Source: https://www.ag.state.mi.us/opinion/datafiles/1970s/op05506.htm
Timestamp: 2020-04-04 15:35:35
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Opinion #5506
Opinion No. 5506
Exemption from tax limitations
District libraries subject to tax limitations
Art 9, Sec. 6 (ad valorem tax limitations)
A district library organized pursuant to 1955 PA 164, is subject to the ad valorem tax limitations of Const 1963, art 9, Sec. 6.
Is a district library organized under 1955 PA 164, as amended by 1978 PA 465, Sec. 2(2), (1) an 'authority, the tax limitations of which are provided by charter or by general law,' and thus exempt from the general taxation limits provided in the first paragraph of Const 1963, art 9, Sec. 6?
The first paragraph of Const 1963, art 9, Sec. 6, as amended by Proposal E (the 'Headlee Amendment', effective December 22, 1978) at the November 7, 1978 general election, sets forth ad valorem taxation limits of units of local government. The second paragraph of Const 1963, art 9, Sec. 6, often referred to as the non-application provision, sets forth those circumstances where the tax limitation of the first paragraph are inapplicable and states:
'Subject to the provisions of sections 25 through 34 of this article, (2) [the foregoing tax limitations shall not apply] to taxes imposed for any other purpose by any city, village, charter county, charter township, charter authority or other authority, the tax limitations of which are provided by charter or by general law.' [Bracketed language inserted; Emphasis added]
Const 1963, art 9, Sec. 31, provides:
'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 (3) voting thereon. . . .' [Emphasis added]
The district libraries act, 1955 PA 264, Sec. 4a, added by 1978 PA 465 (effective October 16, 1978), provides:
'The municipalities which unite for the establishment and operation of a district library pursuant to section 2(2) of this act shall constitute an authority under section 6 of article 9 of the state constitution of 1963.' [Emphasis added]
It should be noted that 1978 PA 465 also amended section 5 of the district libraries act, supra, but did not add any tax limitations thereto.
Following the establishment of a district library as provided by section 2(2) of the act, the methods for funding the district library are set forth in section 5:
'The sums necessary for the establishment and operation of a district library shall be appropriated by the governing or legislative boards of the municipalities entering into the formation of the district library, or by a tax levy for this purpose authorized by a vote of the qualified electors in a participating municipality or a vote of the qualified electors of the district established by the participating municipalities pursuant to section 2(2) of this act, if the proposed tax levy is submitted by the board of trustees of the district library. . . .' [Emphasis added]
While 1978 PA 465, Sec. 4a, denominates a district library as an authority under Const 1963, art 9, Sec. 6, no provision of the district libraries act nor any 'general law' of the state establishes tax limitations of a district library authority. Further, no tax limitation 'provided by charter' within the meaning of Const 1963, art 9, Sec. 6, exists. Thus, no 'tax limitations' within the plain language of Const 1963, art 9, Sec. 6, art provided a district library by the district libraries act.
Therefore, the nonapplication provision of the second paragraph of Const 1963, art 9, Sec. 6, supra, does not apply and any tax that a district library board may seek to levy must fall within the taxing limitations of the participating municipality or district library area unless the electors therein vote to increase existing millage pursuant to the first paragraph of Const 1963, art 9, Sec. 6, and art 9, Sec. 31.
In addition, a district library established pursuant to the act is not vested with any of the indicia of an 'authority' as that term appears within the context of Const 1963, art 9, Sec. 6. The district library is not a separate corporate body, nor does it impose directly a prescribed tax rate. (4) Further, under section 6(1) of the district libraries act, a participating municipality may accomplish withdrawal from the district library simply by a favorable vote of a majority of those voting at a regular election of the withdrawing unit. (5)
Accordingly, it is my opinion that a district library organized under 1955 PA 164, supra, is not vested with the indicia of an authority, including a tax limitation provided by law, so as to be exempt from the general taxation limits provided in the first paragraph of Const 1963, art 9, Sec. 6.
(1) MCLA 397.271 et seq; MSA 15.1780(1) et seq ('the district libraries act')
(2) Sections 25 through 34 were added to Const 1963, art 9, by Proposal E, supra; OAG, 1977-1978, No 5417, p ___ (December 20, 1978).
(3) Const 1963, art 9, Sec. 33, defines 'Local Government' as including 'authorities created by the state, and . . . by other units of local government.'
(4) Contrast with 1939 PA 147 (Huron-Clinton Metropolitan Authority), Secs. 1 and 7, MCLA 119.51, 119.57; MSA 5.2148(1), 5.2148(7); 1945 PA 47 (Joint Hospital Authority), Secs. 1, 2 and 4, MCLA 331.1-331.2, 331.4; MSA 5.2465(1)-(2), 5.2456(4). See generally Huron-Clinton Metropolitan Authority v Boards of Supervisors of Five Counties, 300 Mich 1; 1 NW2d 430 (1941); Bullinger v Gremore, 343 Mich 516; 72 NW2d 777 (1955).
(5) Contrast with 1939 PA 147, supra, OAG, 1949-1950, No 1219, p 570, 571-572 (May 31, 1950); 1945 PA 47, supra, Sec. 3, MCLA 331.3; MSA 5.2456(3).