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. 5484 April 19, 1979 URBAN REDEVELOPMENT CORPORATION LAW: Delegation of screening of tax exemption applications by local legislative body to supervising agency URBAN REDEVELOPMENT CORPORATION LAW: Eligibility for partial tax exemption by all corporations within development area MUNICIPALITIES: Urban Redevelopment Corporation Law MUNICIPALITIES: Performance of administrative duties by city council CONSTITUTION OF MICHIGAN: Art 9, Sec. 2 (surrender of power of taxation) TAXATION: Partial tax exemption pursuant to Urban Redevelopment Corporation Law Section 5 of the Urban Redevelopment Corporation Law authorizes, but does not require a local legislative body to enact an ordinance to appoint an administrative agency to exercise the powers and perform the duties of a supervising agency pursuant to the act. No authority to approve partial tax exemptions pursuant to the Urban Redevelopment Corporation Law may be conferred upon supervising agencies by the local legislative body. Where a local legislative body adopts an ordinance granting partial tax exemptions pursuant to the Urban Redevelopment Corporation Law, every parcel held by any redevelopment in a development shall be entitled to the same partial exemption. Pursuant to the Urban Redevelopment Corporation Law, the performance of administrative duties attendant thereto shall be exercised by a supervising agency. The provision in the Urban Redevelopment Corporation Law authorizing a local legislative body to grant partial tax exemptions to redevelopment corporations does not violate Const 1963, art 9, Sec. 2 which states that the power of taxation shall never be surrendered, suspended or contracted away. Honorable William A. Ryan State Representative 14th District The Capitol Lansing, Michigan Citing the Urban Redevelopment Corporations Law, 1941 PA 250; MCLA 125.901 et seq; MSA 5.3058(1) et seq, you have requested my opinion upon the following questions: '1. Does Section 5 of 1941 PA 250 (MCLA 125.901; MSA 5.3058(1) require a local legislative body utilizing the Act to totally delegate screening, certification, and approval of tax exemption applications to the Planning Board and an appointed Supervising Agency? Does such a delegation effectively pave the way for other exemptions to other redevelopment corporations without City Council approval? '2. Does Section 12(1) of the Act, allowing an exemption of up to ten years for 'any redevelopment corporation' holding property in a 'development', mean that all redevelopment corporations existing or to be formed would qualify for an exemption under the local ordinance? '3. May the City Council, in seeking to retain final approval over each tax exemption application, appoint itself as the Supervising Agency responsible for granting certification to redevelopment plans of redevelopment corporations? '4. Is Section 12(2) of the Act unconstitutional in light of Const 1963, Art 9, Sec. 2 forbidding the contracting away of the power of taxation?' With respect to your first question, 1941 PA 250, supra, Secs. 3 and 5 respectively provide: 'Sec. 3. The following terms, whenever used or referred to in this act, shall, unless a different intent clearly appears from the context, be construed as follows: 'The term 'local legislative body' shall mean the board of aldermen, common council, commission or other board or body vested by the charter of the city or other law with jurisdiction to adopt or enact ordinances or local laws. 'The term 'supervising agency' shall mean the official, bureau, commission or agency appointed, established or designated pursuant to section 5.' (Emphasis added) 'Sec. 5. The local legislative body of a city is hereby authorized by general ordinance or local law to appoint, establish or designate the chief financial officer of the city or some other official or bureau, commission or agency as the person or body to exercise the powers and perform the duties held by or incumbent upon a supervising agency pursuant to this act.' (Emphasis added) Thus, 1941 PA 250, Sec. 5, supra, authorizes, but does not require a local legislative body to pass a general ordinance or local law to appoint the chief financial officer of the city or some other agency to exercise the powers and perform the duties held by or incumbent upon a supervising agency pursuant to this act. No authority to approve a partial tax exemption is conferred upon supervising agencies by this act. 1941 PA 250, supra, Sec. 12, authorizes the local legislative body and not the supervising agency or the planning commission to enact an ordinance to exempt real property by redevelopment corporations. It provides: '1. A local legislative body is hereby authorized by the adoption or enactment of an ordinance or local law to exempt real property held by redevelopment corporations during a maximum exemption period which shall not exceed 10 years from an increase in assessed value over the maximum assessed value, after the adoption or enactment of such an ordinance or local law every parcel of real property held by any redevelopment corporation in a development shall be exempt during the