Proration rules (if homestead not owned/used for full tax year)
- Three alternative proration methods are provided:
1. Use closing or purchase documents (submit with application); treasurer uses those documents to prorate.
2. If no closing documents, treasurer divides total annual tax by 365 and multiplies by number of days used/owned as a homestead.
3. Proration tied to effective date of removal of exemption (assessor-designated date of conveyance or disposition), with the same day-count/365 calculation.
- Administrative language
- Local assessing officers and treasurers have specified responsibilities for accepting applications, verifying documentation, prorating exemptions, and canceling taxes where applicable.
Who or what would be affected
- Primary: Michigan residents who are disabled veterans (as defined) and qualifying surviving spouses — they may receive a full homestead exemption from property taxes if they meet the statutory conditions.
- Secondary: Local assessing officers, treasurers, cooperative housing corporations (when property is held through tenant-stockholder interests), and local taxing units (which bear the revenue loss when exemptions are granted).
- State oversight: State Tax Commission (forms/format) and assessors (denial/rescission processes referenced under section 7c).
Potential fiscal/operational impacts
- Revenue: Granting or expanding exemptions reduces property tax collections for the affected local taxing units (cities, schools, counties). The bill text treats the revenue loss as borne by the local taxing units; the fiscal magnitude depends on the number of qualifying homesteads and timing of claims.
- Administration: Increased administrative tasks for local assessors and treasurers (application intake, document review, prorations, record-keeping). Cooperative housing situations may require additional coordination and documentation.
- No dollar amounts or offset mechanisms are specified in the text.
Procedural / timeline notes
- Introduced Jan 23, 2025; currently in committee (Finance, Insurance, and Consumer Protection). Next steps would typically include committee hearings, possible amendment, committee vote, and (if reported) floor consideration in the originating chamber.
Reference
- Amends: MCL 211.7b (section 7b of the General Property Tax Act). The bill text sets out the eligibility rules, definitions, application window and proration methods summarized above.
If you’d like, I can:
- Compare this draft language to current law and list any substantive differences; or
- Prepare a short fiscal estimate template (rough methodology) showing how a local unit could estimate revenue impacts given counts of qualifying veterans in its jurisdiction.
Compiled from official sources — confirm details with the bill’s official record.
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