*1 Taylor 619 v Commons TAYLORCOMMONSv CITYOF TAYLOR 5, 2001, Docket No. 224686.Submitted November at Detroit. Decided Feb- ruary 5, 2002, appeal sought. at 9:15 A.M. Leave to Taylor Commons, shopping development, brought center an action Wayne against city Taylor Wayne Circuit Court the County, challenging constitutionality the of subsection 2 of 10 of 211.10(2), PA 1991 before the amendments of PA 1994 415. plaintiff completed shopping The construction of the center in properly 1991. In 1992. the tax assessment for Commons substantially higher 1991,representing was than in the value of the physical property resulting completion additions to the from the shopping plaintiff appealed center. The the 1992 assessment to Michigan Tribunal, challenging Tax on the basis of the Uniform Clause, 9, 3, constitutionality of sub- 10(2) section of Act which froze 1992 tax assessments at their adjusted 1991 levels but the 1991 assessments to reflect “additions and losses” to a The Tax Tribunal found that the properly provisions had been assessed in accordance with the question Act 15 and declined to address the constitutional on the jurisdiction proper basis that the tribunal lacked to consider that question. Appeals The Court of affirmed the Tax Tribunal's deci- sion, opined ques- but the Court then that if it were to address the tion of the it would conclude that the provisions 10(2) of subsection of Act 15 were constitutional. Unpublished opinion per Appeals, curiam of the Court of issued July 9, (Docket 182833). 1996 No. The thereafter com- court, in menced its action the circuit court. The circuit Michael F. Sapala, J., plaintiffs judi- dismissed the constitutional claim on res grounds, holding Appeals already cata that the Court of had question adversely addressed the constitutional and had decided it plaintiffs position. plaintiff appealed, to the and the Court of Appeals remanded, holding reversed and that the statements con- cerning opinion of Act 15 in the Court’s appeal of the Tax Tribunal decision were obiter dicta and had no judicata Unpublished opinion Appeals,
res effect. of the Court of May 21, (Docket 206653). remand, issued No. the circuit granted summary disposition defendants, holding court for the challenges constitutional under the Uniform Taxation Clause are 249 Mich subject challenges to the same rational basis test as under the Equal Protection that the of Act 15 did not dis- properties, criminate in the assessment of that a rational basis existed for the assessment schemes for the dif- fering properties. plaintiff appealed. classes of *2 Appeals
The Court of held: Mfg Sciences, Inc, 1. in The Court Ann Arbor v Nat’l Center for (1994), purpose 204 Mich held that the of the Uniform Tax- equal similarly ation Clause was to ensure treatment of situated taxpayers, that there was no discernible difference between the Equal Protection Clause and the Uniform Taxation and that, accordingly, determining the standard for the reasonableness purpose aof taxation scheme for the of the Uniform Taxation Clause was the same rational basis test used to determine whether Equal has there been violation of the Protection Clause. Applying equal protection provi- 2. the rational basis test to the 10(2) 15, sions of subsection of Act it is clear that the has respect pro- failed to establish a constitutional defect with to those property particular visions. Those owners within the classes cre- provisions 10(2)—that is, ated of subsection on the one hand, those with no additions or losses to their and, hand, prop- on the other those with additions or losses to their erty equally. clearly in 1991—are treated There was a rational basis Legislature’s differing changes for the treatment of in valuations changes that resulted from inflation and in valuations that were the tangible property. Accordingly, result of additions or losses to the legislative because there was a rational basis for the scheme expressed 10(2) provisions in subsection of that sub- section do not violate the mandate of the Uniform Taxation Clause. Affirmed. X, concurring, stated that the decision in Ann Arbor v Wilder, Mfg Sciences, Inc, (1994),
Nat’l Center for binding by majority. and concurred in the result reached — — — 1. Taxation Constitutional Law Uniform Taxation Clause Rational Basis Test. purpose Michigan of the Uniform Taxation Clause of the Consti- equal taxpayers; tution is to ensure treatment of there is no discernible difference between the Uniform Taxation Equal Clause; Clause and the Protection the standard for determin- ing purpose the reasonableness of a taxation scheme for the Uniform Taxation Clause is the same rational basis test used to Equal determine whether there has been a violation of the Protec- (Const 1963, 9, 3). tion Clause art — — — 2. Property Tax Assessments Uniform Taxation Clause Rational Basis Test. now-repealed provisions Property of the General Tax Act that respect froze 1992 assessments for real at 1991 levels with for which there were no additions or losses that during provided adjustment occurred but which of assess- any during 1991, to reflect ments additions or losses did not violate Michigan of the Uniform Taxation Clause Con- stitution, being differing there a rational basis for the treatment of (Const 9, 3; the different classes of 1991PA 10[2], subsection before the amendments of 1994 PA 211.10[2] 415). Honigman Miller Schwartz and Cohn (by Michael B. Shapiro and John S. Kane), plaintiff. for the
Steinhardt, Pesick & Cohen, PC. (by Jerome P. Pesick), Wayne County Corporation (by Counsel Stanley), Richard G. for the defendants.
