Source: https://www.ag.state.mi.us/opinion/datafiles/1980s/op06572.htm
Timestamp: 2020-04-04 15:54:16
Document Index: 73892174

Matched Legal Cases: ['art 9', 'art 9', 'art 9', 'art 4', 'art 9', 'art 9', 'art 9', 'art 9']

Opinion #6572
Opinion No. 6572
Const 1963, art 9, Sec. 31--voter approval to subject mobile homes to ad valorem property tax
Removal of ad valorem property tax exemption for mobile homes
The Legislature may remove the exemption for mobile homes in mobile home parks and subject them to the ad valorem property tax without approval of the electors under Const 1963, art 9, Sec. 31.
Honorable David M. Honigman
You have requested my opinion on whether the Headlee Amendment, Const 1963, art 9, Secs. 25-35, prohibits the Legislature from repealing, without approval of the electors, the exemption from ad valorem taxes for mobile homes located in a mobile home park.
In 1959 PA 243, Sec. 41, MCL 125.1041; MSA 5.278(71), the Legislature has imposed a tax of $3.00 per month upon every mobile home in a mobile home park in lieu of a property tax levied upon a mobile home under the General Property Tax Act, MCL 211.1 et seq; MSA 7.1 et seq. Section 2(1) of the General Property Tax Act, MCL 211.2a; MSA 7.2(1), specifically exempts mobile homes in mobile home parks subject to 1959 PA 243, Sec. 41, supra, from ad valorem property taxes.
The Legislature may act to change the tax status of mobile homes located within mobile home parks and may place them on the ad valorem property tax rolls. Const 1963, art 4, Sec. 1. However, the effect of such legislative action is impacted by the so-called Headlee Amendment, Const 1963, art 9, Secs. 25 and 31, which provide:
"Property taxes and other local taxes and state spending may not be increased above the limitations specified herein without direct voter approval. ..." Const 1963, art 9, Sec. 25.
"Units of Local Government are hereby prohibited from levying any tax not authorized by law or charter when this section is ratified or from increasing the rate of an existing tax above that rate authorized by law or charter when this section is ratified, without the approval of a majority of the qualified electors of that unit of Local Government voting thereon. If the definition of the base of an existing tax is broadened, the maximum authorized rate of taxation on the new base in each unit of Local Government shall be reduced to yield the same estimated gross revenue as on the prior base. If the assessed valuation of property as finally equalized, excluding the value of new construction and improvements, increases by a larger percentage than the increase in the General Price Level from the previous year, the maximum authorized rate applied in each unit of Local Government shall be reduced to yield the same revenue from existing property, adjusted for changes in the General Price Level, as could have been collected at the existing authorized rate on the prior assessed value." Const 1963, art 9, Sec. 31. (Emphasis added.)
Thus, the Headlee Amendment pertains to three general areas:
1. The creation of new taxes.
2. The increase (above normal inflation) of existing taxes.
3. The broadening of existing tax bases.
Items 1 and 2 above require voter approval. The broadening of a tax base (which would be the result of the removal of the exemption for mobile homes located within mobile home parks and placement on the ad valorem tax rolls) does not, however, require voter approval. What is required is the adjustment of the tax rate to compensate for the addition to the tax base so that the tax revenues realized as a result of the change will be identical to those realized prior to the broadening of the tax base.
Legislation that would remove the exemption from and subject mobile homes located in mobile home parks to the ad valorem property tax neither creates new taxes nor does it result in an increase in existing tax rates. Instead, such legislation would merely increase the base of an already existing tax. The Headlee Amendment does not require approval of the electors for an alteration to the tax base, but accepts the concept of a broadened tax base. It provides for a reduction of the tax rate so as to yield a zero renewal increase in the gross revenues taken by local units of government.
It is my opinion, therefore, that the Legislature may remove the exemption for mobile homes in mobile home parks and subject them to the ad valorem property tax without approval of the electors under Const 1963, art 9, Sec. 31.