Emmet County v. State Tax Commission

550 397 Mich 550 TAX

EMMET COUNTY v STATE COMMISSION 56092, 56107, 56266, 56267, Argued Docket Nos. 56502. December (Calendar 1-5). August 27, 1975 1976. Nos. —Decided Emmet, Kalamazoo, Saginaw, and Washtenaw Counties and the taxing County appeal by granted units of Washtenaw leave (and from the 1974 of state determination valuation determination) by in two cases the 1973 the State Tax Commis- Appeals adversely appellants sion. The Court of had decided Saginaw equalization and Kalamazoo Counties as the 1973 Saginaw County App v State Tax (1974), appeal appellants and denied leave to all as to the equalization. Held: jurisdiction previously 1. The Tax Tribunal has over matters by sitting appellate heard Tax Commission as an

body. Appeals intracounty equalization Boards Com- formerly missioners were reviewable the State Tax Commis- may sion and now reviewed Tribunal. however, Act, 2. The Tax Tribunal does not authorize the jurisdiction (intercounty) equal- tribunal to assume over state valuation, appellate proceeding ized which is an not and has subject "equalization” never been to administrative review. The subject jurisdiction very to the Tax Tribunal’s same historically statutorily has been reviewed ag- State Tax If Commission. a itself believes grieved by a determination of the State Tax Commission con- cerning intercounty equalization, may judicial seek review asserting fraud or error of law. provisions 3. The of the Administrative Act Procedures do apply intercounty equalization proceedings before the question legislative State Tax Commission. The is one of intent: unlikely Legislature it is most that the intended to make one long-established statutory system by imposing unworkable an- procedure upon language other it. The of the Administrative References for Points in Headnotes 2d, seq. Jur 71 Am State and Local [1-8] Taxation 144 et delegation legislative power. Permissible limits of 474. L Ed 2d, seq. Jur Am Administrative Law et [4-8] § 571 Tax Comm v State result, require because such Procedures Act does not they case” a “contested while are not did not are before Tax Commission. the State exempt equalization from the Administrative state agency appeal no to an administrative Procedures Act because exemption would have been mean- contemplated the was ingless. concurring, dissented. He Lindemer Justice Justice would hold that: provisions Act Procedures must 1. The the Administrative performing by inter- the Tax Commission

be followed State equalization, by county the valuation is which applicable equaliza- holding be made to determined. This would necessary adjustments permit any to tion for 1977 and after Legislature any present practice permit to make the changes it advisable. deems Intercounty equalization State Tax Commission is 2. holding subject by the Tribunal. This to direct Tax review applicable for 1977 and after would be made except similar reasons. for the instant cases for (1974) 160; App Mich NW2d 706 affirmed. op Opinion the Court 1. Taxation —Tax Tribunal —Jurisdiction. Legislature jurisdiction The in the Tax Tribunal over vested sitting previously Tax matters heard the State Commission appellate body; now stands in the stead the Tax Tribunal an (MCL reviewing body Tax as a of the State Commission 7.650[41]). Jurisdiction—Intracounty Equaliza- 2. Taxation —Tax Tribunal — tion. intracounty equalization by Appeals Boards of Commission- formerly re- tax matters which were ers and other are now reviewed viewable Commission (MCL 205.731, 7.650[31],7.650[41]). 205.741;MSA Tax Tribunal Jurisdiction—Intercounty Equaliza- 3. Taxation —Tax Tribunal — tion. does not authorize the Tax Tribunal

The Tax Tribunal Act jurisdiction appellate over state assume counties, subject to never administrative re- which has been view. 397 Intercounty

4. Taxation — Equalization —Review—Courts. aggrieved by A which itself believes determination of concerning intercounty equalization the State Tax Commission may judicial seek review in the case of fraud error of law. Intercounty Equalization 5. Taxation — Proce- —Administrative dures Act. provisions apply The of the Administrative Procedures Act do not intercounty equalization proceedings before the State Tax Commission; Legislature long- did not intend to make one statutory system by imposing established unworkable another (MCL procedure seq., upon seq.; 209.1 et 24.201 et MSA 7.601 seq., seq.). et et 3.560[101] Intercounty Equalization 6. Taxation — Proce- —Administrative dures Act. exempt intercounty equalization proceed- did not ings before the State Tax Commission from the Administrative proceed- Procedures Act because administrative review of the ings contemplated exemption was not and the would have been (MCL meaningless seq., seq.; 209.1 et 24.201 et MSA 7.601 et seq., seq.). et 3.560[101] Dissenting Opinion Williams Lindemer, JJ. Jurisdiction—Intercounty 7. Taxation —Tax Tribunal — Equaliza- tion. Jurisdiction conferred statute on the Tax Tribunal to review under tax laws includes review of inter- county equalization the State Tax which the (MCL equalized county valuation of each is established 7.650[31]). MSA Intercounty Equalization 8. Taxation — Tax Commission— —State Administrative Procedures Act. Intercounty equalization proceedings before the State Tax Com- mission determine the state valuation of each statutory case", lit within the detinition a "contested they specifically because are not controlled another provision; statute or constitutional the State Tax Commission pro- must follow the Administrative Procedures Act in such (MCL ceedings seq.; seq.). 24.201 et et 3.560[101] Lang Bauckham, Reed, & Schaefer for Emmet County. Comm op Opinion Court Prosecuting Attorney (by Burge,