Before:
P.J., and Wilder
JJ.
Neff,
Cooper,
J.
appeals
Plaintiff
as
right
opin-
from an
Cooper,
*3
Wayne
ion of the
Circuit Court granting defendants’
summary
motion for
disposition on
ground
failed to rebut
the strong presumption of
constitutionality surrounding subsection
10(2)
1991
PA
(hereinafter
Act
which was codified as
15
15),
211.10(2).1
appeal, plaintiff challenges the
constitutionality of Act 15, which froze 1992 tax assessments at their 1991 levels while
adjusting
reflect “additions
property.
and losses” to the
Plaintiff
argues that Act 15
requirement
violates the
of uni-
formity in the assessment of ad
1
by
415, which, among
things,
MCL211.10 was amended
PA
1994
other
existing
deleted the
subsection 2 and renumbered subsections 3 and 4 as
211.10(2)
subsections
and 3. All references to MCL
will refer to that sub
section as it
when
existed
it was added
Opinion op the Court disagree taxes. Const 3. We and affirm the trial court’s decision. undisputed.
The facts of this case are In 1991, plaintiff’s partially improved property Taylor, Mich- igan, represented was assessed at $491,420, which fifty percent of its true cash value on December plaintiff completed 1990. In construction of a Taylor shopping center, Commons, known as on the completion of this construction consti- meaning tuted an “addition” within the of MCL 211.34d(l)(a). Thus, the was assessed at year, $2,295,320for the 1992 tax rather than remain- ing at its 1991assessment level. appealed
Plaintiff the 1992 assessment and chal- lenged constitutionality of Act 15 before the Mich- igan Tax Tribunal. However, the tribunal declined to argument ground address the constitutional on the jurisdiction. proper that it lacked The tribunal further properly found that defendants assessed property according appealed to Act 15. Plaintiff Appeals. tribunal’s decision to the Court of City Taylor, unpub- In an opinion per Appeals, lished curiam of the Court of July (Docket 182833) (Taylor I), issued 9, 1996 No. upheld the Court the tribunal’s decision. Because the tribunal could not declare Act 15 unconstitutional, the properly applied pro- Court held that the tribunal plaintiff’s property. visions of Act 15 to I precluded Court further stated that its decision need to address the issue Act 15. However, the Court noted that if it were to address the it would have *4 comports require- concluded that Act 15 with the equality. ments of Taylor plaintiff challenged constitutionality
Thereafter, of Act 15 before the trial corut. The trial court held Appeals already that because the Court of had constitutionality addressed the issue of the judicata claims should be dismissed on res appealed grounds. Tay Plaintiff also this decision. In City Taylor, unpublished opinion lor Commons v per Appeals, May curiam of the Court of issued (Docket (Taylor 206653) II), No. the Court ruling any reversed the trial court’s and held that ref erence to the of Act 15 in I judicata was obiter dictum and had no res effect. The case was then remanded to the trial court. summary disposi- remand, moved for stating tion, that Act 15 was unconstitutional as a matter of law. Plaintiff claimed that its 1991 assess- regardless ment should have been utilized in any property. construction that occurred on the Plain- complained by freezing tiff most real estate singling assessments at level, the 1991 but out, for properties assessment raises, those whose values changed because of construction, added Act 15 concept offended the constitution’s of uniform taxa- tion of real Defendants filed a cross-motion summary disposition. opinion granting The trial court issued an and order summary disposition defendants’ motion for upholding of Act 15. The trial arguments court found that had two for find- ing (1) por- Act 15 unconstitutional: it offended the requiring appraisals tion of the constitution to be (2) determined on the value, basis of true cash or portion exempted property improved of Act 15 that during general 1991 from the freeze *5 App 249 Mich Opinion of the Court Act 15 violated the constitution’s Uniform Taxation ultimately Clause. The trial court declined to address challenge the merits of “true cash value” jurisprudence. Specifically, reasons of the trial court declared that if Act 15 offended the true cash value requirement plaintiff 9, 3, would remedy be without a because Act 15 would cease “to operate way in such a as to confer some benefit to plaintiff.”
