The Michigan Senate approved legislation Wednesday that would prevent out-of-state residents from improperly claiming property tax exemptions when they buy second homes in Michigan.

Sponsored by state Reps. Kim LaSata, of Bainbridge Township, and Dave Pagel, of Berrien Springs, the bills address a key issue in the southwest part of the state near Lake Michigan.

The legislation was introduced because some property owners intentionally declare a homestead property tax exemption on their second home in Michigan, while at the same time claiming a similar exemption on their primary residence in another state.

“I am very encouraged by today’s vote,” LaSata said. “We are one step closer to eliminating an unfair practice that takes money away from Michigan’s classrooms and students.”

The 18 mill non-homestead levy is allocated to local K-12 education, which means when people take advantage of this loophole, local schools lose thousands of dollars in potential revenue.

“Our legislation puts an end to this improper practice and gives local governments a mechanism to collect what is due.” Pagel said. “It’s an important measure that will benefit public schools.”

The new legislation would make it clear that if a property owner has claimed a principal residence exemption in Michigan while claiming a similar exemption in another state, the Michigan exemption would be rescinded. A claim for a Michigan homestead tax exemption could be denied and enforced retroactively if it is discovered the property owner had claimed a similar exemption in another state.

Intentional violators could face a misdemeanor criminal charge.

The legislation already has been approved by the Michigan House. It will soon be on its way to the governor for his consideration.