Donald A. Triemstra), County. T. for Kalamazoo Duane C., Bovill, Saginaw & P. County. for Smith County. Washtenaw Robert 1T.Guenzel for Ypsilanti and 19 town- L. Etter City for John County. Washtenaw ships of of Saline. Allan W. Grossman City for R. Laidlaw for of Ann Arbor. Bruce City A. General, Robert J. Kelley, Frank Attorney R. and Richard General, Derengoski, Solicitor Morgan, W. At- Roesch and Lawrence Assistants General, for defendant. torney Kavanagh, C. J.

I. be remanded urge that these cases Plaintiffs challenge Tribunal the Tax intercounty State Tax Commission’s however, Defendant, contends determination. reviewing authority over no the Tax Tribunal has equalization. intercounty 1, Tribunal was estab- 1974 the Tax July

On Tax Tribunal provisions of the pursuant lished seq.; MCLA 205.701 et MSA Act, 186; PA 1973 Act, 7.650(1) seq. et 31 of the Tax Section Tribunal 7.650(31), upon 205.731; MSA confers MCLA original jurisdiction the exclusive tribunal rates, assessment, valuation, special assess- review 554 397 Mich op Opinion the Court equali- disputes, ments, alia, and, allocation inter property zation, under tax laws. Section of the 7.650(41), act, same endows jurisdiction the tribunal with over actions which by were Tax heretofore reviewable the State Com- § mission or a circuit court. Section and 41 of the Tax Tribunal Act transfer the tax commis- jurisdiction appellate county sion’s former over equalization appeals Clearly, to the Tax Tribunal. appeals intracounty equalization by Boards of formerly Commissioners were reviewable State Tax Commission and can and will be re- Cooper Township viewed the Tax Tribunal. Commission, 58; 222 NW2d (1974). Intracounty equalization appeals satisfy the con- § ditions Act, both 31 of the Tax Tribunal they arising i.e., matters they under the tax laws and are matters formerly appealable to the State Tax Commission. equally

However, it is clear that the Tax Tribu- contemplate nal Act does not nor authorize the jurisdiction equaliza- tribunal to assume over state tion. state, The laws of this since 1913 PA have

provided appeal intracounty equalization an (the body a state Board of State Tax Commission progenitor ers, which was the of the State Tax Commission), any whereas there never has been provision equali for administrative review of state Also, zation of the 83 counties.

provided levy 1972 PA 296 for a tentative during pendency taxes aof appeal before the Tax a final levy subsequent appeal, to resolution of the t legislation dealing i levy whereas never has enacted during with the of ad valorem taxes the time of controversion of state values. State Tax Comm 555 Opinion the Court Legislature deliberately

These actions of the county equali- retain the between clear distinction equalization. They zation and also reveal legislative recognition of the need for review of intracounty equalization and the concomitant need precluding for equalization. administrative review of state § Act, In 41 of the Tax Tribunal vesting jurisdiction it made it clear that was in the previously Tax Tribunal over matters heard appellate body. State Tax Commission as an For- merly, appel- the State Tax Commission was the body assessments, late over individual allocation disputes intracounty and matters. The appellate State Tax act an Commission did not as body equalization. over state Section does not 41 jurisdiction limit the of the tribunal as conferred entirely § § but is in fact with 31. consistent places jurisdiction Section Tribunal 31 arising over those matters under the tax and, § laws therewith, consistent 41 eliminates the tax commission and the circuit court as forums in very formerly litigated. which those matters were gives case, § In the context of this the Tax jurisdiction county equalization ap- Tribunal over peals tax eliminates the commission as "equalization” the forum for its review. The sub- ject jurisdiction very to the Tax Tribunal’s is the historically statutorily same had Commission. been reviewed the State Tax jurisdiction The Tax Tribunal succeeded to that appellate jurisdictions it succeeded the other the tax commission. short, ,now

In the Tax Tribunal stands reviewing body; stead of the tax commission as it has not become the reviewer of tax commission intercounty equalization. action Opinion Court of the deter- aggrieved itself If a believes concerning Tax Commission mination of re- judicial seek may intercounty equalization, of law. fraud or error asserting view II. Procedures the Administrative provisions 3.560(101) seq. et seq.; et

