STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL

Opinion No. 6554

December 20, 1988

CONSTITUTIONAL LAW:

Const 1963, art 9, Sec. 29--obligation to pay increased costs for specialized transportation for persons 60 years of age or over

TRANSPORTATION:

Eligibility of local governmental units for comprehensive transportation funds conditioned upon provision of specialized transportation services

The enactment of legislation to amend 1951 PA 51, Sec. 10e to reduce the age from 65 years to 60 years of persons entitled to special transportation services from transportation authorities or governmental agencies eligible to receive grants from the Comprehensive Transportation Fund by providing the specialized transportation services would not constitute an increased mandated service on units of local government requiring state funding for any necessary increased costs within the purview of Const 1963, art 9, Sec. 29.

William C. Marshall

Chairman

State Transportation Commission

Department of Transportation

425 West Ottawa

Lansing, Michigan 48909

Pursuant to the direction of the Legislature stated in section 10e(22) of 1951 PA 51, as amended by 1987 PA 234, MCL 247.660e(22); MSA 9.1097(10f)(22), you have requested my opinion on the following question:

Your question concerns the Headlee Amendment to the Michigan Constitution ratified by the people on November 7, 1978 and made effective on December 23, 1978, consisting of an amendment to Const 1963, art 9, Sec. 6, and the addition of sections 25 through 34 to Const 1963, art 9. Section 29, which is relevant to your inquiry, provides:

In order to determine whether reducing the age of persons entitled to special transportation services from 65 to 60 triggers the Headlee requirement that all increased costs occasioned by the change be paid by the State, it is first necessary to consider the nature of the obligation to provide the services offered.

Currently, monies from the comprehensive transportation fund are made available in a number of ways to specifically address the transportation needs of citizens 65 years of age or over. For example, Act 51, Sec. 10e(4)(b)(i) and (d)(ii) provide for the distribution of funds for services designed primarily for seniors and handicappers as follows:

In addition, participating eligible authorities or eligible governmental agencies make available "demand actuated service" pursuant to plans approved by the Department of Transportation. Through this service, a bus or smaller transit vehicle provides group rides to members of the general public paying fares individually and on demand rather than in regularly scheduled route service. MCL 247.660c(f); MSA 9.1097(10d)(f). Section 10e(18) of Act 51 provides that no plan describing the demand actuated service to be offered by eligible authorities or governmental agencies may be approved by the Department unless the plan provides the following:

Senior citizens are also afforded preferential fares for public transportation services as provided in section 10e(4)(a)(iii) of Act 51 as follows:

We are advised that the Department contemplates requesting legislation which would provide for an across-the-board reduction of the age of persons entitled to the special services described in Act 51, Sec. 10e, and in response to subsection (22) of this section, the Headlee implications, if any, of an amendment changing all age references in each of the above-quoted statutory provisions from 65 to 60 must be addressed.

A study of the history of Act 51, Sec. 10e(4)(a)(iii), is instructive. It was added by 1972 PA 327 as Sec. 10e(1)(c)(iv) to provide that funds shall not be made available from the general transportation fund to eligible authorities or governmental agencies unless they provide or agree to provide preferential fares to persons 65 years of age or older riding during off-peak periods of service. This subsection was renumbered by the Legislature on several occasions and became Sec. 10e(4)(a)(iii) by virtue of amendatory 1987 PA 234, but its provisions requiring the provision of or the agreement to provide the preferential fares to persons 65 years of age or older has remained substantially unchanged. Thus, since 1972, eligible authorities and governmental agencies have provided or have agreed to provide preferential fares for persons 65 years of age or older in order to receive grants from first the general transportation fund and presently from the comprehensive transportation fund. These provisions have operated without substantial change prior to and subsequent to ratification of the Headlee Amendment by the people.

Since Act 51, Sec. 10e(4)(a)(iii) imposes no duty upon eligible authorities or governmental agencies to furnish transportation to certain persons at preferential rates based upon age, should the Legislature see fit to reduce the age from 65 to 60, such an amendment of the statute would not compel an increased activity or service beyond that required by law impacting Const 1963, art 9, Sec. 29.

Further, the comprehensive transportation fund monies referenced in Act 51, Sec. 10e, are distributed to "eligible authorities" and "eligible governmental agencies," which for purposes of Act 51 are defined in Sec. 10c as follows:

An examination of each of the enabling statutes referenced in the above definitional sections of Act 51 reveals that the Legislature has authorized, but not mandated, the creation of transportation authorities and agencies. For example, the act pursuant to which an "eligible authority" is organized provides that "[a]n authority created under an interlocal agreement pursuant to ... MCL 124.501 to 124.512 of the Michigan Compiled Laws, for the purpose of providing public transportation service may form a public [transportation] authority under this act." ⁽¹⁾ MCL 124.453(3); MSA 5.3475(453)(3). (Emphasis added.)

