Southeastern Michigan Transp. Authority v. Department of Treasury, Docket Nos. 65884

• Citation: 333 N.W.2d 14,122 Mich.App. 92
• Decision Date: 06 May 1983
• Docket Number: Docket Nos. 65884,66087 and 66129
• Parties: SOUTHEASTERN MICHIGAN TRANSPORTATION AUTHORITY, Plaintiff, v. DEPARTMENT OF TREASURY, Defendant, and Board of County Road Commissioners For the County of Oakland, Intervening Defendant. SECRETARY OF STATE, Plaintiff, v. STATE TREASURER, Defendant, and Southeastern Michigan Transportation Authority, Intervening Defendant, and County Road Association of Michigan, Intervening Defendant-Appellee, and Oakland County Road Commission, Intervening Defendant, and Wayne County Road Commission, Intervening Defendant.
• Court: Court of Appeal of Michigan — District of US

Page 14

333 N.W.2d 14

122 Mich.App. 92

SOUTHEASTERN MICHIGAN TRANSPORTATION AUTHORITY, Plaintiff, v. DEPARTMENT OF TREASURY, Defendant, and Board of County Road Commissioners For the County of

Oakland, Intervening Defendant.

SECRETARY OF STATE, Plaintiff, v. STATE TREASURER, Defendant, and Southeastern Michigan Transportation Authority, Intervening Defendant,

and

County Road Association of Michigan, Intervening Defendant-Appellee,

and

Oakland County Road Commission, Intervening Defendant,

and

Wayne County Road Commission, Intervening Defendant.

Docket Nos. 65884, 66087 and 66129.

Court of Appeals of Michigan.

Submitted Sept. 14, 1982.

Decided Dec. 14, 1982.

Released for Publication May 6, 1983.

Downs, Zargaroli and Downs, P.C. by Tom Downs and Michael A. Zagaroli, Lansing, Walter Clements, Detroit, Cooper and Fink, Lansing by Daniel S. Cooper, Lansing, of counsel, for the Southeastern Michigan Transp. Authority.

Frank J. Kelley, Atty. Gen., Louis J. Caruso, Sol. Gen., and Ronald F. Rose, Patrick McElmurry and David L. Balas, Asst. Attys. Gen., for the Dept. of Treasury and the Secretary of State, and Patrick F. Isom, Asst. Atty. Gen., for the State Treasurer.

L.W. McEntee, Birmingham, for the Bd. of County Road Com'rs for the County of Oakland.

Bodman, Longley & Dahling by Joseph A. Sullivan and Lloyd C. Fell, Detroit, for the Bd. of County Road Com'rs for the County of Wayne.

Miller, Canfield, Paddock and Stone by John D. Pirich, Lansing, and John P. Cushman, Grosse Pointe Farms, for the County Road Ass'n of Michigan.

Before ALLEN, P.J., and T.M. BURNS and KELLY, JJ.

PER CURIAM.

Resolution of two issues, common to the three cases consolidated herein, mercifully will bring to an end two and one-half years' controversy extending over six cases involving the collection and distribution of some $23 million in special taxes collected in the tri-county area on behalf of the Southeastern Michigan Transportation Authority (SEMTA), and currently held in escrow under a prior order of this Court. The issues are: (1) Is 1982 P.A. 56, enacted by the Legislature and given immediate effect upon its signing by the Governor April 6, 1982, constitutional? (2) If so, is it retroactive? If both questions are answered by this Court in the affirmative, the sums collected and held in escrow may be distributed to SEMTA. But first, a brief history of the litigation is necessary.

PRIOR LITIGATION

In 1980, the Attorney General issued OAG, 1979-1980, No. 5737, p. 865 (July 11, 1980), holding that § 16a, 1976 P.A. 266, as amended by 1980 P.A. 89, M.C.L. § 124.416a; M.S.A. § 5.3475(116a), which authorized the collection of special taxes on motor vehicles in the tri-county area, was unconstitutional and void. Upon receiving the opinion, the Secretary of State ordered that collection of the taxes cease. However, in Southeastern Michigan Transportation Authority v. Secretary of State, 104 Mich.App. 390, 304 N.W.2d 846 (1981) (SEMTA I), this Court held that the statute was not unconstitutional on its face and that the Secretary of State should continue to collect the fees imposed, but that the fees were to be placed in escrow until the Legislature amended the statute to assure that no more than 10% of sums collected from two funds would be distributed for comprehensive transportation purposes consistent with Const.1963, art. 9, § 9. The Court did not tell the Legislature what to do but suggested that the Legislature might amend the statute so that there would be one fund into which all motor vehicle taxes be placed and from which disbursements not exceeding 10% could be made.

July 15, 1981, the Secretary of State filed an original action for mandamus, seeking to have this Court determine that the power to collect such special taxes expired either on November 15, 1980 (because a written merger agreement between SEMTA and the transportation system of the City of Detroit, as intended by the Legislature, had not been signed), or on April 16, 1981 (because such merger had not taken place). In Secretary of State v. State Treasurer, 113 Mich.App. 153, 317 N.W.2d 238 (1982) (SEMTA II ), this Court split three ways on when and if the tax expired. Judge Michael J. Kelly was of the opinion that the tax terminated April 16, 1981. Visiting circuit judge J.J. Kelley held that the tax terminated November 15, 1980, but, because he felt the power to levy the taxes had already expired, joined Judge Michael J. Kelly in holding the expiration date was April 16, 1981. Judge Allen wrote that he felt that the power to tax had not expired at all and that the expiration date should be left to the Legislature to clarify. SEMTA II was decided January 27, 1982. An application for leave to appeal to the Supreme Court was promptly filed by SEMTA.