Act, MSA MCLA 24.201 (APA), intercounty to apply do not Tax Commission. the State proceedings before herein minority opinion rely Plaintiffs and the Township Cooper in opinion this Court’s recent on Commission, 58; 222 NW2d v State Tax 393 Mich the State (1974), requiring authority in accordance with thv operate Tax Commission to APA provisions. Ann Arbor Town- Township, supra, and

Cooper 682; ship v State Tax intracounty (1975), dealt with NW2d 784 both in the instant we deal with equalization. What very different equalization, is intercounty case process intercounty situation. The deadlines, among which replete statutory following: the

(a) 211.34; the requires MSA 7.52 MCLA equalize respective their commissioners county April the session. during counties (b) 209.5; county 7.605 orders the MCLA MSA statements to forward their tabular commissioners to the State Tax Commission (equalization reports) May. in Monday the first (c) 209.2; 7.602 orders the State MCLA MSA on the second Equalization to convene Board equalize assessments. Monday May (d) 7.604, requires the board showing, by coun- a tabular statement prepare 1976] State Tax Comm Opinion Court ties, valuation, total assessed valuation as equalized by previous commissioners, year’s year’s valuation, current figures recommended values. These must be for- provid- In warded to the clerks. addition ing above, for the tabular statement described provides Equalization for the State Board of finally equali- remain in session and conclude state Monday May. Representa- zation on the fourth tives of the several counties are heard on the Monday May, fourth at which time the board determines relative valuation of the 83 coun- ties and adds to deducts from the assessed presented produces values to it a sum which 50% of true cash value.

Despite plaintiffs limitations, assert, these minority opinion agrees, equaliza- that state pursuant require- tion must conducted to the ments of the Administrative Act Procedures which conceivably require would introduction into evi- approximately pages 162,492 dence of of record for pages 1974, 70,000 1973, and for allow for the approximately employees cross-examination of of the State Tax Commission, and allow counsel proposed counties to submit and resubmit findings of fact and of conclusions law. Presuma- bly, adversary the State Tax party according plaintiffs, right a would have counties, review the evidence of the 83 and cross- county equali- commissioners, examine the or the county. zation director of each procedure virtually impossi- This would make it comply statutory deadlines, ble to with the and impede apportionmept would of collection necessary support pro- taxes to numerous state grams. dealing question legislative with a

We 397 Mich Opinion the Court problem, it is most this intent. If it considered Legislature unlikely intended to make that system statutory long-established unworkable one upon procedure by imposing it. another require language does not the APA minority’s to a "contested act refers result. The equaliza- in state case”. Who are the contestants argument proceedings? Apparently, tion they the State Tax that are the counties may they adversaries become Commission. While Appeals subsequent litigation the Court of concept of a "contested Court, this it stretches adversary commission an case” to denominate the during proceeding it. before again with that of intra-

This situation contrasts Cooper Township, present county equalization township recognized "the and the that where we parties equali- adversary in an become the hearing the State Tax Commis- zation held before 58, 70, n 3. sion”. 393 Co v State Tax Commis- In Fisher-New Center (1969), sion, 713; we held 167 NW2d appeals taxpayer are contested individual passed APA. The then cases within the exempted State Tax Commis- 1969 PA which the APA contested case sion Township, supra, Cooper provisions. we held In apply intracounty equaliza- that statute did Legislature did not matters because the tion county equalization statute, MCLA amend the 211.34; 7.52, assess- as it did the individual It statute, MSA 7.210. does ment analysis requires follow, however, us that such not intercounty equalization. apply the APA to right appeal an has never been a There equaliza- agency intercounty administrative meaningless gesture Therefore, it tion. would be 1976] State Tax Comm Dissenting Williams, Opinion by J.

for the that to declare the APA does apply proceeding. nonexistent We a. hold equali- apply intercounty that the APA does not zation Tax before Commis- sion. JJ., concurred

Levin, Coleman, Fitzgerald, J. Kavanagh, C. part J., took no the decision of this Ryan, case. (dissenting). Cooper Twp In v State 58; 393 Mich 222 NW2d 900

