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. 5369

September 19, 1978

TAX ASSESSMENTS:

Uniformity

TAXATION:

Uniformity of assessments

CONSTITUTION OF MICHIGAN:

Art 9 Sec. 3 (uniform assessments)

Where a city increases or decreases assessments of 40% of the property without reviewing assessments of the remaining 60%, the procedure is invalid.

Honorable Roy Smith

State Representative

The Capitol

Lansing, Michigan 48909

You have requested my opinion as to whether an assessment equalization review program that encompasses 40% of the property in a city each year is violative of Const 1963 art 9 Sec. 3 which states:

'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. The legislature may provide for alternative means of taxation of designated real and tangible personal property in lieu of general ad valorem taxation. Every tax other than the general ad valorem property tax shall be uniform upon the class or classes on which it operates.'

At the outset, it should be noted that there is no statute mandating or regulating assessment practices or methodology. Administration of the general property tax is left to the local assessors, who function under the general supervision of the State Tax Commission. The State Tax Commission in turn has developed an Assessor's Manual which by statute MCLA 211.721; MSA 7.140, must be used by assessing officials in making their determination of true cash value.

It must be noted, however, that in implementing an assessment review program the assessor must take care that those areas or properties studied and reassessed are not done so with disregard for the balance of the properties in the assessing district. In Titus v State Tax Commission, 374 Mich 476; 132 NW2d 647 (1965), the City of Lansing's reassessment program was declared unconstitutional because certain areas of the city were studied and assessments increased while the balance of the city was ignored, thereby creating an impermissible non-uniformity of assessments.

In a similar situation, in the recent case of Township of Port Sheldon et al v Ottawa County Board of Commissioners, 80 Mich App 91 (1978), leave to appeal denied 402 Mich 939 (1978), the Court of Appeals rejected the rotation or cyclical method of equalization. In Port Sheldon, supra, in carrying out its equalization function, Ottawa County Board of Commissioners studied a limited number of its governmental units while ignoring the balance of the units in the county. The Court of Appeals found this intentional exercise in selective review invalid as violating the uniformity principle. On the other hand, the Court of Appeals recognized that equalization and assessment programs could proceed on the basis of random sample sales studies or other methods 'as long as the system chosen does not by design create tax disparities between the concerned units.' (Port Sheldon, supra, p 100)

It is my opinion, therefore, that when a city increases or decreases assessments of 40% of the property without reviewing assessments of the remaining 60%, the procedure is invalid.

Frank J. Kelley

Attorney General