Case Name: MILLER v. DEPARTMENT OF TREASURY, REVENUE DIVISION
Court: Michigan Court of Appeals
Jurisdiction: Michigan
Decision Date: 1969-06-26
Citations: 18 Mich. App. 145
Docket Number: Docket No. 4,832
Parties: MILLER v. DEPARTMENT OF TREASURY, REVENUE DIVISION
Judges: Before: Lesinski, C. J., and Holbrook and Levin, JJ.
Reporter: Michigan appeals reports; cases decided in the Michigan Court of Appeals.
Volume: 18
Pages: 145–171

Head Matter:
MILLER v. DEPARTMENT OF TREASURY, REVENUE DIVISION
L Mental Health — Constitutional Law — Public Institutions— Retarded Persons — -Payment eor Care — Liability oe Relatives —Statute.
Statute establishing liability for financing the care of mentally retarded persons in public institutions providing that the amount which responsible relatives must reimburse the state for institutional care is to be computed from a graduated schedule based on Federal taxable income, held, arbitrary, unreasonable, a denial of equal protection, and therefore invalid, because the criterion of net Federal taxable income does not properly reveal the financial ability of relatives to reimburse the state for such care because of legal, economic incentive provisions available which exempt aetual income from being included in Federal taxable income and permit those of greater financial ability to reimburse the state less than those of lesser means (PA 1965, No 335, §§ 2-9).
2. Mental Health — Constitutional Law — Public Institutions — ■ Retarded Persons — Payment eor Care — Liability oe Relatives —Legislature—Delegation oe Power.
Statute establishing liability for financing the care of mentally retarded persons in public institutions providing that the schedule used to compute liability is to be based on Federal taxable income as shown on the Federal income tax return, held, a violation of constitutional due process and invalid since the law governing the not taxable ineome of any individual is controlled by the Congress of the United States and therefore state legislature improperly delegates to the United States Congress the ultimate determination of the reimbursement amount; state legislatures cannot delegate their sovereign powers to the Federal government or to any other body, and attempts to make future Federal regulations part of the state law are generally held unconstitutional (PA 1965, No 335, §§ 2-9).
References eor Points in Headnotes
[1-5, 7-13] 41 Am Jur 2d, Incompetent Persons §§ 55-57, 59.
41 Am Jur 2d, Poor and Poor Laws § 6.
Constitutionality of statute imposing liability upon estate or relatives of insane person for his support in asylum. 20 ALR3f> 363.
20 Am Jur 2d, Courts § 32.
Dissenting Opinion
Devin, J.
3. Mental Health — Constitutional Law — Retarded Persons— Care in Public Institutions — Payment for Care — Liability of Relatives — Statute.
Contention that the statute establishing liability for financing the eare of retarded persons in institutions is unconstitutional because the graduated schedule used to compute the liability of relatives of the retarded person is based on Federal taxable income and denies equal protection of the laws because certain parents are able to insulate their income from Federal taxation and reduce or eliminate liability, is based on an unproven hypothesis where there is no demonstrable proof that insulation has occurred in numbers sufficient to justify a conclusion that the legislatively selected criterion is unconstitutional; important legislation should not be declared unconstitutional on theoretical grounds where no proof of invidious discrimination exists (PA 1966, No 335).
4. Mental Health — Constitutional Law — Retarded Persons— Care in Public Institutions — Payment for Care — Liability of Relatives.
Provisions of statute establishing liability for cost of care of retarded persons in public institutions which provide for annual redetermination of liability based on Federal taxable income as shown on the latest return should not be lightly rejected because this method; (1) is far superior to a once- and-for-all determination; (2) supplies the readily obtainable, accurate and current information necessary; (3) is more lilcely to reflect ability to pay more accurately than any other easily available index (PA 1965, No 335, §9).
5. Mental Health — Constitutional Law — Retarded Persons— Care in Public Institutions — Cost of Care — Statute—Review.
The statute establishing liability for care of retarded persons in public institutions allows ample administrative and judicial review for those dissatisfied with the amount of liability computed from the schedule; therefore a schedule providing for charges to relatives for care of a retarded person which is based on Federal taxable income is not a denial of due process or equal protection of the law (PA 1965, No 3S5, § 10).
