Board of St. Ry. Com'rs of City of Detroit v. Wayne County

• Decision Date: 26 August 1969
• Docket Number: Docket No. 3480,No. 1,1
• Citation: 18 Mich.App. 614,171 N.W.2d 669
• Parties: The BOARD OF STREET RAILWAY COMMISSIONERS OF the CITY OF DETROIT, Plaintiff, Appellee and Cross-Appellant, v. COUNTY OF WAYNE, a Political Subdivision of the State of Michigan, and Louis H. Funk, Treasurer of the County of Wayne, Defendants, Appellants and Cross- Appellees, and Attorney General of the State of Michigan, Intervenor
• Court: Court of Appeal of Michigan — District of US

Page 669

171 N.W.2d 669

18 Mich.App. 614

The BOARD OF STREET RAILWAY COMMISSIONERS OF the CITY OF

DETROIT, Plaintiff, Appellee and Cross-Appellant, v. COUNTY OF WAYNE, a Political Subdivision of the State of

Michigan, and Louis H. Funk, Treasurer of the

County of Wayne, Defendants, Appellants

and Cross- Appellees,

and

Attorney General of the State of Michigan, Intervenor.

Docket No. 3480.

Court of Appeals of Michigan, Division No. 1.

Aug. 26, 1969.

Released for Publication Nov. 12, 1969.

Rehearing Denied Nov. 26, 1969.

William L. Cahalan, Pros. Atty., Wayne County, Aloysius J. Suchy and William F. Koney, Asst. Pros. Attys., Wayne County, Detroit, for appellant.

Manuel Zechman, Gen. Counsel Dept. of Street Railways, Detroit, for appellee.

Before T. G. KAVANAGH,* P.J., LEVIN and BEER,** JJ.

LEVIN, Judge.

The plaintiff Department of Street Railways (DSR) has over the years, paid both local taxes on its property situated outside Detroit's city limits and county taxes in accordance with the 1909 amendment to the home rule act, which authorized a home rule city to purchase a transportation utility, ¹ and which provided:

'When a transportation utility is so acquired, state and county taxes shall be paid thereon as if privately owned, also local taxes on any portion of such property lying outside of the city limits.' C.L.1948, § 117.4f (Stat.Ann.1949 Rev. § 5.2079).

The State of Michigan has not levied an ad valorem property tax since 1934.

In 1965 the legislature eliminated the words 'and county' from this statutory provision. ² Accordingly, after the July 2, 1965 effective date of this amendment, the DSR no longer was obligated to pay county taxes and, no State tax being levied, was obligated to pay only taxes levied by local units of government on the DSR's property located outside of Detroit's city limits.

The DSR claims it is entitled to a refund from the county of Wayne of

(1) 1964 Wayne county taxes, paid in January and February, 1965 (before the July 2, 1965, effective date of the amending act), applicable to so much of the county's fiscal year as remained after July 2, 1965; ³ and

(2) 1965 Wayne county taxes, paid under protest in January and February, 1966.

The county contends that the DSR is not entitled to any refund of 1964 taxes and that the DSR was required as well to pay the 1965 taxes because they were assessed as of December 31, 1964, a date before the effective date of the amendment, even though 1965 taxes did not become payable until a date, December 1, 1965, after the effective date of the amendment. The county contends that the amendment creates an exemption from assessment and cannot affect an assessment made before the effective date. Thus, contends the county, since the amendment affects only assessments made after the effective date, the first assessment affected by the amendment was the assessment made as of December 31, 1965, and, accordingly, the first taxes from which the DSR became exempt were 1966 county taxes. ⁴

The county argues that the following statutory provision supports its contention that a change in the taxable status of property after assessment but before the assessment becomes payable does not affect liability to make payment:

'The roll shall be reviewed according to the facts existing on the tax day. The board (of review) shall not add to the roll any property not subject to taxation on the tax day nor shall it remove from the roll any property subject to taxation on said day regardless of any change in the taxable status of such property since such day.' M.C.L.A. § 211.29 (Stat.Ann.1960 Rev. § 7.29).

In our opinion the county reads too much into the provision just quoted. This provision was added by P.A.1941, No. 234. Before this 1941 amendment was enacted, the Michigan Supreme Court had ruled that there was properly stricken from the assessment roll property held at the time of assessment by one who was not tax exempt and thereafter, before the final session of the board of review authorized to review that assessment, transferred to an organization which enjoyed tax exemption. Township of Grosse Ile v. Saunders (1933), 262 Mich. 451, 247 N.W. 912. The 1941 amendment was designed to change the law applicable in that kind of situation. Henceforth, a change after the assessment date in the status of the owner (E.g., from exempt to nonexempt or vice versa) or in the nature of the property (E.g., its enlargement, improvement or destruction) would not affect its taxability or ad valorem value.

