"Section 3.  Property tax administration -- limitation on annual property tax increases.  (1) The Except as provided in subsection (2), the state shall appraise, assess, and equalize the valuation of all property which is to be taxed in the manner provided by law.

            (2)(a) Except as provided in subsection (2)(b), no taxing jurisdiction may increase property taxes on any owner-occupied residence in excess of 1.5% a year.

           (i) An owner-occupied residence is a home, structure, or improvement to real property that is continuously occupied by the owner of the residence as the owner's principal place of residence for more than 180 days during previous calendar year.

            (ii) An owner-occupied residence includes appurtenant land not exceeding 5 acres.

            (iii) An owner-occupied residence, if part of a multiple-dwelling structure, includes that portion of the structure occupied as a residence by the owner but does not include areas owned by others or common areas of the structure.

            (b) (i) Except as provided in subsection (2)(b)(ii), upon a purchase or change of ownership of a residence, the tax increase limitation of subsection (2)(a) does not apply in the first tax year of changed ownership. The residence must be taxed based on the greater of the purchase price or the assessed value of the residence as determined by the state.

            (ii) If a change in ownership is to a spouse, child, or grandchild of the owner, the tax limitation of subsection (2)(a) continues to apply to the residence and tax increases must be limited as if no change in ownership occurred.

            (c) This section does not prohibit the reduction or elimination of property taxes on any real property."

            Section 2.  Applicability.  Section 1 initially applies to an increase in property taxes that are levied on an owner-occupied residence after December 31, 2008 and would limit any increase in property taxes that are levied in tax year 2009.