Saginaw County v. State Tax Commission

• Citation: 54 Mich.App. 160,220 N.W.2d 706
• Decision Date: 26 June 1974
• Docket Number: No. 2,17463 and 17468,Docket Nos. 17462,2
• Parties: SAGINAW COUNTY, Plaintiff-Appellant, v. STATE TAX COMMISSION, Defendant-Appellee. KALAMAZOO COUNTY, Plaintiff-Appellant, v. STATE TAX COMMISSION, Defendant-Appellee. SANILAC COUNTY, Plaintiff-Appellant, v. STATE TAX COMMISSION, Defendant-Appellee
• Court: Court of Appeal of Michigan (US)

Page 706

220 N.W.2d 706

54 Mich.App. 160

SAGINAW COUNTY, Plaintiff-Appellant, v. STATE TAX COMMISSION, Defendant-Appellee.

KALAMAZOO COUNTY, Plaintiff-Appellant, v. STATE TAX COMMISSION, Defendant-Appellee.

SANILAC COUNTY, Plaintiff-Appellant, v. STATE TAX COMMISSION, Defendant-Appellee.

Docket Nos. 17462, 17463 and 17468.

Court of Appeals of Michigan, Division No. 2.

June 26, 1974.

Released for Publication Aug. 14, 1974.

William S. Bovill, Smith, Bovill, Joseph & Wolf, Saginaw, for Saginaw county.

Duane T. Triemstra, Donald A. Burge, Pros. Atty., Kalamazoo, for Kalamazoo County.

W. J. Drillock, Drillock & Atkins, Marlette, for Sanilac County.

Frank J. Kelley, Atty. Gen., Robert A. Derengoski, Sol. Gen., Richard R. Roesch, Asst. Atty. Gen., for defendant-appellee.

Before DANHOF, P.J., and T. M. BURNS and CARLAND,* JJ.

DANHOF, Presiding Judge.

On May 29, 1973, the State Tax Commission (STC) adopted the 1973 equalized valuations for all 83 counties in Michigan. Saginaw, Kalamazoo and Sanilac counties appeal that decision by leave granted November 15, 1973. The cases were consolidated for review because each raises a common issue of constitutional significance for our consideration.

I

Plaintiffs contend that M.C.L.A. § 16.186; M.S.A. § 3.29(86) ¹ violates Const.1963, art. 4, § 25, which reads:

'No law shall be revised, altered or amended by reference to its title only. The section or sections of the act altered or amended shall be re-enacted and published at length.' ²

The statute in issue reads:

'The state board of equalization created under section 1 of Act No. 44 of the Public Acts of 1911, as amended, being section 209.1 of the Compiled Laws of 1948, is transferred by a type III transfer to the state tax commission, and the state board of equalization is abolished.'

Plaintiffs argue that the abolition of the State Board of Equalization and the transfer of its functions, duties and powers to the STC is null and void. They rely on Alan v. Wayne County, 388 Mich. 210, 285, 200 N.W.2d 628, 665 (1972), which indicates that when the Legislature intends to amend or alter existing statutes, the intention should be stated specifically 'and those statutes must be amended or altered directly and republished as contemplated by Const.1963, art 4, § 25'. The statute at issue abolishes and transfers the authority and functions of the State Board of Equalization without republishing at lengh the statutory framework thus amended for state equalization. ³ Therefore, plaintiffs argue that all equalizations set by the STC are void.

Prior to Alan, supra, statutes which similarly abolished existing departments or offices, substituted the duties of various officials, or transferred powers to newly created entities without republishing at length the acts amended had been held not to violate the predecessors of art 4, § 25. ⁴ The Alan Court, though agreeing with Justice Cooley in Mahaney that the constitutional provision must be given a reasonable interpretation, set nevertheless a higher standard for compliance with the plain words of the Constitution in light of the more highly sophisticated legislative tools available today. ⁵

Nevertheless, the Alan Court acknowledged that it was not confronted with a situation requiring republication of a lengthy body of laws. ⁶ In the instant case, M.C.L.A. § 16.186, Supra, is but one of approximately 190 sections comprising the Executive Organization Act of 1965. ⁷ The entire act constitutes a sequence of similar consolidations, transfers and abolitions. The theory advocated by plaintiffs applies with equal force to the entire act because none of its sections republishes at length the statutes affected. To strike one section is to strike the entire act sooner or later. Yet the act itself is a result of the people's mandate in art. 5, § 2 of the same Constitution which it allegedly offends:

'All executive and administrative officers, agencies and instrumentalities of the executive branch of state government and their respective functions, powers and duties, except for the office of governor and lieutenant governor and the governing bodies of institutions of higher education provided for in this constitution, shall be allocated by law among and within not more than 20 principal departments. They shall be grouped as far as practicable according to major purposes.'

