EX 30 Docket 22-003358 Spencer vs Butman Township.pdf
Jennifer R Doyle, Petitioner V Township Of Beaverton, Respondent · 25-003860-TT
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STATE OF MICHIGAN GRETCHEN WHITMER GOVERNOR DEPARTMENT OF LICENSING AND REGULATORY AFFAIRS LANSING ORLENE HAWKS DIRECTOR MICHIGAN OFFICE OF ADMINISTRATIVE HEARINGS AND RULES MICHIGAN TAX TRIBUNAL · 611 W. OTTAWA ST., LANSING, MI 48933 · 517-335-9760 PO BOX 30232, LANSING, MI 48909 · Other Carriers: 2407 N GRAND RIVER AVE, LANSING, MI 48906 Paul J Spencer, MICHIGAN TAX TRIBUNAL Petitioner, SMALL CLAIMS DIVISION v MOAHR Docket No. 22-003358 Butman Township, Case Type: Uncapping Respondent. PROPOSED OPINION AND JUDGMENT Personnel Presiding: Erissa J Glekler, Administrative Law Judge Location of Hearing: Telephonic Hearing Held on: May 4, 2023 Appearances on Behalf of Petitioner: Jeffrey Bruss Appearances on Behalf of Respondent: Jamie Houserman PROPOSED JUDGMENT The subject property’s taxable value (TV) was not properly adjusted under MCL 211.27a. The subject property’s TV for the tax year at issue shall be as follows: Parcel Number: 060-160-000-024-00 Year TV 2022 $1,866 2023 $1,959 PROCEDURAL HISTORY Petitioner filed a Petition with the Tribunal on December 27, 2022, and Respondent filed an Answer on February 8, 2023. The amount of the TV in dispute, as set forth in the pleadings, for all tax years at issue is within the jurisdictional limits of the Small Claims Division.1 Further, the property’s TV for subsequent tax years is included in this proceeding.2 1 See MCL 205.762(1). 2 See MCL 205.737(5)(b).
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MOAHR Docket No. 22-003358 Page 2 of 7 ISSUES AND APPLICABLE LAW The issue in this matter is whether Petitioner has proven by a preponderance of the evidence that the subject property’s TV was improperly uncapped under MCL 211.27a. Under the General Property Tax Act, property taxes are based on the property’s TV for the tax year at issue. MCL 211.27a provides that a property’s TV is the lesser of the property’s state equalized or capped TV, and a property’s capped TV is, absent a transfer of ownership, determined mathematically by taking into consideration the prior tax year’s TV, physical losses to the property, the lesser of the rate of inflation or 5%, and physical additions to the property, including omitted property (i.e., property not previously assessed). MCL 211.27a(6) defines “transfer of ownership” as “the conveyance of title to or a present interest in property, including the beneficial use of the property, the value of which is substantially equal to the value of the fee interest.”3 It includes “a conveyance by distribution under a will or by intestate succession,” unless “the distributee is the decedent's or the decedent's spouse's mother, father, brother, sister, son, daughter, adopted son, adopted daughter, grandson, or granddaughter and the residential real property is not used for any commercial purpose following the conveyance.4 SUMMARY OF EVIDENCE A. Petitioner’s Evidence Petitioner’s contentions of TV: Parcel Number: 060-160-000-024-00 Year TV 2022 $1,867 2023* *Petitioner did not provide specific contentions of value for 2023 Petitioner offered the following exhibits: 1. Evidence, filed on December 27, 2022 a. Explanation of appeal b. Letter to BOR dated November 23, 2022 c. Deed of Personal Representative d. Property Transfer Affidavit e. Letters of Authority for Personal Representative f. Certificate of Death 3 Id. 4 MCL 211.27a(6)(f)(ii).