6. Courts — Constitutional Law — Administrative Determination —Review—Probate Court.
The legislature may properly empower probate courts to review administrative determinations judicially under the constitutional provision that the jurisdiction, powers, and duties of the probate court and the judges thereof “shall be provided by law.” (Const 1963 art 6, §15; PA 1965, No 335, §10.)
7. Mental Health — Constitutional Law — Retarded Persons— Care in Public Institutions — Cost oe Care — Liability—Basis for Determination — Statute.
Contention that, because Congress may change the definition of taxable income, the incorporation of the Federal definition of taxable income into the statute establishing liability for financing the care of retarded persons in public institutions is an unconstitutional delegation of power is a theoretical one because (1) only a few factors of the definition, relating to a small number of taxpayers and probably none of those liable, have changed since the act was passed; (3) liability could easily be determined without regard to changes in the act so far; (3) if Congress enacted serious changes in the definition of taxable income the legislature could adopt the change and the Federal definition or reject the change and formulate a new basis of reporting income under the state statute (PA 1965, No 335, §§6-8).
8. Mental Health — Constitutional Law — Retarded Persons— Care in Public Institutions' — Payment eor Care — Liability oe Relatives — Determination oe Liability — Statute.
Provisions of the statute establishing liability for financing the care of retarded persons in public institutions which require that the parent of a retarded person receiving care in a state institution submit a signed copy of his most recent Federal income tax return does not violate the Internal Revenue Code as most courts have concluded that private litigants may be required to produce a copy of their returns; a court should uphold the constitutionality of the act, if at all possible, and adopt a construction of Federal confidentiality provisions which would sustain the legislative requirement (PA 1965, No 335, $ 6; 26 VSC §§ 6103, 721S[a]).
9. Mental Health — Constitutional Law — Equal Protection— Retarded Persons — Care in Public Institutions — Liability for Cost — Statute.
Provisions of the statute establishing liability for financing the care of mentally retarded persons in public institutions which require reimbursement to the state by certain relatives . of retarded persons in amounts computed from the act’s reimbursement schedule are not an unconstitutional denial of equal protection of the law merely because they require those of higher income to pay more than those with less, because economic difference is a realistic and acceptable classification where reimbursement is based on a graduated ability to pay schedule, void of the invidious discrimination which would justify a declaration of unconstitutionality (PA 1965, No 335, §8).
10. Mental Health — Taxation—Liability for Retardates in Public Institutions.
The requirement of the statute establishing liability for financing the care of retarded persons in public institutions that certain relatives of retarded persons reimburse the state for care of those persons in public institutions if they are able is an obligation to provide support for services rendered and not a tax.
11. Mental Health — Parent and Child — Liability for Retardates ' in Public Institutions — Equal Protection.
Provisions of the statute establishing liability for financing the care of mentally retarded persons in public institutions which require parents and certain other relatives of retarded persons to reimburse the stale for their care in public institutions, but which exempt from liability parents of retardates over age 21 and those who have been institutionalized for 15 years do not violate the right of equal protection under the law; parental responsibility for the care of minor children is a universal ethic as is the financial emancipation of competent adults and the legislature is not bound to require reimbursement from parents of retarded adults in order to properly require it from parents of retarded minors, -nor is it barred from relieving parents of retardates who have been institutionalized for shorter periods (PA 1965, No 335, § Í).
12. Mental Health — Constitutional Law — Equal Protection— Handicapped Minors — Care in State Institution — Parental Liability — Cost op Care.
The legislative decision that parents of retardates in public institutions must reimburse the state for care given according to financial ability does not violate the right to equal protection of the law because parents of blind and deaf children are not required to reimburse the state; services provided one group of afflicted children vary from those provided other groups and the legislature may properly vary the quantity and quality of services offered (PA 1965, No SS5).
13. Mental Health — Constitutional Law — Retarded Persons— Care in Public Institutions — Cost of Care — Liability for Cost — Equal Protection.
