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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) STATE OF MICHIGAN FRANK J. KELLEY, ATTORNEY GENERAL Opinion No. 6118 January 14, 1983 TAXATION: Levy for debt service before issuance of bonds A municipality may not levy taxes for payment of principal and interest upon bonds prior to the time the bonds are delivered unless the electors specifically approve the levy of the taxes prior to the time of delivery of the bonds. Honorable Robert A. Bowman State Treasurer Treasury Building Lansing, Michigan Referring to OAG, 1979-1980, No 5539, p 340 (August 13, 1979), which concluded that a school district may not levy taxes without limitation as to rate or amount to meet debt service on school bonds before delivery thereof, your predecessor has requested my opinion whether the Municipal Finance Act, 1943 PA 202, ch 7, Sec. 1a(1); MCLA 137.1a; MSA 5.3188(45a), as amended by 1980 PA 85, would impact that opinion. 1943 PA 202, ch 7, Sec. 1a, supra, as amended, in pertinent part, provides: '(1) If a municipality has obligations outstanding, or with the approval of its electors has authorized the issuance of or has incurred obligations to be paid from collections of its next tax levy, an officer or official body charged with a duty in connection with the determination of the amount of the next taxes to be raised or with the levying of the next taxes, shall include in the amount of taxes levied each year:' The underscored language was added by amendatory 1980 PA 85. Const 1963, art 9, Sec. 6 sets forth ad valorem tax limits, but authorizes levy without limitation as to rate or amount for voter approved bonded debt. However, as concluded in OAG, 1979-1980, No 5539, supra, the taxable real and tangible personal property within a school district does not become liable for the payment of principal and interest upon bonds of a school district until the bonds are delivered. Furthermore, the electors generally have submitted to them for their approval only the purpose and maximum principal amount of a bond issue proposed, but not other details of the issue such as date of delivery or the tax levy associated with the debt service on the bonds. The Legislature, in granting a municipal corporation authority to levy a tax, must observe constitutional limitations and restrictions. Bacon v Kent-Ottawa Metropolitan Water Authority, 354 Mich 159; 92 NW2d 492 (1958). It is my opinion, therefore, that 1943 PA 202, ch 7, Sec. 1a, supra, may not, without offending Const 1963, art 9, Sec. 6, be construed to permit unlimited tax levy before incurring of the indebtedness by delivery of the bonds unless the voters specifically approve the levy of the taxes prior to the time of delivery of the bonds. Frank J. Kelley Attorney General
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