The following opinion is presented on-line for informational use only and does not replace the official version.

STATE OF MICHIGAN

BILL SCHUETTE, ATTORNEY GENERAL

MICHIGAN NATURAL RESOURCE TRUST FUND:   DEPARTMENT OF NATURAL RESOURCES:   CONSTITUTIONAL LAW:   CONST 1963, ART 9, § 35:

Expenditures from Michigan Natural Resource Trust Fund

Const 1963, art 9, § 35, does not permit the expenditure of Michigan Natural Resource Trust Fund interest and earnings for payments in lieu of taxes on property under the jurisdiction of the Department of Natural Resources that was not purchased with Michigan Natural Resource Trust Fund funds, including property purchased with state or federal game and fish funds.

Opinion No.  7268                                         

August 9, 2012

Honorable Bruce Caswell

State Senator

The Capitol

Lansing, MI 48909-7536

You ask whether the Michigan Constitution allows expenditures of Michigan Natural Resource Trust Fund (MNRTF) interest and earnings for payments in lieu of taxes on property under the jurisdiction of the Michigan Department of Natural Resources (DNR) that was not originally purchased with MNRTF money, such as property purchased with state or federal fish and game funds.[1]   

To answer your question, it is first necessary to examine the text of the constitutional provision establishing the MNRTF.  Const 1963, art 9, § 35, states, in part:

There is hereby established the Michigan natural resources trust fund. The trust fund shall consist of all bonuses, rentals, delayed rentals, and royalties collected or reserved by the state under provisions of leases for the extraction of nonrenewable resources from state owned lands, except such revenues accruing under leases of state owned lands acquired with money from state or federal game and fish protection funds or revenues accruing from lands purchased with such revenues.  The trust fund may receive appropriations, money, or other things of value.  The assets of the trust fund shall be invested as provided by law.

* * *

The interest and earnings of the trust fund shall be expended for the acquisition of land or rights in land for recreational uses or protection of the land because of its environmental importance or its scenic beauty, for the development of public recreation facilities, and for the administration of the trust fund, which may include payments in lieu of taxes on state owned land purchased through the trust fund.  [Emphasis added.]

This provision was added to the Michigan Constitution in 1984 by Proposal B, an initiative to amend the Constitution under Const 1963, art 12, § 1.  The section was later amended by Proposal P in 1994, and Proposal 2 in 2002.  Proposal B created the MNRTF funded by certain royalties, bonuses, and rentals collected by the State under leases for the drilling of oil and gas or mining of minerals on state owned land.  Michigan United Conservation Clubs v Dep’t of Treasury, 239 Mich App 70, 74; 608 NW2d 141, aff’d 463 Mich 995 (2001).  The establishment of the MNRTF dedicated these revenues from the extraction of state owned nonrenewable resources for the acquisition of recreational land, or environmentally sensitive or scenic land, and for the development of public recreation facilities.

Const 1963, art 9, § 35, also expressly provides that interest and earnings derived from the MNRTF shall be expended for the administration of the trust fund, which may include payments in lieu of taxes “on state owned land purchased through the trust fund.”

Michigan courts apply settled principles of law in interpreting constitutional provisions.  “[T]he primary objective of constitutional interpretation, not dissimilar to any other exercise in judicial interpretation, is to faithfully give meaning to the intent of those who enacted the law.” National Pride At Work, Inc v Governor, 481 Mich 56, 67-68; 748 NW2d 524 (2008).  The courts “typically discern[ ] the common understanding of constitutional text by applying each term’s plain meaning at the time of ratification.”  Id. at 67, citing Wayne County v Hathcock, 471 Mich 445, 468-469; 684 NW2d 765 (2004).  “When the language of a constitutional provision is unambiguous, resort to extrinsic evidence is prohibited.”  Id. at 80.

In Michigan United Conservation Clubs, 239 Mich App at 76-77, the Court of Appeals applied these settled rules to interpret Const 1963, art 9, § 35:

First, we must ask whether the constitutional language is unambiguous and, if so, whether the statute comports with the language of the constitution itself. . . .

Only if the language of art 9, § 35 admits of varying interpretations should this Court undertake an examination of the circumstances surrounding its ratification.

There, the Court concluded that the constitutional language “bonuses, rentals, delayed rentals, and royalties” is clear and unambiguous and did not require any inquiry into the circumstances surrounding its ratification by the people.  Id. at 77-82.

Here, the language relevant to your question – “on state owned land purchased through the trust fund” – is unambiguous.  A plain reading of Const 1963, art 9, § 35, is that payments in lieu of taxes may be made with MNRTF interest and earnings only with respect to “state owned land purchased through” the MNRTF.  Although discretion exists in that expenditures of MNRTF interest and earnings for the administration of the trust fund “may” include payments in lieu of taxes on state owned land, the applicable provision also contains the self-executing condition that the state owned land was “purchased through the trust fund.”  

