The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us) STATE OF MICHIGAN FRANK J. KELLEY, ATTORNEY GENERAL Opinion No. 5185 March 22, 1977 TAX ASSESSMENTS: True cash value Improvements to realty CONSTITUTION OF MICHIGAN: Art 9, Sec. 3 The provision of the general property tax act which excludes expenditures for certain normal repairs and maintenance up to a minimum of $4,000 each year not to exceed 3 consecutive years from the determination of 'cash value' is valid. Hon. Bobby Crim State Representative The Capitol Lansing, Michigan 48901 You have asked for my opinion as to whether, in providing for ad valorem taxation of real property, 1976 PA 293 (1) was a valid exercise of the legislature's authority to provide for the determination of true cash value. Const 1963, art 9, Sec. 3, provides: 'The legislature shall provide for the uniform general ad valorem taxation of real and tangible personal property not exempt by law. The legislature shall provide for the determination of true cash value of such property; the proportion of true cash value at which such property shall be uniformly assessed, which shall not, after January 1, 1966, exceed 50 percent; and for a system of equalization of assessments. . . .' 1893 PA 206, Sec. 27, as amended by 1976 PA 293 and 1976 PA 411 currently provides in pertinent part: "Cash value', means the usual selling price at the place where the property to which the term is applied shall be at the time of assessment, being the price which could be obtained for the property at private sale, and not at forced or auction sale. Any sale or other disposition by the state or an agency or political subdivision of the state of lands acquired for delinquent taxes or an appraisal made in connection therewith or the value attributed to the property of regulated public utilities by any governmental regulatory agency for rate making purposes, shall not be considered as controlling evidence of true cash value for assessment purposes. In determining the value the assessor shall also consider the advantages and disadvantages of location, quality of soil, zoning, existing use, present economic income of structures, including farm structures and present economic income of land when the land is being farmed or otherwise put to income producing use, quantity and value of standing timber, water power and privileges, mines, minerals, quarries, or other valuable deposits known to be available therein and their value. 'The assessor, beginning December 31, 1976, shall not consider expenditures for normal repairs and maintenance in determining the true cash value of property for assessment purposes. In no event shall the amount excluded exceed $4,000.00 each year for not to exceed 3 consecutive years. The following repairs shall be considered normal maintenance if they are not part of a structural addition: '(a) Outside painting. '(b) Repairing or replacing siding, roof, porches and steps, or sidewalks and drives. '(c) Repainting, repairing or replacing existing masonry. '(d) Replacement of awnings. '(e) Add or replace gutters and downspouts. '(f) Replace storm windows or doors. '(g) Insulation or weatherstripping. '(h) Complete rewiring. '(i) Replacing plumbing and light fixtures. '(j) New furnace replacing one of the same type or replacing oil or gas burner. '(k) Plaster repairs, inside painting, or other redecorating. '(l) New ceiling, wall, or floor surfacing. '(m) Removing partitions to enlarge rooms. '(n) Replace automatic hot water heater. '(o) Replacing dated interior woodwork.' Pursuant to Const 1963, art 9, Sec. 3, the legislature must provide for uniform taxation of real and personal property and must also provide a method by which the true cash value is to be determined. It is clear, therefore that the legislature may implement this constitutional mandate by specifying benchmarks to be used by those involved in the assessment process. Although the legislature may not adopt a definition of true cash value which is the antithesis of that term, it may specify the factors that are to be taken into account by an assessor in making a determination of true cash value. That the legislature has this degree of control in fixing the standards by which the true cash value of property is to be determined may be demonstrated by reference to the following excerpt from the recent case of Cooper Township v State Tax Commission, 393 Mich 58; 222 NW2d 900 (1974). 'It is the Township's position that when the Constitution's framers chose the unique term 'true cash value' they had in mind a determination of value not necessarily synonymous with the more common term 'fair market value'. In the opinion of the Township, 'true cash value' more properly refers to 'that portion of the theoretical consideration paid which is net to the seller. Put in another fashion, if the theoretical price of the theoretical seller's home is $20,000 but he leaves the theoretical closing table with only $18,500 [there being $1,500 expenses of sale], the 'true cash value' of the real estate is $18,500.' 'The Township, however, points to no authority, judicial or otherwise, to buttress its argument. 'We are confident that the State Tax Commission followed the clear intent of the legislature as expressed in MCLA 211.27; MSA 7.27 when it refused to consider costs of sale in the determination of true cash value. The statute, while it states many factors that the assessor should consider in reaching his opinion of value, makes no mention of such factors as commissions, abstract and deed expenses, or any other costs normally associated with the sale of real property. If the Legislature had intended these expenses to be deducted, we believe that it would have made its intention apparent in the language of the statute. See, generally, State ex rel Morgan v Kinnear, 80 Wash 2d 400; 494 P2d 1362 (1972); The Michigan Property Tax: Assessment, Equalization, and Taxpayer Appeals, 17 Wayne L Rev 1397, 1415-1417 (1971).' [393 at 72; emphasis added] As noted, 1893 PA 206, Sec. 27, supra, provides that, begining with 1977 assessments, the assessor 'shall not consider expenditures for normal repairs and maintenance in determining the true cash value of property.' The act further provides that the amount excluded from consideration shall not exceed $4,000 for each year for not to exceed three consecutive years. The act then lists 15 items of 'repair' that shall be considered 'normal maintenance' if they are not part of a structual addition to the property. I see no relevant distinction between the exclusion of expenses of sale from the determination of cash value and the exclusion of the cost of normal repairs and maintenance from the determination of cash value. Therefore, since the Supreme Court in Cooper Township gave its approval to legislative authority to exclude expenses of sale, it must be concluded that they will similarly uphold the statutory provision excluding the cost of normal repair and maintenance. It is therefore my opinion that the amendments to 1893 PA 206, Sec. 27, constitute a valid exercise of the legislature's authority to provide for the determination of true cash value. It is to be noted, however, that in implementing this provision it is the assessor's duty to determine what the fair maket value of the property would be if the named repairs were not made, not to deduct the cost of repairs from the assessment. Frank J. Kelley Attorney General (1)