House Bill 4050 was introduced by Representative Bettie Scott (Democrat, 3rd District) on January 22, 2009. The stated purpose of the bill is to amend the Michigan property tax code to exclude unpaid utility bills from being considered tax payments. Thus, a person's home would not be subject to foreclosure due to their failure to pay utility bills on-time.. Section 78A of the Michigan General Property Tax Act, which House Bill 4050 seeks to amend, provides for the forfeiture of assets on which taxes are not paid. Thus, if a person continually fails to pay their property taxes, their property can be seized by the state as payment for the unpaid taxes. House Bill 4050 would amend this section of the law to specifically exclude delinquent utility bills from being considered taxes. The rest of the section would remain unchanged under the amendment.
In troubled economic times, this seems to be a humanitarian attempt to reduce the rate of home foreclosure. Under current law, a person can be exempted from paying property taxes by reason of poverty. Section 211.7u of the General Property Tax Act provides for poverty exemptions. However, the act states that "taxes" include any "interest, penalties, or fees..." There is no specific exemption for a person's utility bills. Thus, a person in poverty is exempt from paying property taxes, but could technically be considered to be evading their property taxes if they fail to pay their utilities.
H.B. 4050 was introduced on January 22, 2009. It was subsequently read into the record and referred to the Committee on Intergovernmental and Regional Affairs. On February 4, it was reassigned to the Committee on Urban Policy. The bill was reported out of committee favorably on October 13 with the recommendation that it be passed by the House as a whole. However, no action seems to have been subsequently taken on the bill. According to the Michigan Legislature website, the bill was "referred to a second reading" on October 13, the same day it was reported out of committee. The bill was popular in committee, passing by a vote of 6-1. The bill itself seems quite benign and uncontroversial, likely costing little if any revenue. Though no public polling has been taken on the matter, this would likely be a fairly popular proposal. It is a simple, cheap, humanitarian measure. Whether this bill will ultimately be enacted is unclear, though passing the Republican-controlled Senate would likely be more difficult that the Democratic House of Representatives. If passed by both houses of the legislature, it would almost certainly be signed by Governor Granholm.