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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. 6601 September 28, 1989 HOUSING: Exemption of elderly or handicapped housing property owned by city from ad valorem taxation TAXATION: Exemption of housing properties owned by a city and operated by a city housing authority Reimbursement of local taxing authorities for revenues lost due to exemption of elderly or handicapped housing property owned by city Property owned by a city, operated by a city housing commission created pursuant to MCL 125.651 et seq; MSA 5.3011 et seq, and used or occupied solely by elderly or handicapped families is exempt from general ad valorem taxation under MCL 211.7d and 211.7m; MSA 7.7(4a) and 7.7(4j). A municipal corporation which owns property used or occupied solely by elderly or handicapped families, and managed by a housing commission created pursuant to MCL 125.651 et seq; MSA 5.3011 et seq, does not qualify for reimbursement of tax revenues under MCL 211.7d(6); MSA 7.7(4a)(6). Honorable Bob Emerson State Representative The Capitol Lansing, Michigan 48909 You have requested my opinion on two questions which may be stated as follows: 1. Are housing properties, which are owned by a city and operated by a city housing commission created pursuant to MCL 125.651 et seq; MSA 5.3011 et seq, exempt from ad valorem property tax if the properties are used or occupied solely by elderly or handicapped families? 2. Is a municipal corporation, which owns housing properties used or occupied solely by elderly or handicapped families and managed by a housing commission created pursuant to MCL 125.651, et seq; MSA 5.3011 et seq, entitled to have the state treasurer draw a warrant upon the state treasury for the total amount of tax revenues lost by a local taxing unit pursuant to MCL 211.7d(6); MSA 7.7(4a)(6)? MCL 125.651 et seq; MSA 5.3011 et seq, provides the legal authority for cities, villages, townships and counties to acquire housing facilities and to establish municipal housing commissions to operate such facilities. MCL 125.652; MSA 5.3012, provides that: "Any city, village, township or county of the state of Michigan may purchase, acquire, construct, maintain, operate, improve, extend or repair housing facilities and eliminate housing conditions which are detrimental to the public peace, health, safety, morals or welfare." MCL 125.653(a); MSA 5.3013(a), provides in pertinent part that: "Any city, village, township or county may create by ordinance, a commission with power to accomplish the purposes set forth in section 2 of this act [MCL 125.652; MSA 6.3012]...." MCL 125.661; MSA 5.3021, provides in pertinent part that: "All deeds, contracts, leases or purchases entered into by the commission shall be in the name of the city or village and shall be approved by the governing body of said city or village...." There are two sections of the General Property Tax Act which deal with the exemption from ad valorem taxation of property used for housing owned by a local unit of government. The first, MCL 211.7m; MSA 7.7(4j), provides in part: "Property owned by, or being acquired pursuant to an installment purchase agreement by a county, township, city, village, or school district used for public purposes ... is exempt from taxation under this act...." The second, MCL 211.7d(1); MSA 7.7(4a)(1), provides in part: "Housing owned and operated by a nonprofit corporation or association or by the state, political subdivision of the state, or an instrumentality of the state, for occupancy or use solely by elderly or handicapped families is exempt from all general property taxation by the state, city, village, or county, or by a public body or agency...." Thus, it is clear that if property is owned by a city and used for a "public purpose," or for occupancy or use solely by handicapped or elderly families, it is exempt from general ad valorem taxation. You advise that not only are the properties in question used solely by elderly or handicapped families, but that they are also managed by a city housing commission established under MCL 125.651 et seq; MSA 5.3011 et seq. As it is a statutory duty of the housing commission to improve the housing within its jurisdiction and eliminate conditions detrimental to the public well-being, it is, therefore, clear that the properties so used are used for a "public purpose." Advisory Opinion re Constitutionality of PA 1966, No 346, 380 Mich 554, 575; 158 NW2d 416 (1968), and Sabaugh v. City of Dearborn, 384 Mich 510, 517; 185 NW2d 363 (1971). It is my opinion, in answer to your first question, that property owned by a city, operated by a city housing commission created pursuant to MCL 125.651 et seq; MSA 5.3011 et seq, and used or occupied solely by elderly or handicapped families, is exempt from general ad valorem taxation under MCL 211.7d and 211.7m; MSA 7.7(4a) and 7.7(4j). Turning to your second question, MCL 211.7d(6); MSA 7.7(4a)(6), provides for reimbursement to local taxing units of tax revenues lost under MCL 211.7d; MSA 7.7(4a), in certain circumstances. MCL 211.7d(6); MSA 7.7(4a)(6), provides: "When a tax roll is placed in the hands of a city, county, village, or township treasurer for collection, and there are taxes assessed on that roll against property concerning which exemption is claimed under this section, the treasurer shall prepare a statement on a form prescribed by the department of management and budget showing all descriptions for which exemptions have been claimed under this section, the names and addresses of the corporations or associations entitled to the exemptions, the total amount of taxes so exempted, and the amount of taxes assessed against the descriptions. The city, county, village or township treasurer shall forward the statement to the department of management and budget, upon verification of which the state treasurer shall draw his or her warrant upon the state treasury for the total amount of tax revenues lost by a local taxing unit as a result of the nonprofit housing exemption allowed by this act as shown by the statement. The state treasurer after examination of the statement shall forward the warrants to the city, county, village, or township treasurer." (Emphasis added.) Thus, while MCL 211.7d; MSA 7.7(4a), exempts qualified housing owned by governmental units or non-profit corporations and associations from taxation, the reimbursement provision of MCL 211.7d(6); MSA 7.7(4a), only applies to tax revenues lost due to the "nonprofit housing exemption" afforded to "corporations or associations entitled to the exemptions." "Nonprofit corporation or association" is defined in MCL 211.7d(5); MSA 7.7(4a)(5), as "a nonprofit corporation or association incorporated under the laws of this state not otherwise exempt from general ad valorem real and personal property taxes...." (Emphasis added.) The property described in your question is owned by a city and is exempt from general ad valorem taxation under both MCL 211.7m and 711.7d(1). It is not owned by a nonprofit corporation or association. Because the reimbursement provision applies only to properties which are owned by qualified nonprofit corporations and associations, no reimbursement of cities has been authorized by the Legislature and none may be made to a city operating housing for elderly or handicapped families. It is my opinion, in answer to your second question, that a municipal corporation, which owns property used or occupied solely by elderly or handicapped families and managed by a housing commission created pursuant to MCL 125.651 et seq; MSA 5.3011 et seq, does not qualify for reimbursement of tax revenues under MCL 211.7d(6); MSA 7.7(4a)(6). Frank J. Kelley Attorney General
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