MARPOSS CORPORATION v CITY OF TROY
Docket No. 137121
Court of Appeals of Michigan
Submittеd October 6, 1993. Decided March 10, 1994; approved for publication March 18, 1994
204 Mich. App. 156
The Court of Appeals held:
1. The trial court properly found that the defendant did not waive its right tо object by initially referencing the wrong statute in its objection or by failing to file an amended objection within twenty days of its adoption.
2. The section of the act that provides that an application for a tax exemption shall not be approved by the receiving governmental unit where the governmental unit from which the business is moving objects,
3. The defendant‘s objections would not havе been sufficient even if they had involved job loss because the statute is silent regarding when an objection based on lost jobs is valid.
4. If sufficient standards could be gleaned from the statute as a whole, a finding would be made that the defendant abused its discretion in objecting to the move.
5. The purpose of the act is not to revitalize economically depressed areas, but to encourage the development of high-tech industry and interaction between that industry and institutions of higher learning, and also to secure long-term prosperity for the state. The defendant‘s reasons for objecting constitute an abuse of discretion and would be insufficient to block the tax abatement because they did not relate to the purposes of the act.
Affirmed in part and reversed in part.
TAYLOR, P.J., dissenting, stated that the Technology Park Development Act is constitutional and the defendant‘s city council did not exceed the legitimate bounds of its legislative discretion in objecting to the plaintiff‘s tax exemption. The power to object to the exemption is a legislative function given to the defendant‘s legislative body by statute that may not be usurped by the judiciary. The plain language of the act gives the defendant the absolute right to veto the tax exemption, and the lack of standards and guidelines surrounding the exercise of the objection is not a fatal flaw. The statute provides an authorization from the Legislature to local municipal legislative bodies to decide whether and on what grounds to object. The state constitution allows such authorization. The defendant‘s objection was well within the ambit of the act and was not arbitrary or unreasonable. The act was intended to help revitalize economically depressed areas. The actions of the Troy City Council should be affirmed and the trial court‘s order granting summary disposition for the plaintiff should be reversed.
1. ADMINISTRATIVE LAW — DELEGATION OF POWER — STATUTES.
The guiding principles in determining whether a statute provides sufficient standards for delegation of authority are: the act in question must be read as a whole and the provision in question construed with reference to the entire act; the standard should be as reasonably precise as the subject matter requires or permits; if possible, the statute must be construed as valid, i.e., it must be construed as conferring administrative, not legisla-
2. TAXATION — TECHNOLOGY PARK DEVELOPMENT ACT — PURPOSES OF ACT.
The purpose of the Technology Park Development Act is to encourage the development of high-tech industry and the interaction between that industry and institutions of higher learning, and to secure the long-term prosperity of the state; the revitalization of economically depressed areas is not a purpose of the act (
3. TAXATION — CONSTITUTIONAL LAW — TECHNOLOGY PARK DEVELOPMENT ACT — OBJECTIONS TO TAX EXEMPTION — DELEGATION OF LEGISLATIVE POWER.
The provision in the Technology Park Development Act that provides that a tax exemption authorized by the act shall nоt be approved by the receiving governmental unit where the governmental unit from which the business is moving objects is an unconstitutional delegation of legislative power because it does not provide sufficient standards regarding what reasons are valid grounds for objecting or guidelines to determine whether objections should be filed, or for deciding, once an objection is filed, whether an objection is reasonable and should be sustained; the absolute grant of discretiоn to the governmental unit from which the business is moving to object and prevent the approval of the exemption is an unconstitutional delegation of power (
Butzel Long (by James C. Bruno, Clara DeMatteis Mager, and Daniel R.W. Rustmann), for Marposs Corporation.
Peter A. Letzmann and John J. Martin, III, for the City of Troy.
Before: TAYLOR, P.J., and HOOD and B. A. JASPER,* JJ.
PER CURIAM. This is an action challenging defendant‘s refusal to consent to a tax abatement under
Plaintiff sought to move its facilities from defendant, City of Troy, to a technology park in the City оf Auburn Hills. The City of Auburn Hills offered plaintiff a tax abatement under the statute. However, under the statute, defendant‘s consent was required before plaintiff could actually be granted the tax abatement. Defendant objected to the move and thereby blocked the abatement, though not the move.
Plaintiff sued, alleging that defendant waived its right to object (count I); that defendant abused its discretion in objecting (count II); that defendant‘s objection conflicted with the legislative schemе (count III); and that the objection violated the constitutional guarantee of equal protection (count IV).1 The trial court ruled for defendant on counts I and IV and for plaintiff on counts II and III. The defendant appeals, and the plaintiff cross appeals. We reverse in part and affirm in part.
