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### STATE OF MICHIGAN

COURT OF APPEALS

KATHY J. MCNEW,

Petitioner-Appellant, UNPUBLISHED September 22, 2016

v No. 327944
Tax Tribunal TOWNSHIP OF THORNAPPLE, LC No. 14-007756-TT

Respondent-Appellee.

Before: J ANSEN , P.J., and K. F. K ELLY and O’B RIEN , JJ.

P ER C URIAM

.

Petitioner, Kathy J. McNew, appeals as of right the Tax Tribun al’s final opinion and judgment affirming the uncapping of the taxable value of real p roperty owned by petitioner as the successor trustee of the Gerald A. McNew and Joyce A. McNew Revocable Living Trust for the 2013, 2014, and 2015 taxable years. We affirm.

The Gerald A. McNew and Joyce A. McNew Revocable Living Trust (“the trust”) was executed on December 19, 2008. That same day, Gerald and Joyce McNew, petitioner’s parents, executed a warranty deed conveying the property at issue to the mselves “as tenants-by-theentireties, for their lifetime coupled with an unrestricted pow er to convey the property during their lifetime or the survivor’s lifetime.” According to the d eed, if Gerald or Joyce McNew had not conveyed the property prior to their deaths, the property w as to be conveyed to the trust’s successor and administered according to its terms. According t o the trust, Gerald and Joyce McNew were the settlors and primary trustees, but, upon their d eaths, the first successor trust would be their youngest daughter , petitioner, and, upon their d eath, petitioner wo uld receive “all right, title, and interest in the front twelve (12) acres” and her three siblings would receive “all right, title, and interest in the b ack twenty-eight (28) acres” of the property at issue.

Joyce McNew and Gerald McNew passed away in 2010 and 2012 resp ectively. On July 3, 2014, respondent, the Township of Thornapple, sent petitione r a letter that provided as
follows:

Part of Proposal A of 1994 requires the taxable value of proper ty in the State of Michigan be “uncapped” in the year following a transfer of owne rship. Per the language of the Gerald A. McNew & Joyce A McNew Trust, as succe ssor trustee, the above referenced property is conveyed to you if it had not been conveyed-2- prior to their deaths. Since Gerald A. McNew, the survivor of Joyce A. McNew[,] passed away on April 16, 2012, the property was convey ed to you at that time. The property shoul d have been uncapped for the 2013 tax roll.

Attached to the letter were affi davits reflecting the updated t axable values for the 2013 and 2014 taxable years in light of the uncapping.

Petitioner appealed to the Small Claims Division of the Tax Tr ibunal, arguing that the taxable value of the property was improperly uncapped, but the Tribunal disagreed. It concluded that, upon Gerald McNew’s death in 2012, the property at issue was conveyed to the trust pursuant to the deed. Thus, because a conveyance to a trust is a transfer of ownership pursuant to MCL 211.27a(6)(c), the Tribunal concluded, the taxable value of the property was properly uncapped. Accordingly, the Tribunal concluded that respondent had correctly calculated the taxable values of the property at issue for the 2013, 2014, and 2015 taxable years. This appeal
followed.

“Where fraud is not claimed, [a ppellate courts] review[] the t ribunal’s decision for misapplication of the law or adoption of a wrong principle.” Wexford Med Group v City of
Cadillac , 474 Mich 192, 201; 713 NW2d 734 (2006). Questions of statuto ry interpretation and application are reviewed de novo. Gardner v Dep’t of Treasury , 498 Mich 1, 5; 869 NW2d 199 (2015). When interpreting statut ory provisions, courts “follow the established rules of statutory construction, the foremost of which is to ascertain and give ef fect to the intent of the Legislature.” Id . at 5-6. First, courts look to the language of the statute it self, and, if clear and unambiguous, courts “presume that the Legislature intended the meaning clearly expressed. Accordingly, the statute must be enforced as written and no fur ther judicial construction is permitted.” Id . at 6.

