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. 5544 August 15, 1979 MUNICIPALITIES: Tax abatement for housing project located within a village Where a housing project is eligible for tax abatement and receives health and safety services from the village within which it is located, the owners of the housing project must file notice of exemption with the village assessor. By ordinance, the village may change the period of tax exemption. Service charges in lieu of taxes are paid to the village and the village may increase such charges by ordinance. Honorable Gary G. Corbin State Senator The Capitol Lansing, Michigan 48909 You have asked a series of questions with respect to the effect of 1966 PA 346, Sec. 15a, MCLA 125.1415a; MSA 16.114(15)(a), on the eligibility of a housing project located within a village for tax abatement. A housing project which is eligible for tax abatement, pursuant to 1966 PA 346, Sec. 15a, supra, is located completely within the Village of Montrose. The Village of Montrose is located within the Township of Montrose. Both the village and the township have their own assessing officer. The village provides the basic public health and safety services to the housing project. The State Housing Development Authority Act of 1966, 1966 PA 346, MCLA 125.1401 et seq; MSA 16.114(1) et seq, authorizes payments in lieu of taxes by nonprofit housing corporations, cooperatives and other corporations. 1966 PA 346, supra, Sec. 15a, provides in pertinent part as follows: '(1) Whenever a housing project is financed with a federally-aided or authority-aided mortgage or advance or grant from the authority, then, except as provided in this section, the housing project shall be exempt from all taxes imposed by the state or by any political subdivision, public body or taxing district in which the project is located. The owner of a housing project eligible for the exemption must file with the local assessing officer a notification of the exemption, which shall be in an affidavit form as provided by the authority. The completed affidavit form shall first be submitted to the authority for certification by the authority that the project is eligible for the exemption. The owner shall then file the certified notification of the exemption with the local assessing officer prior to November 1 of the year preceding the tax year in which the exemption is to begin. '(2) The owner of a housing project exempt from taxation under this section shall pay to the municipality in which the project is located an annual service charge for public services in lieu of all taxes. The amount to be paid as a service charge in lieu of taxes shall be for new construction projects the greater of, and for rehabilitation projects the lesser of, (i) the tax on the property on which the project is located for the tax year prior to the date when construction or rehabilitation of the project was commenced, or (ii) 10% of the annual shelter rents obtained from the project. Any municipality by ordinance from time to time may establish or change the service charge to be paid in lieu of taxes by all or any class of housing projects exempt from taxation under this act at any amount it chooses, not to exceed the taxes that would be paid but for this act. '(3) The exemption from taxation granted by this section shall remain in effect for so long as the federally-aided or authority-aided mortgage or advance or grant from the authority is outstanding, not to exceed 50 years. The municipality may establish by ordinance a different period of time for the exemption to remain in effect. '(5) Notwithstanding the provisions of subsection (1), any municipality may provide by ordinance that the tax exemption established in subsection (1) shall not apply to all or any class of housing projects within its boundaries to which subsection (1) applies; and if the municipality so provides, then the tax exemption established in subsection (1) shall not be applicable to the class of housing projects designated in the ordinance. The ordinance, if it so provides, shall be effective with respect to housing projects for which an exemption has already been granted on December 31 of the year in which it is adopted, but not before. Any municipality that has adopted such an ordinance subsequently may repeal that ordinance, which repeal shall become effective on the date designated in the repealing ordinance.' In 1966 PA 346, supra, Sec. 11(h), the legislature has defined the 'municipality' as used in the act to mean any city, village or township in the state. The duties of the village assessor to make an assessment roll on real and personal property within the village is prescribed in 1895 PA 3, chap IX, Sec. 8, MCLA 69.8; MSA 5.1378. 1966 PA 346, Sec. 15a, supra, requires that owners of a housing project located within a city, village or township seek tax abatement from the city, village or township in which the project is located. The section also provides that in return for health and safety services provided by a city, village or township the owners of the housing project must pay service charges in lieu of taxes for such services. Your questions are answered in the order presented: 1. To which assessing officer must the owner of a housing project located within a village submit the affidavit in order to be eligible for the exemption? The owner must submit his affidavit of eligibility to the village assessing officer. 2. Does the word 'municipality' in 1966 PA 346, Sec. 15a, supra, refer to the village or to the township? Clearly the Village of Montrose is a municipality under 1966 PA 346, Sec. 15a, supra. The services are provided by the Village of Montrose. Since the services are provided by the Village of Montrose, 1966 PA 346, Sec. 15a, supra, requires the owner to pay the annual service charge to the Village of Montrose. 3. Which municipality, the Village or the Township, has the authority, by ordinance, to change the service charge? The Village of Montrose has the authority to change the service charge by ordinance. 4. Which municipality, the Village or the Township, has the authority, by ordinance, to change the period of the exemption? The Village of Montrose may, by ordinance, change the period of the exemption. 5. Which municipality, the Village or the Township, has the authority, by ordinance, to determine that the tax exemption shall not apply? The Village of Montrose has the authority to determine, by ordinance, that the tax exemption shall not apply. Frank J. Kelley Attorney General