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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. 6199 January 23, 1984 LIBRARIES: Township library--eligibility for reimbursement of tax revenue lost by exemption of personal property inventories TAXATION: Single business tax--reimbursement of township libraries for tax revenue lost by exemption of personal property inventories A township library in whose behalf ad valorem property taxes are levied for its use is eligible under the Single Business Tax Act, 1975 PA 228, to receive reimbursement of the proportionate share of tax revenue lost because of the statutory exemption of personal property inventories from ad valorem property taxation. Honorable Martha W. Griffiths Lieutenant Governor The Capitol Lansing, Michigan You have requested my opinion on the following question: Are townships required to reimburse free public libraries created pursuant to 1877 PA 164 in accordance with Chapter 6 of the Michigan Single Business Tax Act, 1975 PA 228? In your letter of request, you have referred specifically to the Armada Free Public Library, created under the authority of 1877 PA 164; MCLA 397.201 et seq; MSA 15.1661 et seq; which provides for the establishment, funding and operation of free public libraries in villages and townships. This statute meets the provisions of Const 1963, art 8, Sec. 9 which requires that the Legislature provide by law for the establishment and support of public libraries. 1877 PA 164, supra, Sec. 10 provides: 'When 50 voters of any incorporated village or township shall present a petition to the clerk of the village or township, asking that a tax may be levied for the establishment of a free public library in such village or township, and shall specify in their petition the rate of taxation, not to exceed one mill on the dollar . . . and if the majority of all the votes cast in such village or township shall be for the tax for a free public library, the tax specified in such notice shall be levied and collected in like manner with other general taxes of said village or township, and shall be known as the library fund, and when such free public library shall have been established and a board of directors elected and qualified, as hereinafter provided, it shall be the duty of such board of directors on or before the first Monday of September in each year, where it has been voted to establish a free public library by a township, and on and before the second Monday in April, where it has been voted to establish a free public library by an incorporated village, to prepare an estimate of the amount of money necessary for the support and maintenance of such library for the ensuing year, not exceeding one mill on the dollar of the taxable property of the village or township, and report such estimate to the assessor of such village or the supervisors of such township for assessment and collection, the same as other village and township taxes, and the same shall be so assessed and collected; and the corporate authorities of any such villages or townships may exercise the same powers conferred upon the corporate authorities of cities under this act.' The Armada Free Public Library encompasses the Township of Armada, amd by contract, provides library services to the Township of Richmond. Both townships are located in Macomb County. This office is informed by the Armada Township Treasurer that, under the authority of 1877 PA 164, Sec. 10, supra, a 3/4 mill tax is levied for the operational support of the Armada Free Public Library. The funds are to be expended for library purposes as determined by the library board. OAG, 1959, No. 3432, p 166 (August 14, 1959). Chapter 6 of the Michigan Single Business Tax Act, 1975 PA 228, Sec. 131 et seq; MCLA 208.131 et seq; MSA 7.558(131) et seq, provides for the diversion of a portion of the revenue generated by the single business tax for distribution to cities, villages, townships and counties to compensate such local units of government for tax revenues lost by the exemption of personal property inventories from ad valorem property taxation. OAG, 1977-1978, No 5206, p 183 (August 4, 1977). The Single Business Tax Act, 1975 PA 228, supra, Sec. 134, provides: 'The department of treasury shall calculate the amount of payment to be made to a city, village, and township by multiplying the amount of state equalized value of tax exempt inventory property as certified by the department of treasury under section 132 times the property tax rate for each taxing unit as certified each year to the department of treasury for purposes of this act. . . . The townships shall receive their funds by February 1 of each year, beginning in 1977.' Section 137 of the Single Business Tax Act, supra, sets forth the method which the Treasurer of a city, village, township or county must utilize in order to calculate the proportionate share of the tax revenues to be reimbursed to taxing authorities and provides, in pertinent part: '(1) The treasurer of any city, village, township, or county who collects money for an authority that levies property taxes, shall pay an eligible authority its proportionate share of the reimbursements under sections 134 and 135. The proportionate share shall be calculated by the percentage that the property taxes collected by the authority are to the property taxes of the assessing unit. The property taxes of such authorities may be added to the millages used in section 134. '(2) For an authority to be eligible for compensation under this act, that authority must have an authorization to have taxes levied for its use as provided by law.' (Emphasis added.) The Legislature has not defined the term 'authority' in 1975 PA 228, supra. Although not specifically denominated as such, it may be concluded that the Armada Free Public Library is an 'authority' within the intendments of the Single Business Tax Act, Sec. 137, supra. It is to be noted that the District Library Act, 1955 PA 164, MCLA 397.271 et seq; MSA 15.1780(1) et seq, Sec. 4a provides: 'The municipalities which unite for the establishment and operation of a district library pursuant to section 2(2) [footnote omitted] of this act shall constitute an authority under section 6 of article 9 of the state constitution of 1963.' It is my opinion, therefore, that since the Armada Free Public Library has levied for its use a 3/4 mill property tax authorized by 1877 PA 164, Sec. 10, supra, the distribution provisions of the Single Business Tax Act, 1975 PA 228, Sec. 137, supra, authorize the reimbursement of the proportionate share of tax revenue lost because of the statutory exemption of inventories from ad valorem property taxation to the Armada Free Public Library. Frank J. Kelley Attorney General
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