AB 598

Under current law, a local governmental unit may allow a special assessment

that is imposed to pay for public improvements to be paid in installments. A local

governmental unit includes a city, village, town, county, and special purpose district

that is allowed to levy a special assessment. If installments are allowed, the local

governmental unit may impose interest on the unpaid balance of the special

assessment. Current law does not prescribe a maximum rate of interest that may

be charged. Under this bill, installment payments are structured by the local

governmental unit's governing body. Also under the bill, the interest rate is set by

the governing body, and may include an administrative fee of up to 2 percent. Once

the interest rate is set, the bill prohibits the rate from being changed during the

course of the installment payments.

Also under current law, if a person is aggrieved by the levy and collection of an

unlawful property tax assessed against his or her property, the person may file a

claim against the taxation district to recover the unlawful tax. If the taxation district

denies the claim, the person may file an action in circuit court. If the person filing

the claim prevails with the taxation district or at the circuit court, the recovery on

his or or her claim may include interest at the rate of 0.8 percent per month.

Under this bill the interest rate that a person may receive on the recovery of an

unlawfully assessed tax is the average annual discount rate determined by the last

auction of 6-month U.S. treasury bills that is held before the claim for recovery is

filed or the action for recovery is commenced. This rate of interest is the same as the

maximum amount of interest that an aggrieved person may collect on the recovery

of an excessive assessment of property taxes imposed by a taxation district.

Generally, under current law, and subject to a number of exceptions, a city,

village, town, or county (political subdivision) may not increase its levy by a

percentage that exceeds its "valuation factor," which is defined as the greater of

either zero percent or the percentage change in the political subdivision's equalized

value due to new construction, less improvements removed. The base amount of a

political subdivision's levy, on which the levy limit is imposed, is the actual levy for

the immediately preceding year.

Under one of the current law exceptions, the limit that would otherwise apply

does not apply to the amount that a political subdivision levies to make up any

revenue shortfall for the debt service on a revenue bond issued by the political

subdivision.

Under this bill, a similar exception is created for the amount that a political

subdivision levies to make up any revenue shortfall for the debt service on a special

assessment B bond issued to fund a public improvement.