The statute establishing liability for financing the care of retarded persons in public institutions is not unconstitutional and does not create an unreasonable classification of taxpayers based on whether or not they are parents of retarded minors since parents of institutionalized persons receive a special benefit from the institutions and have a moral duty to provide for their children when financially able (PA 1965, No SS5).
Appeal from Wayne, Carl M. Weideman, J.
Submitted Division 1 December 5, 1968, at Detroit.
(Docket No. 4,832.)
Decided June 26, 1969.
Leave to appeal granted August 21, 1969.
See 382 Mich 775.
Complaint by Donald A. Miller and Geraldine B. Miller, his wife, against the State of Michigan, Department of Revenue, for a determination that Act 335 of the Public Acts of 1965, regarding the liability of relatives for the care and maintenance of mentally retarded persons in state institutions, is unconstitutional and for an injunction to prevent its enforcement. Summary judgment for plaintiffs. Defendant appeals.
Judgment affirmed.
Donald A. Miller, for plaintiffs.
Frank J. Kelley, Attorney General, Robert A. Derengoski, Solicitor General, and William D. Dexter, Richard Roesch, and James B. Saunders, Assistant Attorneys General, for defendant.
Amicus Curiae: Michigan Association of Retarded Children by Strom, Iloehn & Shipman (Thomas L. Butch, of counsel).
Before: Lesinski, C. J., and Holbrook and Levin, JJ.

Opinion:
Holbrook, J.
Plaintiffs are parents of a mentally retarded child who was formally committed to the Lapeer State Home and Training School by the Wayne county probate court in January, 1957, and are within the classification of relatives liable for the care and maintenance of their child under the provision of PA 1965, No 335 (MCLA § 330.651 et seq., Stat Ann 1365 Cum Supp § 14.870[101] et seq.). Pertinent portions of this act are reprinted in the footnote.
Plaintiff brought this action against the Department of Revenue of the State of Michigan, in the circuit court for Wayne county, claiming that the act was unconstitutional for several reasons and requesting relief from its threatened enforcement.
Both parties moved for a summary judgment stating that there was no issue of fact present in the case and that the matter could be disposed of by ruling on the law. After being furnished thorough briefs by all counsel and hearing arguments, the learned trial judge found the act unconstitutional for several reasons. The State of Michigan appeals.
We need consider here only two reasons asserted concerning unconstitutionality of the act. Some of the other aspects of the case are. considered in our opinion in the case of In re Raseman Estate (1969), 18 Mich App 91, to which we make reference.
The plaintiffs, in the trial court and here, assert that the reimbursement statute violates the equal protection clauses of our State and Federal Constitutions. In the recent case of Fox v. Employment Security Commission (1967), 379 Mich 579, 588, 589, Mr. Justice T. M. Kavanagh states:
"This Court has held numerous times that the Michigan Const 1908, art 2, § 1, secures the same right of equal protection as does its counterpart in the Constitution of the United States. Gauthier v. Campbell, Wyant & Cannon Foundry Company (1960), 360 Mich 510, 514, and cases therein cited. The same provisions in Const 1963, art 1, § 1 and 2, must likewise be held to afford the same rights as the Federal equal protection clause.
"There is no doubt that State legislatures have a broad range of discretion in establishing classifications in the exercise of their powers of regulation. However, the constitutional guarantees of equal protection are interposed against discriminations that are entirely arbitrary. In determining what is within legislative discretion and what is arbitrary, regard must be had for the particular subject of the State legislation. There must be a relation between the classification and the purposes of the act in which it is found." Smith v. Cahoon, Sheriff (1931), 283 US 553, 566 (51 S Ct 582, 587, 75 L Ed 1264, 1274); Morey v. Doud (1957), 354 US 457, 465 (77 S Ct 1344, 1350, 1 L Ed 2d 1485, 1491); Beauty Built Construction Corporation v. City of Warren (1965), 375 Mich 229; Palmer Park Theatre Company v. City of Highland Park (1961), 362 Mich 326.
