STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL

Opinion No. 6772

October 28, 1993

APPROPRIATIONS:

Retroactive adjustments of revenue sharing payments to local units of government

The revenue sharing payments to local units of government under the State Revenue Sharing Act of 1971 are not subject to retroactive adjustments under section 1027a of 1992 PA 175 based on population count corrections made by the United States Census Bureau.

Patricia A. Woodworth

Director

Department of Management and Budget

P.O. Box 30026

Lansing, Michigan 48909

You have asked whether the revenue sharing payments to local units of government under the State Revenue Sharing Act of 1971 are subject to retroactive adjustments under section 1027a of 1992 PA 175 based on population count corrections made by the United States Census Bureau.

The State Revenue Sharing Act of 1971, 1971 PA 140, MCL 141.901 et seq; MSA 5.3194(401) et seq, provides for the periodic distribution of certain state revenues to local units of government. These revenues include portions of the income tax, sales tax, intangibles tax and the single business tax. See sections 11, 12 and 13 of the State Revenue Sharing Act of 1971 and Const 1963, art 9, Sec. 10.

Under section 3(1) of the State Revenue Sharing Act of 1971, population counts determine the distribution to which each local unit is entitled. Population counts, in turn, depend on census data provided by the United States Census Bureau. Section 3(1) contains several provisions for taking into account census corrections published by the federal Census Bureau in determining revenue distributions under the State Revenue Sharing Act of 1971, the most pertinent of which provides that adjustments to revenue distributions shall not be made until the July 1st following the date of the correction. Thus, under that provision of the State Revenue Sharing Act of 1971, there are only future adjustments in revenue sharing payments based on population count corrections.

Next, we turn to an analysis of section 1027a of 1992 PA 175, the act appropriating money for, among other purposes, the Department of Management and Budget. That statutory section provides as follows:

The above-quoted statutory language appears to contemplate retroactive adjustments in revenue sharing payments to local units of government. The relationship between that language and section 3(1) of the State Revenue Sharing Act of 1971 with regard to adjusting revenue sharing payments based on corrected census count errors is not altogether clear. However, for the reasons that follow, it is unnecessary to resolve that issue to answer your question.

Section 1027a contemplates an appropriation for census correction grants in section 101. However, there is no appropriation in section 101 for that purpose. HB5520, which became 1992 PA 175, was originally introduced on February 18, 1992. 1992 Journal of the House 256 (No. 18, February 18, 1992). An amendment adding the line item of appropriation entitled "[c]ensus correction grants" in the amount of $15,800 was adopted on second reading of the bill. That amendment was adopted at the same time that HB5520 was amended by adding section 1027a. 1992 Journal of the House 971-973 (No. 52, April 29, 1992). The bill eventually adopted by the conference committee, however, omits this line of appropriation while retaining section 1027a. 1992 Journal of the Senate 1807, 1886 (No. 60, June 30, 1992); 1992 Journal of the House 2008 (No. 79, July 22, 1992) (Conference Report adopted).

An item in an appropriations bill contains the subject and amount of an appropriation and must set apart a specific portion of money. OAG, 1985-1986, No 6399, p 402, 409 (November 13, 1986). A line item may be a single line or contained in a numbered paragraph of an appropriations bill. Id. However, conditions and directions regarding expenditures do not constitute an appropriation by themselves. OAG, 1991-1992, No 6684, p 46, 50 (June 11, 1991); OAG, 1991-1992, No 6707, p 102, 113 (December 12, 1991). Thus, as an explanatory and directory paragraph, section 1027a does not contain "items appropriating moneys" within the meaning of Const 1963, art 5, Sec. 19. Further, once the census correction grant in section 101 was deleted, there was no appropriation to which the directives of section 1027a could be applied.

The Michigan Constitution expressly provides that "[n]o money shall be paid out of the state treasury except in pursuance of appropriations made by law." Const 1963, art 9, Sec. 17. White v Dep't of Social Services, 20 MichApp 481, 484; 174 NW2d 315 (1969). In the absence of a valid appropriation, there is no authority for payment of a census correction grant in accord with the spending directives contained in section 1027a. Thus, there is no need to consider whether there is any conflict between section 3(1) of the State Revenue Sharing Act of 1971 and section 1027a of 1992 PA 175 with regard to census corrections and the distribution of state revenues to local units of government.

It is my opinion, therefore, that the revenue sharing payments to local units of government under the State Revenue Sharing Act of 1971 are not subject to retroactive adjustments under section 1027a of 1992 PA 175 based on population count corrections made by the United States Census Bureau.

Frank J. Kelley

Attorney General