(1974), Twp and Ann Arbor v State Tax Commis- (1975), sion, 682; 227 NW2d 784 this legis- had Court occasion to examine and construe relating equaliza- ounty lative enactments to intrac appeals upon tion. The instant call this Court to similarly legislative they construe enactments as intercounty equalization. relate to Specifically, provisions we are asked whether the (APA)1 of the Administrative Procedures Act must (STC) be followed the State Tax Commission performing intercounty equalization and whether jurisdiction the Tax Tribunal has for direct review intercounty equalization determinations questions affirmatively.2 STC. We answer both I— Facts year process Each tax assessment begins step place anew. The first takes at township, village city level where local assess- 3.560(101) seq.; MSA etseq. 24.201 1 MCLA plaintiffs prevailed have on Since both these need not issues we plaintiffs’ argument examine alternate 86 of the Executive 4, Reorganization Act of 1965 is in contravention of Const art §25. 397 Williams, Dissenting Opinion J. property ing required located to assess officers are property general community. tax The the within law, property provides be as- 27,3 "shall value” and that its true cash sessed at of 50% assessing determining the officer the "cash value” property price the would the which must ascertain bring considering as: such factors location, disadvantages qual- of advantages "the and use, soil, present ity zoning, existing economic in- of structures, including pres- structures and come of farm being the land ent economic income of land when use, producing quan- put income farmed or otherwise timber, power standing water and tity and of value mines, minerals, quarries, other valuable privileges, deposits and their value.” known to be available therein 211.27; MCLA MSA 7.27.

Upon assessing completing task, the officer his property to the local the assessment rolls submits taxing The board is unit’s Board of Review.4 correcting any charged errors found in property may owners assessment roll. Individual challenge of assessed valua- and seek review property by tion of their as determined assess- ing of officer also the board review. adoption by review, correction and

After review, are local assessment rolls boards County transmitted to Board Commission- county commissioners in each meet ers. The April assessment rolls to to examine the various taxing located within the determine whether units uniformly prop- equally have assessed erty its true value. at 50% upon discovering unequal commissioners, 211.27; MSA 7.27. MCLA 7.29. Tax Comm Dissenting Opinion assessments, equalize empowered assess ments among units respective taxing adding to or of the deducting the valuation taxable to produce of the local unit the sum which reflects the proper proportion of true cash value required by 6It is this process law.5 which is commonly referred to as ihiracounty county equalization.

Upon completion intracounty of equalization, the assessment rolls are forwarded to the State required by Commission which is statute to in meet Lansing commencing the second Monday in May for purpose equalizing the of the assess ment of rolls each the 83 counties.6 Initially, the prepares STC preliminary what is called findings and sends out a each recommended equalized May valuation. The fourth Monday is reserved for the hearings before STC where county representatives challenge the may primary find ings. Something in the nature of ten minutes is given to each representative present the coun ty’s hearings case. When the completed, are the STC determines what if adjustments, any, further appropriate the equalized files final state (SEV). value In 1973 and 1974 the final decisions were rendered day on the of the hearing.

The of the SEV assessed is relevant the computing amount of school and welfare aid provided by determining the state as well as in community’s entitlement to revenue-sharing 5 211.34; MCLA MSA 7.52. To the their assist commissioners in task, County Equalization Department the created the provides authority survey property which staff services has the assessments. 209.2; equaliza MSA 7.602. Prior to 1965 the state board responsible equalization. inter-county responsibility tion was for This July 23, was transferred to the STC effective 1965. MCLA 3.29(86). Dissenting Opinion rolls, as funds.7 The assessment STC, upon tax rolls which eventually become local taxes are levied. us arose case, now before appeals

In this during STC made from determinations intercounty equalization May, May, 1973 and Court of Ap- Appeals were taken process. regard to the The leave with peals.8 granted Court 7 The will be examined in detail. See state school formula aid opinion. Ila of this Section provided of welfare funds for The allocation and distribution pertinent part: Act which reads under of the Social Welfare moneys provide of such for distribution "The commission shall * ** following appropriated to the facts: be with reference shall "(a) respective by experience of the Need for relief as demonstrated counties. "(b) respective Funds of the counties. dis- financial resources expended monthly by respect tributed the be in to the net amount shall respective public departments, general relief. State funds for spent by net amount distributed such city department less than shall 40% any department general county, district or relief. Whenever expenditures equals general 1 mill of share of relief valuation, equalized funds the state the state shall distribute for 400.18; general of excess of 1 mill.” MCLA the relief costs in 100% MSA 16.418. Act, 141.914; Sharing the MCLA MSA Section 14 of Revenue 5.3194(414), computation sharing provides of certain revenue "tax In 5§ funds shall be in accordance with the effort formula”. act, the to mean: the tax effort formula said computing, "the for the total amount of revenue method from time, any single for under such formula at the available distribution village by: paid city, township a be or amount "(a) village Multiplying city, township by effort the or relative tax population. its "(b) Dividing the revenue available for distribution total amount of single by products any of the under such formula at time the sum (a). from (b) "(c) by Multiplying quotient products the from the individual added.) (a) city, village township.” (Emphasis or from each 5(1) Section states that: " village city, township for a means its 'Local tax effort rate’ or 141.905; MCLA MSA local taxes divided its state value.” 5.3194(405). 5.3194(414) 141.906; also and MCLA MSA See formula). 5.3194(406)(tax burden 8 appeals STC and 1974 At time were taken determination, the Tax Tribunal was not in existence. primarily resolving procedural Since case is concerned with this Tax Comm Dissenting Opinion by Williams, against determinations but ruled App the Appeals, citing 160. The Court counties. covering ap- the 1973 its decision peals, challenging leave in cases denied those 1974 determinations. initially granted

