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. 6804 June 22, 1994 CONSTITUTIONAL LAW: Conveyance of state property to a local unit of government and sale of a portion of that property to adjacent property owners under Const1963, art 4, Sec. 30 Section 2 of 1993 PA 226, which authorizes conveyance of state lands to a local unit of government, does not constitute an appropriation for a local purpose requiring a two-thirds majority vote of both the House and Senate under Const1963, art 4, Sec. 30, since the convyed lands must be open to all members of the public regardless of their residence. Section 3 of 1993 PA 226, which authorizes the subsequent conveyance of certain parcels of land by a local unit of government to adjacent property owners, for fair market value to be returned to the State of Michigan, does not constitute an appropriation for a private purpose requiring a two-thirds majority vote of both the House and Senate under Const1963, art 4, Sec. 30. Honorable William Faust State Senator The Capitol Lansing, Michigan You have asked whether 1993 PA 226 constitutes a local or private act which required a two-thirds majority vote of the House and of the Senate pursuant to Const1963, art 4, Sec. 30. 1993 PA 226 originated as House Bill 4422. The bill was introduced by Representative Middleton on March 3, 1993. 1993 Journal of the House (No. 17, March 3, 1993). It was eventually approved, with certain amendments, by both the House and the Senate and was signed by the Governor on November 4, 1993, becoming 1993 PA 226 and taking immediate effect. 1993 Journal of the House 3300 (No. 96, November 9, 1993). As enacted, 1993 PA 226 is entitled "An Act to authorize the department of natural resources to convey certain state owned property in Livingston and Oakland counties; to prescribe conditions for the conveyance; and to provide for the disposition of the revenue derived from the conveyance." The provisions of the bill, as it was introduced, were succinctly summarized by the House Legislative Analysis Section: The bill would convey the former Fenton Rearing Pond site to Rose Township for recreational purposes and allow the township to sell to adjacent landowners, for fair market value, a narrow triangular shaped fragment of the rearing pond property. The 42.72-acre site, which is located primarily in Oakland County (though part also falls in Livingston County), currently is administered by the Department of Natural Resources, which had previously used the site to rear various species of sport fish. The land would be conveyed for one dollar, could be used only for public recreation, and would have to be open to all state residents on the same terms, fees, and conditions. The conveyance also would allow Rose Township to sell to adjacent property owners a 1.92-acre strip of land in the conveyance that is south of Baker road, but if the township did this it would have to reimburse the state for the fair market value of the land sold. Title to the land would revert to the state if the land were used for any purpose other than public recreation, and the state would keep mineral rights to the land. A SUMMARY OF HOUSE BILL 4422 AS INTRODUCED 3-3-93, House Legislative Analysis, HB4422 (3-26-93). Despite the several amendments made to the bill, this summary still represents an accurate general description of the bill as enacted. The provisions of 1993 PA 226, it should be noted, are not at all unusual; in both form and substance, 1993 PA 226 closely resembles numerous other legislative acts authorizing the conveyance of state-owned lands to local units of government. See, e.g., 1993 PA 123 (authorizing conveyance of state-owned lands in Macomb and Oakland Counties to various cities) and 1993 PA 111 (authorizing conveyance of state-owned lands in Macomb County to the charter township of Shelby). Const1963, art 4, Sec. 30, provides: The assent of two-thirds of the members elected to and serving in each house of the legislature shall be required for the appropriation of public money or property for local or private purposes. Your inquiry effectively raises two separate questions regarding the application of this constitutional principle to 1993 PA 226. These questions may be stated as follows: (1) Does section 1 of 1993 PA 226, which authorizes conveyance of state lands to a local unit of government, constitute an appropriation for a local purpose requiring a two-thirds majority vote of both the House and Senate under Const1963, art 4, Sec. 30? (2) Does section 3 of 1993 PA 226, which authorizes the subsequent conveyance of certain parcels of land by a local unit of government to adjacent property owners, for fair market value to be returned to the State of Michigan, constitute an appropriation for a private purpose requiring a two-thirds majority vote of both the House and the Senate under Const1963, art 4, Sec. 30? Addressing your first question, Moreton v Secretary of State, 240 Mich 584, 587-590; 216 NW 450 (1927), is the only reported appellate decision which has construed the term "local purposes" as that term is used in Const1963, art 4, Sec. 30. Moreton concerned a state statute which had appropriated state gasoline tax revenues for use by various cities, villages, and counties. The monies appropriated to these local units of