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HB 4373

Property tax: exemptions; exemption from state education tax for certain residential property and certain agricultural property; provide for. Amends secs. 2 & 3 of 1993 PA 331 (MCL 211.902 & 211.903).

2025-2026 Regular Session Introduced by Steve Carra and 4 co-sponsors

Exempts residential real property (sec. 34c) and certain agricultural parcels with a dwelling from the State Education Tax after 12/31/2025; effect depends on enacting H01184'25a.

bill electronically reproduced 04/22/2025
#propertytax:exemptions #propertytax:stateeducationtax
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Bill Summary · HB 4373

Summary — HB 4373 (2025)

Title: Property tax: exemptions; exemption from state education tax for certain residential property and certain agricultural property; provide for. Amends secs. 2 & 3 of 1993 PA 331 (MCL 211.902 & 211.903).

Main purpose

HB 4373 would amend the State Education Tax Act (1993 PA 331) to exempt certain residential and certain agricultural properties from the state education tax (SET) beginning for taxes levied after December 31, 2025.

Key provisions

  • Amends definitions and the SET levy provisions in MCL 211.902 and MCL 211.903.
  • Retains the general SET framework (historically a 6-mill levy, with prior year exceptions noted in the statute), and the current exemptions for industrial personal property (and the turbine exception).
  • Adds two new SET exemptions effective for taxes levied after December 31, 2025 (new subsection (4)):
    • (a) Property classified as residential real property under section 34c of the General Property Tax Act — i.e., parcels classified as residential.
    • (b) Qualified agricultural property that is exempt from local school district operating tax under section 7ee of the General Property Tax Act, where a single-family dwelling is located on the parcel and that dwelling is owned and occupied by an owner who:
    • is actively involved in the agricultural use of the property, and
    • has not claimed a principal residence exemption on other property under section 7cc.
  • Includes an enactment condition: the amendatory act does not take effect unless a related House bill (request no. H01184'25 a) of the 103rd Legislature is enacted.

Who is affected

  • Residential property owners whose property is classified as residential under section 34c would be exempt from the SET.
  • Certain farmers: owners of qualified agricultural parcels (already eligible for local school operating tax exemption under section 7ee) who live in a single-family dwelling on that parcel, are actively engaged in farming the property, and do not claim another principal residence exemption.
  • State education tax revenue streams and, consequently, school funding formulas or allocations could be affected (see Potential impacts).

Procedural / timeline notes

  • Introduced: March 11, 2025 (Rep. James DeSana); electronically reproduced April 22, 2025.
  • Referred to committees (Land & Resource Management; Finance), reported favorably, placed on General State Calendar, read a 2nd time, passed to engrossment; companion bill SB 2419 exists.
  • Latest listed actions include being laid on the table subject to call (May 10, 2025).
  • Effective date contingent on enactment of a separate House bill (request no. H01184'25 a).

Potential impacts (summary)

  • Reduces the SET tax base by removing residential property and specified agricultural parcels from SET liability for taxes levied after 12/31/2025.
  • Likely to reduce state SET revenue collected from those property classes; could affect state-level education funding allocations unless offset by other legislative changes (the bill’s conditional enactment suggests related legislation may address offsets).
  • Shifts in distribution of tax burden or need for alternate funding could occur; specific fiscal effects would depend on the number/value of exempted properties and any accompanying appropriations or statutory adjustments.

(Amends 1993 PA 331, secs. 2 & 3 — MCL 211.902 & 211.903.)

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

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