HB 4079 — Summary (Property tax: special assessment deferment program)
Status: Introduced 03/07/2025; reported with substitute (H‑2) and referred to Second Reading. Tie‑bar with HB 4080 — neither bill takes effect unless both are enacted.
Purpose
- Reinstates and updates the Special Assessment Deferment program (1976 PA 225) that allows certain homeowners to defer payment of local special assessments on their homesteads.
- Modifies eligibility limits, interest treatment, and procedural requirements to broaden access and clarify lender consent/subordination.
Key provisions and changes
- Eligibility (unchanged core rules): owner must be 65+ or totally/permanently disabled, a U.S. citizen, a Michigan resident and sole homestead owner for 5+ years, and meet household income limits. Deferred assessments must be at least $300 (exclusive of interest).
- Income cap increase: H‑2 substitute sets the initial household income eligibility cap at $34,900 (for assessments on/after Oct. 1, 2022) and requires annual adjustment for inflation by the State Treasurer using the Consumer Price Index for the Detroit‑Warren‑Dearborn area.
- (Earlier drafts showed other cap amounts; the H‑2 substitute reflected above.)
- Interest: eliminates the prior 0.5% per month (6% annual) interest charge on deferred amounts for assessments levied on or after Oct. 1, 2022 (i.e., amounts deferred on/after that date are not subject to the 0.5%/month interest).
- Lender/land‑contract consent: when a homestead is encumbered by a mortgage or land contract, written lender consent must accompany the deferment affidavit and must explicitly state the lender understands its security interest will be subordinate to the State’s lien for the deferred amount.
- Application and lien: applicants file an affidavit with the local assessing officer (includes a prominent statement that a state lien will be placed on the property). The State records a lien in favor of the State and is repaid when the property is sold, transferred, or within one year after death, consistent with existing law.
- Related changes (in tied HB 4080): adds certain assessments (e.g., for dam construction/reconstruction) into the definition of special assessments and relaxes the surviving‑spouse remarriage rule — deferment continues for jointly owned homesteads regardless of remarriage.
Who is affected
- Primary beneficiaries: low‑ to moderate‑income senior homeowners (65+) and totally/permanently disabled homeowners who meet the residency/ownership requirements.
- Local units of government and special assessment districts: state makes interim payments to local units for deferred amounts and is later repaid when liens are satisfied; timing of local collections may shift.
- Mortgage lenders / land contract vendors: must provide specified written consent and accept subordination to the State lien.
- Michigan Department of Treasury: administers adjustments, the special revolving fund, lien recording, and reimbursements.
Fiscal impact
- Short term: the special revolving fund would need to advance payments for deferred assessments; the House Fiscal Agency estimated near‑term payments of roughly $100,000 annually and that the current fund balance (~$3.1 million) can cover early costs.
- Long term: no expected net state/local fiscal impact because deferred amounts are repaid (timing of receipts changes, but net collections remain).
Procedural / timing notes
- The bills are tie‑barred: HB 4079 cannot take effect unless HB 4080 also becomes law.
- The H‑2 substitute conditions some provisions on assessments dated Oct. 1, 2022 or later.
- Key legislative steps completed include committee reporting and placement on the House calendar; status should be checked for any later actions or amendments.
Primary sponsor: Rep. Bill G. Schuette (House analysis); related companion/companion activity includes HB 4080 and SB 2337 (companion).
