Governor Snyder has signed the two top legislative priorities of the Home Builders Association of Michigan into law!

On December 27, 2012 the Governor signed House Bill 4134 (now Public Act 494 of 2012) and House Bill 4561 (now Public Act 504 of 2012) into law. The new laws take effect immediately.

PA 494 removes the 18-mill school tax on new residential construction on development property for three years or until the new construction was no longer located on development property, whichever occurs first. The exemption would apply for taxes levied after November 1, 2012.

"Development property" means real property on which a residential dwelling, condominium unit, or other residential structure is located, if the dwelling, unit, or structure meets all of the following conditions:
1. Is not occupied and has never been occupied.
2. Is available for sale.
3. Is not leased.
4. Is not used for any business or commercial purpose.

"New construction" means property not in existence on the immediately preceding tax day and not replacement construction. The exemption will apply for taxes levied after November 1, 2012.

That’s a property tax reduction of $1,800 for every $100,000 in taxable value on your inventory home or 20 times the $90 annual dues you pay to the state association.

To claim an exemption under subsection (1), an owner of development property must file an affidavit claiming the exemption with the local tax collecting unit on or before June 1 for the immediately succeeding summer tax levy and all subsequent tax levies or on or before November 1 for the immediately succeeding winter tax levy and all subsequent tax levies. The Michigan Department of Treasury is currently designing the affidavit form. We will let you know when the form is available

PA 504 places the Michigan Residential Code on a flexible code adoption cycle. Currently the residential code and the energy requirements found in chapter 11 of the residential code must be updated every three years whether such an update is needed or not.

Commencing with the 2015 national code change cycle the residential code will shift to the flexible code cycle found in the bill. The process of updating the 2009 Residential Code, including the residential energy efficiency requirements found in Chapter 11 of the residential code, by adding, amending or rescinding rules will begin by March 27, 2013. This is the same process the state has used in for previous code updates. Updates to the commercial codes began last year.

PA 504 also prevents the adoption or enforcement of any new or existing code, including the new International Green Construction Code, which is not already listed in the Single State Construction Code Act. In order for a new, unlisted code to be promulgated and enforced, the Legislature must first pass a bill and the Governor must sign that bill adding the code to the list found in the Single State Construction Code Act. This requirement does not apply to codes, such as the residential code, already listed in the law. It also prevents the substitution of an unlisted code for a code named in the law which was the subject of the administrative procedures lawsuit filed by the association in 2005.

Look for more information on these and other 2011-2012 accomplishments in next week’s edition of NEWSWIRE.
Lee Schwartz
Executive Vice President for Government Relations
Home Builders Association of Michigan