government were to be used solely to maintain state highways located within those jurisdictions. Despite the fact that the act in question appropriated monies to specific local units of government, the Court concluded that the act was not for a "local" purpose within the meaning of Const1908, art 5, Sec. 24, the predecessor to Const1963, art 4, Sec. 30. Finding that the state has a legitimate interest in all public roads, and that the maintenance of such roads is a matter of statewide concern, the Court concluded that "[t]he purpose of these appropriations is not for the benefit of certain localities but for the State at large." Id, at 589. Thus, the Court held "the act does not make appropriations for local purposes and therefore does not come within the constitutional prohibition." Id, at 589-590. OAG, 1983-1984, No 6225, p 303, 307-309 (May 7, 1984), examined an appropriation of state funds for the Detroit Institute of Arts and reached a similar conclusion. The opinion observed that an appropriation is "not an appropriation for a local purpose simply because it is expended in a particular locality," id, at 308, and went on to state: Unquestionably, and uniquely in Michigan, the Detroit Institute of Arts, as a widely acclaimed cultural facility, is utilized by the citizens of this state without regard to residency in the city. The facility is an outstanding tourist attraction utilized by tourists and their families. Its vast displays and cultural facilities are readily and regularly available to Michigan students. [ Emphasis added.] For these reasons, the opinion concluded, "the allocation of moneys to the Detroit Institute of Arts ... contained in 1983 PA 166, Secs. 1 and 31, is for a state, and not for a local, purpose." Id, at 309. Section 2 of 1993 PA 226 provides, in pertinent part: (1) [T]he conveyance authorized by this act shall provide that the property shall be used only for public recreation purposes and that the property shall be open to all members of the public as prescribed in subsection (2).... (2) The conveyance authorized by this act shall provide that all members of the public using the property shall be subject to the same annual and daily fees, terms, and conditions. The conveyance also shall provide that the grantee may waive daily fees or waive fees for the use of specific areas or facilities in the case of use by specified groups or classes of persons, but the waiver of fees shall apply to all members of that group or class regardless of their residence. [ Emphasis added.] Thus, even though title to the property in question passes to a local unit of government, the terms of the conveyance assure that the property continues to be readily and regularly available to all of the citizens of the state without regard to residency. It is my opinion, therefore, in response to your first question, that section 2 of 1993 PA 226, which authorizes conveyance of state lands to a local unit of government, does not constitute an appropriation for a local purpose requiring a two-thirds majority vote of both the House and Senate under Const1963, art 4, Sec. 30, since the conveyed lands must be open to all members of the public regardless of their residence. The second question posed by your inquiry is whether section 3 of 1993 PA 226, which authorizes the subsequent conveyance of certain parcels of land by a local unit of government to adjacent property owners, for fair market value, to be returned to the State of Michigan, constitutes an appropriation for a "private purpose" within the meaning of Const1963, art 4, Sec. 30. Section 3 of 1993 PA 226 provides: The conveyance authorized by this act shall provide that the township of Rose is authorized to sell to adjacent property owners certain parcels of property that are within the property described in section 1 and are located south of Baker road. The conveyance authorized by this act also shall provide that if the township sells any of that property, the township shall reimburse the state for the fair market value of the property sold. The fair market value of the property sold to adjacent property owners shall be determined by appraisal by an independent fee appraiser, which appraisal shall be approved by the department of natural resources. [ Emphasis added.] Research has failed to disclose any Michigan appellate court decision which considered whether the transfer of public money or property for fair consideration is an appropriation of public money or property within the meaning of Const1963, art 4, Sec. 30. However, the predecessor of this constitutional provision, Const1850, art 4, Sec. 45, was borrowed from article 1, section 9 of the 1846 New York Constitution, which required a two-thirds legislative approval for bills appropriating public money or property for local or private purposes. Advisory Opinion re Constitutionality of PA1966, No 346, 380 Mich 554, 590; 158 NW2d 416 (1968), opinion of Justices Adams and Kavanagh. Because Michigan courts would likely consider how the New York courts have interpreted the comparable New York constitutional provision, it is appropriate to consider those decisions. Rumsey v New York & N.E.R. Co., 130 NY 88, 91; 28 NE 763, 764 (1891), considered legislation that would permit the commissioners of the land office to grant land