In the case of People v. Chapman (1942), 301 Mich 584, a statute of this State was challenged as un'con stitutionally denying the defendant therein equal protection of the laws. Justice Starr, writing for the Court, stated (pp 597, 598):
"It is well recognized that the legislature may make classifications of persons, provided such classifications are based on substantial distinctions and are in accord with the aims sought to be achieved. (Citing cases.) However, such classification must be neither arbitrary nor capricious, but must rest on reasonable and justifiable foundations. In Haynes v. Lapeer Circuit Judge (1918), 201 Mich 138, p 141, the rule is stated:
" ' "Legislation which, in carrying out a public purpose for the common good, is limited by reasonable and justifiable differentiation to a distinct type or class of persons is not for that reason unconstitutional because class legislation, if germane to the object of the enactment and made uniform in its operation upon all persons of the class to which it naturally applies; but if it fails to include and affect alike all persons of the same class, and extends immunities or privileges to one portion and denies them to others of like kind, by unreasonable or arbitrary subclassification, it comes within the constitutional prohibition against class legislation." '
"See, also, Davidow v. Wadsworth Manfg. Co. (1920), 211 Mich 90, 97-102; Peninsular Stove Co. v. Burton (1922), 220 Mich 284, 286; Smith v. Wayne Probate Judge (1925), 231 Mich 409." (Emphasis supplied.)
The legislature, under the provisions of the act, endeavored to require those of the class liable to reimburse the State in accord with their financial ability to do so. By making the net taxable income as shown by their Federal income tax return the criteria for the amount of reimbursement in all cases (insofar as maximum payment is concerned) the legislature has actually permitted an opposite re- suit. Our Federal income tax law has several legal economic incentive provisions exempting actual income of a taxpayer from being included in net taxable income inter-alia, all interest income from municipal bonds, 1/2 of income profit derived from long term capital gains, and partial depreciation credit and income depletion allowances for those in certain businesses. The inclusion of such actual income not reflected in net taxable income would require many of sufficient ability to reimburse the maximum amount set forth in the act even though their net taxable income may be less than $5,000. It is obvious that any reimbursement statute such as the one under consideration, to be uniform, should not exclude relatives who have actual ability to reimburse. A formula should not be tied to net taxable income shown by a Federal tax return that permits those of greater financial ability to reimburse the State less than others of lesser financial ability in the same class. It permits those more able to pay to reimburse the State less or possibly nothing at all.
We find that PA 1965, No 335 does not accomplish the purpose of the act, i.e., to fairly and uniformly charge those of sufficient ability to reimburse the State in a reasonable manner. Many illustrations of this truth can be made but we deem them unnecessary. Net taxable income under the Federal income tax law does not properly reveal the financial ability of the relative to be charged to reimburse the State for the costs of maintaining the patient.
We conclude that the act is arbitrary, unreasonable and in conflict with the equal protection clause of our constitution and therefore is invalid.
The plaintiffs also assert that the act is unconstitutional in that there is lack of due process in its operation.
The legislature has provided for liability, total or partial, on a formula based on the net taxable income of a relative as shown by his or her Federal income tax return. The law determining net taxable income of any individual is controlled by the Congress of the United States. Thus the legislature has delegated to the Congress the ultimate determination of the amount to be reimbursed by each such relative.
In Auditor General v. Hall (1942), 300 Mich 215, 224, Mr. Justice Butzel stated:
"In far more traditional forms of action both criminal and civil, length of sentences and the amount of damages may vary materially before different judges and juries. As long as there is not an abuse of discretion and a judge remains within the limits of the law, we find there is due process. In re Brewster Street Housing Site (1939), 291 Mich 313, 340, we approved of the following citation from Cincinnati, W. & Z. R. Co. v. Commissioners of Clinton County (1852), 1 Ohio St 77, 88, 89:
" 'The true distinction, therefore, is, between the delegation of power to make the law, which necessarily involves a discretion as to what it shall be, and conferring an authority or discretion as to its execution, to be exercised under and in pursuance of the law. The first cannot be done; to the latter no valid objection can be made.' "
In the case of Dearborn Independent, Inc. v. City of Dearborn (1951), 331 Mich 447, it is stated on pp 454, 455, as follows:
"The requirement in said statute, above italicized, of admission by the post-office department as a second-class mail matter would make the validity of the publication of legal notices depend upon the future as well as present regulations of the United States post-office department. In that respect it offends against the Constitution of our State (1908), art 5, § 1, which, among other things, provides:
" 'The legislative power of the State of Michigan is vested in a senate and house of representatives.'
