SUPERIOR HOTELS LLC V TOWNSHIP OF MACKINAW
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STATE OF MICHIGAN
COURT OF APPEALS
SUPERIOR HOTELS, LLC,
FOR PUBLICATION
March 10, 2009
9:00 a.m.
Petitioner-Appellee,
v
No. 276836
Michigan Tax Tribunal
LC No. 00-313228
MACKINAW TOWNSHIP,
Respondent-Appellant.
Advance Sheets Version
Before: Markey, P.J., and Whitbeck and Gleicher, JJ.
PER CURIAM.
Respondent appeals by right the Michigan Tax Tribunal’s ruling that the State Tax
Commission (STC) lacked jurisdiction under MCL 211.154 to correct the taxable value of
petitioner’s commercial real estate for the tax years 2001 through 2003. The error arose over a
two-year period when petitioner was building a motel on the subject property. During that time
respondent’s former assessor continued to calculate the property’s taxable value on the basis of
the taxable value of the motel established when it was only half completed, which was adjusted
annually for inflation as permitted by MCL 211.27a. The STC entered an order in response to
respondent’s petition under § 154 to correct the taxable valuation of the property for tax year
2001 from $841,604 to $1,622,420, for tax year 2002 from $868,535 to $1,674,338, and for tax
year 2003 from $881,563 to $1,699,453. Petitioner sought relief from the STC’s order in the Tax
Tribunal, which ruled that the STC lacked jurisdiction to correct an assessor’s error in
calculating taxable value because respondent had failed to show that the subject property was
“incorrectly reported or omitted” within the meaning of § 154. We hold that because the Tax
Tribunal erred as a matter of law, its judgment must be reversed.
I. Summary of Facts and Proceedings
The parties submitted this dispute to the Tax Tribunal on stipulated facts. The most
pertinent are:
7.
Superior Hotels began construction of a motel known as a
“Baymont Inn” on the property in 1997 and completed construction of the hotel in
1998.
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8.
The Township assessed the subject property as 50% complete on
December 31, 1997 and calculated the 1998 assessed value and taxable value
accordingly.
9.
For the 1999 tax year (December 31, 1998 assessment date), the
Township assessed the subject property as 100% complete, but calculated the
1999 taxable value by applying the applicable inflation rate to the 1998 taxable
value which 1998 taxable value was based on a 50% completion calculation.
10.
The Township assessed the subject property as 100% complete for
the 1999 tax year and such assessment was reflected on the assessment roll.
11.
No portion of the subject property was “omitted” from assessment
by the Township.
***
15.
The Township filed Michigan Department of Treasury Form L4154, Assessor or Equalization Director’s Notice of Property Incorrectly Reported
or Omitted from Assessment Roll (copy attached as Exhibit A) with the State Tax
Commission alleging an error made by the Township in calculating the 2001,
2002 and 2003 taxable values for the subject property.
16.
On March 7, 2005, Superior Hotels appeared before the State Tax
Commission.
17.
The State Tax Commission accepted the Section 154 petition filed
by the Township and increased the 2001, 2002 and 2003 taxable values of the
subject property as requested by the Township.
At issue in this case is MCL 211.154, the critical first sentence of which provides:
If the state tax commission determines that property subject to the
collection of taxes under this act[1] . . . has been incorrectly reported or omitted
for any previous year, but not to exceed the current assessment year and 2 years
immediately preceding the date the incorrect reporting or omission was
discovered and disclosed to the state tax commission, the state tax commission
shall place the corrected assessment value for the appropriate years on the
appropriate assessment roll. [Emphasis added.]
1
The act referred to is the General Property Tax Act, MCL 211.1 et seq. Section 154 also
includes property subject to taxation under 1974 PA 198, MCL 207.551 to 207.572 (relating to
industrial development districts), 1905 PA 282, MCL 207.1 to 207.21 (property of public
utilities), 1953 PA 189, MCL 211.181 to 211.182 (lessees of tax-exempt property), and property
taxed under the Commercial Redevelopment Act, 1978 PA 255, MCL 207.651 to 207.668.