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MOAHR Docket No. 22-003358 Page 3 of 7 g. Authorization of Attorney’s Representation h. Email correspondence 2. Evidence, filed on January 17, 2023 a. Copies of previously filed evidence 3. Evidence, filed on April 6, 2023 a. Copies of previously filed evidence No exhibits were excluded from evidence. Based on the pleadings, admitted exhibits, and sworn testimony, Petitioner contends that the subject property is exempt from uncapping pursuant to MCL 211.27a(6)(f)(ii) because it transferred from the estate of Petitioner’s father, Paul E. Spencer, to Petitioner. Petitioner’s representative testified that there isn’t any dispute between the parties that this transfer is exempt from uncapping; the only dispute is the jurisdiction of the December Board of Review and the Tribunal and whether the uncapping that occurred can be corrected. Although Petitioner did not claim an exemption from uncapping on the filed property transfer affidavit, the December Board of Review had authority to adjust the property’s taxable value pursuant to MCL 211.53b(6)(c) and MCL 211.27a(4). Petitioner sent a letter requesting relief to the Board of Review via email on November 28, 2022. The request was sent to the assessor pursuant to their instructions for presenting matters to the December Board of Review. On November 30, 2022, the assessor indicated that she would not be forwarding the issue to the December Board of Review due to her determination there was no clerical error under MCL 211.53b. Petitioner replied and attempted to clarify their position, but the assessor again stated that the matter would not be presented to the Board of Review. The assessor’s refusal to present the issue to the Board of Review was a denial of Petitioner’s request for relief and Petitioner’s appeal to the Tribunal was proper. In response to Respondent’s testimony, Petitioner’s representative testified that an updated property transfer affidavit is not required, and the cited statutes clearly provide for the relief requested. Petitioner takes issue with Respondent’s contention that Petitioner’s appeal was one day late. Petitioner did submit a second request for relief by mail immediately after receiving the assessor’s correspondence indicating that she would not be presenting the matter to the Board of Review, but the original request was made well in advance of the Board of Review date. B. Respondent’s Evidence The property’s TV, for the tax year at issue, is: Parcel Number: 060-160-000-024-00 Year TV 2022 $10,400 2023 $10,920
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MOAHR Docket No. 22-003358 Page 4 of 7 Respondent offered the following exhibits: 1. Evidence, filed on February 8, 2023 a. Assessment notice b. Record card c. Valuation report d. Property transfer affidavit No exhibits were excluded from evidence. Based on the pleadings, admitted exhibits, and sworn testimony, Respondent contends that Petitioner failed to claim an exemption from uncapping on the property transfer affidavit that was filed on June 24, 2021. Petitioner’s request to have the matter heard at the December Board of Review was not granted because failure to claim an exemption on the property transfer affidavit is not a qualified error. Because the matter was not heard by the Board of Review, Petitioner’s appeal should be dismissed for lack of jurisdiction. In further explanation, Respondent’s representative testified that the law is clear that the property transfer affidavit has to be filed within 45 days of the date of transfer and that it has to reflect any applicable exemptions. Respondent is not aware of anything in the law that provides for correction of the property transfer affidavit but even if it did, Petitioner has not filed a corrected affidavit. Respondent’s representative agreed with Petitioner’s representative that there is no dispute that the transfer in question was exempt from uncapping; the sole issue in Respondent’s view is whether the property transfer affidavit can be changed after the fact. Upon inquiry from the Tribunal, Respondent’s representative confirmed that she did not present Petitioner’s request for relief to the December Board of Review for consideration. Petitioner did file a formal protest to the Board of Review by mail, but it was not received until one day after the Board of Review met, which was on the statutory date of December 13, 2022. FINDINGS OF FACT The following facts were proven by a preponderance of the evidence: 1. The subject property is located at Queens Way in Gladwin County. 2. The subject property is classified as residential. 3. The subject property’s TV for 2021 was $1,807. 4. The subject property was conveyed from the estate of Petitioner’s father, Paul E. Spencer, to Petitioner via deed on June 24, 2021.
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MOAHR Docket No. 22-003358 Page 5 of 7 5. Petitioner filed a property transfer affidavit (PTA) on July 7, 2021.5 The PTA indicated that the transfer was between related persons but did not identify any exemption(s) from uncapping. 6. Respondent uncapped the subject property’s TV for the 2022 tax year via the 2022 assessment notice. 7. Petitioner submitted a letter to the Butman Township BOR c/o Butman Township Tax Assessor on November 23, 2022, requesting that the property’s TV be recapped pursuant to MCL 211.53b and MCL 211.27a(4). 8. Respondent’s assessor did not present the uncapping issue to the December 2022 BOR. 9. Respondent’s assessor informed Petitioner on November 30, 2022, and December 6, 2022, that she would not be presenting the uncapping issue to the December 2022 Board of Review. 10. Petitioner filed this appeal on December 27, 2022. CONCLUSIONS OF LAW Under the General Property Tax Act (GPTA), TV is determined pursuant to MCL 211.27a. Except for additions and losses, annual increases are limited to 5% or the rate of inflation, whichever is less.6 In the year following a transfer of ownership, however, TV is set equal to the SEV (i.e., “uncapped”).7 As noted above, a “transfer of ownership” is defined by MCL 211.27a(6) as “the conveyance of title to or a present interest in property, including the beneficial use of the property, the value of which is substantially equal to the value of the fee interest.”8 It includes “a conveyance by distribution under a will or by intestate succession,” unless “the distributee is the decedent's or the decedent's spouse's mother, father, brother, sister, son, daughter, adopted son, adopted daughter, grandson, or granddaughter and the residential real property is not used for any commercial purpose following the conveyance.9 The subject property was conveyed from the estate of Petitioner’s father, Paul E. Spencer, to Petitioner. This conveyance is not a “transfer of ownership” within the meaning of the statute, and the property’s TV therefore should not have uncapped. As for whether the December 2022 Board of Review had authority to recap the property’s taxable value, MCL 211.27a(4) states, in pertinent part, that “if the taxable value of property is adjusted under subsection (3) and the assessor determines that there had not been a transfer of ownership, the taxable value of the property shall be adjusted at the July or December board of review.”10 “The use of ‘shall’ in a statute 5 The affidavit was signed on June 24, 2021, but is stamped “received” on July 7, 2021. 6 MCL 211.27a(2). 7 MCL 211.27a(3). 8 Id. 9 MCL 211.27a(6)(f)(ii). 10 Id. (emphasis added). The statute further states: ““Notwithstanding the limitation provided in section 53b(1) on the number of years for which a correction may be made, the July or December board of review may adjust the taxable value of property under this subsection for the current year and for the 3 immediately preceding calendar years . . . . For purposes of section 53b, an adjustment under this subsection shall be considered the correction of a clerical error.” Id.