This Court leave and sua sponte of the vacated the order STC for failure to proceed in accordance the APA and re- Tribunal, manded the cause to the Tax (1975). 772, 776, 779 motion for On reconsideration we vacated our earlier order scheduled the arguments. appeals instant for oral 393 Mich 815- (1975). Impact Equalization II — appeals Each of the instant is bottomed on a challenge Equalized to State Value of set the STC for each of the counties involved. resolving legal Before issues raised parties, prudent why would to examine equalization process impor- is of such vital Any tance. increase to deduction from the assessment rolls of affects both the upon prop- amount of taxes local levied individual erty owners the amount of state aid and sharing revenue nity. funds received a local commu- fully appreciate impact In order to of inter- county equalization levied, on the amount of taxes necessary it is first to understand the effect inter- county equalization purposes has on state aid. For inquiry pur of our discussion we will focus on the impact on state school aid. questions inter-county equalization, necessary not associated it is appeal.

to delve into the substantive matters which this occasioned Mich 550 Dissenting Opinion A. State Aid ure,9 Legislat

Under formula devised state certain school aid is within limits at payable given a rate school proportional to a district’s level), taxing effort but (millage inversely propor tional property the assessed value of the located within the school district.10 Equalization provides Section 21' of the Act School District in pertinent part: "(1) Except act, provided as otherwise in this from the amount appropriated every in section 11 there is allocated to district an per computed membership pupil by subtracting, amount from $42,400.00 1975-76, equalized in the district’s state valuation behind membership pupil multiplying resulting each and then difference purposes operation the tax levied for included in the cost of the district as defined in section 582 of the school code of amended, being not in excess of 20 mills. A district Laws, Michigan Compiled section 340.582 of the but levying than 20 more mills for operating purposes membership pupil allocated, addition, per shall be an amount $38,250.00 computed by subtracting, to be 1975-76, equalized the district’s state valuation behind each member- ship pupil multiplying resulting and then difference the tax levied in excess of 20 mills not in but excess of 27 mills in 1975-76.” 15.1919(521). statutory following equa- formula can be translated into the tions: levying up 1. Districts 20 mills — Equation ($42,400) power equalization figure A (SEV) = per pupil millage per pupil* value rate state aid X levying 2. Districts more than 20 mills equation millage On first 20 mills levied A is used. On the levied in (but mills) excess of 20 mills as follows: more than 27 not the formula would be — Equation power ($38,250) equalization figure per pupil B SEV X = millage per pupil excess of mills state aid equations together give The totals of A and B are added the total aid.* the, *Note that under last clause of 21 all allocations are reduced by: by adding payment of the "0.6 of sum determined 1% state aid under this section and the total taxes levied for school operating purposes. Reductions authorized in this section shall be a reduction to the sum of all state aid received under this act.” 10Using hypothetical levying school districts more than mills, following hypotheticals by example: way consider the v State Tax Comm Dissenting Opinion Williams, J.

The importance of fair and uniform to the proper distribution of school aid is evident. If property given located within county is as- sessed at value, less than its true 50% school district in located that county stands most instances more receive state aid than it would if the property properly was assessed.11 effort).

Example (taxing A (Power 42,400 equalization figure) $ (SEV —20,000 per pupil) 22.400 0.015

X (state per pupil) $336.00 aid effort) millage But if (taxing the school district its increases per pupil state aid will increase: (PEF) 42,400 $ (SEV) -20,000 22.400 levied) (millage 0.020 X (state per pupil)

$448.00 Example aid (state value). equalized B (PEF) 42,400 $ (SEV -20,000 per pupil) 22.400 (millage) 0.020 X (state per pupil) $448.00 However, aid if the state value within the school district

increases the amount of state school aid for that school district will decrease. (PEF) 42,400 $ — (SEV 30,000 per pupil) 12.400 (millage) 0.020 X (state per pupil). $248.00 aid following hypothetical examples Consider the where

located in school district has been under-assessed 20%: Example A. (PEF) 42,400 $ — (incorrect 20,000 per pupil) SEV 22.400 (millage) 0.020 X (state per pupil)