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The Tax Tribunal first noted that the Legislature did not define the statutory terms
“incorrectly reported” or “omitted,” so it was permitted to construe those terms to determine
whether the STC had jurisdiction under § 154. To ascertain the meaning of the term “incorrectly
report,” the Tax Tribunal relied primarily on Detroit v Norman Allan & Co, 107 Mich App 186;
309 NW2d 198 (1981), and Eagle Glen Golf Course v Surrey Twp, unpublished opinion per
curiam of the Court of Appeals, issued April 19, 2002 (Docket No. 224810), one of several
unpublished cases of this Court that have followed Norman Allan. Quoting from Eagle Glen,
supra at 2, the Tax Tribunal opined that § 154 “permitted ‘assessments to be corrected only if a
property’s status is misrepresented, such as when a taxpayer incorrectly claimed that the property
was tax-exempt.’” Superior Hotels, LLC v Mackinaw Twp, 16 MTTR 119 (Docket No. 313228,
February 23, 2007), at 123. The Tax Tribunal then reasoned on the basis of the stipulated facts,
¶ 11 and ¶ 15 in particular, that “neither the status of the property [as exempt or taxable] nor a
purported omission was at issue.” Id. at 123. Specifically, the Tax Tribunal ruled that
respondent had conceded in ¶ 11 of the stipulated facts that there was no issue concerning
“omitted” property in the present case. Id. Thus, the Tax Tribunal concluded that
“[r]espondent’s own stipulations of fact dictate that MCL 211.154 is not applicable to this
matter.” Superior Hotels, supra at 123.
In reaching its conclusion that § 154 did not confer jurisdiction on the STC in this case,
the Tax Tribunal also relied on dicta in Centre Mgt v City of Ferndale, unpublished opinion per
curiam of the Court of Appeals, issued August 10, 2004 (Docket No. 248266). The Tax
Tribunal, quoting Centre Mgt, supra at 2, opined, “‘MCL 211.154 did not confer jurisdiction on
the STC to correct an assessor’s error in mistakenly undervaluing the property in previous years
because MCL 211.154 does not apply to property conceded to be taxable but alleged to be
improperly assessed.’”2 Superior Hotels, supra at 123. In addition, the Tax Tribunal quoted its
own prior decision in Michigan Basic Property Ins v State Tax Comm, 15 MTTR 423 (Docket
No. 296251, March 13, 2006) at 429, which in turn quoted Eagle Glen, supra at 3, stating
“‘MCL 211.154 does not “confer jurisdiction on the state tax commission to correct an assessor’s
error in mistakenly undervaluing the property, because MCL 211.154 does not apply to property
conceded to be taxable but alleged to be improperly assessed.”’” Superior Hotels, supra at 123124. On the basis of this authority, the Tax Tribunal ruled that § 154 does not grant jurisdiction
to the STC “to correct an assessor’s undervaluing the property for previous years.” Id. at 124.
The Tax Tribunal further ruled that respondent’s error in calculating the subject
property’s taxable value might arguably have been considered a “a clerical error or a mutual
mistake of fact relative to the correct assessment figures, the rate of taxation, or the mathematical
computation relating to the assessing of taxes,” correctible under MCL 211.53b. But the Tax
2
Centre Mgt, supra, relied for this dictum on Norman Allan, supra, and Gen Motors Corp v
State Tax Comm, 200 Mich App 117; 504 NW2d 10 (1993). The latter case held that the STC
could employ the services of an accounting firm in a § 154 proceeding regarding alleged
underreporting of taxable personal property. The Court cited Norman Allan for the proposition
that “MCL 211.154 . . . applies where the issue is whether property thought to be taxable has
been incorrectly reported or omitted.” Gen Motors Corp, supra at 120.
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Tribunal opined that respondent’s failure to appear before the board of review was fatal to
correcting the assessor’s error in calculating taxable value under that section. Superior Hotels,
supra at 124. This same defect, the Tax Tribunal ruled, also deprived it of jurisdiction to correct
the assessor’s error in calculating taxable value. Id., citing MCL 205.735.
Accordingly, the Tax Tribunal entered judgment for petitioner reinstating the original
taxable values for the subject property for the tax years 2001-2003. Superior Hotels, supra at
124-125. Respondent appeals as of right.
II. Standard of Review
Our review of the Tax Tribunal’s decision is limited. Mt Pleasant v State Tax Comm,
477 Mich 50, 53; 729 NW2d 833 (2007). “In the absence of fraud, error of law or the adoption
of wrong principles, no appeal may be taken to any court from any final agency provided for the
administration of property tax laws from any decision relating to valuation or allocation.” Const
1963, art 6, § 28. Factual findings of the Tax Tribunal are final if they are supported by
competent, material, and substantial evidence on the whole record. Id.; Meadowlanes Ltd
Dividend Housing Ass’n v City of Holland, 437 Mich 473, 482; 473 NW2d 636 (1991). Thus, as
here, where the facts are not disputed and fraud is not alleged, our review is limited to whether
the Tax Tribunal made an error of law or adopted the wrong legal principles. Id. at 482-483.