First, we agree with the trial court that defendant did not waive its right to object by initially referencing the wrong statute in its objection or by failing to file an amended objection within twenty dаys of its adoption. Imposing such a severe sanction for what is essentially a ministerial error is not supported by the language of the act.
The basic question raised in this appeal is whether the act gives the governmental unit from which the business is moving the absolute right to veto the granting of a tax exemption by the community setting up the technology park.
The preamble to the Technology Park Development Act states, among other things, that the act‘s purpose is to “рrovide for the establishment of
Completion of the facility will not cause the transfer of employment of more than 20 full-time persons from 1 or more local governmental units or, if completion of the facility will cause the transfer of emplоyment of more than 20 full-time persons from 1 or more local governmental units, the applicant has provided notification to the department and to each local governmental unit from which such employment is to be transferred and the notified local governmental unit has not objected by resolution within 30 days after receipt of notification of the transfer of employment. If a notified local governmental unit objects within 30 days after receipt of the nоtification, the application shall not be approved until the objection is waived by the objecting local governmental unit. If the local governmental unit objects, a copy of the resolution of objection showing reasons for the objection shall be filed within 20 days after adoption with the department. [Emphasis added.]
Defendant argues that the emphasized language gives it an absolute right to veto the tax exemption. Plaintiff contends that such a grant of аbso-
“There is no doubt that a legislative body may not delegate to another its lawmaking powers. It must promulgate, not abdicate.” Osius v St Clair Shores, 344 Mich 693, 698; 75 NW2d 25 (1956). “This is not to say, however, that a subordinate body or official may not be clothed with the authority to say when the law shall operate, or as to whom, or upon what occasion, provided, however, that the standards prescribed for guidance are as reasonably precise as the subject matter requires or permits.” Id.; see also Lansing School Dist v State Bd of Ed, 367 Mich 591, 596-598; 116 NW2d 866 (1962). Thus, where the Legislature “has set up sufficient standards for the guidance of the” body making the particular decision, there is no unconstitutional delegation of power. Id. at 598; see also Petrus v Dickinson Co Bd of Comm‘rs, 184 Mich App 282, 294-295; 457 NW2d 359 (1990). On the other hand, where the deciding body is allowed to “change the State law to suit its own purposes” or is given “an unlimited number of choices” regarding when and how to apply the law, the delegation is unconstitutional because the deciding body is being, in effect, permitted to decide or alter policies of statewide concern. Arlan‘s Dep‘t Stores, Inc v Attorney General, 374 Mich 70, 77; 130 NW2d 892 (1964); see also Osius, supra at 697-701.
To determine whether the act provides adequate standards to survive constitutional scrutiny,
However, the Legislature must not be denied “the ability to set forth standards that are flexible and practicable.” Id. We conclude that, under these standards, the statute is unconstitutional.2
Reading the statute as a whole, it is clear that its goal is to promote the establishment of technology parks where certain industries will be concentrated and accessible to institutions of higher learning. The statute attempts to make сoncessions to the communities that will lose more than twenty jobs when employers relocate to these parks by allowing them to object to the incentives offered to encourage the move, i.e., by allowing them to object to the tax abatements. The statute attempts to satisfy due process requirements by providing for notice and a statement of reasons.
However, the statute provides no indication of what reasons are valid grounds for objeсting. In other words, a community losing more than twenty jobs may object or not, in its sole discretion. There are no guidelines provided to determine, once more than twenty jobs are involved, whether objections should or should not be filed.
We cannot agree that constitutionally sufficient standards may be gleaned from the provision allowing for objections.3 We also cannot agree that defendant‘s objections would have been sufficient if they had had any relationship to job loss. That is because, since only communities suffering a loss of more than twenty jobs may object, there are always going to be some jobs lost. However, the statute is silent regarding how to determine whether an objection based on lost jobs is valid. For example, the statute does not specify whether there must be some kind of relationship between population and jobs lost or whether some other standard must be met before an objection based on lost jobs is valid. The statute is also silent regarding whether job loss is the only valid reason for objecting. We therefore find that it is an unconstitutional delegation of power.
Going one step further, we also note that if sufficient standards could be gleaned from the statute as a whole, then we would find that defen-
The City of Auburn Hills need not give inducements for economic development because it is not a city in a state of ecоnomic decline; and
Tax abatements diminish revenues to Oakland County government which must then be supported by other taxpayers in other cities, villages and townships, some of which are in a state of decline; and
The City Council of the City of Troy concludes that it chooses not to grant tax abatements within the City of Troy and therefore it chooses not to act upon requests which indirectly grant tax abatements outside the City of Troy in prospering communities.
