STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL

Opinion No. 5196

May 11, 1977

DEFERRED SPECIAL ASSESSMENTS:

Homesteads of persons attaining age of 65 years.

DEPARTMENT OF TREASURY:

Duty to pay all of deferred special assessments.

The owner of a homestead who has attained the age of 65 years and is otherwise qualified upon the filing and approval of a single application, may obtain the deferment of all of the installments of a special assessment levied and unpaid for certain improvements as provided for in 1976 PA 225, as last amended by 1976 PA 437, and payment therefor shall be made by the Department of Treasury.

Mr. Allison Green

State Treasurer

Department of Treasury

Treasury Building

Lansing, Michigan

You have requested my opinion on the following questions regarding the effect of 1976 PA 225, as last amended by 1976 PA 437:

1976 PA 225, as last amended by 1976 PA 437, MCLA 211.761 et seq; MSA 5.3536(1) et seq, provides for the deferment of the collection of special assessments of $300 or more on homestead properties owned by persons who have been residents of the State and owners of the homestead for five years or more if they have attained the age of 65 years and their household income is not in excess of $6,000 per year. Under the provisions of the Act the deferment of special assessments is to obtain until one year after the owner's death subject to further order of the Probate Court, or until the homestead or any part thereof is conveyed or transferred to another or a contract to sell is entered into.

The task at hand is to ascertain and give effect to the intent of the legislature. City of Grand Rapids v Crocker, 219 Mich 178; 188 NW 221 (1922). Resort may be had to the history of the statute and to the legislative proceedings resulting in the enactment as disclosed in the jourals. Liquor Control Commission v Fraternal Order of Eagles, Aerie No. 629, 286 Mich 32; 281 NW 427 (1938).

Responding to the first question, whether the entire special assessment, including delinquent, current and future annual installments are to be paid, a study of the legislative history of 1976 PA 225, supra, demonstrates the controlling legislative intent. 1976 PA 225, supra, demonstrates the controlling legislative intent. 1976 PA 225, supra, was introduced in the 1975 legislature as House Bill No. 4047. As originally introduced, Section 6 of House Bill No. 4047 concluded with the following sentence:

The House of Representatives, on second reading, approved a Substitute House Bill No. 4047 on December 4, 1975. Section 6 of Substitute House Bill No. 4047 omitted the last sentence of Section 6 and contained in its place the following sentence:

1975 House Journal No. 133, p 3799. Thereafter, the Substitute House Bill No. 4047 was approved 94 to 4, without change. 1975 House Journal No. 134, p 3824. The Senate amended Section 6 of Substitute House Bill No. 4047 by striking all of the last sentence of Section 6 and by adding the following sentence to the beginning of section:

Both houses of the legislature approved Section 4 of Substitute House Bill No. 4047, without change, which contains the following last sentence:

Any possible conflict between Section 4 and Section 6 of 1976 PA 225, supra, was eliminated by the enactment of 1976 PA 437. There the legislature specifically amended Section 4 of 1976 PA 225, supra, to strike the phrase 'each year' therefrom.

In light of this clear legislative history, there is no basis for construing the word 'shall', as used in Section 6 of 1976 PA 225, supra, to mean 'may'. As a command to the Department of Treasury, it is mandatory. See People v De La Mater, 213 Mich 167; 182 NW 57 (1921).

This explication of the legislative history of Sections 4 and 6 of 1976 PA 225, as last amended by 1976 PA 437, supra, is clear and convincing. The conclusion is compelled that the Department of Treasury shall pay the entire balance owing of the special assessment of an applicant who qualifies under the Act. Thus, the entire special assessment, including all delinquent, if any, current and future annual installments, must be paid by the Department of Treasury, as command by the legislature in 1976 PA 225, Sec. 6, supra.

2. Since the answer to the first question is in the affirmative, it is unnecessary to consider and answer the second question.

3. In your third question you ask whether lands, upon which the State has filed a deferred special assessment lien pursuant to 1976 PA 225, supra, may be sold for delinquent ad valorem property taxes.

At the outset it should be observed that the legislature has provided in 1976 PA 225, Sec. 2, supra, that the payment of special assessments and due and payable on a homestead where the owner meets all of the terms and conditions of this Act shall be deferred until one year after the owner's death, subject to further order by the Probate Court, or until the homestead or any part thereof is conveyed or transferred to another or a contract to sell is entered into. This section must be read together with Section 8 of the Act, supra, which provides:

The special assessments deferred under the provisions of 1976 PA 225, supra, are those assessments for improvements against real property for curb and gutter, sidewalk, sewer, water, street paving, a drain, or a connection fee or similar charge for a sewer or water system as specified by the legislature in Section 1 of the Act, supra. Ad valorem property taxes are assessed, levied and collected pursuant to the provisions of 1893 PA 206; MCLA 211.1 et seq; MSA 7.1 et seq.

The distinction between ad valorem property taxes and special assessments is well settled. The former are burdens imposed upon property owners for governmental purposes without regard to any special benefit inuring to the taxpayer. The latter are imposed on the theory that the value of the property in the special assessment district is enhanced by the improvement for which the assessment is made. In re Petition of Auditor General, 226 Mich 170; 197 NW 552 (1924). Graham v City of Saginaw, 317 Mich 427; 27 NW2d 42 (1947).

Since the legislature has deferred only the payment of special assessments under the provisions of 1976 PA 225, as last amended by 1976 PA 437, lands upon which the State has filed a deferred special assessment lien may be sold for delinquent ad valorem taxes in accordance with the provisions of 1893 PA 206, supra.

4. In your fourth question you ask what remedies are available to the State to protect its deferred special assessment lien.

In 1976 PA 225, Sec. 8, supra, upon termination of the deferred period of the special assessment, either one year after the owner's death, subject to the order of the Probate Court, or conveyance or execution of a contract for sale of the homestead, whichever occurs first, all of the collection procedures specified by 1893 PA 206, supra, become operative. 1976 PA 225, Sec. 8, supra, treats all of the deferred special assessments as having become delinquent three years prior to the termination of the deferment and the property would be subject to tax sale to satisfy the deferred special assessment lien in accordance with the provisions of 1893 PA 206, supra.

5. Because the answer to your third question was in the affirmative, it is unnecessary for me to consider and answer your fifth question.

Frank J. Kelley