The issue in this case presents a question of statutory interpretation, which this Court reviews de
novo. Wexford Med Group v Cadillac, 474 Mich 192, 202; 713 NW2d 734 (2006).
The primary goal of construing a statute is to determine and give effect to the intent of
the Legislature. Mt Pleasant, supra at 53. The first step in doing this is to review the language
of the statute. United Parcel Service, Inc v Bureau of Safety & Regulation, 277 Mich App 192,
202; 745 NW2d 125 (2007). “If the statutory language is unambiguous, the Legislature is
presumed to have intended the meaning expressed in the statute and judicial construction is not
permissible.” Mt Pleasant, supra at 53. A statutory provision “is ambiguous only if it
‘irreconcilably conflict[s]’ with another provision or when it is equally susceptible to more than a
single meaning.” Lansing Mayor v Pub Service Comm, 470 Mich 154, 166; 680 NW2d 840
(2004) (citation omitted and emphasis in original).
In reading a statute, this Court must assign to every word or phrase its plain and ordinary
meaning unless the Legislature has provided specific definitions or has used technical words or
phrases that have acquired a peculiar and appropriate meaning in the law. MCL 8.3a; Ford
Motor Co v Woodhaven, 475 Mich 425, 439; 716 NW2d 247 (2006). Also, we must not read
statutory words or phrases in isolation; rather, we must read each word or phrase and its
placement in the context of the whole act. Lansing Mayor, supra at 167-168. Thus, we must
consider “both the plain meaning of the critical word or phrase as well as ‘its placement and
purpose in the statutory scheme.’” Sun Valley Foods Co v Ward, 460 Mich 230, 237; 596 NW2d
119 (1999) (citation omitted).
We also note that “‘the construction given to a statute by those charged with the duty of
executing it is always entitled to the most respectful consideration and ought not to be overruled
without cogent reasons.’” In re Complaint of Rovas Against SBC Michigan, 482 Mich 90, 103;
754 NW2d 259 (2008), quoting and adopting the standard quoted in Boyer-Campbell Co v Fry,
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271 Mich 282, 296; 260 NW 165 (1935) (citation and quotation marks omitted). In this regard,
the Legislature has granted the STC general supervisory authority over the assessment of
property for taxation as provided in Const 1963, art 9, § 3, and legislation implementing that
constitutional provision. See MCL 211.150. Clearly, the STC believes that § 154 grants it
jurisdiction to correct the assessor’s error in calculating taxable value in this case and supports
this position in an amicus curiae brief. We accord respectful consideration to the STC’s position.
Nevertheless, “the agency’s interpretation is not binding on the courts, and it cannot conflict with
the Legislature’s intent as expressed in the language of the statute at issue.” In re Complaint of
Rovas, supra at 103.
III. Analysis
We begin our analysis of § 154 by reading it both as a whole and as part of the General
Property Tax Act (GPTA), MCL 211.1 et seq., to determine the Legislature’s overall purpose.
We conclude that in § 154 the Legislature has conferred administrative jurisdiction on the STC
to correct erroneous property tax assessments in specific limited circumstances. Specifically, the
STC may correct an “assessment value” that results in an “assessment change.” MCL
211.154(1). An “assessment change” under § 154 may result “in increased property taxes,”
MCL 211.154(2), or might “result[] in a decreased tax liability,” MCL 211.154(6). That the
STC’s administrative jurisdiction under § 154 to correct erroneous property tax assessments is
not precluded by the appellate jurisdiction of the Tax Tribunal is manifested by the Legislature’s
extension of jurisdiction to correct assessment values “for any previous year, but not to exceed
the current assessment year and 2 years immediately preceding the date the incorrect reporting or
omission was discovered and disclosed to the state tax commission,” MCL 211.154(1). This
time frame is well beyond the limited time to appeal an assessment dispute to the Tax Tribunal,
which, in general, must also be contemporaneously protested before the Board of Review. See
MCL 205.735 and MCL 205.735a.3 Moreover, subsection 7 of § 154 clearly provides that after a
final decision by the STC in a § 154 proceeding, the appellate jurisdiction of the Tax Tribunal
may be invoked, as in this case: “A person to whom property is assessed pursuant to this section
may appeal the state tax commission order to the Michigan tax tribunal.” MCL 211.154(7).