Following
uniformity
the standards for tax
sum-
System,
marized in Avis Rent-A-Car
Inc v Romulus,
App
(1975),
65 Mich
119, 128-129;
We review de novo a trial court’s
on sum-
mary disposition. Madejski
Ltd,
v Kotmar
246 Mich
(2001). Similarly,
441, 443;
MCL before the amendment of PA provided: 415, 1992, equalized
In year the assessment as for the 1991 tax adjusted shall be used on the assessment roll and shall be only losses, to reflect additions and as those terms are 34d, splits defined in section and and combinations that splits have occurred. Additions and losses and and combi- nations shall be valued at 1991 levels. plaintiffs argument
find We
would mandate an
extremely narrow construction of Const 1963,
9,
art
suggests
plain
§
language
3. Plaintiff
that the
provision distinguishes
constitutional
between ad
property
valorem
taxes and all other taxes. In 1992
provided:
the constitution’s Uniform Taxation Clause
legislature
provide
general
shall
ad
for
uniform
tangible personal
valorem taxation
real
property
and
of
exempt by
legislature
provide
not
law. The
shall
for the
property;
determination
pro-
of true cash value of such
portion
property
of true cash value at which such
shall be
uniformly assessed,
not,
January 1,
which
shall
after
percent;
system
equalization
exceed 50
and for a
may
legislature
provide
assessments. The
for alternative
249 Mich
personal
designated
tangible
means of taxation of
real and
general
Every
in lieu of
ad valorem taxation.
tax
valorem,
general
than the
ad
tax
other
shall be
uniform, upon
operates.
the class or classes on which it
9, 3,
Proposal
art
before its amendment
[Const
A
(emphasis added).2]
Essentially, plaintiff
pro-
claims that
constitution
types
uniformity: (1)
vides for two different
abso-
uniformity,
lute
based on true cash values without
regard
property,
to different classifications of
in ad
(2)
uniformity
taxation,
class-based
with
regard
to other forms of
As such,
taxation.
equal protection
maintains that
apply
considerations do not
in ad valorem
taxation. This Court
analysis
finds such a tortured
of the Uniform Taxa-
unsupportable
Clause,
tion
9, 3,
art
unwarranted.
Mfg
In Ann Arbor v Nat’l Center
Sciences, Inc,
(1994),
303;
upheld granted of a statute that exemptions from ad valorem taxes to certain research facilities. The in Ann Arbor claimed Michigan Strategic that a section of the Fund Act, 125.2074(6), was unconstitutional because it vio- lated the Uniform Const *7 § purpose 3. However, this Court stated that the uniformity “equal clause was to ensure treatment taxpayers.” supra to Ann Arbor, at 305. The Ann Arbor Court further found “no discerni- Equal ble difference between the Protection and Uni- 1963, 9, Proposal § Const art 3 was amended the ratification of a in provides caps requires legislative 1994. The amendment assessment approval operating for certain taxes levied for school district purposes.
