STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL

Opinion No. 5340

July 28, 1978

TAXATION:

Differential millage

CONSTITUTION OF MICHIGAN:

Art 9, Sec. 3 (uniform general ad valorem taxation)

VILLAGES:

Differential ad valorem taxes between township and village

TOWNSHIPS:

Differential ad valorem taxes between township and village

A statute which provides for a different ad valorem tax rate within the boundaries of a village located within a charter township is unconstitutional.

Honorable Ernest W. Nash

State Representative

Lansing, Michigan 48909

You have requested my opinion concerning 1947 PA 359, Sec. 27, as amended by 1976 PA 90; MCLA 42.27; MSA 5.46(27), which authorizes imposition of and provides for limitation of ad valorem taxes by townships for their municipal purposes. You ask whether a levy of several mills, not exceeding five, on property in the nonincorporated portion and a simultaneous levy of one mill upon property in the village portion of the township is constitutional.

Prior to the effective date of 1976 PA 90, a charter township could levy a tax not exceeding 1/2 of 1 percent (five mills), upon all taxable property within the township. The electors of the charter township may elect to increase the tax levy to an amount not exceeding 1 percent (ten mills), for a period not exceeding 20 years at any one time.

Differential millage was the subject of 1976 PA 90, which amended, in part, 1947 PA 359, Sec. 27, supra, to provide that the

This amendment, which was effective for the first time for the levy of 1977 taxes, purports to limit the township board to the levy of one mill upon property located within the village portion of the township, and to five mills in the nonincorporated portion of the township.

There are many charter townships which do not have an incorporated village within their boundaries. Obviously, such townships may levy up to five mills upon property throughout the township. However, a township which does contain an incorporated village is limited by 1947 PA 359, supra, to a levy of one mill upon property in the village and five mills in the remainder of the charter township.

Initially, it is noted that for purposes of the levy of township property taxes, a village is part of the township in which it is located. See Bray v Stewart, 239 Mich 304; 214 NW 193 (1927); Dearborn v Allen Park, 348 Mich 449; 83 NW2d 447 (1957); Ford Motor Co v Wayne Co, 358 Mich 653; 101 NW2d 320 (1960).

Const 1963, art 9, Sec. 3 mandates uniform general ad valorem taxation. The Supreme Court, in Huron-Clinton Metropolitan Authority v Board of Supervisors, 304 Mich 328, 335, 336; 8 NW2d 84, 87-88 (1943); and in Titus v State Tax Comm, 374 Mich 476, 480; 132 NW2d 647, 649 (1965), adopted the following from Exchange Bank of Columbus v Hines, 3 Ohio St 1, 15:

The amendatory provisions of 1976 PA 90 clearly violate the constitutional rule of tax uniformity. The Constitution requires that the rate of a charter township tax 'must be co-extensive with the territory to which it is applicable,' i.e., throughout the charter township.

It is also to be noted that, currently and since its inception, 1947 PA 359, Sec. 27, supra, has provided that:

The foregoing language authorizes the levy of differential millage, i.e., a township property tax levy of a lesser rate upon property located in the village than upon property located in the township outside the corporate boundaries of the village. For reasons discussed above, any application of the quoted provision which would result in a differential millage would also be unconstitutional.

1976 PA 90 added a new Sec. 3a to the act, 1947 PA 359, dealing with charter townships. The remaining amendments of Sec. 27, wrought by Act No. 90, are solely concerned with grammatical improvement.

MCLA 8.5; MSA 2.216, restates the general rule of severability of invalid portions from valid portions of a statute. The invalidity of a portion of a statute does not affect its remaining portions which can be given effect without the invalid portion, provided that such remaining portions are not rendered inoperable or inconsistent with legislative intent. People v DeSilva, 32 Mich App 707; 189 NW2d 362 (1971); Am Youth Fdn v Benona Twp, 37 Mich App 722; 195 NW2d 304 (1972).

After severance of the invalid portion of Sec. 27, namely, the limitation of the charter township levy to 1/10 of 1% of the assessed valuation of property within the limits of a village located within the township, the remaining portions of 1976 PA 90, supra, particularly the addition of Sec. 3a to the charter township law, can remain operable and thus are fully effective.

In conclusion, to the extent that 1947 PA 359, Sec. 27, supra, provides for a differential millage within the boundaries of a village located within a charter township, it is unconstitutional.

Frank J. Kelley