Secretary of State v. Department of Treasury
| Decision Date | 31 March 1982 |
| Docket Number | Docket No. 58846 |
| Citation | 317 N.W.2d 238,113 Mich.App. 153 |
| Parties | SECRETARY OF STATE, Plaintiff, v. STATE TREASURER, Defendant, and Southeastern Michigan Transportation Authority, County Road Association of Michigan, Oakland County Road Commission, and Wayne County Road Commission, Intervening Defendants. |
| Court | Court of Appeal of Michigan — District of US |
Frank J. Kelley, Atty. Gen., Robert A. Derengoski, Sol. Gen. and Louis J. Caruso, Patrick McElmurry, and David L. Balas, Asst. Attys. Gen., for plaintiff Secretary of State.
Patrick F. Isom, Asst. Atty. Gen., for defendant Dept. of Treasury.
Downs, Zagaroli & Downs, P. C., Lansing, and Walter Clements, Detroit, for Southeastern Michigan Transp. Authority.
L. W. McEntee, Birmingham, for Oakland County Road Commission.
Bodman, Longley & Dahling, Detroit, by Joseph A. Sullivan, for Wayne County Road Commission.
Miller, Canfield, Paddock & Stone by John D. Pirich, Lansing, and John P. Cushman, Grosse Pointe Farms, for County Road Ass'n of Michigan.
Before ALLEN, P. J., M. J. KELLY and KELLEY, * JJ.
I cannot agree with Judge Allen's holding that the Southeastern Michigan Transportation Authority (SEMTA) tax should continue until the Legislature establishes a termination date. As I read the legislation in question, the tax expired on April 16, 1981.
In an effort to merge the SEMTA and City of Detroit mass transit systems, the Legislature established a tax which would expire three years from the effective date of the act if a merger agreement was not reached. As the expiration date approached, the Legislature amended the act, and it presently reads in part:
"(5) This section shall expire November 15, 1980, unless the transportation system of the city of Detroit has a written merger agreement with the transportation system of the southeastern Michigan transportation authority.
"(6) If, before April 16, 1981, the transportation system of the city of Detroit has been merged with the transportation system of the southeastern Michigan transportation authority, this section shall expire April 15, 1982." 1980 P.A. 89; M.C.L. Sec. 124.416a; M.S.A. Sec. 5.3475(116a).
The 1980 amendment changed the dates and the aim of the legislation. Instead of establishing one date for the merger of the systems, it established one date for entering into a written agreement to merge, and one date for the merger. However, the Legislature never set a date for the expiration of the tax if a merger agreement were entered into but the merger did not take place by April 16, 1981.
When construing a statute, the court must ascertain and give effect to the legislative intention. Production Credit Ass'n of Lansing v. Dep't of Treasury, 404 Mich. 301, 311, 273 N.W.2d 10 (1978). Legislative enactments must be read as a whole so as to harmonize the meaning of their separate provisions. Washtenaw County v. Saline River Intercounty Drainage Board, 80 Mich.App. 550, 555, 264 N.W.2d 53 (1978), lv. den. 402 Mich. 944 (1978). Statutes must be construed to avoid absurd results. In the Matter of Marable, 90 Mich.App. 7, 10, 282 N.W.2d 221 (1979), lv. den. 407 Mich. 871 (1979). Finally, ambiguities in a statute imposing a tax are interpreted in favor of the taxpayer. The E. F. MacDonald Co. v. Dep't of Treasury, 62 Mich.App. 626, 632, fn. 2, 233 N.W.2d 678 (1975).
In this case, the legislative intent in passing 1980 P.A. 89 was to encourage the City of Detroit and SEMTA to merge their mass transportation systems. To accomplish this, the Legislature established two dates. If a written merger agreement were reached before November 15, 1980, the tax would continue. If the systems had actually merged by April 16, 1981, the tax would continue. To allow the tax to continue after April 16, 1981, even though the merger has not occurred, is patently contradictory. This result frustrates the legislative purpose of 1980 P.A. 89. Under such an interpretation, the impetus to merge is devitalized because the tax would continue until the Legislature acted. Therefore, the merger which the Legislature clearly sought is thwarted. I find that the SEMTA tax terminated on April 16, 1981, because SEMTA and the City of Detroit failed to merge their mass transit systems.