"The act in question unlawfully attempts to delegate to the United States post-office department the determination of the qualifications of a newspaper to publish legal notices. See King v. Concordia Fire Ins. Co. (1905), 140 Mich 258 (6 Ann Cas 87), (syllabus 5) as follows:
" 'The Michigan standard policy law of 1881 (Act No 149), providing for an insurance commission and authorizing it to prescribe a standard form for fire insurance policies, is unconstitutional because attempting to delegate legislative powers in violation of section 1 of article 4 of the Constitution.'
"At the time of the decision in the King Case the Constitution of 1850 was in effect, which, however, contained substantially the same delegation of the legislative power (Const 1850, art 4, § 1) as we have above quoted from the Constitution of 1908, which latter was in effect when the statute, above quoted (CL 1948, § 691.611), was enacted and also when the said statute was amended in 1933 in the form above quoted. See, also, In re Brewster Street Housing Site (1939), 291 Mich 313, in which, at page 340, the King Case, supra, is cited as establishing the law in this State upon the subject of unconstitutional delegation of legislative power. See, also, Colony Town Club v. Unemployment Compensation Commission (1942), 301 Mich 107, 113.
" 'The State legislatures cannot delegate their sovereign powers to the Federal government. While a statute is valid which adopts existing statutes, rules, or regulations of Congress by reference, an attempt to make future regulations of Congress part of the State law is generally held to be unconstitutional.' 16 CJS, p 343.
" 'Since under the doctrine of the separation of the powers of government the lawmaking function is assigned exclusively to the legislature, it is a cardinal principle of representative government that except when authorized by the Constitution — as may be the case in reference to municipal corporations— the legislature cannot delegate the power to make laws to any other authority or body [citing decisions in 30 States]. Any attempt to abdicate legislative power in any particular field, although valid in form, is unconstitutional and void.' 11 Am Jur 2d, pp 921, 922, § 214."
Also, see, Sutherland Statutory Construction, § 520, p 551.
Although we realize that the Congress may not know or consider its direct power or discretion to vary liability under the act, it still violates the fundamental requirement of constitutional due process and for this reason is invalid.
The trial court ruled the act unconstitutional for other reasons which we deem unnecessary to consider, except to note that the statute fails to provide for a notice of hearing and a hearing before the administrative agency to determine in the first instance the liability of the relatives.
Limited to the reasons set forth in this opinion, we affirm the trial court in its determination that PA 1965, No 335 is unconstitutional and invalid.
No costs, the construction of a statute being involved.
Lesinski, C. J., concurred.
"An act relating to the liability of relatives for the care and maintenance of mentally retarded persons admitted to public institutions; and to prescribe the powers and duties of certain public officers.
"See. 2. Notwithstanding the provisions of sections 9a, 11, 13, 18, 18a or 19 of Act No 151 of the Public Acts of 1923, as amended, being sections 330.19a, 330.21, 330.23, 330.28, 330.28a and 330.29 of the Compiled Laws of 1948, or the provisions of section 2 of chapter 1 of Act No 146 of the Public Acts of 1925, as amended, being section 401.2 of the Compiled Laws of 1948, or the provisions of Act No 146 of the Public Acts of 1925, as amended, being sections 401.1 and 401.21 of the Compiled Laws of 1948, the liability of any relative for the care and maintenance of a mentally retarded person shall be imposed and determined only in accordance with the provisions of this act.
"See. 4. The husband, wife, father and mother of a mentally retarded person shall jointly and severally be liable to the state for the care and maintenance of the committed mentally retarded person until he is 21 years of age or until he has been a patient in a publie institution for a total period of 15 years, whichever first occurs.
"Por the purposes of this section, in the case of an adopted mentally retarded person, 'father' and 'mother' mean the adopting father and mother.