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MOAHR Docket No. 22-003358 Page 6 of 7 generally ‘indicates a mandatory and imperative directive,’ ”11 and the December Board of Review was therefore required to adjust the subject property’s taxable value once the assessor determined that there was not a “transfer of ownership” within the meaning of MCL 211.27a.12 Respondent’s refusal to present the matter to the December 2022 Board of Review was therefore erroneous, and the Tribunal finds that it constitutes an effective denial of the relief requested. As such, and inasmuch as Petitioner’s appeal was filed within 35 days of notice of Respondent’s effective denial, the Tribunal’s jurisdiction was properly invoked. Petitioner’s failure to identify an exemption from uncapping on the property transfer affidavit or file a corrected affidavit has no impact on this determination because while buyers, grantees, and other transferees are required to file a property transfer affidavit within 45 days of a “transfer of ownership” pursuant to MCL 211.27a(10), the plain language of the statute only requires identification of “the parties to the transfer, the date of the transfer, the actual consideration for the transfer, and the property's parcel identification number or legal description.”13 The Michigan Supreme Court has also recognized that “the provisions establishing taxable values in MCL 211.27a(2) and MCL 211.27a(3) are both mandatory and automatic. Both subsections unambiguously provide that the taxable value for a property falling under each respective subsection ‘is’ the value that results from the parameters contained in the applicable subsection.”14 Consequently, uncapping (or lack thereof) occurs by operation of law and the property transfer affidavit has no impact on the same. Given the above, the subject property has a TV of $1,866 for the 2022 tax year and $1,959 for the 2023 tax year.15 JUDGMENT This is a proposed decision and not a final decision. As such, no action should be taken based on this decision. After the expiration of the time period for the opposing party to file a response to the exceptions, the Tribunal will review the case file, including the Proposed Opinion and Judgment (POJ) and all exceptions and responses, if any, and: 11 Michigan Educ Ass'n v Sec'y of State, 489 Mich 194, 218; 801 NW2d 35, 48 (2011). 12 MCL 211.27a(4) is the controlling statute in this case. MCL 211.53b(6)(c) is not applicable because it defines “qualified error” as “an adjustment under section 27a(4).” The error this section permits the Board of Review to correct is therefore an erroneous recapping of taxable value under MCL 211.27a(4). This determination is supported by the fact that MCL 211.27a(4) specifically states that an adjustment under that section is considered the correction of a “clerical error” for the purpose of MCL 211.53b and provides for correction of additional years. 13 Id. 14 Michigan Properties, LLC v Meridian Twp, 491 Mich 518, 531; 817 NW2d 548, 554 (2012) 15 2021 TV of $1,807 x 1.033 = $1,866.631; 2022 TV of $1,866 x 1.05 = $1,959.30. Taxable values are not rounded up. See STC Bulletin 3 of 1995. See also STC Bulletin 17 of 2021 and STC Bulletin 19 of 2022.
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MOAHR Docket No. 22-003358 Page 7 of 7 a. Issue a Final Opinion and Judgment (FOJ) adopting the POJ as a Final Decision; b. Issue an FOJ modifying the POJ and adopting the Modified POJ as a Final Decision; or c. Issue an Order vacating the POJ and ordering a rehearing or such other action as is necessary and appropriate. EXCEPTIONS This POJ was prepared by the Michigan Office of Administrative Hearings and Rules. The parties have 20 days from the below “Date Entered by Tribunal” to notify the Tribunal and the opposing party in writing, by mail or by electronic filing, if they do not agree with the POJ and to state in writing why they do not agree with the POJ (i.e., exceptions). Exceptions are limited to the evidence submitted prior to or at the hearing and any matter addressed in the POJ. There is no fee for filing exceptions. The opposing party has 14 days from the date the exceptions were mailed to that party to file a written response to the exceptions. A copy of a party’s written exceptions or response must be sent by mail or electronic service, if agreed upon by the parties, to the opposing party and proof must be submitted to the Tribunal that the exceptions or response were served on the opposing party. By _________________________________ Date Entered by Tribunal: May 30, 2023 PROOF OF SERVICE I certify that a copy of the foregoing was sent on the entry date indicated above to the parties or their attorneys or authorized representatives, if any, utilizing either the mailing or email addresses on file, as provide by those parties, attorneys, or authorized representatives. By: Tribunal Clerk