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. 6792

March 4, 1994

COUNTIES:

Use of county accommodations tax revenues to support exhibit areas in a community college museum

TAXATION:

Use of county accommodations tax revenues to support exhibit areas in a community college museum

Under the accommodations tax act, 1974 PA 263, Kalamazoo County may not disburse accommodations tax revenues to Kalamazoo Valley Community College for the purpose of supporting exhibit areas in the Kalamazoo Public Museum.

Honorable Mary C. Brown

State Representative

The Capitol

Lansing, MI

You have asked the following question:

Under the accommodations tax act, 1974 PA 263, may Kalamazoo County disburse accommodations tax revenues to Kalamazoo Valley Community College for the purpose of supporting exhibit areas in the Kalamazoo Public Museum?

As background to this question, you relate that, in July, 1991, Kalamazoo Valley Community College (KVCC) assumed operation and control of the Kalamazoo Public Museum. You advise that KVCC envisions transforming the museum into "a significant educational and recreational resource and attraction for residents and visitors to Kalamazoo County."

Kalamazoo County presently imposes an accommodations tax under the provisions of 1974 PA 263, MCL 141.861 et seq; MSA 5.3194(371) et seq. Pursuant to section 7 of that statute, revenues derived from this tax may be used only for certain specific purposes. As originally enacted, section 7 provided:

The revenues derived from the taxes imposed pursuant to this act shall be deposited in a special fund to be used by the county or by an authority which is organized pursuant to state law, together with other available funds only to pay:

(a) The cost of administration and enforcement of the ordinance.

(b) The financing of the acquisition, construction, improvement, enlargement, repair, or maintenance of convention and entertainment facilities, including the payment of principal and interest, when due, on bonds or other evidence of indebtedness issued by the county for convention and entertainment facilities.

(c) Current or future annual rental payable by the county to an authority organized pursuant to state law for the purpose of acquiring, constructing, improving, enlarging, repairing, or maintaining the convention and entertainment facilities and leasing them to the county.

(d) The promotion and encouragement of tourist and convention business in the county.

The language of section 7, as originally enacted, contained no express reference to museums. However, in 1989, the Legislature amended section 7 by means of 1989 PA 13, adding a new subsection (e). That new subsection authorizes a county to expend accommodations tax revenues to pay:

(e) The principal and interest, when due, on bonds or other evidence of indebtedness issued by or on behalf of the county for the purpose of financing the construction of a museum, or the current or future rental payable by the county to an authority organized pursuant to state law for the purpose of constructing a museum and leasing it to the county, only if the museum is located in a city with a population of 180,000 or more. [ Emphasis added.]

While this language explicitly authorizes the use of accommodations tax revenues for financing a museum facility, it also restricts such expenditures to cities with a population of 180,000 or more. The largest city in Kalamazoo County is the City of Kalamazoo. As of the 1990 federal census, the population of the City of Kalamazoo was 80,277, substantially less than the 180,000 specified in section 7(e) of 1974 PA 263.

Of equal significance, House Bill 4333, which became amendatory 1989 PA 13, originally proposed to amend section 1(c) of 1974 PA 263 by adding the term "museums" to the definition of "convention and entertainment facilities" eligible for funding under that statute. Had this language been adopted, a museum such as that operated by KVCC would clearly have constituted a "convention and entertainment" facility eligible for funding under the statute. However, the Legislature rejected this proposal, deleting the proposed amendment to section 1(c) and retaining only the language amending section 7. 1989 Journal of the House 591. "Generally, the rejection of an amendment indicates that the legislature does not intend the bill to include the provisions embodied in the rejected amendment." 2A Sutherland Statutory Construction (5th ed), Sec. 48.18, p 369. See also, People v Adamowski, 340 Mich 422, 429; 65 NW2d 753 (1954), and Miller v State Farm Mutual Automobile Ins Co, 410 Mich 538, 567; 302 NW2d 537 (1981).

In light of the express restrictions adopted by the Legislature in section 7(e) of 1974 PA 263, as amended, and of the Legislature's rejection of language which would have expanded the definition of "convention and entertainment facilities" in section 1(c) to include museums, it must be concluded that a county is not authorized to expend accommodations tax revenues for a museum facility except to the limited extent authorized by section 7(e) as added by 1989 PA 13.

It is my opinion, therefore, that under the accommodations tax act, 1974 PA 263, Kalamazoo County may not disburse accommodations tax revenues to Kalamazoo Valley Community College for the purpose of supporting exhibit areas in the Kalamazoo Public Museum.

Frank J. Kelley

Attorney General