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Patricia Paruch, Kemp Klein Law Firm
State Tax Commission Revises Klooster Case Memo
Douglas Kelin, Lipson Neilson Cole Seltzer & Garin, PC
The Michigan State Tax Commission recently rescinded and replaced a March 21, 2011, case memo discussing the Michigan Supreme Court decision in Klooster v. City of Charlevoix. The revised case memo is dated June 9, 2011.
Klooster analyzed the exceptions to “transfer of ownership” in MCL 211.27a(7)(h). Taxable value remains “capped” for a conveyance falling outside the definition of “transfer of ownership,” i.e. a property’s taxable value cannot increase more than five percent per year or the inflation rate, whichever is less.
The revised case memo offers a clear methodology to determine whether property taxes remain capped for conveyances in a joint tenancy context by offering definitions of key persons in the transaction (“initial joint tenant,” and “original owner”), and by providing a straight-forward step by step method to analyze a “conveyance at issue.” Step 1 requires identification of the “conveyance at issue” as either (i) the creation of the initial joint tenancy, (ii) the creation of the successive joint tenancy, or (iii) the termination of a joint tenancy. Steps 2 through 4 provide rules to determine whether the taxable value uncaps in each of the three categories.
The case memo also provides several simplified examples using the step by step analysis. A new comment included in the memo reminds assessors to analyze each tenancy-in-common interest separately. It is possible for a partial uncapping to occur as a person may be an “original owner” as to one tenancy-in-common interest, but not an “original owner” as to the remainder of the tenancy-in-common interests in the property.
A discussion of the rescinded March 21, 2011, case memo appears in the article, “Application of Michigan’s Uncapping Statute to Transfers Involving Joint Tenancies” appearing in the Michigan Real Property Review, Summer 2011, Vol. 38, No. 2.
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October 6, 2011
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July 18-21, 2012
Legislature Limits Municipalities’ Ability to Prevent Gravel Mining
Matthew W. Heron and Richard A. Sundquist, Clark Hill PLC
Supported by the Michigan Aggregates Association, HB 4746 was introduced on June 14, 2011, and adopted into law July 20, 2011 (PA 113 of 2011; MCL 125.3205). PA 113 legislatively reinstates the common law “no very serious consequences” test of Silva v. Ada Township, 416 Mich 153 (1982), which the Michigan Supreme Court overruled in Kyser v. Kasson Township, 486 Mich 514 (2010). The Kyser plaintiff had sought a zoning variance to allow gravel mining on her property notwithstanding that the township zoning ordinance permitted mining only on parcels in the mining district.
Under Silva, “[t]he ‘no very serious consequences’ rule constitute[d] an exception to the ‘reasonableness’ test for assessing the constitutionality of zoning regulations and provides that ‘regulations which prevent the extraction of natural resources are invalid unless ‘very serious consequences’ will result from the proposed extraction.’” Kyser, 486 Mich at 522. The Kyser opinion overruled the “no very serious consequences” test, stating that it constituted judicial policy-making. “Michigan's constitution directs the Legislature, not the judiciary, to provide for the protection and management of the state's natural resources[,] and. . . policy-making is at the core of the legislative function.” Kyser, 486 Mich at 556-557.
Under PA 113, a person challenging a zoning decision has the initial burden of showing: (i) valuable natural resources exist on the property; (ii) either the person or the market served by the person needs the natural resources; and (iii) no very serious consequences will result from the mining PA 113 requires application of the Silva standards for assessing whether a proposed mining operation would result in “very serious consequences,” to the community. Recently a Houghton County Circuit Court judge rejected a challenge to the constitutionality of PA 113.