The Legislature originally added subsection 7 to § 154 when 1982 PA 539 added it as
subsection 4, which provided: “A person to whom property is assessed pursuant to this section
may appeal the state tax commission determinations to the Michigan tax tribunal.” This
amendment of § 154 was a clear legislative rejection of Detroit v Jones & Laughlin Steel Corp,
77 Mich App 465, 476; 258 NW2d 521 (1977), which held that proceedings under § 154 are
appellate in nature and must be first brought in the Tax Tribunal. This Court in Norman Allan,
supra at 191, followed Jones & Laughlin Steel. As discussed more fully later in this opinion,
1982 PA 539 also seriously undermined the Norman Allan decision in several other respects.
3
MCL 205.735a supersedes MCL 205.735 for appeals to the Tax Tribunal after December 31,
2006. In general, MCL 205.735a permits owners of property classified as commercial or other
business use to bypass the Board of Review and appeal directly to the Tax Tribunal. See 2006
PA 174.
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Our reading of § 154 is consistent with the legislative scheme regarding both the Tax
Tribunal and the STC. The Tax Tribunal is a “quasi-judicial agency,” MCL 205.721, that is
granted “exclusive and original jurisdiction” of “proceeding[s] for direct review of a final
decision, finding, ruling, determination, or order of an agency relating to assessment, valuation,
rates, special assessments, allocation, or equalization, under property tax laws,” MCL
205.731(a). “A ‘proceeding’ is defined as an ‘appeal’ in MCL 205.703 . . . .” Wikman v City of
Novi, 413 Mich 617, 631; 322 NW2d 103 (1982). Thus, pertinent to this case, the Tax Tribunal
is a quasi-judicial agency having exclusive and original jurisdiction over final agency decisions
“relating to assessment” and “valuation . . . under property tax laws.” MCL 205.731(a). Having
entered an order correcting the taxable value of petitioner’s property, the STC is an “agency” as
defined in MCL 205.703(a), i.e., “a board, official, or administrative agency who is empowered
to make a decision, finding, ruling, assessment, determination, or order that is subject to review
under the jurisdiction of the tribunal or who has collected a tax for which refund is claimed.”4
The Tax Tribunal is vested with “jurisdiction over matters previously heard by the State Tax
Commission as an appellate body.” Jefferson Schools v Detroit Edison Co, 154 Mich App 390,
398; 397 NW2d 320 (1986) (emphasis in original), citing MCL 205.741 and Emmet Co v State
Tax Comm, 397 Mich 550, 555; 244 NW2d 909 (1976).
On the other hand, as already noted, the Legislature in MCL 211.150 has granted the STC
general supervisory authority over the assessment of property for taxation. The Legislature has
specifically conferred on the STC the authority “[t]o receive all complaints as to property liable
to taxation that has not been assessed or that has been fraudulently or improperly assessed, and to
investigate the same, and to take such proceedings as will correct the irregularity complained of,
if any is found to exist.” MCL 211.150(3). This authority implicates the administrative, rather
than the appellate, jurisdiction of the STC. See Jefferson Schools, supra at 398-399. Thus, the
administrative jurisdiction of the STC available under § 154 to correct the “assessment value” of
“property subject to the collection of taxes” that “has been incorrectly reported or omitted”
dovetails harmoniously with the appellate jurisdiction of the Tax Tribunal to review the STC’s
final agency determination or order under § 154. MCL 211.154(7).
The first sentence of § 154 establishes the limited circumstances to which it applies.
There must be an “assessment value” that needs to be corrected as a result of taxable property
having been “incorrectly reported or omitted . . . .” We agree with the Tax Tribunal’s
observation in SSAB Hardtech, Inc v State Tax Comm, 13 MTTR 164 (Docket No. 288672,
March 30, 2004), at 174: “It is reasonable to conclude that section 154 only applies when the
assessment was based upon the incorrect reporting” or omission. (Emphasis in original.) We
also conclude that “assessment value” as used in § 154 means either “taxable value” or 50
percent of the true cash value of property subject to taxation as those terms are defined in the
Michigan Constitution and statutes.
When the Legislature does not provide definitions, courts may consult a dictionary.
Halloran v Bhan, 470 Mich 572, 578; 683 NW2d 129 (2004) (“Undefined statutory terms must
4
2008 PA 125 amended MCL 205.703(a) without changing its substance.
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be given their plain and ordinary meanings, and it is proper to consult a dictionary for
definitions.”). The Random House Webster’s College Dictionary (1992) provides three
definitions for the word “assessment.” It may mean (1) “the act of assessing; appraisal;
evaluation,” (2) “an official valuation of property, used as a basis for levying a tax,” or (3) “an
amount assessed as payable.” Because the word “assessment” in § 154 is coupled with the word
“value” in the context of property subject to taxation, the second definition is the most pertinent.