formity of Taxation Clauses.” Id. at 306. The Court power exempt went on to state that the to entities necessarily implies power from taxation according to discriminate between entities to a standard of reasonableness. Id. “The standard of reasonableness under the rational-basis test is any reasonably may whether set of facts be conceived justify to the discrimination.” Id. It is clear to this applied equal protection Court that Ann Arbor con- siderations to determine statute, whether a which property differently treated certain classes of real purposes assessing ad valorem taxes, vio- uniformity provision lated the of Const 1963, 9, art 3. Thus, in contrast claims in the equal protection analysis appropri- instant case, an uniformity prop- ate to determine the of ad valorem erty tax assessments. concept recently Syntex
This
was
reaffirmed in
Dep’t Treasury,
Laboratories v
286;
(1998).
specifically
As a there is no discernible difference equal protection guarantee between the and the Uniform requires § which uni- formity general ad per- valorem taxation of real and requires sonal all other taxes to be uniform upon they operate. or class classes on which Both require disputed that some rational basis for a classification must be shown to exist. A rational basis shall be found to any reasonably jus- exist if set of facts can be conceived to tify alleged discrimination. [Citation omitted.] *8 619
Opinion the Court Syntex agreed basis that a rational Court in also disputed classifications in the ad must be shown for property taxation of and in the assessment of all other taxes. analysis equal protection
Because we find that an is appropriate, under we now examine the treatment property similarly owners in this Act 15 of situated conceded the constitu- case. Wenote that has analysis tionality equal protection is of Act 15 if an provided applicable. We further note that has similarly proof prop- no that Act 15 treated situated erty disparately. exemption owners We find that the operates provision of on different classes of Act 15 provide unequal property and treatment for does not similarly property Rather, situated owners. the classi- provided fications in Act 15 are based on real differ- reasonably necessity suggest ences, which of dif- permitted example, Act ferent treatment. For properties no construction or “additions” to with new by prop- have their tax assessments determined erty’s Distinguishable 1991 assessed value. from that property property physically class of where value is previ- has not added and the new construction been ously provided equal treatment Thus, taxed. Act 15 and uniform taxation for owners. find was a rational basis for dis-
We also that there property taxpayers tinguishing between who made no changes to their and those whose splits, losses, was affected and combina- additions, purpose tions. The of Act 15 and its distinctions was accurately explained thoroughly in the trial opinion: court’s by Wilder, J. Concurrence a
The distinction is rational one. As noted in the [Senate Agency Analysis, 19, April 26, 1991, p 4], major Fiscal SB concern was that assessed values had exceeded Conceivably, the rate of inflation. could *9 that, rapid unchecked, have been concerned left this rise in negatively impact assessed value on would on the affordability hand, of residential On the other foregoing apply rationale cannot be said to to an increase in to, example, activity value due for construction or similar tangibly property. Indeed, affected the there is no indi- tangible change cation that assessed value based on a property, respect such as what occurred with property, problematic. Instead, problem had been as the Legislature conceivably seen, could have addressed an upward spiral of assessments that could exceed the rate of inflation. Court, therefore, finds that the could rationally distinguished
have granting tax relief for the 1992 premised tax potential assessment on the cause of a (or decrease) plaintiffs increase in value. The offer no explanation why Legislature’s judgment as to had no rational basis.
We agree analysis with this and find that the assess- ment scheme set out in rationally Act 15 was based to provide short-term solutions to stabilize property assessments. Consequently, we find that Act 15 did not offend the concept of uniformity set out in Const 3.§
Affirmed.
Neff, P.J., concurred.
J. (concurring). This Court concluded in
Wilder,
Ann Arbor v Nat’l Center
Mfg Sciences, Inc, 204
Mich
303, 305-306;
Concurrence Wilder, appellant directly con- does not address or refute this Accordingly, in Ann Arbor is clusion. the decision panel, binding I result on this concur by majority. reached