STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL

Opinion No. 5842

January 19, 1981

CONSTITUTIONAL LAW:

Const 1963, art 9, Sec. 18 (credit of the state)

TOWNSHIPS:

Contribution to programs for the aged

A township, as authorized by the Legislature, may make an appropriation of funds to a private, nonprofit corporation or organization for senior citizen activities or services pursuant to a contract entered into between the township and the private corporation or organization.

Honorable Mitch Irwin

State Senator

The Capitol

Lansing, Michigan

You have requested my opinion on a matter which may be phrased as follows:

Const 1963, art 9, Sec. 18, provides:

This provision has been held applicable to political subdivisions and instrumentalities of the state, which include counties and townships. Drain Commissioner of Oakland County v City of Royal Oak, 306 Mich 124, 142; 10 NW2d 435, 441 (1943).

OAG, 1977-1978, No 5402, p 714 (December 13, 1978), considered whether Const 1963, art 9, Sec. 18, supra, was offended by a county appropriating county funds for the preservation of an historical landmark, where the appropriation of such funds was statutorily authorized. OAG, No 5402, supra, concluded that, pursuant to statutory authorization, it was a matter of judgment in the sound discretion of the county commissioners whether a county appropriation for restoring and preserving an historical landmark would 'result in a degree of public benefit so as to constitute adequate consideration' under Const 1963, art 9, Sec. 18, supra. In so concluding, OAG, No 5402, supra, quoted extensively from Alan v Wayne County, 388 Mich 210, 325-327; 200 NW2d 628, 684-685; reh den 388 Mich 626; 202 NW2d 277 (1972):

Accordingly, OAG, No 5402, supra, held that it was necessary that an agreement between the county and the nonprofit historical landmark corporation be entered into providing how the funds would be utilized by the private, nonprofit organization, embracing such purposes as, but not limited to, the continued existence of the historical landmark and its availability to the public. See also, OAG, 1977-1978, No 5212, p 199 (August 17, 1977).

OAG, 1979-1980, No 5664, p 630 (February 20, 1980), held that under Const 1963, art 9, Sec. 18, supra, the Legislature may authorize the Department of Natural Resources to remit funds from the Fish and Game Protection Fund to private, nonprofit organizations for the maintenance of suitable habitat in Canada for migratory birds, pursuant to contract between the Department and such nonprofit organizations. OAG, No 5664, supra, concluded that such agreement may require that any funds appropriated be expended on fresh water waterfowl which breed or migrate through Michigan; the continued existence of the nonprofit organization; submission of annual reports on project expenditures; copies of annual audits and annual assurance of tax-exempt status, and if appropriate, the availability of the waterfowl propagation area to the public.

It is presumed, as it was in Alan, supra, that under Const 1963, art 9, Sec. 18, local government officials will perform their statutory duties and exercise proper judgment in the determination of consideration received for value transferred, pursuant to appropriate contractual terms, and that judgment shall be respected unless a clear abuse of discretion is demonstrated.

1976 PA 39, MCLA 400.571 et seq; MSA 5.3439(1) et seq, authorizes local units of the government to appropriate funds for purposes of providing activities or services to persons 60 years of age or older. 1976 PA 39, supra, Sec. 1, declares the Legislature's judgment that the provision of services to senior citizens is a valid public purpose. 1976 PA 39, supra, is legislation which effectuates the provisions of Const 1963, art 4, Sec. 51:

In City of Gaylord v Gaylord City Clerk, 378 Mich 273; 144 NW2d 460 (1966), our Supreme Court stated that Const 1963, art 4, Sec. 51, supra, when considered in conjunction with the traditional public policy of the state, limits powers of the Legislature, and of government generally, to such legislative acts and such governmental powers as exhibit a public purpose. Accordingly, the Legislature's finding that it is a valid public purpose to provide services to older persons, pursuant to 1976 PA 39, supra, is consistent with Const 1963, art 4, Sec. 51, supra.

1976 PA 39, supra, Sec. 2(b), pertinently provides that local governments, including counties and townships, are within the ambit of the act. The activities or services which may be furnished pursuant to the act are described as '. . . identifiable action directed toward the improvement of the social, legal, health, housing, educational, emotional, nutritional, recreational, or mobility status of older persons.' 1976 PA 39, supra, Sec. 3, providing for local government appropriations, states:

In 1976 PA 39, supra, Sec. 2(e), the legislature has defined the term 'funds' as 'general tax revenues, federal revenue sharing funds, state revenue sharing funds, and other funds under the control of the governing body.' [Emphasis supplied.] Therefore, 1976 PA 39, supra, authorizes a county or township to make appropriation of funds, including general and revenue sharing funds, to a private nonprofit corporation such as a county council on aging.

1976 PA 39, supra, Sec. 4(1), requires that an appropriation must be approved by a majority of the members of the governing body of the local unit of government. 1976. PA 39, supra, Sec. 5, sets forth the mandatory terms of an appropriation made under the act, which terms are:

The statutorily-required terms for any appropriation made pursuant to 1976 PA 39, supra, are consistent with the reasoning of Alan v Wayne County, supra, and the opinions of this office, discussed above, which have construed Const 1963, art 9, Sec. 18, supra. ⁽¹⁾

It is, therefore, my opinion that a county or township may make an appropriation from general and revenue sharing funds to private, non-profit corporations or organizations, such as the Oscoda County Council on Aging, which undertake the provision of senior citizen activities or services, and where a contract is entered providing for the terms of the appropriation as authorized by 1976 PA 39, supra.

Frank J. Kelley

The Federal Revenue Sharing Act, entitled The State and Local Fiscal Assistance Act of 1972, Sec. 123; 86 Stat 919 (1972), as amended, 31 USC Sec. 1243, provides: