STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL

Opinion No. 6007

November 18, 1981

TAXATION:

Assessment, intracounty equalization, and intercounty equalization of taxation property

Honorable John M. Maynard

State Representative

The Capitol

Lansing, Michigan

Honorable Gilbert J. DiNello

Senator

The Capitol

Lansing, Michigan

Honorable Thomas Guastello

Senator

The Capitol

Lansing, Michigan

Honorable David H. Evans

State Representative

The Capitol

Lansing, Michigan

Honorable Dennis M. Dutko

State Representative

The Capitol

Lansing, Michigan

Honorable John Strand

State Representative

The Capitol

Lansing, Michigan

Honorable Arthur Miller, Jr.

Senator

The Capitol

Lansing, Michigan

Honorable John T. Kelsey

State Representative

The Capitol

Lansing, Michigan

Honorable Doug Cruce

State Representative

The Capitol

Lansing, Michigan

Honorable Nick Ciaramitaro

State Representative

The Capitol

Lansing, Michigan

Honorable Leo R. LaLonde

State Representative

The Capitol

Lansing, Michigan

You have requested my opinion on a number of questions which deal with the assessment and equalization of property for tax purposes. Additionally, you inquire as to the function and powers of the various assessors, local boards of review, and equalization boards under the laws of the State of Michigan.

In view of the nature and scope of your inquiry, it is appropriate first to set out the legal background which is common to the theme of your questions.

The General Property Tax Act, 1893 PA 206; MCLA 211.1 et seq; MSA 7.1 et seq, provides for the assessment and equalization of property for ad valorem tax purposes. It is a yearly process. 1893 PA 206, supra Secs. 10 and 34; 1911 PA 44, Sec. 2; MCLA 209.2; MSA 7.602. The major successive steps in the process include assessment by the local assessor, county equalization and state equalization.

The initial step in this process is the assessment, by the local assessor, of property at 50% of its true cash value. 1893 PA 206, supra, Sec. 27(4). 'Cash value' is defined in 1893 PA 206, supra, Sec. 27(1) as follows:

The courts of the State of Michigan have held that true cash value is synonymous with fair market value. CAF Investment Co v State Tax Commission, 392 Mich 442; 221 NW2d 588 (1974); Consumers Power Co v Port Sheldon Township, 91 Mich App 180; 283 NW2d 680 (1979). Safran Printing Co v Detroit, 88 Mich App 376; 276 NW2d 602 (1979).

1962 PA 122; MCLA 211.721; MSA 7.40, requires that assessors use the Assessor's Manual, as approved by the State Tax Commission, hereinafter referred to as 'Tax Commission,' as a guide in preparing assessments. OAG, 1981-1982, No 5909, p 206 (May 20, 1981).

An individual taxpayer who is aggrieved by an assessment may, in accordance with 1893 PA 206, supra, Sec. 30, appeal the assessment to the local board of review. If not satisfied with the determination of the local board of review, an appeal may be taken, pursuant to the Tax Tribunal Act, 1973 PA 186; MCLA 205.701 et seq; MSA 7.650(1) et seq, to the Michigan Tax Tribunal, hereinafter referred to as 'Tax Tribunal.' 1973 PA 186, supra, Sec. 35, provides that a protest to the local board of review is a prerequisite for appeal to the Tax Tribunal. Absent an appeal, the individual assessment is final and is deemed to be correct. Once the board of review has finished its work and, after the final decision of the Tax Tribunal in the event an assessment is appealed, the assessment process is at an end.

The next phase in the process is intracounty equalization, also known as county equalization. This function is performed by the county board of commissioners at its April meeting. Pursuant to 1893 PA 206, Sec. 34, supra, the county board of commissioners examines the assessment rolls of the various local units within the county and ascertains whether each class of property separately equalized, in the respective local units of government, has been equally and uniformly assessed. If the county board of commissioners determines that the various assessment rolls have not been equally and uniformly assessed, then value is either added to or deducted from a particular class of property within a particular unit until, in the judgment of the county board of commissioners, a sum is produced which represents 50% of the true cash value of each separately equalized class of property within that local unit. To assist the county board of commissioners in its duty of intracounty equalization, the Legislature has provided in 1893 PA 206, Sec. 34(3), supra, for the establishment of a department, within the county, to assist the county board of commissioners in its intracounty equalization duties.

With respect to intracounty equalization, local units of government, if they are aggrieved by the decision of the county board of commissioners, may appeal the determination to the Tax Tribunal. 1893 PA 206, Sec. 34, supra; 1973 PA 186, Sec. 31; MCLA 205.731; MSA 7.650(31); Emmet County v State Tax Commission, 397 Mich 550; 244 NW2d 909 (1976). Absent an appeal by a local governmental unit, intracounty equalization is final and is deemed to be correct.

The third step in the process is intercounty equalization, also known as state equalization, conducted in accordance with 1911 PA 44; MCLA 209.1 et seq; MSA 7.601 et seq, which is performed by the Tax Commission as the successor to the State Board of Equalization, 1965 PA 380, Sec. 86; MCLA 16.186; MSA 3.29(86), on the second and fourth Mondays in May. The total value of each class of property separately equalized in each county in Michigan is examined and adjusted so that each class of separately equalized property within each county is assessed at the same percentage of true cash value. 1911 PA 44, supra, Sec. 4. Again, absent judicial review sought by an aggrieved county, state equalization is final and deemed to be correct. Const 1963, art 6, Sec. 28. See also, Emmet County v State Tax Commission, supra.

Your questions will now be stated exactly as asked and answered seriatim.

To begin, the term 'points' should be defined. Historically, a 'point,' as that term is used in financial and banking circles in connection with the financing of property, refers to 1% or more of the amount financed, to be paid by the seller of the property to the financial institution undertaking to finance the purchase of the property. However, due to recently enacted federal law, 'points' may now be charged to the purchasers of real property under certain circumstances. OAG, 1981-1982, No 5972, p 350 (September 2, 1981), states:

OAG, 1981-1982, No 5972, supra, concluded that the federal preemption was still effective so that qualified Michigan lenders, since March 31, 1980, may charge discount points to be paid by the borrower.

1893 PA 206, supra, Sec. 27(3), provides:

Thus, 1893 PA 206, Sec. 27(3), supra, provides that the assessor, a county equalization department or the Tax Commission, before utilizing real estate sales data on real property purchases for the purpose of determining assessments or in making sales ratio studies for the purpose of assessing or equalizing assessments, shall exclude from the sales data, to the extent such amounts are included in the real property purchase price and identified in the purchase agreement furnished by the purchaser to the assessor or an affidavit filed by the purchaser with the assessor, any amounts paid by the purchaser for obtaining financing of the purchase price. Such amounts would include 'points' paid by the purchaser, amounts paid by the purchaser for personal property and amounts paid by the purchaser for surveys.

The Legislature has failed to provide for the exclusion of legal fees, whether paid by the seller or the purchaser, in determining true cash value of the property.

It is my opinion, therefore, that the assessor, in determining the true cash value of a parcel of property, must remove from the sales price of the parcel the amounts attributable to personal property, survey costs attendant to the last conveyance and the amounts paid by the purchaser for obtaining financing, which would include 'points' paid by the purchaser which are properly identified to the assessor. Such costs are excludable in determining true cash value, but legal fees paid by the purchaser or seller and 'points' paid by the seller and not included in the purchase price are not excludable. See also, Cooper Township v State Tax Commission, 393 Mich 58; 222 NW2d 900 (1974).

A sales ratio study is a comparison between the assessed valuation and the sales price for each described property. It is a listing of facts, including, but not limited to, a description of property, the assessed valuation, the date of sale, the price paid for the property and the names of the grantors and grantees. It is used as a tool by local assessors, county equalization departments and the Tax Commission in carrying out their duties. Its use, and what must be excluded from it, is provided for in 1893 PA 206, Sec. 27, supra.

It is my opinion, therefore, that in keeping with the answer to your first question, personal property, financing costs paid by the purchaser, which includes 'points,' and amounts attributable for surveys are to be excluded from the individual sales when they have been properly reported to the assessor. It is my further opinion that the Legislature has not authorized legal fees paid by the purchaser and the seller and 'points' paid by the seller to be excluded from the purchase price for purposes of determining true cash value for assessments of sales ratio studies.

Prior to 1976, the Legislature exempted from taxation the value of various trees, shrubs, plants, bushes and vines growing on agricultural land devoted to agricultural purposes. 1893 PA 206, supra, Sec. 7e.

The Legislature amended 1893 PA 206, Sec. 7e, supra, by 1976 PA 386, to add subsection (2), supra, which provides:

The Legislature made it clear that the land value for assessment purposes does not include the land over which public rights-of-way for drains, roads, drainage ditches, highways and streets are located. The land covered by such a public easement must be excluded from the valuation appraisal process. However, the Legislature has not authorized the exclusion of land over the surface of which private easements or private public utility rights-of-way are located from the assessment process.

It is my opinion, therefore, that only land over the surface of which public rights-of-way for drains, roads, drainage ditches, highways and streets are located shall be excluded from consideration in making the appraisal valuation for assessment purposes. Private easements, private public utility rights-of-way and swamps not within the limits of a public right-of-way shall not be excluded from the valuation process for assessment purposes.

1893 PA 206, Sec. 27(1), supra, defines cash value to mean the usual selling price in the vicinity where the property to which the term is applied is at the time of assessment. The physical condition, functional obsolescences, if any, as well as other factors, and location of the property are factors which affect the usual selling price and must be considered in determining true cash value. It is my opinion, therefore, that even though there is no specific statutory provision with respect to age, abandonment, misuse and obsolescence, they must be considered in the determination of true cash value of real property.

As indicated in answer to the first question, personal property which was included in the purchase price of real property and identified as such in the purchase agreement or affidavit filed with the assessor is to be excluded from the purchase price for purposes of determining the true cash value of the property. Storage bins which are affixed to the land and become fixtures are deemed real property for property, ⁽¹⁾ sales ⁽²⁾ and use tax ⁽³⁾ purposes and are not excludable from the purchase price, even though they are subject to being dismantled and sold as separate structures. 1893 PA 206, Sec. 27(3)(b), supra.

It is my opinion, therefore, that the value of personal property, such as tractors, trailers and farm implements, included and identified in the purchase agreement covering the sale of real property, must be excluded in determining true cash value of property. Grain storage bins affixed to the land are considered real property and their value is to be included in determining true cash value of the real property.

The assessor, in determining the usual selling price of property, must analyze relevant sales and convert the prices to standard units of comparison. If the standard unit price rates are derived from property which is similar to the property to be appraised, the resultant appraised valuations may reflect true cash value by either the frontage approach or the acreage approach. The latter basis, that is acreage, is the most common formula used. Under that formula, the acreage of a farm is priced using rates derived from sales of farms of similar marketability, size, location, frontage and productivity.

It is my opinion, therefore, that either the front foot formula or the acre formula may be employed to assess the true cash value of parcels of land, provided that the resulting assessment reflects 50% of the true cash value of the property. Similar parcels of land, taking into consideration such factors as the shape of the parcel and amount of land within such parcel, may be used for comparison.

1893 PA 206, Sec. 24, supra, requires that the assessor determine the value of each property according to his or her best information and judgment. The assessor may, as one factor in the assessment process, divide separate farm properties into any category which will provide for the best analysis and determination of the usual selling price or true cash value of each assessable separate farm property.

It is my opinion, therefore, that a local assessor may, as one factor in the assessment process, divide separate farm properties into categories that will assist him or her in evaluating comparable separate farm properties using like factors, such as size, productivity, location and frontage.

It must first be noted that your question assumes that those public officials involved in the assessment and equalization process will consciously overlook overassessment. This assumption is without foundation since it is to be presumed that public officials will act in accordance with law. West Shore Community College v Manistee County Board of Commissioners, 389 Mich 287; 205 NW2d 441 (1973).

As indicated in the answer to the second question, a sales ratio study is a tool used in the assessment and equalization processes and contains known facts in regards to specific parcels of property. Sales ratio studies are not 'benchmarks.' These studies are usually prepared by the county equalization department for their own use in assisting the county board of commissioners in intracounty equalization. These studies are generally available to local assessors prior to December 31 and contain no information that the local assessor could not have obtained. In fact, some local assessors prepare their own sales ratio studies.

There is no assurance that any one sale, in a sales ratio study, is representative of the usual selling price of a comparable piece of property, as many factors enter into the selling price.

It is my opinion, therefore, that if a parcel of property sells for more or less than twice its assessed value, the selling price must be accurately reflected on the sales ratio study, as well as the appropriate past assessed value. Of course, as stated above and, it is again emphasized, an individual taxpayer may always protest an individual assessment, alleged to be higher than 50% of true cash value, to the local board of review and, in turn, to the Tax Tribunal.

1893 PA 206, Sec. 27(4), supra, requires the assessment of all taxable property at 50% of true cash value. Equalization studies conducted by the county equalization department are prepared for the purpose of recommending valuations to the county board of commissioners as to the total value of each class in each township and city and are unrelated to the actual assessment. These studies are to be completed and provided to the Tax Commission by December 31 of any given year. Chapter XVI of the Assessor's Manual. To the extent that the board of commissioners adjusts the total assessed valuation of each separately equalized classification of property in accordance with 1893 PA 206, Sec. 34, supra, assessors may consider adjusting, on the next assessment roll, the assessment of properties within the classes which have been equalized upward or downward. In this connection, it must be pointed out that the duties of a local assessor in the assessment process are concluded once the assessment roll is completed on the first Monday in March. 1893 PA 206, Sec. 24, supra. Thereafter, a local assessor has no authority to alter an assessment on the roll. If the local assessor determines that an equalization study or report indicates a parcel of property is assessed at more than 50% of true cash value prior to the first Monday in March, he may lower the assessment to the proper figure.

It is my opinion, therefore, that a local assessor may change an assessment, based on an equalization study or report, if the change is done prior to the first Monday in March of any given year. After the first Monday in March of any given year, an assessment may be changed only pursuant to the action of a local board of review or upon appeal to the Tax Tribunal, as indicated above. If the assessor fails to make the change, the taxpayer may appeal to the local board of review and, in turn, to the Tax Tribunal.

1973 PA 186, Sec. 35(1), supra, requires that a protest before the local board of review is a prerequisite to the Tax Tribunal acquiring jurisdiction over an assessment dispute. Sisters of Mercy, Province of Detroit, Inc v Pennfield Township, 91 Mich App 470; 283 NW2d 645 (1978).

It is my opinion, therefore, that absent a protest to the board of review, an individual taxpayer may not appeal an alleged overassessment to the Tax Tribunal.

The Tax Commission is charged with receiving reports of assessments and equalized valuations from all assessment districts (cities and townships) and the 83 counties. 1893 PA 206, supra, Sec. 150(4). It must consider the best information available regarding the total assessable value of each of the counties to determine the state equalized valuation for each county.

As more fully set forth above, if the property owner has unsuccessfully protested the assessment before the local board of review, an appeal may be filed by the property owner with the Tax Tribunal after state equalization, but before June 30. 1973 PA 180, Sec. 35(3); MCLA 205.735(3); MSA 7.650(35)(3). However, local units only have the right to appeal to the Tax Tribunal from intracounty equalization and the county only has the opportunity to appeal intercounty equalization in the Court of Appeals. Emmet County v State Tax Commission, supra. The Legislature has not provided the individual taxpayer with the right to appeal either intracounty or intercounty equalization.

It is my opinion, therefore, that an individual taxpayer may not appeal either intracounty or intercounty equalization.

As stated above and as explained in the answer to your eleventh question, an individual taxpayer may not appeal intercounty equalization by the Tax Commission.

It is my opinion, therefore, that a taxpayer may neither appeal intercounty equalization nor the imposition of the result of intercounty equalization.

The Tax Commission must comply with the provisions of sections 148, 149, 150, 151 and 152 of 1893 PA 206, supra, except for those functions which were transferred to the Tax Tribunal by 1973 PA 186, supra. Those functions transferred were the appellate or review functions of the Tax Commission. The Tax Commission retains the purely administrative functions contained in sections 148, 149, 150, 151 and 152 of 1893 PA 206, supra. Emmet County v State Tax Commission, supra.

These administrative functions include, but are not limited to: taking possession of assessment rolls for use in carrying out the provisions of the act, issuing subpoenas, examining books and records of persons liable for property tax (1893 PA 206, Sec. 148, supra); conducting its meetings in accordance with the Open Meetings Act (1893 PA 206, Sec. 149, supra); exercising general supervision over the assessing officers of this state, requiring from any officer in this state reports to aid in the furtherance of its duties (1893 PA 206, Sec. 150, supra); issuing of a report to the Governor of this state setting forth the activities of the commission (1893 PA 206, Sec. 151, supra); and inspecting the various assessment rolls (1893 PA 206, Sec. 152, supra).

However, 1893 PA 206, Sec. 154, supra, provides for the addition of omitted property to the assessment roll after notice and hearing by the Tax Tribunal. In Detroit v Jones & Laughlin Steel Corp, 77 Mich App 465; 258 NW2d 521 (1977), the Court of Appeals ruled that the jurisdiction of the Tax Tribunal was appellate in nature. Thus, this authority may not be considered administrative.

It is my opinion, therefore, that the Tax Commission retains those purely administrative functions found in 1893 PA 206, Secs. 148, 149, 150, 151 and 152, supra, but the appellate function of 1893 PA 206, Sec. 154, supra, is presently within the exclusive jurisdiction of the Tax Tribunal.

The Tax Commission may investigate alleged wrongdoing in the property tax system at the request of an aggrieved taxpayer. The general language which suggests such a requirement, 1893 PA 206, Sec. 150(3), supra, refers to the function of individual assessment review which has been transferred to the Tax Tribunal by 1973 PA 186, supra. When the Tax Commission has investigated an alleged wrongdoing, it makes its findings known and takes appropriate action. See, OAG, 1959, No 3414, p 105 (May 15, 1959).

It is my opinion, therefore, that the Tax Commission may investigate alleged wrongdoing in the property tax system at the request of an aggrieved taxpayer.

The Tax Commission is charged with the general supervision of 1893 PA 206, supra, and is mandated to confer with and advise assessing officers as to their duties. These statutory duties include general supervision over county equalization directors and local assessors. 1893 PA 206, Sec. 150, supra. The Legislature has provided in 1893 PA 206, Sec. 150, subsection (1), supra, as follows:

It is my opinion, therefore, that even though the various equalization directors and local assessors may be in the employ of the various counties and units of local government and under their control as employees, the Tax Commission has general supervision over said local tax officials.

If the Tax Commission, sitting as the State Board of Equalization, on the fourth Monday in May in accordance with 1911 PA 44, Sec. 4, supra, determines that the valuation of a class of property approved by the county board of commissioners exceeds 50% of true cash value, it should deduct valuation so that the resulting state equalized valuation would be lower than the county equalized valuation. This type of action would produce an equalized valuation factor to reduce the valuation of properties within a county to equal 50% of their true cash value. In turn, the valuation of individual properties in a governmental unit within the county would also be appropriately reduced.

The Tax Commission no longer has jurisdiction over the assessed value of individual properties. In the past, the Tax Commission had no jurisdiction over the equalized value of individual classes of property. Beginning with the 1981 state equalization, the Tax Commission has jurisdiction over the total equalized value assigned to a class of property separately equalized for the county taken as a whole. The classes of property are: agricultural, developmental, residential, commercial, industrial, timber cutover and personal. 1893 PA 206, Sec. 34(2), supra. It does not have jurisdiction over the equalized value assigned to individual assessment units within a county. Upon a finding that the value of a class of property in the county, taken as a whole, is assessed at more than 50% of its true cash value, the Tax Commission would assign an equalization factor as described above.

It is my opinion, therefore, that if the Tax Commission, sitting as the State Board of Equalization, determines that the equalized valuation of a class of property of a county approved by the county board of commissioners exceeds 50% of true cash value, an equalization factor is then ordered to reduce the assessed value of such class of property within the county to equal 50% of true cash value of the property.

As indicated above, all assessors must observe their statutory duty of assessing property at 50% of true cash value. 1893 PA 206, Sec. 27, supra. Additionally, all assessing officers must use the Assessor's Manual as a guide in preparing assessments. 1962 PA 122, supra, and OAG, 1981-1982, No 5909, p 206 (May 20, 1981), supra. As stated in the answer to your fifteenth question, equalization directors and their staffs are under the general supervision of the Tax Commission and are required to comply with the provisions of chapter XVI of the Assessor's Manual (Equalization).

It is my opinion, therefore, that assessors and equalization personnel must perform their statutory duties and comply with the Assessor's Manual. If an assessor or equalization personnel fail to perform these duties, any taxpayer may file a complaint with the Tax Commission, as indicated in the answer to your fourteenth question, for appropriate action.