maximum exemption period from any increase in assessed value over or in excess of the maximum assessed value. Such exemption shall not, however, apply to any improvement made upon such real property after the beginning of the maximum exemption period but the local legislative body may, by appropriate legislative action, establish a maximum assessed value and maximum exemption period, not to exceed 10 years, for such subsequent improvements. '2. For the purpose of fixing the date of commencement of the maximum exemption period for a group of parcels of real property in a development area, the city is hereby authorized with the approval of its local legislative body to contract with a redevelopment corporation to place in 1 or more groups the various parcels of real property therein. Such a contract may provide that all the parcels in each group shall be deemed to have a common stated date of completion of the development by the redevelopment corporation.' As only the local legislative body has the authority to enact ordinances to exempt real property from any increase in assessed valuation for the statutory maximum period of time, it may not delegate this legislative function to an official or administrative body. See In Re Brewster Street Housing Site, 291 Mich 313, 340; 289 NW 493 (1939), and People v Sell, 310 Mich 305, 321; 17 NW2d 193 (1945). It is, therefore, my opinion that a local legislative body may delegate to a supervising agency only administrative functions specified for supervising agencies in the act and is precluded from delegating its authority to adopt ordinances allowing such partial tax exemptions. In response to your second question, 1941 PA 250, Sec. 12(1), supra, states that '. . . after the adoption or enactment of such an ordinance or local law every parcel of real property held by any redevelopment corporation in a development shall be exempt. . . .' A local legislative body can determine to enact an ordinance for exemption of all developments or it can choose to retain full taxability by failing to enact an ordinance. If it chooses to pass such an ordinance, than all qualifying redevelopment corporations will be entitled to the tax exemption as mandated by the legislature. A duly enacted ordinance for tax exemption must be equally applied to all redevelopment corporations within the development and all of their property which qualifies as an approved development is entitled to tax exemption. Your second question is answered in the affirmative. As to your third question, in my opinion, the legislature contemplated that the city council would determine the question of potential tax exemption, but that the performance of administrative duties attendant thereto shall be exercised by a supervising agency. It must be presumed that the legislature intended to preserve the concept of separation of powers. See Thiesen v Dearborn City Council, 320 Mich 446, 31 NW2d 806 (1948), and Local 321, State, County and Municipal Workers of America v City of Dearborn, 311 Mich 674; 19 NW2d 140 (1945). It is therefore my opinion that a city council may not appoint itself as the supervising agency. Your fourth question inquires about the constitutionality of 1941 PA 250, Sec. 12(2), supra, in light of Const 1963, art 9, Sec. 2, which provides: 'The power of taxation shall never be surrendered, suspended or contracted away.' 1941 PA 250 Sec. 12(2) supra, however, does not authorize the city to contract with the redevelopment corporation for the grant of the property tax exemption. It is the legislature which grants the exemption in the act, and not the municipality. Compare Lexington Townhouses Cooperative v City of Warren, 32 Mich App 523; 189 NW2d 139 (1971). This section merely authorizes the city to contract with a redevelopment corporation for the grouping or classification of parcels to accomplish a common date for the completion of improvements on those parcels and thus a common date for the commencement of the maximum exemption period for such a group of parcels. 1941 PA 250, supra, Sec. 13, illustrates the legislature's expectation that a development may cover several distinct parcels of property, each having different maximum exemption periods. 1941 PA 250, Sec. 12(2), supra, authorizes the grouping or classification of parcels to minimize the number of maximum exemption periods attributable to a development or improvement, although several distinct parcels may be involved. The legislature has the power to prescribe the subjects of taxation and exemption and to make classifications in such regard. United States Cold Storage Corp v Detroit Board of Assessors, 349 Mich 81, 91; 84 NW2d 487 (1957), and Rockwell Spring and Axle Co v Romulus Township, 365 Mich 632; 114 NW2d 166 (1962). The exercise of the legislature's power to grant and classify the exemptions is not the surrender or contracting away of the power of taxation. Compare W. A. Foote Memorial Hospital, Inc. v City of Jackson Hospital Authority, 390 Mich 193, 215; 211 NW2d 649 (1973). It is, therefore, my opinion that section 12(2) of 1941 PA 250 is not in violation of Const 1963, art 9, Sec. 2. Frank J. Kelley Attorney General