under the waters of navigable rivers or lakes in perpetuity for the beneficial enjoyment of the land by the adjacent owner without any consideration. Interpreting Const N.Y.1846, art 1, Sec. 9, the Court said: The act in question is doubtless one which required the assent of two-thirds of the members elected to each branch of the legislature.... In Sweet v City of Syracuse, 129 NY 316, 336-337; 27 NE 1081 (1891), the New York Court of Appeals said: [I]t may be observed that the word "appropriating," as used in this section of the Constitution, refers to a transfer of public property as a gift or gratuity, and not to some right in or privilege connected with property belonging to the state transferred for an equivalent. The Court continued at pp 347-348 stating: The word "appropriating," as used in the constitutional provision, manifestly has no reference to the appropriation of public money or property where the state gets an equivalent.... The object and purpose of this provision were clearly intended to forbid the legislature, without a two-thirds vote, to make gratuitous appropriations of the public money or property to localities or individuals, and thus to divest the state of its money or property without any equivalent, and it could have no other purpose. The legislature by a majority vote could authorize a sale of the property of the state for a consideration, or the disposition of it in discharge of an obligation. [ Emphasis added.] The New York Court of Appeals at 36 NY2d 986; 374 NYS2d 603; 337 NE2d 120 (1975), affirmed without opinion Broad Properties v O'Hara, 45 AD2d 868, 869; 358 NYS2d 3, 4 (2d Dept 1974). That case held it was not a violation of N.Y. Const, art 3, Sec. 20, (1) which prescribes the two-thirds vote, for the Legislature to authorize "the Commissioner of General Services ... upon the written consent of the Commissioner of Transportation and upon such terms and conditions, including consideration, as the Commissioner of General Services may fix and determine," to sell a certain parcel of state-owned property to a private buyer. The New York position is summarized in 97 NYJur2d Statutes (1992), Sec. 42, p 41: The word "appropriation" as used in the constitutional provision requiring the assent of two-thirds of legislators for every bill appropriating the public moneys or property for local or private purposes refers to a transfer of public property as a gift or gratuity and does not refer to the appropriation of public money or property where the state gets an equivalent therefor. It is also useful to review how Const1963, art 9, Sec. 18, has been interpreted. That section provides, in pertinent part: The credit of the state shall not be granted to, nor in aid of any person, association or corporation, public or private, except as authorized in this constitution. This constitutional provision, like Const1963, art 4, Sec. 30, Advisory Opinion re Constitutionality of PA1966, No 346, 380 Mich, at pp 584-585, is designed to limit the use of public moneys for private purposes. In interpreting Const1963, art 9, Sec. 18, the Michigan Supreme Court has taken the same approach as the New York Court of Appeals set forth above by ruling that, when the state receives fair value for public money or property, there is no lending of the credit of the state under Const1963, art 9, Sec. 18. Five justices of the Michigan Supreme Court said, in In Advisory Opinion on Constitutionality of 1986 PA 281, 430 Mich 93, 126-127; 422 NW2d 186 (1988), concerning Const1963, art 9, Sec. 18: If the state or a municipality receives value in return for what it gives away, there is no loan of credit under the constitution. We articulated this rule in Alan [v Wayne County, 388 Mich 210; 200 NW2d 628 (1972) ] supra, p 325: Michigan case law interpreting Const1963, art 9, Sec. 18 is neither ample nor precise. It is clear the state or its subdivision the county cannot give anything away without consideration.... When the state acquires or transfers something of value in return for value the state does not offend Const1963, art 9, Sec. 18. Normally, "the Legislature or Executive Branch is the judge of what is fair value in matters in which it is concerned.... Their judgment, however, is subject to judicial review for abuse of judgment." Id., p 330. Accord, Petrus v Dickinson County Bd of Comm'rs, 184 MichApp 282, 297; 457 NW2d 359 (1990), lv den 435 Mich 879 (1990); CPC Internat'l, Inc v Aerojet General Corp, 759 FSupp 1269, 1284 (WDMich, 1991). These authorities compel the conclusion that, when public money or property is exchanged for fair value, there is no appropriation of public money or property within the meaning of Const1963, art 4, Sec. 30. The Legislature or, by delegation, the Executive Branch, determines the question of fair value which is subject to judicial review for abuse of discretion. It is my opinion, therefore, that section 3 of 1993 PA 226, which authorizes the subsequent conveyance of certain parcels of land by a local unit of government to adjacent property owners, for fair market value to be returned to the State of Michigan, does not constitute an appropriation for a private purpose requiring a two-thirds majority vote of both the House and the Senate under Const1963, art 4, Sec. 30. Frank J. Kelley Attorney General (1)