Where a constitutional term is undefined, dictionary definitions may be consulted to determine its meaning.  See, e.g., National Pride, 481 Mich at 69-76.  As used in the context of the relevant language of Const 1963, art 9, § 35, “through” can be defined as:  “[b]y way of” or “[b]y the means or agency of.”  The American Heritage Dictionary of the English Language (1976).  Hence, a plain reading of the constitutional provision leads to the conclusion that “purchased through” means state owned land that was originally acquired by the State of Michigan with funds derived from the MNRTF, as opposed to other sources, such as state and federal game funds. 

“Mandatory constitutional provisions are presumed to be self-executing when they may be given effect without the need for additional legislation.”  OAG, 1975-1976, No 4917, pp 222, 224-226 (December 24, 1975); 5 Mich Civ Jur Constitutional Law, § 27, Self-executing effect (2011).  This rule applies even though legislation may facilitate implementation of the constitutional provision in question.  Hamilton v Secretary of State, 227 Mich 111, 116-117; 198 NW 843 (1924); Wolverine Golf Club v Secretary of State, 24 Mich App 711, 725-726; 180 NW2d 820 (1970), aff’d 384 Mich 261 (1971); OAG, 1967-1968, No 4555, pp 36, 41-42 (April 12, 1967).  Thus, although MCL 324.1901 et seq., was enacted to facilitate the implementation of Const 1963, art 9, § 35, the legislation does not and cannot alter the self-executing limitation on the payments in lieu of taxes specified in that constitutional provision.

In any event, the applicable statute, MCL 324.1903(1), is consistent with this express constitutional limitation:

Subject to the limitations of this part and of section 35 of article IX of the state constitution of 1963, the interest and earnings of the trust fund in any 1 state fiscal year may be expended in subsequent state fiscal years only for the following purposes:

(a)  The acquisition of land or rights in land for recreational uses or protection of the land because of its environmental importance or its scenic beauty.

(b)  The development of public recreation facilities.

(c)  The administration of the trust fund, including payments in lieu of taxes on state owned land purchased through the trust fund.  The legislature shall make appropriations from the trust fund each state fiscal year to make full payments in lieu of taxes on state-owned land purchased through the trust fund, as provided in section 2154.  [Emphasis added.]

The interpretation of Const 1963 art 9, § 35 limiting  payments in lieu of taxes to state owned lands acquired through the MNRTF is also supported by the rule of construction, expressio unius est exclusio alterius – the express mention of one thing excludes all others.  See Hoerstman General Contracting, Inc v Hahn, 474 Mich 66, 74-75; 711 NW2d 340 (2006). Logic and common sense hold that “when people say one thing they do not mean something else.”  Feld v Robert & Charles Beauty Salon, 435 Mich 352, 362; 459 NW2d 279 (1990), quoting 2A Sands, Southerland Statutory Construction (4^th ed), § 47.24, p 203.  Const 1963, art 9, § 35, sets forth a limitation on what payments in lieu of taxes may be made with MNRTF interest and earnings.  If the intent was to allow payments in lieu of taxes for other state lands, including lands purchased with state or federal game and fish funds, the constitutional provision would have so stated.  Notably, the second sentence of Const 1963, art 9, § 35, expressly distinguishes “state owned lands acquired with money from state or federal game and fish protection funds or revenues accruing from lands purchased with such revenues” from all other state owned lands, and excludes revenues derived from such lands from the MNRTF.

Where, as here, the language of the constitution is plain and unambiguous, it is not necessary to look elsewhere to ascertain the intent of the people who ratified it.  National Pride, 481 Mich at 80.  Nonetheless, the language of the ballot proposal regarding Const 1963, art 9,    § 35, provides further support for the conclusion that the provision does not allow for expenditure of MNRTF revenues for payments in lieu of taxes on lands not purchased through the trust fund.  Ballot Proposal B, approved by Michigan voters in 1984, stated, in relevant part:

2.         Require that earnings from the Trust Fund be used only for:

(a)        purchasing land or rights in land:

(1)  for public recreation;

(2)  of environmental importance; or

(3)  of particular scenic beauty;

(b)        developing public recreation facilities;

(c)        administering the Natural Resources Trust Fund.  [Emphasis added.][2]

Given this ballot language, the people who ratified the constitutional amendment would have reasonably understood that earnings from the trust fund would be used only for the three purposes listed in paragraph 2(a)-(c).  The first of these listed purposes – “purchasing land” – plainly could not reasonably be understood to include making payments in lieu of taxes on other state lands not purchased with this trust fund revenue.  Nor would the second listed purpose – “developing public recreation facilities” – have been commonly understood as including such payments.  While the third permitted purpose – “administering the Natural Resources Trust Fund” – could have been understood as including payments in lieu of taxes for lands purchased through the trust fund as referred in paragraph 2(a), it could not have been understood to include the costs of administering other state owned lands. 

It is my opinion, therefore, that  Const 1963, art 9, § 35, does not permit the expenditure of MNRTF interest and earnings for payments in lieu of taxes on property under the jurisdiction of the DNR that was not purchased with MNRTF funds, including property purchased with state or federal game and fish funds.

BILL SCHUETTE

Attorney General