[HISTORY: Adopted by the City Commission of the City of Royal Oak as indicated in article histories. Amendments noted where applicable.]
[Adopted 10-15-1990 by Ord. No. 90-14]
Editor's Note: Section 20, Sunset provision, of this ordinance, provided that this ordinance shall be reviewed by the City Commission prior to the passage of one year; and that it shall not remain in effect beyond one year unless it is again passed by the City Commission.
This article shall be known as "An ordinance to defer tax payment for low-income senior citizens."
It having been determined that property taxes may become a burden on senior citizens with moderate, fixed incomes to the extent of maintaining the ownership interests in their homes, this article proposes to defer payment of municipal taxes in order to lessen those burdens and to protect the homestead and property values of those so impacted.
As used in this article, the following terms shall have the meanings indicated:
- The City of Royal Oak.
- A dwelling or a unit in a multiple-unit dwelling, owned and occupied as a home by the owner thereof, including all contiguous unoccupied real property owned by that person. Homestead includes a dwelling and an outbuilding used in connection with a dwelling, situated on the lands of another.
- Includes a person eligible for the exemption specified in this act, who owns a homestead, or is purchasing a homestead under a mortgage or land contract or who owns a dwelling situated on the leased lands of another; among others, it does not include a tenant-stockholder of a cooperative housing corporation.
- PROPERTY TAX
- A tax against real property by the City for any millage, except debt levies. Property tax does not include charges for current service, taxes for debt levies or any tax levied by a government agency other than the City, even if the City collects it.
The payment of property taxes that are due and payable on a homestead in any year in which the owner meets all of the terms and conditions of this act shall be deferred until one year after the owner's death, subject to further order by the probate court or until the homestead or any part of the homestead is conveyed or transferred to another or a contract to sell is entered into. The death of a spouse shall not terminate the deferment of property taxes for a homestead owned by husband and wife under tenancy by the entireties as long as the surviving spouse does not remarry. The inclusion of another person as a part owner, for example a son or a daughter, shall terminate the deferment of property taxes for a homestead. Property taxes deferred under this act may be paid in full at any time.
If the collecting officer of the City determines that legal or equitable title to a homestead or any part of a homestead for which property taxes are deferred under this article is conveyed or transferred or a contract to sell the homestead or part of a homestead is entered into, and the deferment is not terminated, the owner or owner's estate shall be subject to an interest rate of 1% per month or fraction of a month, on the amount deferred, computed from the date of conveyance, transfer, or contractual agreement. The amount of interest shall be payable to the collecting officer and transmitted by that officer pursuant to § 671-10.
The City Assessor shall notify each owner whose property taxes are authorized to be deferred under this act that if legal or equitable title to the homestead or any part of the homestead is conveyed or transferred, or a contract to sell the homestead or part of the homestead is entered into, the deferment is terminated and the amount deferred is immediately due and payable, plus interest as provided in § 671-5.
An owner of a homestead who is 65 years of age or older, a citizen of the United States, a resident of this state for five or more years, and the owner of the homestead for five or more years is eligible for the deferment of property taxes on that homestead pursuant to this act. The owner and the owner's spouse shall not have received during the last calendar year household income as defined in Section 508 of Act No. 281 of the Public Acts of 1967, as amended, being MCLA § 206.508 of the Michigan Compiled Laws, in excess of 1.3 times the "very low income limit" established by HUD for the Oakland County area under Sec. 8 Existing Housing Assistance Program. Further, the owner and the owner's spouse shall not have assets in excess of $200,000.
The maximum dollar amount of household income and assets required by § 671-7 to be eligible for the deferment of property taxes under this act shall be adjusted each year beginning on January 1, 1991, pursuant to § 671-7. The resultant product shall be rounded off to the nearest whole dollar, which shall be the new household income and asset requirements for the current year.
An owner may apply to the local assessing officer for deferment of the payment of property taxes on the owner's homestead. The application shall be made upon an affidavit form to be furnished and made available by the City Assessor at convenient locations. The affidavit form shall contain the following statement in ten-point boldface type located immediately above the applicant's signature: "If this deferment is authorized the City Treasurer will place a lien on your property." A person making a false affidavit for the purpose of obtaining deferment of property taxes under this act is guilty of perjury. If the homestead is owned jointly by husband and wife, each spouse shall sign and file the affidavit. If the homestead is encumbered by a mortgage or an unpaid balance on a land contract, a deferment of property taxes shall not be made without the written consent of the mortgagee or the land contract vendor, which shall be filed with the affidavit. The affidavit shall contain proof of insurance for the following year. A new affidavit shall be filed each year with the local assessing officer at least 60 days prior to the due date of a property tax bill or installment of the property tax for which deferment is requested.