“For the purpose of collecting ad valorem taxes, or taxes based on the value of property, the
word ‘assessment’ means the determination of the value of property for tax purposes . . . .”
Wikman, supra at 632. See also MCL 211.10(1): “An assessment of all the property in the state
liable to taxation shall be made annually in all townships, villages, and cities by the applicable
assessing officer as provided in section 3 of article IX of the state constitution of 1963 and
section 27a.” The cited constitutional and statutory provisions split Michigan property tax
assessments into “taxable value” and 50 percent of true cash value, so “assessment value” must
include both.
In 1994, Michigan voters approved Proposal A, “which amended article 9, § 3 of the
Michigan Constitution.” Toll Northville Ltd v Northville Twp, 480 Mich 6, 11; 743 NW2d 902
(2008). As amended, Const 1963, art 9, § 3, provides, in part:
The legislature shall provide for the uniform general ad valorem taxation
of real and tangible personal property not exempt by law except for taxes levied
for school operating purposes. The legislature shall provide for the determination
of true cash value of such property; the proportion of true cash value at which
such property shall be uniformly assessed, which shall not, after January 1, 1966,
exceed 50 percent; and for a system of equalization of assessments. For taxes
levied in 1995 and each year thereafter, the legislature shall provide that the
taxable value of each parcel of property adjusted for additions and losses, shall
not increase each year by more than the increase in the immediately preceding
year in the general price level, as defined in section 33 of this article, or 5 percent,
whichever is less until ownership of the parcel of property is transferred. When
ownership of the parcel of property is transferred as defined by law, the parcel
shall be assessed at the applicable proportion of current true cash value.
The purpose of Proposal A, as explained by our Supreme Court, was
“to generally limit increases in property taxes on a parcel of property, as long as it
remains owned by the same party, by capping the amount that the ‘taxable value’
of the property may increase each year, even if the ‘true cash value,’ that is, the
actual market value, of the property rises at a greater rate. However, a
qualification is made to allow adjustments for ‘additions.’” [Toll Northville,
supra at 12, quoting WPW Acquisition Co v City of Troy, 466 Mich 117, 121-122;
643 NW2d 564 (2002).]
The Legislature implemented Proposal A by amending relevant portions of the GPTA.
See 1994 PA 415; Moshier v Whitewater Twp, 277 Mich App 403, 405; 745 NW2d 523 (2007).
In doing so, the Legislature codified Proposal A’s bifurcated assessment system in § 27a of the
GPTA, subsections 1 and 2 of which provide:
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(1) Except as otherwise provided in this section, property shall be assessed
at 50% of its true cash value under section 3 of article IX of the state constitution
of 1963.
(2) Except as otherwise provided in subsection (3),[5] for taxes levied in
1995 and for each year after 1995, the taxable value of each parcel of property is
the lesser of the following:
(a) The property’s taxable value in the immediately preceding year minus
any losses, multiplied by the lesser of 1.05 or the inflation rate, plus all additions.
For taxes levied in 1995, the property’s taxable value in the immediately
preceding year is the property’s state equalized valuation in 1994.
(b) The property’s current state equalized valuation. [MCL 211.27a(1)
and (2) (emphasis added).]
MCL 211.27a(11) provides that “additions” as used in § 27a has the same meaning “as
defined in section 34d.” MCL 211.34d(1)(b) defines “additions,” in pertinent part:6
For taxes levied after 1994, “additions” means, except as provided in
subdivision (c), all of the following:
(i) Omitted real property. As used in this subparagraph, “omitted real
property” means previously existing tangible real property not included in the
assessment. Omitted real property shall not increase taxable value as an addition
unless the assessing jurisdiction has a property record card or other
documentation showing that the omitted real property was not previously included
in the assessment. The assessing jurisdiction has the burden of proof in
establishing whether the omitted real property is included in the assessment.
Omitted real property for the current and the 2 immediately preceding years,
discovered after the assessment roll has been completed, shall be added to the tax
roll pursuant to the procedures established in section 154. For purposes of
determining the taxable value of real property under section 27a, the value of
omitted real property is based on the value and the ratio of taxable value to true
cash value the omitted real property would have had if the property had not been
omitted.
***
5
Subsection 3 of § 27a relates to transfers of ownership, which is not pertinent here.
6
Section 34d was twice amended since the periods pertinent to this case without change to the
portions of § 34d discussed in this opinion. See 2005 PA 12 and 2007 PA 31.
