Bill
HB 4675
Expands tax/fee exemptions for land bank authorities: exempt from all taxes, special assessments, and user fees unless an express service contract is in place; debt income exempt.
Status and key dates
- House bill introduced: May 25, 2023 (Rep. Kristian Grant).
- Passed House: May 21, 2024; passed Senate: Dec 20, 2024.
- Approved by Governor: Jan 16, 2025. Filed with Secretary of State: Jan 16, 2025.
- Assigned Public Act No. 204 of 2024. Effective date: April 2, 2025.
- Statutory sections amended: MCL 124.754, 124.763, and 124.764.
Purpose and intent
- Clarify and expand the tax/charge exemptions that apply to land bank fast track authorities created under the Land Bank Fast Track Act. The change responds to conflicting court decisions about whether land banks are liable for certain local charges (notably stormwater/drainage and sewer/service fees).
Main provisions
- Expanded exemption (Sec. 4 & Sec. 13): Property owned by a land bank authority, and the authority’s income and operations, are explicitly exempt from
- all taxes,
- special assessments, and
- user fees
imposed by the State or any local unit of government, as provided in section 13.
- User-fee exception (contracting): The act does not prevent an authority (or its tenant) from entering an express contract with a local unit to receive services; in that case a user fee may be charged. Local units are prohibited from providing services to an authority (or its tenant) unless there is an express contract.
- Debt exemption: Bonds/notes issued by the authority and interest/income from those instruments remain exempt from state and local taxation.
- Companion change (House Bill 4679 / Revenue Bond Act): allows a “public improvement” (per Revenue Bond Act definitions) to provide a free service to a land bank authority (addresses prior case law interpretation that required charging reasonable cost/value).
Who is affected
- Directly: State and local land bank fast track authorities (reduced operating costs, clearer exemption status).
- Indirectly: Local units of government and local taxing/assessment authorities (potential loss of fee/assessment revenue on properties held by land banks), utilities and public-improvement providers (clarity over charging or providing services), and residents in distressed areas whose properties pass through land banks.
- Stakeholders: State Land Bank Authority and county/local land banks (supportive); Michigan Townships Association and Michigan Assessors Association (opposed).
Fiscal impact (summary)
- Likely positive for the State Land Bank and some state finances (reduced expenditures); mixed at the local level due to reduced fee/assessment revenue. Nonpartisan fiscal analyses describe the overall effect as likely shifting funds among units of government and possibly net‑zero statewide, though local revenues on affected properties would decrease. The magnitude depends on properties and local fee structures.
Background context
- The amendments respond to two conflicting court rulings (City of Highland Park v State Land Bank Authority and City of Highland Park v Wayne County Land Bank Authority) that produced uncertainty about whether land banks must pay stormwater/sewer/user fees. The legislation clarifies that land banks are generally exempt unless they contract to receive services.
Compiled from official sources — confirm details with the bill’s official record.
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