$448.00 aid Opinion Dissenting taxing encompassing counties districts in School good at assess faith 50% units which taxing diligence penalized of the effect is not this under-evaluation units. The result only more than its fair receives that a district pays funds, total share, out more but also the taxing fiscal resources. further the state’s If the STC’s true. is also The reverse of course high, property equalized is too the of valuation state aid to vital to lose school district stands rightfully entitled. which is Property Taxes B. Increased or decrease increase effect of an The second of the tax on the size value is the state experi- taxpayer. Past sent to the individual bill goes the that if assessment demonstrated ence has intercounty equalization up the a result of as millage the end result the same rate remains pockets money the of taken from is is that more the taxpayer. argument was discussion

At considerable oral higher question could taxes whether devoted to reducing millage simply to offset be avoided Example B. (PEF) 42,000 $ (correct —25,000 per pupil) SEV 17,400 (millage) 0.020

X (difference pupil). per $100.00 $348.00 — consequence to some school will be of no Fluctuations in the SEV regard districts in aid. Those school to state school districts figure power equalization per pupil exceeds which the SEV Depart- Michigan According to the school aid. entitled to state not only fell districts Bulletin 10-12 of school ment of Education’s during inter- category 42 districts 1974-75. For some of these in this erroneously important. county equalization If the STC has could be per pupil high, SEV is shown a school district whose the SEV too set deprived power equalization figure may of state exceeding pupil per rightfully SEV it is entitled because its aid to which school should figure. power equalization actually less than the be shown as State Tax Comm Dissenting Opinion impact higher Adjusting assessments. millage, glance, appears at to be a first rather avoiding simple tax increases. In means fact taxing requires PA 243 now units other districts, than school intermediate school districts community college and lage districts "reduce their mil- subsequent rate so that to the increase or- * * ** dered property the state tax [the] commission total levied taxes shall exceed that which would have if had been levied there been no increase in valuation the state”.12 However, the exclusion school districts from requirements highly significant. act of this up Taxes levied portion for schools make substantial of an individual owner’s tax bill. example, among party For those counties to the proceeding, millage instant over two-thirds of the millage.13 levied was school significant portion Thus, a of the taxes levied by requirements mandatory are unaffected the of required PA 243. School districts are not millage practical reduce their considerations prevent reducing millage them from the school voluntarily. despite Consequently, 1975 PA an individual’s taxes will increase when STC during intercounty equalization increases the county’s value of a assessment roll. 7.52. 13Figures following: for 1974* show the Total Taxes School Ratio Taxes Levied_Levied_(%) 7,262,978.99 County 5,331,579.32 $ $ 73.74 62,396,877.63 44,621,340.48 County Kalamazoo 71.75 Saginaw 61,263,005.32 County 44,612,830.53 72.82 68.67 98,471,246.80 County 67,623,059.14 Washtenaw upon published report *Based the State Tax Commission March 17, 1975. However, it should be noted that taxes here not all the school operational figure consequently levied are costs and do not in the compilation of aid. state school Dissenting Opinion why school dis-

There is a basic reason fairly millage prop- offset their tricts cannot reduce resulting from inter- erty increases assessment above, an As discussed county equalization. was of property value increase in the corresponding in a usually the district results In order to insure reduction in state school aid. keep adequate that funds are available the loss state school operational, district school increases would have resulting aid from valuation taxes. The school higher property to be offset by keep at millage district at least have to its would current level.

Furthermore, did their if school reduce districts millage as been to offset effect suggested it has upon taxpayer, the result increased assessment be of state aid received would the amount is be further This because state would reduced. (prop- only upon taxability school aid is based not rate). base) tax effort erty taxing (millage but 21 of the School Under formula contained millage District Act as the is reduced Equalization amount aid of school declines.14 Thus, Legislature’s efforts to ease the despite placed upon taxpayer the individual result- burden ing from increases assessments ordered STC, this af- taxpayers may adversely state’s intercounty equalization process. fected more one In school districts located in than of uniform an- county, the lack adds If to the taxpayer’s other dimension dilemma. A at but assessed value 50% opinion. example B in fn 9 of Of for school See this course always levying 27 mills true. For districts example, change over this will not was from millage no if the reduction 30 to 28 would be there only school aid because aid is available on the first mills levied. the amount levied excess of 27 mills do not further increase Taxes school aid. County Tax Comm Dissenting Opinion 40%, B County only taxpayers is at A paying proportional their more than share for operation of the school district. Ill — Tax Tribunal In 1973 the Tax Tribunal was created to review agency decisions tax relating property matters.15 Legislature that: provided

"The original jurisdiction tribunal’s exclusive and shall be:

"(a) A proceeding for decision, direct review of a final finding, ruling, determination, or order an agency relating assessment, valuation, rates, special assess- ments, allocation, equalization, property under tax laws. "(b) proceeding A for refund or redetermination of a added.)

tax under (Emphasis tax laws.” 7.650(31). MSA

No one seriously contends that STC an "agency” meaning within the of the act and as the statutory language specifically includes within jurisdiction tribunal’s review decisions relat- ing equalization, appears intended that the tribunal would have the author- ity to review intercounty determina- tions rendered State Tax Commission. In Commission, Cooper Twp v State Tax supra, Ann Twp Arbor v State Tax supra, recognized this Court that Tax juris- Tribunal has diction to review intracounty equalization.