We are aware that some local units of government have advanced the position that the Headlee Amendment prohibits increases both in the level of activities mandated by state law and in the level of activities undertaken at the option of a local unit. This interpretation, however, has been soundly rejected by the Michigan Supreme Court in a recent case.

In Livingston County v Dep't of Management & Budget, 430 Mich 635; 425 NW2d 65 (1988), an action was brought by Livingston County against the Department of Management and Budget and the Department of Natural Resources for reimbursement of county expenditures made for sanitary landfill improvements. The Michigan Municipal League and the Michigan Townships Association, as amicus curiae, argued that "[t]he Headlee trigger for state funding is a rise in the level of any local service, even an optional one, beyond the level required as of the Headlee effective date." 430 Mich at 640.

After reviewing the purpose behind and circumstances surrounding adoption of the Headlee Amendment, as well as dicta from several Court of Appeals' decisions, the Michigan Supreme Court held that the language referring to "an increase in the level of activity or service" in Const 1963, art 9, Sec. 29, "refers only to required, not optional, services or activities." 430 Mich at 648.

Similarly, each of the statutes referenced in Act 51, Sec. 10c(b) and (c), as rendering a governmental agency "eligible" for comprehensive transportation fund monies provides only an authorization, and not a command, for transit-related activity: legislative bodies of cities "may incorporate" a public transportation authority (MCL 124.352; MSA 5.3475(2)); a public agency "may" enter into interlocal agreements (MCL 124.504; MSA 5.4088(4)); political subdivisions are "authorized ... upon consent of each political subdivision" to enter into contracts for transferring functions (MCL 124.532; MSA 5.4087(2)); municipal corporations "shall have the right" to enter into intergovernmental contracts (MCL 124.3; MSA 5.4083)); an authority created under MCL 124.504; MSA 5.4088(4), for the purpose of providing public transportation "may form a public authority under this act" (MCL 124.453(3); MSA 5.3475(453)(3)); and public corporations have the "authority" to make public improvements (MCL 141.102; MSA 5.2732). ⁽²⁾ Thus, the Legislature has not required that any authority or governmental agency engage in the delivery of transportation services, but rather has offered an opportunity for it to do so.

Reference is also made to City of Ann Arbor v State of Michigan, 132 Mich App 132; 347 NW2d 10 (1984), where the Court of Appeals reversed an order of the Court of Claims requiring the State to reimburse municipal corporations for their expenses incurred in providing fire protection to state facilities. In so ruling, the court found that the furnishing of fire protection services by municipal corporations is not an activity required by state law under the Headlee Amendment. The court was persuaded by the fact that the applicable statutes authorizing charter townships, townships, and cities to provide fire protection were "clearly permissive rather than mandatory." 132 Mich App at 136. The court further supported this result by reference to the section of the legislation implementing the Headlee Amendment defining a "state requirement" as a state law requiring a new or increased activity, but not including:

OAG, 1979-1980, No 5594, p 473 (November 16, 1979), considered an act of the Legislature mandating a change in the number of members of a county department of public works from three, five or seven members to seven or nine members. Noting that the statute did not require a county to establish a department of public works, but only mandated the number of members once established, it was concluded that no new or increased activity or service was imposed upon the local governmental unit and no appropriation was required to cover any additional costs occasioned by the change under Const 1963, art 9, Sec. 29.

A similar conclusion was reached in OAG, 1983-1984, No 6237, p 339 (July 31, 1984) where the Headlee Amendment was found not to apply to a state statute specifying that local units of government could not engage in public works projects without the assistance of licensed architects, engineers, and land surveyors. This conclusion was supported by reference to the reasoning of the court in City of Ann Arbor, supra, reinforcing the distinction between new and increased levels of activities required of local governmental units, which is covered by the Headlee Amendment, and a "command of prohibition instructing local units not to engage in [a certain activity] unless certain conditions are fulfilled," which is not so covered. OAG, 1983-1984, No 6237, at 340.

Applying these authorities to your question, it is clear that no obligation is imposed upon any eligible authorities or eligible governmental agencies to provide transportation services to persons 65 years of age or over unless it agrees to do so. Thus, no new or increased activity or service would be "required" within the meaning of MCL 21.234(5)(h); MSA 5.3194(604)(5)(h), if the Legislature were to reduce the age of citizens entitled to the benefits now afforded under Act 51, Sec. 10(e), from 65 to 60.

It is my opinion, therefore, that any amendment to 1951 PA 51, Sec. 10e, reducing the age of persons entitled to specialized transportation services from 65 to 60 would not constitute an increased state mandated service on units of local government requiring state funding for any necessary increased costs within the purview of Const 1963, art 9, Sec. 29.

Frank J. Kelley

Attorney General