Upon receipt of the affidavit, the local assessing officer shall promptly examine it to determine if the applicant meets the requirements of this article and may make an inspection of the property and property records and conduct an investigation and survey as it deems necessary. An applicant shall not be compelled to supply information not reasonably essential to a proper determination of the eligibility of the owner and the homestead for the relief provided under this article. The local assessing officer shall promptly make its decision with respect to an application under this section and shall notify the applicant of its decision not later than the due date for the property taxes involved in the application. A decision of the local assessing officer shall be final except for appeal by right to the City Commission or as otherwise provided pursuant to the Constitution.
The local assessing officer shall report the total number and amounts of such deferments to the City Commission prior to the due date of any property taxes.
The City Treasurer shall cause the recording of a lien in favor of the City with the register of deeds and notify the County Treasurer of the property taxes deferred, indicating the amount deferred for each property tax and identifying the homestead. The collecting officer shall enter on the current tax roll opposite each homestead for which deferment is allowed a notation that payment is deferred pursuant to this article.
The City Treasurer, if required by Act No. 206 of the Public Acts of 1893, as amended, being MCLA §§ 211.1 to 211.157 of the Michigan Compiled Laws, to make a return of delinquent taxes to the County Treasurer, shall include in the delinquent tax roll all homesteads for which deferment of property tax assessments are approved, and shall enter on the delinquent tax roll opposite each such item a notation that payment is deferred pursuant to this article. If the City is collecting its own delinquent taxes, the Treasurer similarly shall note on the City tax record of each such property that payment is deferred pursuant to this article. The collection of property taxes deferred for all such homesteads shall be made thereafter only in accordance with this article, any law, ordinance, or charter to the contrary notwithstanding.
Upon termination of the deferment of property taxes under this article, the collection procedures of Act No. 206 of the Public Acts of 1893, as amended, and any provisions of any law, ordinance, or charter applicable to the collection of delinquent taxes in a City collecting its own delinquent taxes, suspended by the terms of this article during the period of deferment, shall again apply to the deferred property taxes the same as they would have applied had no deferment been authorized and all of the property taxes had been levied initially in the third year preceding the calendar year in which the deferment was terminated, except that the provisions of those laws, ordinances, and charters with respect to collection fees, interest, penalties, and other charges shall not be applicable to the collection of, or foreclosure of the lien for property taxes deferred hereunder. The lien for deferred property taxes shall be for the amount of the property tax only and shall not have any additional fee, penalty, or interest added except as provided in this act.
Editor's Note: See MCLA § 211.1 et seq.
[Amended 10-14-1991 by Ord. No. 91-19]
The payment of property tax deferred under this article made by the owner or owner's estate shall include interest computed at a rate of 1/2% per month or fraction of a month.
The City Assessor shall notify each owner whose property taxes are authorized to be deferred under this article of the interest rate provided in this section.
Upon receipt of payment of property taxes deferred under this act, the collecting officer shall forthwith transmit the amount received to the City as reimbursement for the sums theretofore advanced, to indemnify the local property tax funds.
[Adopted 5-19-2008 by Ord. No. 2008-07]
This article shall hereafter be known and cited as the "City of Royal Oak Tax Exemption Ordinance for The Village of Royal Oak."
The City Commission of Royal Oak, Oakland County, Michigan, hereby makes the following legislative findings:
That it is a proper public purpose of the State of Michigan and its political subdivisions to provide housing for its elderly citizens and to encourage the development of such housing by providing for a service charge or payment in lieu of property taxes (hereinafter "PILOT") in accordance with the provisions of Public Act 346 of 1966, as amended.
That such housing for elderly persons is a public necessity, and, as the City of Royal Oak will be benefited and improved by such housing, the encouragement of the same by providing certain real estate tax exemptions therefor is a valid public purpose.
That the City of Royal Oak is authorized by said Act to establish or change the service charge to be paid in lieu of taxes by any or all classes of housing exempt from taxation under this article at any amount it chooses not to exceed the taxes that would be paid but for the Act.
That the provisions of this article for tax exemption and the service charge in lieu of taxes during the periods hereinafter contemplated are essential to the determination of economic feasibility of housing developments which are constructed and financed in reliance thereto.