However, General, the Attorney despite ap- language of parently clear the act and deci- our Arbor, Cooper and Ann sions in máin- strenuously 7.650(1) seq.; etseq. et MCLA 205.701 550 397 570 Williams, Dissenting Opinion J. subject equalization not is

tains inter to the Tax Tribunal. review portion § of 31 limits which the He cites to that "equalization, jurisdiction the under to Tribunal’s equalization intercounty property tax laws”. Since equali- performed pursuant the board of to is equalization, argues, intercounty he is act,16 zation property technically performed the tax "under not consequently the is outside tribunal’s laws” and jurisdiction. attempts argument erroneously

Such an equate language "property tax laws” contained the general property law, PA § 31 tax with the plural. language "property tax laws” is 206.17The descriptive with It is of those laws concerned special property assessment, valuation, rates, tax equalization, assessments, and cer- allocation and meaning tainly its state board included within equalization Legislature intended of act.18Had jurisdiction only over the Tax Tribunal to have general property equalization under the conducted equalization) easily (intracounty it could tax law spoke provided. Rather, so But it did not. it have "laws”. of Attorney General concedes that an

While the methodology, interchange statistics between seq. seq.; MCLA 209.1 et 7.601 et MSA seq.; seq. et 7.1 et 211.1 1963, 6, judicial portion of art 28 which limits § latter Const “property language In of tax laws”. review pertinent tax uses part 28 reads: § fraud, adoption wrong "In the of error of law or the of absence no any any agency appeal may principles, provided be taken to court from final any deci- of tax laws from for the administration added.) (Emphasis relating valuation or sion allocation.” Attorney interpretation "property adopted we General’s of If 6, laws”, portion, argued equal force that this art tax could type apply intercounty equalization of does not because this pursuant equalization performed equalization state board act. v State Tax Comm Dissenting Opinion goal intracounty intércounty and ultimate and argues types exists, he that the two different in- they differently.19 tended that be treated We can- accept proposition. only this Not is there an interchange intracounty intercounty between equalization, part continuing but both are of one process begins year which at the first of the right assessments at the local level and continues through intercounty equalization. on step assessment/equalization At each in the process, highly complex determinations of a and desirability technical nature are made. The for type step some of review or check at each is (local evident. At the intermediate levels assess- through intracounty equalization), ment such re- per- view is available. It would be inconsistent mit review at these lower levels but deny review of (intercounty equaliza- decisions at the final level tion) inequities great- where the could well be the Legislature, est. Absent a clear mandate from the we will not attribute to them such an intent. The empowers Tax Tribunal Act the tribunal to review intercounty equalization. Accordingly, this matter pro- is remanded to the Tax Tribunal for further ceedings.20 Attorney intercounty equalization General maintains that

historically subjected has been to limited review and cites Auditor Wayne County Supervisors, 256; General v 216 Mich 185 NW 157 (1921). However, hardly proposition this case stands for the that inter- county equalization equalization differently intracounty is to be treated upon Attorney since the Court in Auditor General relied Supervisors, 72; (1879), General v Sanilac 42 Mich 3 NW 260 City Encanaba, 555; (1886), McDonald v of 29 NW 93 which involving intracounty equalization. were cases (now scope judicial Also Auditor General involved the of review 28). governed 6, Const art Judicial review and review Tribunal, body necessary special expertise cope the Tax with with the complex questions vastly tax are different matters. Tribunal, As this matter is remanded to the Tax find it we 397 Mich Dissenting Opinion

We impact of the practical not unmindful our intercounty decision. Review time, the Tax Tribunal will consume there is no debate time to the the essence whole However, Leg- we believe the process. capabilities islature possesses the creative to rem- arise, edy practical problems may whatever if any. In order give them the time devise any procedures, needed holding applica- we make our ble to intercounty equalization for and there- after except the instant cases. Procedures Act

IV — Administrative In Cooper Twp v State Tax supra, we held that the Administrative Procedures Act is applicable to STC proceedings adjudicating dis- puted intracoxmty equalization determination. We said: "The Administrative Procedures Act defines a 'con- * * * tested case’ mination 'a proceeding to be in which a deter- legal rights, privileges of the duties of a required named party is to be law made an agency opportunity evidentiary after an hearing.’ for an 3.560(103). 24.203; MCLA representative Township, MSA The as the equalization purposes of all the tax- and payers boundaries, within recogniza- its valid has a assuring

ble interest that its residents are not taxed Likewise, at an unfair county rate. board of com- missioners, representatives as county, of the entire have a duty equalize to throughout assessments county taxpayers pay so that all proportionately a fair government. statute, share of the By cost the State designated Tax agency responsible Commission is as the adjudicating disputed for the equalization findings between township county. capacity and In that authorized to conduct an evidentiary hearing. MCLA unnecessary parameters judicial discuss exact review of equalization proceedings. v State Comm Dissenting Opinion therefore, opinion, present 7.52. In our presents matter controversy squarely within the Ad- ministrative Procedures Act definition of a 'contested (Footnote omitted.) case’.” 70.