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(iii) New construction. As used in this subparagraph, “new construction”
means property not in existence on the immediately preceding tax day and not
replacement construction. New construction includes the physical addition of
equipment or furnishings, subject to the provisions set forth in section 27(2)(a) to
(o). For purposes of determining the taxable value of property under section 27a,
the value of new construction is the true cash value of the new construction
multiplied by 0.50. [Emphasis added.]
This Court in Kok v Cascade Charter Twp, 255 Mich App 535; 660 NW2d 389 (2003),
addressed a situation similar to the case at bar. In Kok the construction of a residence took two
tax years. The Kok Court was then faced with how to properly calculate its taxable value under
the statutory scheme set forth above. In Kok, the petitioner’s home was only 56 percent
completed when it was first assessed. After the home was completed in the second tax year, the
township assessed it “‘as complete new construction.’” Id. at 537. The home owner appealed to
the Tax Tribunal, contending that the assessment after the home was completed violated Const
1963, art 9, § 3, as amended by Proposal A, and MCL 211.27a(2)(a) because it increased the
home’s taxable value in excess of the taxable value of the first year multiplied by the lesser of
1.05 or the inflation rate. Kok, supra at 537. The Tax Tribunal rejected the petitioner’s claim,
reasoning that the township had simply treated as new construction the difference between the
home’s value as completed in the second tax year and the value of the home as partially
completed the prior tax year. Id. at 538. This Court, after reviewing § 27a and § 34d(1)(b),
concluded that the Legislature had “provided a technical definition of the term ‘addition,’” and
no language in subsection 34d(1)(b)(iii) supported “finding that the taxable value of an addition,
including new construction, can be determined by ‘treat[ing] as new construction the difference
between the value of the house as completed at December 31, 1999, and the value of the partially
completed house at December 31, 1998.’” Kok, supra at 543. Rather, applying the plain
language of pertinent statutes, the Court held:
The portion of the house that was not completed at the time the property
was assessed for the 1999 tax year and that was not included in the assessment of
the taxable value of the property falls within the meaning of “addition” for
purposes of determining the taxable value of the property for the 2000 tax year.
Applying the plain language of the statute, the taxable value of the property for
the 2000 tax year is the lesser of the 1999 taxable value multiplied by the lesser of
1.05 or the inflation rate, “plus the true cash value of the new construction
multiplied [by] 0.50.” MCL 211.27a(2)(a); MCL 211.34d(1)(b)[iii]. [Kok, supra
at 543.]
Applying the plain language of MCL 211.27a(2)(a) and MCL 211.34d(1)(b)(iii) to the
stipulated facts of this case leads to the inescapable conclusion that respondent’s assessor erred
in calculating the taxable value of petitioner’s property for the 1999 tax year (December 31,
1998, assessment date) by failing to include “new construction” that was an “addition” within the
meaning of § 27a(2)(a) and § 34d(1)(b)(iii). Although the assessor properly calculated the first
part of the 1999 taxable value by multiplying the property’s 1998 taxable value “by the lesser of
1.05 or the inflation rate,” MCL 211.27a(2)(a), the assessor failed to add the “the true cash value
of the new construction multiplied by 0.50.” MCL 211.34d(1)(b)(iii). When petitioner’s
property was assessed for the tax year 2000, again by only applying the applicable multiplier to
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the prior year’s taxable value, what was “new construction” in 1999 came within the definition
of “omitted real property” under § 34d(1)(b)(i). This conclusion flows from our determination
that the word “assessment” as used in the pertinent provisions of the GPTA includes both
“taxable value” and 50 percent of true cash value. Thus, the “new construction” completed in
1998 but not included in the determination of the 1999 taxable value became “omitted real
property” as of the 2000 assessment date and assessment dates thereafter because it was
“previously existing tangible real property not included in the assessment.”
MCL
211.34d(1)(b)(i). “Omitted real property for the current and the 2 immediately preceding years,
discovered after the assessment roll has been completed, shall be added to the tax roll pursuant to
the procedures established in section 154.” Id. Consequently, the Tax Tribunal erred as a matter
of law by ruling that the STC lacked jurisdiction under § 154 to issue an order correcting the
taxable value for the subject property for the tax years 2001 to 2003.