While the appeal in SEMTA II was pending, proceedings in SEMTA III (No. 63872) and SEMTA IV (No. 65164) were filed. In SEMTA III, a writ of mandamus directing the distribution of $2.4 million was sought, such sums representing SEMTA's share of taxes placed in escrow for the period July 30, 1980 (the date when the taxes were first escrowed), through November 15, 1980 (the earliest date on which one judge in SEMTA II concluded the tax expired). By stipulation the parties agreed to the release of the $2.4 million principal but without interest. On July 7, 1982, this Court entered an order directing disbursement to SEMTA of $2.4 million, without interest, and disbursement of collection expenses to the Secretary of State. That order terminated SEMTA III which is now a closed case.

In SEMTA IV claim was made for accrued interest on the sums which were released in SEMTA III. On July 12, 1982, this panel ordered the Department of Treasury to show cause why accrued interest in the amount of $591,228.07 should not be distributed to SEMTA and why the amount of $6,320.82, representing interest earned on the collection expenses incurred by the Secretary of State, should not be distributed to the Secretary of State. On August 12, 1982, an order was entered directing the State Treasurer to disburse such sums to SEMTA and the Secretary of State, respectively. For practical purposes, SEMTA IV is a closed case.

Meanwhile, on April 6, 1982, the Legislature passed and the Governor signed 1982 P.A. 56. That act, which was given immediate effect, provided for the continuation of the SEMTA taxes until December 31, 1982, specified a formula to assure that not more than 10% of certain motor vehicle fees would be distributed for mass transportation purposes (thus eliminating the objection raised to disbursement in SEMTA I ), and eliminated the provisions relative to merger between SEMTA and the transportation system of the City of Detroit. On August 10, 1982, the Supreme Court, in lieu of granting leave to appeal in SEMTA II, vacated the judgment in SEMTA II and remanded the case back to the Court of Appeals "for reconsideration in light of 1982 PA 56". Secretary of State v. State Treasurer, 414 Mich. 874, 322 N.W.2d 710 (1982).

July 29, 1982, SEMTA V (No. 65884) was filed asking this Court to issue a writ of mandamus directing the Department of Treasury to disburse $18.7 million in funds escrowed from November 15, 1980 (the last date of disbursement in SEMTA III ) to April 6, 1982 (the date 1982 PA 56 became effective). On August 10, 1982, 414 Mich. 874, 322 N.W.2d 710, the same date that the Supreme Court remanded SEMTA II to this Court for reconsideration, SEMTA VI (No. 66087) was filed seeking mandamus for $2.9 million in funds placed in escrow from April 6, 1982, to June 30, 1982. On November 5, 1982, SEMTA enlarged upon this request by asking for an additional $2.1 million for the period June 30, 1982, to September 30, 1982, September 30 being the end of the last quarter for which payment is due SEMTA under 1982 P.A. 56. ¹ On September 10, 1982, this Court ordered SEMTA V, SEMTA VI and SEMTA II (On Remand) consolidated, and on October 8, 1982, granted the parties the opportunity to file additional briefs and pleadings. SEMTA and the Attorney General on behalf of the Secretary of State elected to stand on the briefs and pleadings already filed. The Oakland County Road Commission (OCRC) filed additional briefs and pleadings claiming: (1) In SEMTA VI, plaintiff was not entitled to funds escrowed prospectively from April 6, 1982, because 1982 P.A. 56 was in violation of Const.1963, art. 9, § 9; (2) In SEMTA V, plaintiff was not entitled to escrowed funds from November 15, 1980, to June 6, 1982, because 1982 P.A. 56 was not retroactive; (3) In SEMTA II (On Remand), because 1982 P.A. 56 was not retroactive, the majority opinion in SEMTA II should be affirmed. With this factual background in mind, we address the three pending cases.

SEMTA VI

SEMTA VI is the least complex of the three cases since no question of retroactivity is involved. The issue is simply whether this Court should order the release to SEMTA and the Secretary of State of fees collected and held in escrow from the date 1982 P.A. 56 was enacted, April 6, 1982, to September 30, 1982. The Attorney General in his brief on behalf of the Department of Treasury dated August 30, 1982, stated that he had no objection to release of the then estimated $2.9 million providing that any order under which that sum would be released would contain language that the amount released be subject to verification of the computation of the figures and a determination of compliance with the provisions of Const.1963, art. 9, § 9.

However, intervening defendant OCRC objected to any disbursement of funds collected pursuant to 1982 P.A. 56 on grounds that the statute is in violation of Const.1963, art. 9, § 9. Specifically, OCRC claims that 1967 P.A. 204, as most recently amended by 1982 P.A. 56, does not contain the constitutional language demanded by Const.1963, art. 9, § 9, that the monies collected be restricted to conventional roadbuilding and maintenance purposes or to...