We also held that: particular controversy

"When a fits within the statu- tory case’, definition of a specifi- 'contested and is not cally controlled another statute or constitutional provision, required we believe that the Commission is comply procedures specified with the in the Administra- tive Procedures Act.” 393 Mich 69. intercounty

There can be little doubt but that equalization proceedings statutory fit within the impact definition of a "contested case”. The intercounty equalization upon counties, local tax- ing taxpayers units and individual was outlined important above; interests are at stake. The adver- intercounty equalization saries in an will be the particular county different counties and/or a the State Tax Commission. Attorney maintains, however, General that Cooper our decision in does not control the instant argues case. He in- never apply intercounty equaliza- tended the APA to tight tion statutory before the STC and cites the completing intercounty

time-frame for proof. impossible, It would be he complete intercounty contends, for the STC to equalization in time for the school tax bills July sent out on schedule in and it would be extremely process doubtful whether the would be completed by December when the township bills are sent. He cites the fact that Legislature provided has for continuation of assess- levy during pendency ment and of taxes 397

Dissenting Opinion litigation21 intra-county equalization has but made provision intercounty equalization. no similar for tight given He concludes that schedule and statutory relief, absence of could apply. not have APA intended that the asking Attorney really What the General is us judicial exception to do is to create a intercounty equalization, in the case of application

because may practical APA to STC here cause problems. tight We so. A decline to do time scheme taxing provisions and absence of interim alone legislative cannot be construed as a intent exempt intercounty equalization proceedings from the APA. Attorney argues applying General APA (and tribunal) procedures permitting review the disrupt process

will a which has functioned effi- ciently years. reports concerning equalization proc- Recent suggest process anything ess that the has been but efficient;22By restricting hearings the nature of the by precluding appearance review, and an of effi- may ciency inadequacies be but maintained and inequities they brought when will not exist light and resolved. plaintiffs suggest, application As the of the APA intercounty equalization long to STC will in the help, hamper equalize run the State’s effort to effectively fairly. certainly the counties and It will 211.39a; 7.80(1). Program Request, Reorgani See Revision State Tax Program Request, zation Alternative Revision Commis Study Cycle. report maintaining sion —3 Year The former discussed present equalization process following terms: good "Status Cannot conscience ever Quo. be considered for a growing backlog equalization appeals, moment. A decline insufficient not an the of assessment and inadequate current information due to manpower number studies and insufficient make this alternative, prelude conditions, present but a chaos. Under system surely whole tax would almost break down p years.” within a few 14. 1976] v State Tax Comm Dissenting Opinion Williams, J. expedite

facilitate and the efforts of the Tax Tribu- equalization. reviewing intercounty nal when recognize initially change However, we that intercounty equalization presently it performed conducted accordance with the APA will cause certain difficulties. In permit any necessary adjustments order to and to any changes allow the to make it functioning deems advisable to assist in efficient equalization process, holding we make our regarding application applicable of APA standards intercounty equalization to ter. for 1977 and thereaf-

Plaintiffs also have asked us to rule the Admin applies proceedings istrative Procedures Act upon before the Tax Tribunal. We decline to rule question this at this time. In Ann Arbor Twp supra, State Tax 686-687, this Court said: pass "We judgment cannot on how the Tax Tribunal proceedings conducts its until we have such However, 7.650(21)

before us. states that quasi-judicial Tribunal 'is a agency’. As such, we expect would procedures to conform to applicable agencies.” to other such

V — Conclusion provisions We hold of the Administra- tive Procedure Act must be followed the State performing intercounty equali- Commission jurisdiction zation and that the Tax Tribunal has intercounty for direct review of deter- minations the STC. Appeals The Court of is reversed and the matter pro- is remanded to the Tax Tribunal for further ceedings opinion. consistent with this public question being costs,

No involved. Lindemer, J., concurred with

Case Details

Case Name: Emmet County v. State Tax Commission

Court Name: Michigan Supreme Court

Date Published: Aug 27, 1976

Citation: 244 N.W.2d 909

Docket Number: Docket Nos. 56092, 56107, 56266, 56267, 56502, (Calendar Nos. 1-5)

Court Abbreviation: Mich.