As indicated in the answer to your second question, 1893 PA 206, Sec. 27, supra, provides what may and may not be included in a sales ratio study.

If the intracounty equalized valuation approved by a county board of commissioners is excessive, the Tax Commission, sitting as the State Board of Equalization, may reduce the total valuation of the county by means of an appropriate factor so that, in its judgment, based on the best information available, the final equalized valuation of the county equals 50% of true cash value. The quality of any sales study would be one of the factors which the Tax Commission may consider, the weight to be given a sales study would naturally depend on its reliability, accuracy and quality.

It is my opinion, therefore, that if a sales ratio study used by a county equalization department does not comply with 1893 PA 206, Sec. 27, supra, and if that study results in the county board of commissioners adopting a total valuation for the county in excess of 50% of the true cash value within the county, the Tax Commission must adjust the valuation in the intercounty equalization process so that the final equalized valuation of the county equals 50% of true cash value.

Every lawful assessment roll must have been prepared by an assessor certified by the State Assessors Board according to 1893 PA 206, Sec. 10d, supra.

Hayes v City of Jackson, 267 Mich 523; 255 NW 361 (1934), and Negaunee v State Tax Commission, 337 Mich 169; 59 NW2d 136 (1953), deal with the scope of jurisdiction of local boards of review over assessment rolls. In both the Hayes case, supra, and Negaunee case, supra, the Supreme Court rejected the attempt by a board of review to make across-the-board adjustments to the assessment roll prepared by the assessor.

These cases held that boards of review are endowed with jurisdiction over each and every assessment appearing on the roll. However, the court limited this jurisdiction to a conscientious exercise of value judgment brought to bear upon each individual assessment. Simply stated, the court held that a board of review may bring its judgment to bear upon each of the assessments appearing on the roll but may not treat them in totality. Thus, the board of review may adjust assessments individually, but it may not reject the entire assessment roll out of hand.

It should be noted that in 1980 the Tax Commission assumed jurisdiction of three assessment rolls and reinstated assessments thereon because they had been totally rejected by the local boards of review.

Rejection by a board of review of an entire roll and substitution therefor of an old assessment roll constitutes an evil of the same character as rejection of a roll and substitution therefor of valuations uniformly reduced or augmented by a certain percentage. Either one of the foregoing actions is beyond the scope of jurisdiction possessed by boards of review and is prohibited by Hayes, supra, and Negaunee, supra.

It is my opinion, therefore, that a local board of review does not have the authority to reject an assessment roll. Adjustments to an assessment roll made by the board of review must be made individually and based upon the individual merit of each assessment.

Pursuant to 1893 PA 206, supra, Secs. 29 and 30, the local board of review has the authority to increase or decrease an individual assessment on its own motion provided the property owner is notified so that the change may be protested. The board of review may, upon complaint by the aggrieved taxpayer, reduce an assessment because the property was overvalued. The board of review may also, with the concurrence of the township supervisor or appropriate city official, grant a reduction of assessment or an exemption because of poverty. 1893 PA 206, supra, Sec. 7(u).

It is my opinion, therefore, that a board may reduce individual assessments on property on an individual basis because either the property is overvalued or for reasons of poverty of the taxpayer.

The Tax Commission, in the equalization process, does not have the authority to restore the assessed valuation of an individual community which has been significantly reduced by the board of review. However, when it equalizes the county along with the other counties in the state, its action may serve to restore an assessed valuation loss of this type. In the case of an illegal action by the board of review, as described in answer to your nineteenth question, the Tax Commission may take jurisdiction over the roll of an individual community and restore the assessments. 1893 PA 206, Sec. 152, supra.

As indicated above, at the time of intracounty equalization, the county board of commissioners is obliged to add valuation to any township or city whose total assessment level has been determined to be less than 50% of true cash value. 1893 PA 206, Sec. 34, supra. Similarly, the Tax Commission is obliged to add to the total valuation approved by the county board of commissioners when that valuation has been determined to equal less than 50% of the true cash value of the entire county. 1911 PA 44, Sec. 4, supra. The amounts added in each case should bring the total valuations assigned to the prescribed level of 50% of true cash value.

On the other hand, the Tax Commission would not be obliged to add valuation to a county unless the county board of commissioners adopted an unacceptable total valuation for the county.