This mandate was not self-executing, but required implementation by law. ⁸ Reorganization by statute was to be completed within two years after the Constitution took effect on January 1, 1964. ⁹

One of the most basic rules of statutory construction is to read statutes as a whole. Provisions should be read in context, not in isolation, and should be harmonized to give effect to all. Common sense dictates that the same approach be taken when the Constitution is the subject of inquiry. By art. 5, § 2, the delegates to the Constitutional Convention envisioned consolidation and reorganization of the executive departments. In view of the time limitation on reorganization by statute, we cannot presume that the framers intended that all the compiled laws effected should be re-enacted and republished at length in the process. 'The Constitution is a practical instrument', as Justice Catron remarked about is Federal brother, 'made by practical men * * *'. ¹⁰ A contrary holding would bring the wheels of government screeching to a halt and would produce a situation where, 'from mere immensity of material, it would be impossible to tell what the law was'. ¹¹

A major reason for the language of art. 4, § 25 'is to require that notice be given to the legislature and the public of what is being changed and the content of the act as revised, altered or amended'. ¹² In the unique context of this case, and giving the provision a reasonable and practical interpretation, ¹³ we hold that this notice requirement is satisfied by the 1965 act and that neither the Legislature nor the people were misled or deceived as to the act's scope and effect.

II

Saginaw and Kalamazoo Counties contend that equalization proceedings are subject to the Administrative Procedures Act of 1969. ¹⁴ Republic Development Corp. v. State Tax Commission, 38 Mich.App. 166, 195 N.W.2d 923 (1972), and Fisher-New Center Co. v. Detroit, 38 Mich.App. 750, 197 N.W.2d 272 (1972), held that § 152, as amended, of the general property tax act ¹⁵ exempted the STC from the contested case provisions of the Administrative Procedures Act. Plaintiffs, while recognizing these cases, find them distinguishable because they were concerned with individual assessment appeals, rather than appeals from state equalization. We disagree. State equalization is an integral part of individual assessment determinations because it finalizes local assessed valuations which are merely the tentative tax base. ¹⁶ Whereas individual assessment appeals do not have a drastic effect upon the operations of local government, an equalization appeal could have such an effect. Therefore, the policy which favors exemption of individual assessment appeals from the procedural requirements of the administrative procedures act furnishes even stronger reason for excluding equalization proceedings and appeals from a time-consuming process which would necessarily impede the apportionment and collection of taxes.

III

Saginaw and Kalamazoo Counties contend that the STC violated the public board meetings act ¹⁷ by voting their final report in private session. The STC agrees that its final equalization proceedings are subject to the act, but argues that the proceedings of May 29, 1973 fully complied therewith. The purpose of the public board meeting act is to provide members of the public with the opportunity to be present and observe the manner in which the public business is transacted. ¹⁸ Plaintiffs do not deny that the May 29 session was open to the public and attended by the representatives of the several counties (including plaintiffs), members of the press, the Legislature and others. Their claim is rather that the equalizations are void because the commissioners, following adjourment to consider the statements of the county representatives, did not reconvene their meeting to announce completion of their task before release of their final report. Assuming Arguendo noncompliance withe the act, the record is barren of any indication that plaintiffs were prejudiced thereby or that equalizations were based on factors other than were discussed or available to all in attendance.

IV

Saginaw and Kalamazoo Counties contend that the STC erred when it rejected the argument that 'true cash value' ¹⁹ means 'net proceeds in the hands of the hypothetical seller.' Plaintiffs argue that the expenses of closing a sale do not represent economic benefit to the seller and that therefore the true cash value of taxable property does not include expenses customarily incurred for abstracting, deed preparation, realtor's commission, revenue stamps, termite inspection and financing points. Plaintiffs cite no authority for this proposition. There is authority which we find persuasive and which holds that such a construction would be inconsistent with the term 'true and fair value' contained in the Constitution of the State of Washington. ²⁰ Furthermore, assuming that we could accept plaintiffs' definition of true cash value, still this would furnish no basis for judicial intervention in plaintiffs' behalf into the 1973 state equalization proceedings since the taxable wealth of all 83 counties was determined by the same standard of usual selling price or fair market value. Where there is conflict between the standards of cash value and equality of treatment, the latter should predominate. ²¹

V

Sanilac County contends that the 1973 increase in its equalized value amounts to fraud and that equalization should have been fixed at 30% Less than what the STC determined it to be. This claim is considerable weakened when it is seen that the...