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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. 6213

March 30, 1984

LIBRARIES:

District library--eligibility for reimbursement of tax revenues lost by exemption of personal property inventories

TAXATION:

Single business tax--reimbursement of district library for tax revenue lost by exemption of personal property inventories

A district library in whose behalf ad valorem property taxes are levied for its use is eligible, pursuant to the Single Business Tax Act, 1975 PA 228, to receive reimbursement of the proportionate share of tax revenues lost as a result of the statutory exemption of personal property inventories from ad valorem property taxation.

Honorable Kenneth J. DeBeaussaert

State Representative

The Capitol

Lansing, Michigan

You have requested my opinion on the following questions:

Are townships and villages required to reimburse a district library created pursuant to 1955 PA 1964 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 Romeo District Library, created under the authority of 1955 PA 164; MCLA 397.271 et seq; MSA 15.1780(1) et seq, which authorizes cities, villages, townships, school districts and counties to establish a district library.

1955 PA 164, Sec. 4a, as added by 1978 PA 265, supra, provides:

'The municipalities which unite for the establishment and operation of a district library pursuant to section 2(2) of this act shall constitute an authority under section 6 of article 9 of the state constitution of 1963.' (Emphasis added.)

Support of a district library by either appropriation from the municipalities involved in the district library or by a tax levy is authorized by 1955 PA 164, supra, Sec. 5.

'The sums necessary for the establishment and operation of a district library shall be appropriated by the governing or legislative boards of the municipalities entering into the formation of the district library, or by a tax levy for this purpose authorized by a vote of the qualified electors in a participating municipality or a vote of the qualified electors of the district established by the participating municipalities pursuant to Sec. 2(2) of this act, if the proposed tax levy is submitted by the board of trustees of the district library. . . .'

The Romeo District Library encompasses the Township of Bruce and Washington and the Village of Romeo in Macomb County. This office is informed that one-half mill is levied for the operational support of the Romeo District Library.

Chapter 6 of the 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 revenues 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).

Section 137 of the Single Business Tax Act, supra, sets forth the method that 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.)

In OAG, 1983-1984, No 6199, p 226 (January 23, 1984), it was concluded that, although not denominated as such, the Armada Free Public Library is an 'authority' for the purposes of the Single Business Tax Act, Sec. 137, supra. It has levied for its use a 3/4 mill property tax authorized by 1877 PA 164, Sec. 10; MCLA 397.210; MSA 15.1671, so that 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.

The Romeo District Library, expressly denominated as an authority by the Legislature, has a one-half mill tax levied for its use. The Single Business Tax Act, Sec. 137, supra, expressly requires the appropriate township and village treasurers to pay the appropriate share of the reimbursements to the Romeo District Library.

It is my opinion, therefore, that the Romeo District Library is eligible for reimbursement in accordance with the Single Business Tax Act, supra, of the proportionate share of tax revenues lost as a result of the statutory exemption of personal property inventories from ad valorem property taxation.

Frank J. Kelley

Attorney General


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