The City of Royal Oak acknowledges that The Damone Group, L.L.C. (the "sponsor") has offered, subject to receipt of a mortgage loan from the Michigan State Housing Development Authority, to erect, own and operate a housing development identified as "The Village of Royal Oak" on certain property consisting of a site of approximately 7.53 acres in the City of Royal Oak at 3412 Devon Road, located on the north side of West Thirteen Mile Road between Crooks Road and Durham Road to partially serve elderly persons of low to moderate income. (See attached Exhibit A for legal description of the housing development). The sponsor has offered to pay the City on account of this housing development an annual service charge for public services in lieu of taxes pursuant to Ordinance No. 2006-11, Emergency Service Cost Recovery Ordinance, and to absorb all costs for solid waste collection and disposal.
[Amended 4-20-2009 by Ord. No. 2009-01]
As used in this article, the following terms shall have the following meanings:
- The State Housing Development Authority Act, being PA 346 of 1966 of the State of Michigan, as amended.
- ANNUAL SHELTER RENTS
- The total collections during an agreed annual period from all occupants of a housing development representing rents or occupancy charges exclusive of all charges for natural gas, electricity, heat or other utilities furnished to the occupants.
- The Michigan State Housing Development Authority.
- A single person who is 55 years of age or older or a household in which at least one member is 55 years of age or older and all other members are 50 years of age or older.
- ELIGIBILITY OF OCCUPANTS
- Such persons as shall be determined pursuant to the Regulations Establishing Admissions and Continued Occupancy Policies, as may have been or will be developed by the Authority.
- HOUSING DEVELOPMENT
- A development which contains a significant element of housing for elderly persons and such elements of other housing, commercial, recreational, industrial, communal, and educational facilities as the Authority determines improve the quality of the development as it relates to housing for persons of low to moderate income.
- MORTGAGE LOAN
- A loan to be made by the Authority to the sponsor for the construction and permanent financing of the housing development.
- Persons or entities that have applied to the Authority for a mortgage loan to finance a housing development.
- Fuel, water, sanitary sewer service and/or electrical service that are paid by the housing development for and on behalf of its eligible occupants.
It is hereby determined that the class of housing developments to and for which the tax exemption shall apply and for which a service charge shall be paid in lieu of such real property taxes shall be elderly units only, which are financed or assisted pursuant to the Act. It is further determined that The Village of Royal Oak is of this class of housing.
The housing development identified as "The Village of Royal Oak" and the property on which it shall be constructed shall be exempt from all property taxes from and after the commencement of construction. The City, acknowledging that the sponsor and the Authority have established the economic feasibility of The Village of Royal Oak in reliance upon the enactment and continuing effect of this article and the qualification of the housing development for exemption from all property taxes and a payment in lieu of taxes as established herein, and in consideration of the sponsor's offer, subject to receipt of a mortgage loan from the Authority to construct, own and operate said housing development, agrees to accept payment of an annual service charge for public services in lieu of all property taxes.
The annual service charge for the Village of Royal Oak shall be equal to 4% of the annual shelter rents actually collected. However, the service charge shall not exceed taxes which would be paid absent this tax exemption; provided, however, that the subject development will not be entitled to solid waste collection and disposal service, including yard waste collection, and all emergency service costs shall be reimbursed to the City of Royal Oak in accordance with Chapter 306, Emergency Service Recovery Ordinance No. 2006-11.
[Amended 4-20-2009 by Ord. No. 2009-01]
Notwithstanding the provisions of Section 15(a)(5) of the Act to the contrary, a contract between the City and future sponsors, with the Authority as a third-party beneficiary thereunder, to provide tax exemption and accept payments in lieu thereof as previously described is effected by enactment of this article. The Mayor and City Clerk shall be and hereby are authorized to execute any and all such contracts which may be required by the Authority for the purpose of effectuating and executing the provisions of this section.
Editor's Note: See MCLA § 125.1415a(5).
The annual service charge in lieu of taxes as determined hereunder shall be payable in the same manner as general property taxes are payable to the City except that the annual payment shall be paid between July 1 and July 15 of each year, beginning in the year following the year in which the certificate of occupancy is issued to the housing development. Payments in lieu of taxes or portions thereof remaining unpaid after August 1 of the year in which they are due shall accrue at an interest rate of 4% per month.
[Amended 7-20-2009 by Ord. No. 2009-08]
The tax exemption granted by this article shall remain in full force and effect until the happening of one or more of the following:
The repayment of all Authority loans made in connection with the housing development or the real property associated therewith.
The expiration of 50 years from and after the first year that a sponsor avails itself of the tax exemption benefits provided by this article.
The cessation of the housing development as housing for the elderly.
Failure to begin construction of the housing development within one year from the effective date of this amendment.