STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL

Opinion No. 5786

September 22, 1980

TAXATION:

Ad valorem property tax on closed iron mine

Specific tax on low-grade iron ore

TOWNSHIPS:

Ad valorem property tax on closed iron mine

An iron mine property which ceased production and completed shipments in the calendar year 1979 continues to be subject to the specific tax imposed by 1963 PA 68 for the year 1980.

Where the iron mine property does not reopen or make shipments after July 21, 1979, it may be restored to the ad valorem property tax assessment rolls in 1981 by order of the Tax Tribunal or by the township board of review, if in session.

Mr. Howard A. Tanner

Director

Department of Natural Resources

Stevens T. Mason Building

Lansing, Michigan 48909

You have requested my opinion on the following questions relating to the taxation of the Mather iron mine complex located in Marquette County:

You indicate in your letter that the Mather iron mine complex has, since the enactment of 1963 PA 68; MCLA 207.271 et seq; MSA 13.158(1) et seq, been subject to the specific tax imposed by 1963 PA 68, supra, Sec. 2(1)(a). The mine ceased production on July 21, 1979 and shipments from the Mather mine were completed during calendar year 1979.

The tax provided for in 1963 PA 68, supra, is a specific tax as opposed to the ad valorem tax imposed by the General Property Tax Act of 1893, 1893 PA 206; MCLA 211.1 et seq; MSA 7.1 et seq. 1963 PA 68, supra, Sec. 9, provides that:

In 1963 PA 68, supra, Sec. 6, the legislature has provided:

As the Mather mine ceased production on July 21, 1979 and completed shipments during the calendar year 1979, the Mather mine was subject to the specific tax for 1979. Beginning January 1, 1980, and for the calendar years following, the Mather mine will not meet the requirements of 1963 PA 68, Sec. 2(1)(a), supra.

If the Mather mine continues in its failure to beneficiate or agglomerate a sufficient percentage of its annual shipments to comply with any of the subdivisions of subsection 1 of Section 2 of the Act, then, as of July 21, 1981, the Mather iron mine will have completed the period of two consecutive years provided for in Section 6 and, thereafter, the state geologist shall so certify.

This certification will be made in 1981, and pursuant to 1963 PA 68, Sec. 6, supra, the Mather iron mine property will then be taxed on an ad valorem rather than specific basis, for the tax year 1981, being the year of certification, and 'thereafter'.

Local boards of review complete their task on or before the first Monday in April; 1893 PA 206, supra, Sec. 30a; MCLA 211.30a; MSA 7.30(1). Consequently, as of July 21, 1981, the boards of review will have disbanded and the only body with jurisdictional authority over assessment rolls as of that time is the Tax Tribunal created by 1973 PA 186; MCLA 205.70 et seq; MSA 7.650(1) et seq.

To fulfill the statutory mandate for general ad valorem taxation in the tax year 1981, being the year of certification, the local assessor must proceed according to 1893 PA 206, supra, Sec. 154; MCLA 211.154; MSA 7.211. Upon his petition, the Tax Tribunal ⁽¹⁾ may order the mine property placed upon the assessment roll, after giving its owner an opportunity to appear at a hearing, if the tribunal concludes that no reason exists in fact or in law which would justify an exemption of such property from taxation. It should be noted that, if the state geologist's certification is executed prior to adjournment of the local boards of review, that board should, after hearing, place the property upon the assessment roll.

As the Mather iron mine property does not become subject to ad valorem taxation until the 1981 tax year, it is my opinion that the Mather iron mine property would be subject to the provisions of 1963 PA 68, supra, for the tax year 1980 and would be subject to the specific tax provided therein. Therefore, the answer to your first question is in the affirmative.

In answer to your last question, as the second year following the completion of shipments would be the tax year 1981, the year in which the certification is made, the Mather iron mine property would be subject to ad valorem taxes in that year and thereafter, provided that the township board of review, if in session, holds a hearing and places the mine property on the assessment roll or the Tax Tribunal, upon petition and hearing, orders the mine property placed on the assessment roll.

Frank J. Kelley