"Sec. 6. Within 30 days after admission of the patient or the effective date of this aet, whichever is later, the relative shall file the signed, completed form with the department of revenue. The form shall be accompanied by a signed copy of the relative's most recent ineome tax return submitted to the United States internal revenue service. The department of revenue shall bill the relative for the amounts of liability determined under the provisions of this aet from the date of admission of the patient or the effective date of this act, whichever is later, through the succeeding June 30. Payments of the amounts shall be made monthly. The first payment shall be made by the end of the month after the mailing of the bill and cover the monthly liability through the end of that month as determined under the provisions of this aet.
"Sec. 7. The form shall contain the name of the patient; the name of the institution to which the patient has been admitted; the name and address of the relatives liable for the care and maintenance of the patient under the provisions of this aet; the schedule of liability set forth in section 8; the net taxable income of the relative last reported to the United States internal revenue service for federal ineome tax purposes; the names and ages of dependents of the relative; and sueh other information as may be required by rules adopted by the department of revenue.
"See. 8. (1) The amount of monthly liability of a relative for the care and maintenance of a mentally retarded person under the provisions of this act shall be originally determined by use of the following schedule:
Net Taxable Monthly Income Liability Net Taxable Monthly Income Liability
$ 0 to 4,999 0 $12,500 to 12,999 95
5.000 to 5,499 20 13.000 to 13,499 100
5.500 to 5,999 25 13.500 to 13,999 105
6.000 to 6,499 30 14.000 to 14,499 110
6.500 to 6,999 35 14.500 to 14,999 115
7.000 to 7,499 40 15.000 to 15,499 120
7.500 to 7,999 45 15.500 to 15,999 125
8.000 to 8,499 50 16.000 to 16,499 130
8.500 to 8,999 55 16.500 to 16,999 140
9.000 to 9,499 60 17.000 to 17,499 150
9.500 to 9,999 65 17.500 to 17,999 160
10.000 to 10,499 70 18.000 to 18,499 170
10.500 to 10,999 75 18.500 to 18,999 180
11.000 to 11,499 80 19.000 to 19,499 190
11.500 to 11,999 85 19.500 to 19,999 200
12.000 to 12,499 90 20.000 and over 210
"See. 10. If the relative believes that the monthly liability as determined by the sehedule does not accurately reflect his current income status or his ability to pay due to changed circumstances or otherwise, the relative may request at any time a determination of liability by the department of revenue. Bor purposes of the determination, the department of revenue may request the relative to supply all relevant financial information and such additional information as may be provided by rules of the department of revenue. After review of the information, the department of revenue shall establish the monthly liability of the relative. If the relative is dissatisfied with the determination, he may appeal the determination to the probate court of the county of residence of the patient. The probate court shall then determine the liability. In no case may the liability determined by the department or by the probate com-t exceed that established by the schedule. Appeals from the determination of the probate court may be made as in other cases.
11. (1) a care maintenance of a patient fails to pay the amount due, the commissioner of revenue may petition the probate court of the county of residence of the patient .and thereupon the court may forthwith issue an execution in the amount so stated and the same shall bo directed to any sheriff or constable of any eounty in the state or the commissioner of Michigan state police. An execution shall not be issued by the probate court if an appeal as provided by section 10 is pending before the probate court and shall not bo issued until at least 15 days from the final determination of the appeal by the probate court and the final determination of tho court is not obeyed by the relative. In addition the commissioner of revenue may bring an action at law wherever the liable relative resides or may be found to recover the amount of payments which the liable relative is delinquent in paying. Before the commissioner of revenue can bring this action of law under this section, he shall be required to show that the relative liable under this act was notified by certified mail of his liability and that a period of at least 15 days has lapsed between the notification date and the date of the commencement of action as provided by this section. The costs of such jiroceedings shall be assessed against the relative only if the relative is held to be liable under the provisions of this act.
"(2) If a liable relative fails to file a form, the monthly liability of the relative is deemed to be $210."
In re Baseman Estate, ante, p 91.
Trellsite Foundry & Stamping Company v. Enterprise Foundry (1901), 365 Mich 209.