Our conclusion is not altered by ¶ 11 of the parties’ stipulation, which states, “No portion
of the subject property was ‘omitted’ from assessment by the Township.” This stipulation was
for the benefit of the Tax Tribunal after the STC had already properly assumed jurisdiction under
§ 154 and issued its order correcting the taxable value of petitioner’s property for the tax years
2001 to 2003. Parties cannot confer jurisdiction on a court by stipulation where it otherwise does
not exist. Bowie v Arder, 441 Mich 23, 56; 490 NW2d 568 (1992). We think the converse
applies: the parties cannot by their stipulation deprive the STC of jurisdiction it had already
properly exercised. Moreover, in its brief and at oral argument, respondent’s counsel explained
that the stipulation in ¶ 11 was not intended as a waiver of its legal argument that the assessor’s
error in this case resulted in “property subject to the collection of taxes” being “incorrectly . . .
omitted for any previous year,” thus confering jurisdiction on the STC to “place the corrected
assessment value for the appropriate years on the appropriate assessment roll.” MCL 211.154(1)
(emphasis added). Rather, respondent contends that it only intended to stipulate that petitioner’s
whole parcel of property was included on its assessment roll. Further, respondent cites
unpublished opinions of this Court that support the legal conclusion that taxable property was
omitted from the “assessment value” within the meaning of § 154. See Eyde Constr Co v City of
Lansing, unpublished opinion per curiam of the Court of Appeals, issued November 25, 2003
(Docket No. 239423), Cohn v West Bloomfield Twp, unpublished opinion per curiam of the
Court of Appeals, issued November 22, 2002 (Docket No. 232917), and Rockind v West
Bloomfield Twp, unpublished per curiam opinion of the Court of Appeals, issued March 2, 2001
(Docket No. 214620). Although not binding precedent, MCR 7.215(C)(1), we find these
unpublished cases persuasive because they are consistent with our reading of the constitutional
and statutory scheme.
Finally, ¶ 11 of the parties’ stipulation must be read together with the rest of the parties’
stipulation to determine whether the facts of this case come within the jurisdiction of the STC
under § 154. When read together as a whole, the stipulated facts make plain that the assessor’s
error in calculating taxable value under § 27a(2) occurred in this case because the assessor failed
to add the new construction in the year it was finished. In the following tax years, this initial
error resulted in the omission of taxable property from taxable value. Thus, the Tax Tribunal
erred as a matter of law by reaching the legal conclusion from the stipulated facts that this case
did not implicate the omission of taxable property within the meaning of § 154.
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Last, we address this Court’s decision in Norman Allan, on which the Tax Tribunal and
petitioner heavily rely for the proposition that the STC’s jurisdiction under § 154 is limited to
circumstances where the status of property as either taxable or exempt has been incorrectly
reported or omitted. Although several unpublished opinions of this Court have followed Norman
Allan, these opinions have precedential value only to the extent that they are persuasive. MCR
7.215(C)(1). Likewise, although Norman Allan has precedential value, it is not binding on this
Court because it was decided before November 1, 1990. MCR 7.215(J)(1). We agree with
respondent and the STC that the Legislature’s adoption of 1982 PA 539 patently undermines this
Court’s reasoning in Norman Allan. Norman Allan was also decided more than a decade before
the adoption of Proposal A, which dramatically altered Michigan’s property tax system.
In Norman Allan, the city of Detroit filed petitions in the Tax Tribunal seeking to
increase the personal property tax assessments of two respondent taxpayers, Norman Allan &
Company and E. L. Rice & Company. With respect to Norman Allan, the city contended that the
company incorrectly reported the value of its personal property subject to taxation. With respect
to E. L. Rice, the city contended, among other things, that the company had omitted certain
inventory from its report of personal property subject to taxation. Norman Allan, supra at 187188. The Tax Tribunal granted an order favoring the city and increasing the assessed value of
Norman Allan’s personal property and adding the assessed value of the omitted inventory in the
case of E. L. Rice. On appeal, this Court reviewed which of two statutory provisions, MCL
211.22 or MCL 211.154, might control the city’s claims. Norman Allan, supra at 189-190.
At the time Norman Allan was decided, the first sentence of § 154 only referred to
“incorrectly reported” property liable to taxation, and the second sentence provided, “‘If it
appears to the commission that no reason in fact or in law exists which would justify an
exemption of such property from taxation for those 2 years, it shall immediately place the total
aggregate assessment value for the omitted years on the then current assessment roll in the
column provided.’” Norman Allan, supra at 190 (emphasis added). The Court held that § 154
“applies when property has been incorrectly reported as exempt property but is thought to be
(i.e., is ‘made to appear to be’) taxable property.” Norman Allan, supra at 191. Although the
Court opined that the language of the statute that it emphasized “reinforced” its conclusion, the
Court pointed to no other language in § 154 that supported its interpretation that § 154 does not
apply when property is undervalued because something other than the status of the property has
been “incorrectly reported.” Norman Allan, supra at 191-193; Cf. Eagle Glen Golf Course,
supra at 3 (Although it acknowledged “that MCL 211.154 has been amended since the decision
in Norman Allan,” it opined that “it is apparent to us that the Norman Allan Court did not rely
solely on this excerpted language in reaching its decision.”) (emphasis in original). 1982 PA 539
eliminated entirely the language emphasized and relied on by the Norman Allan Court and added
“omitted” taxable property to § 154.