It is my opinion, therefore, that the Tax Commission has the final authority only to raise or lower the total valuation of a county. If the Tax Commission determines that the valuation within a county should be adjusted, the factor adjustment approved by the Tax Commission is then spread back to each local unit within that county in direct proportion to that unit's proportionate share of total county value as determined by the county board of commissioners. See, 1 OAG 1955, No 2400, p 771 (December 29, 1955).

Although the board of review has authority over individual assessments, it has no supervisory authority over the assessor. As stated in the answer to your ninth question, once the assessment roll is completed and turned over to the board of review, a local assessor has no independent authority to make any changes in the roll.

It is my opinion, therefore, that the board of review does not have the authority to direct the local assessor to consider all reductions made as a loss in assessed valuation of a community.

Because questions 23 and 24 are related, they will be considered and answered together.

1893 PA 206, supra, Sec. 44, provides that in a township or city in which the treasurer receives a salary, only the township board or governing body of a city may waive all or part of the collection fee on taxes paid before a certain date. OAG, 1981-1982, No 5844, p 3 (January 8, 1981). The collection fee collected by the treasurer shall be credited to the contingent fund of the township or city.

Thus, the Legislature has provided that the collection fee be collected unless waived by the governing body of the city or township.

It is my opinion, therefore, that the collection fee shall be collected from the property taxpayer by the local treasurer unless it is waived by the governing body of the local unit of government.

Sections 1611 and 1612 of 1976 PA 451, the School Code of 1976; MCLA 380.1611, MCLA 380.1612; MSA 15.41611, MSA 15.41612, provide that reasonable expenses incurred by a city or township in assessing and collecting summer school taxes, to the extent that the expenses are in addition to the expenses of assessing and collecting any other taxes at the same time and exceed the amount of any fees imposed by the city or township for collection of the school taxes, shall be billed to and paid by the school district requesting such collection. OAG, 1981-1982, No 5859, p 60 (March 6, 1981).

It is my opinion, therefore, that local units of government may bill and collect from a school district expenses only for the levying and collecting of summer school taxes to the extent that these expenses exceed the amount of fees charged to the taxpayers.

As stated in answer to your twenty-fifth question, it is permissible for the tax collecting local unit of government to charge only a school district for the summer collection of its property taxes. There is no statutory authority to impose collection charges on any other local unit.

It is my opinion, therefore, that the collecting local unit of government may charge school districts only for collection of summer taxes and there is no statutory authority to impose any other collection fees upon other units of government.

Example:

1977-1978 = 41% 41

[12 MO. PER.]

1978-1979 = 40% 40

[12 MO. PER.]

1979-1980 = 39% 39

----

[ 6 MO. PER.] 120

120 DIVIDED BY 3 = 40%

PROPOSED WEIGHTED CHANGE = 2 x 41% = 82

2 x 40% = 80

1 x 39% = 39

----

201

201 DIVIDED BY 5 = 40.2%

The 30-month sales ratio study appears to be a reference to the sales ratio described in the Michigan Assessor's Manual, chapter XVI, Equalization, which provides for equal weight for each of the most recent three years preceding tax day. For each period within the study, sales are compared to assessments and an assessment level percentage is derived. These assessment level percentages are added and then divided by three (three years) to determine the assessment level percentage to true cash value for the period covered by the study. Therefore, in your example, each your would be given equal weight and a ratio of 40% would result.

The sales ratio study was developed by the Tax Commission to provide for keeping equalization reasonably up-to-date in the face of rising or falling prices. There are two requirements to be met in the administration of the general property tax law: one is uniformity, and the other is the 50% of true cash value of the property assessed. The three-year sales ratio guide used by the Tax Commission provides a reasonable means of achieving uniformity throughout the state.

A local assessor is not prohibited from using other relevant information along with the sales ratio study in determining assessments. If additional relevant information is available, such as comparable sales at levels lower than those indicated by the sales ratio study, the assessor must consider those sales.

It is my opinion, therefore, that the sales ratio study, as outlined in chapter XVI of the Assessor's Manual, provides a reasonable means of achieving uniformity throughout the state and must be followed by county equalization departments. However, a local assessor, if he or she uses the sales ratio study, is not precluded from using other relevant information in determining the assessments, but must consider other comparable sales at lower levels, if any, known to the assessor but not listed on the sales ratio study.

Frank J. Kelley