In 1994, voters passed Proposal A, amending article 9, § 3 of the Michigan Constitution to limit the annual increase in property tax asses sments and to authorize enabling legislation. The purpose of Proposal A was to limit tax increases on property as long as it remains owned by the same p arty, even though the actual market value of the property may have risen at a gre ater rate. Toll Northville Ltd v Northville Twp , 480 Mich 6, 12; 743 NW2d 902 (2008). The Michigan Legislature was charged with determining the specifics needed to give effect to Proposal A’s mandate. See Const 1963, art 9, § 3 (pr oviding for the reassessment of a parcel’s value w hen ownership has been transf erred “ as defined by law ”) (emphasis added). The 1995 amendments of the [General Prope rty Tax Act] fixed the cap on assessment increases at the lesser amount of either 5 percent of the assessed value of the pr operty for the previous year or the increase in the rate of inflation from the previous year. MCL 211.27a(2). Aft er certain “transfer[s] of ownership” occur, property becomes uncapped and thus subject to reassessment based on actual property value. MCL 211.27a(3). [ Klooster v City of Charlevoix , 488 Mich 289, 296-297; 795 NW2d 578 (2011) (emphasis in original).]

The term “transfer of ownership” is statutoril y defined in MCL 211.27a(6) as follows:-3- (6) As used in this act, “transfer of ownership” means the con veyance of title to or a present interest in property, including the benef icial use of the property, the value of which is substantially equal to the valu e of the fee interest. Transfer of ownership of propert y includes, but is not limited to the following:

(a) A conveyance by deed.

* * *

(c) A conveyance to a trust after December 31, 1994, except un der any of the following conditions:

( i ) If the settlor or settlor’s spouse, or both, conveys the prop erty to the trust and the sole present beneficiary or beneficiaries are the settler or the settler’s spouse, or both.

( ii ) Beginning December 31, 2014, for residential real property, i f the settlor or the settlor’s spouse, or both, conveys the residenti al real property to the trust and the sole present beneficiary or beneficiaries are the settlor’s or the settlor’s spouse’s mother, fath er, brother, sister, son, daught er, adopted son, adopted daughter, grandson, or g randdaughter and the residentia l real property is not used for any commercial pur pose following the conveyance.

This statutory language is clea r and unambiguous—a conveyance of real property by
deed to a trust after December 31, 1994, is a “transfer of owne rship” that results in the uncapping
of the taxable value of the re al property pursuant to MCL 211.2 7a(3) unless a sta tutory exception applies. In this case, according to the December 2008 warranty deed, if neither Gerald McNew nor Joyce McNew conveyed the property at issue before their dea ths, the property would be conveyed to the trust. Thus, when Gerald McNew passed away in April 2012, the property at issue was conveyed to the trust ( and to petitioner as trustee f or the trust) to be administered according to the trust’s terms. Thus, pursuant to MCL 211.27a( 3), the conveyance of the property on April 16, 2012, to the trust constituted a “transfe r of ownership” that triggered the uncapping of its taxable value.

On appeal, petitioner first argu es that a transfer of ownershi p did not occur because “the transfer of property at issue . . . fits squarely within” a sta tutory exception found in MCL 211.27a(7)(s). We disagree. MCL 211.27a(7)(s) provides as fol lows:

(7) Transfer of ownership does not include the following:

* * *

(s) Beginning December 31, 2013 through December 30, 2014, a t ransfer of residential real property if t he transferee is related to th e transferor by blood or affinity to the first degree and the use of the residential rea l property does not change following the tra nsfer. [MCL 211.27a(7)(s).]-4- However, as the Tribunal correct ly concluded, the conveyance at issue in this case occurred on April 16, 2012, i.e., the date of Gerald McNew’s death. Becaus e MCL 211.27a(7)(s) applies only to conveyances made between December 31, 2013, and Decembe r 30, 2014, and this conveyance obviously was not made between those dates, this sta tutory exception does not apply. Petitioner does not address the date of the conveyance at all on appeal. Instead, she merely claims that a conveyance to the trust was basically a co nveyance to Gerald and Joyce McNew’s children, and we are not convinced that a conveyance to a trust is a conveyance to a “transferor by blood or affinity to the first degree” as plaint iff contends. In any event, we need not reach a conclusion in that regard because the conveyance di d not occur between December 31, 2013, and December 30, 2014.

Affirmed.

/s/ Kathleen Jansen /s/ Kirsten Frank Kelly
/s/ Colleen A. O’Brien