The only other basis for the decision in Norman Allan regarding § 154 is the Court’s
conclusion that MCL 211.22 was the more pertinent and controlling statute under the facts of
that case. At the time of the decision, MCL 211.22 provided for correcting both “incorrectly”
reported as well as “omitted” taxable property. Specifically, the statute provided, in part:
“[Testimony Assessment.] If the supervisor or assessing officer, a member
of the state tax commission, or the director or deputy director of the county tax or
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equalization department as mandatorily established under section 34 of this act
shall be satisfied that any statement so made is incorrect * * * [he] is hereby
authorized to set down and assess to such person, firm or corporation so entitled
to be assessed, such amount of real and personal property as he may deem
reasonable and just.
“Whenever examination and investigation reveal that the written statement
of personal property is incorrectly made, that any data submitted is false, or that
certain personal property has been omitted from the statement, the supervisor or
assessing officer may petition the state tax commission to revise the personal
property assessment of the person submitting such erroneous statement, if the
petition is filed on or before June 30 of each year.” [Norman Allan, supra at 189190, quoting extant MCL 211.22 (emphasis in original).]
The Court held that § 22 “applies when the assessor petitions the tribunal to increase the
value on the tax roll of personal property inadequately and improperly reported by a taxpayer but
which is conceded to be taxable.” Norman Allan, supra at 191. But the Court held that the city’s
petition had not been timely filed. Id. at 193. In particular, the Court held that because the city
was “challenging the statements submitted by respondents, it should have proceeded under MCL
211.22; MSA 7.22, and the failure to comply with its requirements necessitates a dismissal of
both cases.” Norman Allan, supra at 193 (emphasis in original).
The Legislature apparently was not pleased with the Norman Allan decision. 1982 PA
539 also eliminated the language in § 22 that the Norman Allan Court relied on in reaching its
conclusions. The amended statute eliminated any need for taxing authorities to timely file a
petition with any other authority, but permitted a supervisor or assessing officer, a member of the
state tax commission, or the director or deputy director of the county tax or equalization
department to make contemporaneous investigations regarding property tax statements. The
1982 legislation also added “omitted” taxable property to § 154 and expanded the scope of that
section to correct “assessment value” to “not to exceed the current assessment year and 2 years
immediately preceding the date of discovery . . . .” MCL 211.154, as amended by 1982 PA 539.
In sum, the Legislature’s adoption of 1982 PA 539 virtually eliminated all language in
both MCL 211.154 and MCL 211.22 on which the Norman Allan Court relied in its analysis of
those two statutory provisions. “[W]hen a legislative amendment is enacted soon after a
controversy arises regarding the meaning of an act, it is logical to regard the amendment as a
legislative interpretation of the original act . . . .” Adrian School Dist v Michigan Pub School
Employees’ Retirement Sys, 458 Mich 326, 337; 582 NW2d 767 (1998) (citations and quotation
marks omitted). The Legislature consolidated the authority of the STC under § 154 to correct
incorrect assessment values that result when property subject to taxation is “incorrectly reported
or omitted” and eliminated the language in the second sentence of § 154 emphasized and relied
on by the Norman Allen Court in reaching its conclusions. 1982 PA 539 must be considered the
Legislature’s rejection of the Norman Allan decision. Moreover, the plain language of § 154,
read in light of the post-Proposal A tax scheme, supports the conclusion that § 154 confers
jurisdiction on the STC whenever taxable property has been “incorrectly reported or omitted” for
whatever reason and an incorrect “assessment value” results. Therefore, we conclude that
Norman Allan is not reliable precedent or authority for our interpretation of § 154.
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For all the foregoing reasons, we hold that the Tax Tribunal erred as a matter of law by
concluding that the STC lacked jurisdiction in this case. Therefore, we reverse the judgment of
the Tax Tribunal and reinstate the order of the STC correcting the taxable values of petitioner’s
property for the tax years 2001 to 2003. As the prevailing party, respondent may tax costs
pursuant to MCR 7.219.
/s/ Jane E. Markey
/s/ William C. Whitbeck
/s/ Elizabeth L. Gleicher
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