The 1941 amendment need not be read, however, as declaring a legislative purpose applicable to all future legislation changing the taxability of persons or property. In our opinion the 1941 legislation does not concern changes in status brought about by new legislation. The 1941 legislature did not mean to tie the hands of future legislatures, nor could it. In determining the legislature's intent in enacting a particular law, we are not encumbered by an absolute rule of construction such as that argued for by the county.

Our task is to determine what the 1965 legislature intended. Did the 1965 legislature intend that the county repay the DSR for county taxes paid in 1965 before the 1965 amendment was enacted? Did it intend that the DSR would, despite the passage of the amendment, be obliged to pay taxes which did not become payable until after the effective date of the amendment and that the benefit of the exemption would be deferred until the time for payment of 1966 taxes?

We have concluded that the 1965 legislature did not intend to require counties to repay municipal transportation utilities any portion of the taxes paid before the amendment became effective, but it did intend to relieve them from liability to pay taxes otherwise thereafter payable even though the assessment date for the taxes thereafter payable preceded the effective date of the amendment.

We arrive at this conclusion not only because that construction of the 1965 amendment appears to be the more sensible construction and the one most likely to be in accord with the legislature's purpose, but also because, read literally, the act as amended provides that the only taxes thereafter 'payable' are State taxes (no longer levied) and local taxes. Thus, after the amendment took effect, county taxes no longer were required to be 'paid.'

As amended effective July 2, 1965, the statutory provision read: 'state taxes shall be Paid thereon as if privately owned, also local taxes on any portion of such property lying outside of the city limits.' ⁵ (Emphasis supplied.) Accordingly, effective July 2, 1965, the DSR, as to property located within Detroit's city limits, was not required to 'pay' anything. Thereafter, all that 'shall be Paid' are 'local taxes on any portion of such property lying outside of the city limits.' Since the taxes for the year 1965 (county fiscal year December 1, 1965--November 30, 1966) did not become payable until December 1, 1965, and, thus, had not been paid on July 2, 1965, there was no further obligation to Pay them. 1964 taxes (county fiscal year December 1, 1964--November 30, 1965) had, however, already been paid when the amendment was adopted. In short, the exemption from taxation effected by the 1965 amendment is an exemption from future payment as well as an exemption from future assessment.

The intervenor's contention that the term 'local taxes' includes county taxes is rejected. Clearly the legislature, at least for this purpose, distinguished between State, county and local taxes. While the word 'local' may for some purposes include a county as well as a city, township, village, etc., in this case it is apparent that the word 'county' and the word 'local' have different meanings. When the legislature eliminated the word 'county,' it meant to exempt municipal transportation utilities from the payment of county taxes as to property located both within and without the limits of the parent city. ⁶

The DSR alternatively contends that this statutory provision, imposing liability to pay taxes on public transportation utilities acquired by home rule cities, violates Michigan's one-object-expressed-in-the-title constitutional provision (Const.1963, art. 4, § 24) ⁷ and, for that reason, it is entitled to recover the taxes paid for 1964 as well as 1965.

It might have been better draftsmanship to have placed the provision concerning the taxability of municipal transportation utilities in the general property tax law (where one might expect to find it) rather than in the home rule act. There is, however, no constitutional requirement that the legislature do a tidy job in legislating. It is perfectly free to enact bits and pieces of legislation in separate acts or to tack them on to existing statutes even though some persons might think that the bits and pieces belong in a particular general statute covering the matter. The constitutional requirement is satisfied if the bits and pieces so enacted are embraced in the object expressed in the title of the amendatory act and the act being amended.

The home rule act ⁸ and other acts providing for the incorporation of cities and other units of local government have been interpreted as having as their object anything germane to their functioning. ⁹

'Most of the great changes in our city organizations have come in under laws which did no more than to indicate by their titles a purpose to incorporate, or reincorporate, or revise the corporate charter of the municipality dealt with. Anything which is meant to form a permanent element in municipal arrangements is pertinent to the corporation.' Holden v. Board of Supervisors of Osceola County (1889), 77 Mich. 202, 204, 43 N.W. 969, 970. ¹⁰

So interpreted, the acquisition of a public transportation utility and anything related to its acquisition and ownership properly could be included in the home rule act. A provision regarding the taxability of a transportation utility's property...