I turn now to the consequences of the concurrence of Judge J. J. Kelley who agrees that the taxes in question have expired. Though he believes they expired at an earlier date, his opinion leaves no doubt but that a majority of this panel conclude that as of April 16, 1981, the authority to levy a $2.50 registration fee and a $6 title fee on motor vehicles registered or transferred in Wayne, Oakland, and Macomb counties expired. Therefore, it becomes necessary to address the relief requested by the Secretary of State in his original action for mandamus filed with this Court.
As noted in the first paragraph of Judge Allen's minority opinion, the Secretary of State asks that this Court modify its opinion in Southeastern Michigan Transportation Authority v. Secretary of State, 104 Mich.App. 390, 304 N.W.2d 846 (1981), 1 in three respects: (1) order that the collection of SEMTA taxes cease immediately; (2) order that SEMTA taxes collected after April 15, 1981, and deposited in the escrow account, plus interest earned thereon, be returned to the individuals who paid the tax; and (3) order that the costs of the Secretary of State and the Department of Treasury, in returning said sums, be deducted from the escrow account.
A majority of this panel having determined that the authority to levy SEMTA taxes ceased as of April 16, 1981, it is hereby ordered:
1. That the collection of SEMTA taxes shall cease upon the issuance of final process by the Clerk of this Court, as provided in GCR 821.3. 2
2. That SEMTA taxes collected after April 15, 1981, and subsequently deposited into the escrow account, plus the interest earned thereon after April 15, 1981, be returned to those individuals who paid those taxes.
3. That the costs of the Secretary of State and Department of Treasury, in returning said monies collected after April 15, 1981, be credited to the Department of State and the Department of Treasury from the escrow account.
4. That all SEMTA taxes collected through April 15, 1981, plus the interest earned thereon, continue to be held in the escrow account and not be disbursed until the terms and conditions set forth in SEMTA v. Secretary of State, supra, have been complied with.
Mandamus granted pursuant to the order of this Court. No costs, a public question being involved.
I agree with Judge M. J. Kelly that the SEMTA taxes have expired. However, I write separately because I believe they expired on November 15, 1980. Nevertheless, since the power to levy the taxes in question already had expired by April 16, 1981, I am pleased to join Judge M. J. Kelly in holding that the expiration date is April 16, 1981, and that all sums collected thereafter and placed in the escrow account, plus interest thereon, less costs to the Secretary of State and the Department of Treasury in returning such monies, be returned to the persons paying such tax.
Judge Allen's very thorough dissenting opinion states the history of this litigation and frames all the issues. I do not agree that the November 14, 1980 "agreement" made by the Detroit transportation system and SEMTA was a "merger agreement" within the contemplation of the 1980 amendment of Sec. 16a (4) and (5).
In 1967, the Legislature passed Act 204, allowing for creation of metropolitan transit authorities. This Act was amended by 1976 P.A. 266, adding thereto Sec. 16a which provided for financing the acquisition or improvement and operation of public transportation facilities in a transportation district by imposing taxes on vehicles and on the transfer of motor vehicle titles.
Section 16a also required the deposit of revenue from the taxes in a separate account in the state treasury to be returned on a quarterly basis to the authority in the area in which a transportation district has been created. For years such revenue has accumulated.
To forestall endless collection of the taxes without corresponding benefits from a merged transit system, the Legislature set deadlines in subsections (5) and (6) of Sec. 16a:
"(5) This section shall expire 3 years after the effective date of this amendatory act unless the transportation system of the city of Detroit has been merged with the southeastern Michigan transportation authority.
"(6) If, within 3 years after the effective date of this amendatory act, the transportation system of the city of Detroit has been merged with the southeastern Michigan transportation authority, this section shall expire 5 years after the effective date of this amendatory act." 1976 P.A. 266.
In 1979, the Legislature changed the deadlines:
"(5) This section shall expire April 15, 1980, unless the transportation system of the city of Detroit has been merged with the transportation system of the southeastern Michigan transportation authority.
"(6) If, before April 16, 1980, the transportation system of the city of Detroit has been merged with the transportation system of the southeastern Michigan transportation authority, this section shall expire April 15, 1982." 1979 P.A. 68.
For the obvious purpose of speeding the merger or, alternatively, of stopping the collection of taxes, the Legislature, on April 14, 1980, gave immediate effect to again-changed deadlines:
"(5) This section shall expire November 15, 1980, unless the transportation system of the city of Detroit has a written merger agreement with the transportation system of the southeastern Michigan transportation authority.
"(6) If, before April 16, 1981, the transportation system of the city of Detroit has been merged with the transportation system of the southeastern Michigan transportation authority, this section...
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