As discussed before, wе find from the preamble and the legislative history that the purpose of the act is not to revitalize economically depressed areas but rather to encourage the development of high-tech industry and interaction between that industry and institutions of higher learning, and also to attempt to secure long-term prosperity for the state. Because the reasons for defendant‘s objections do not relate to the purposes of the act, they constitute an abuse of discretion and would be insufficient to block the tax abatement offered to plaintiff.
Affirmed in part and reversed in part.
TAYLOR, P.J. (dissenting). The Technology Park Development Act (TPDA),
The majority believes that because
The majority has veered off the path of intelligible constitutional analysis, propelled by the mistaken notion that the Troy City Council is some type of administrative agency to which too much power has been delegated. But the contrary is true. The municipal entities of this state have, by constitution and statute, been afforded broad grants of legislative authority.
The plain language of the TPDA gives Troy the absolute right to veto the tax exemption. The lack of standards and guidelines surrounding the exercise of the objection is not a fatal flaw if one
Because the statute passes constitutional muster, the question before us is a very narrow one: was the Troy City Council‘s objection arbitrary and unreasonable, Union Twp v Mount Pleasant, 381 Mich 82, 89-90; 158 NW2d 905 (1968). The responsibility of exercising judicial restraint in legislative matters was discussed by Mr. Justice Holmes:
While the courts must exercise a judgment of their own, it by no means is true that every law is void which may seem to the judges who pass upon it excessive, unsuited to its ostensible end, or based upon conceptions of morality with which they disagree. Considerable latitude must be allowed for differences of view as well as for possible peculiar conditions which this court can know but imperfectly, if at all. [Otis v Parker, 187 US 606, 608-609; 23 S Ct 168; 47 L Ed 323 (1903).]
I would hold that Troy‘s objection to plaintiff‘s transfer was well within the ambit of the TPDA, and therefore was not arbitrary or unreasonable.
The majority seizes uрon the notion that this statute was not enacted to revitalize economically depressed areas, and from this fact reasons that because the City of Troy objected to plaintiff‘s transfer on economic grounds, Troy acted unreasonably. This is wrong on its face because the
[c]ompletion of the facility is calculated to and will . . . have the reasonable likelihood to increase economic activity, create employment, retain employment, or prevent the loss of employment in the local governmental unit in which the facility is located. [
MCL 207.710(2)(c) ;MSA 7.800(110)(2)(c) .]
It seems to me disingenuous to suggest that the Legislature was not greatly concerned with the vitality of economically depressed areas in light of this provision.
In addition, this statute was amended by 1990 PA 151, § 1, effective June 27, 1990, to add a subsection 2(e). This subsection provides that if any employment is caused to be transfеrred from a local governmental unit with a population of more than 800,000, that local governmental unit may withhold its consent. Because our large metropolitan areas are well known to be distressed economically, this amendment is strong evidence that enhancing the vitality of economically endangered areas was a central concern of the Legislature in passing the TPDA.
Obviously, then, it cannot be unreasonable under the majority‘s own analysis for Troy to object for that reason.
I feel it should also be pointed out that, notwithstanding the majority‘s invocation of the legislative history,2 it should be understood that it surpasses unlikely, in a Legislature apportioned on a
I would uphold the constitutionality of the statute and affirm the actions of the Troy City Council, and so would reverse the trial court‘s order granting summary disposition to plaintiff with regard to issues II and III.
Notes
My general attitude towards [legislative history] can be summed up . . . by saying that I regard it as the greatest surviving legal fiction. If you can believe that a committee report (to take the most respected form of legislative history) in
fact expresses what all the Members of Congress (or at least a majority of them) “intended” on the obscure issues that it addresses; if you сan believe that a majority of them even read the committee report; indeed, if you can believe that a majority of them was even aware of the existence of the obscure issue; then you would have had no trouble, several hundred years ago, in permitting all tort actions to be squeezed into the writ of assumpsit by the patently phony allegation that the defendant had undertaken (assumpsit) to be careful. Even beyond the unreliability of almost all legislative history (most of which is now cooked-up legislative history) as an indication of intent, it seems to me that asking what the legislators intended rather than what they enacted is quite the wrong question. [Address by Justice Antonin Scalia before the Attorney General‘s Conference on Economic Liberties in Washington, D.C. (June 14, 1986).]
Compounding the problem with the Michigan legislative histories is that, in this state, unlike the federal legislature, there is no verbatim journal of the proceedings of either house of the Legislature or of its committees. Further, unlike Congress, the Michigan House of Representatives or Senate does not vote on an acceptance of the legislative history. The creation of legislative histories are therefore free play for legislative staffers and special-interest pleaders. Their hope may well be to fill these empty vessels with potions on the chance that someday some credulous court, unaware of its dubious authenticity, may drink deeply.