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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)



Opinion No. 5767

September 3, 1980


Const 1963, art 9, Secs. 3, 25, 31

Where the Tax Tribunal makes a final decision as to the equalization of assessments intracounty which effectively lower 1975 taxes within a city, within the county and effectively raise the 1975 taxes levied within certain other governmental units within the county, the final tax levy of 1975 taxes appearing on the 1979 tax rolls does not violate Const 1963, art 9, Secs. 25 and 31.

Honorable Harold J. Scott

State Senator

The Capitol

Lansing, Michigan

You have asked my opinion on two questions in regard to a case decided by the Michigan Tax Tribunal, Docket No. 7654, dated March 3, 1977. Specifically, you ask:

'(1) If there is a county equalization pending before the Michigan State Tax Tribunal, would a title company be liable for any adjustment in future years in the event the 'encumbrance' is not shown on the title?.'

'(2) If, as a result of an equalization appeal on the 1975 values for Genesee County, increases and decreases are made on the 1979 tax roll, would these amounts be subject to the Headlee Amendment?'

Your first question concerns the liability, if any, of a real estate title insurance company upon a policy of insurance insuring the state of the title to a particular parcel of real estate where the Michigan Tax Tribunal reviews the county equalization and an adjustment in the tax levy is required. Because the liability, if any, of such insurance company would insure to a private person and because the policy of insurance determining the rights and duties of the parties to the insurance contract is not before me, nor should it be before me, I am constrained to advise that it would be inappropriate for me to respond to your question.

Turning to your second question, the so-called 'Headlee Amendment' consists of an amendment to Const 1963, art 9, by altering existing section 6, which is not in issue here, and the addition of sections 25 through 34 to Article 9 of the Michigan Constitution of 1963, as proposed by an initiative petition ratified at the general election on November 7, 1978, and effective December 22, 1978.

Const of 1963, art 9, Sec. 3, provides, in pertinent part, that:

'[t]he 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 . . ..' (Emphasis supplied.)

The process of equalization of assessments is constitutionally mandated and as stated by the Michigan Supreme Court in Waterford Township v Moore, 312 Mich 556, 560; 20 NW2d 497, 498 (1945), quoting its earlier Opinion is St. Ignace City Treasurer v Mackinac County Treasurer, 310 Mich 108, 116; 16 NW2d 682, 685 (1944), "[t]he constitutional requirement of a uniform rule of taxation can be satisfactorily effected only through the process of equalization."

The Legislature has complied with this constitutional mandate by providing that local assessment rolls made by assessors of local units are subject to equalization by the county board of commissioners as authorized by 1893 PA 206, Sec. 34, as last amended by 1978 PA 124; MCLA 211.34; MSA 7.52. If an appeal is taken from the county equalization decision to the Tax Tribunal, in accordance with the Tax Tribunal Act, 1973 PA 186; MCLA 205.701 et seq; MSA 7.650(1) et seq, the Legislature has required that the levy of taxes upon the equalized value of property as determined by the county board of commissioners be a 'tentative levy' until a final determination is made by the Tax Tribunal. 1893 PA 206, Sec. 39a, as last amended by 1974 PA 384; MCLA 211.39a; MSA 7.80(1).

In Emmet County v State Tax Commission, 397 Mich 550, 554; 244 NW2d 909, 910 (1976), the Supreme Court recognized that the Legislature has provided for 'a tentative levy of taxes during the pendency of a county equalization appeal . . . with a final levy subsequent to resolution of the appeal, . . .' It must be noted that the decision of the Tax Tribunal may be reviewed by the Court of Appeals as a matter of right as set forth in 1973 PA 186, Sec. 53; MCLA 205.753; MSA 7.650(53). Thus, it is patent that a time lag will develop between the initial date the tentative taxes become due and the date that the final taxes due become certain.

The property taxes in question represent the final tax levy for the calendar year 1975. The final tax levy for 1975 was incorporated into the tax roll for 1979 in accordance with 1893 PA 206, Sec. 39a, supra.

The Tax Tribunal, by its decision, effectively lowered the 1975 taxes levied within the City of Flint by giving a credit for a portion of those taxes tentatively paid on the 1979 tax roll. Conversely, the taxes levied outside the City of Flint and within Genesee County were effectively raised by the imposition of additional 1975 taxes on the 1979 roll. Although the collection of the final levy of 1975 taxes was made through the 1979 tax roll, there is no basis to contend that any increases in the levy of 1979 taxes took place.

Const 1963, art 9, Sec. 25, in pertinent part, provides:

'Property taxes and other local taxes and state taxation and spending may not be increased above the limitations specified herein without direct voter approval.'

In Const 1963, art 9, Sec. 31, the people have provided, in pertinent part, as follows:

'Units of Local Government are hereby prohibited from levying any tax not authorized by law or charter when this section is ratified or from increasing the rate of an existing tax above that rate authorized by law or charter when this section is ratified, without the approval of a majority of the qualified electors of that unit of Local Government voting thereon.'

Const 1963, art 9, Secs. 3, 25 and 31, must be construed together. School District No. 9, Pittsfield Township, Washtenaw County v Washtenaw County Board of Supervisors, 341 Mich 388; 67 NW2d 165 (1954). Effect must be given to each constitutional provision. People v Case, 220 Mich 379; 190 NW 289 (1922).

The Michigan Supreme Court has held that the purpose of Const 1963, art 9, Sec. 3, is to enhance the goal of uniformity of taxation by the process of equalization. Allied Supermarkets, Inc v Detroit, 391 Mich 460; 216 NW2d 755 (1974). Because, as demonstrated above, the process of intracounty equalization includes an appeal to the Tax Tribunal and for further possible review by the Court of Appeals, the purpose of Const 1963, art 9, Sec. 3, requiring uniform taxation based upon equalized evaluation may only be accomplished if the final tax levy is based upon equalized evaluation as determined by the Tax Tribunal and the courts, even though the final tax levy is made in a calendar year subsequent to the calendar year of the tentative tax levy.

The additional tax or credit representing the final 1975 tax levy on property within Genesee County spread on the 1979 tax roll is not a levy of or an increase in the levy of 1979 taxes. Rather, it is the 1975 final levy in accordance with the determination of the Tax Tribunal. Since the 'Headlee Amendment' took effect on December 22, 1978, taxes for the year 1975 would not be affected thereby even though the collection of final 1975 taxes or credits given were effected after the 'Headlee Amendment' became operative.

It is, therefore, my opinion that the final levy for the 1975 tax year made by an assessing officer pursuant to the final decision of the Tax Tribunal in 1979 does not violate Const 1963, art 9, Secs. 25 and 31.

Frank J. Kelley

Attorney General

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