MICHIGAN CONSTITUTION
ARTICLE IX
FINANCE AND TAXATION
Art. IX §1 | TAXES FOR STATE EXPENSES
Art. IX §2 | POWER OF TAXATION, RELINQUISHMENT
Art. IX §3 | PROPERTY TAXATION; UNIFORMITY; ASSESSMENTS; LIMITATIONS; CLASSES; APPROVAL OF LEGISLATURE
Art. IX §4 | EXEMPTION OF RELIGIOUS OR EDUCATIONAL NONPROFIT ORGANIZATIONS
Art. IX §5 | ASSESSMENT OF PROPERTY OF PUBLIC SERVICE BUSINESSES
The rate of taxation on such property shall be the average rate levied upon other commercial, industrial, and utility property in this state under the general ad valorem tax law, or, if the legislature provides, the rate of tax applicable to the property of each business enterprise assessed by the state shall be the average rate of ad valorem taxation levied upon other commercial, industrial, and utility property in all counties in which any of such property is situated.
Art. IX §6 | REAL AND TANGIBLE PERSONAL PROPERTY; LIMITATION ON GENERAL AD VALOREM TAXES; ADOPTION AND ALTERATION OF SEPARATE TAX LIMITATIONS; EXCEPTIONS TO LIMITATIONS; PROPERTY TAX ON SCHOOL DISTRICT EXTENDING INTO 2 OR MORE COUNTIES
The foregoing limitations shall not apply to taxes imposed for the payment of principal and interest on bonds approved by the electors or other evidences of indebtedness approved by the electors or for the payment of assessments or contract obligations in anticipation of which bonds are issued approved by the electors, which taxes may be imposed without limitation as to rate or amount; or, subject to the provisions of Section 25 through 34 of this article, to taxes imposed for any other purpose by any city, village, charter county, charter township, charter authority or other authority, the tax limitations of which are provided by charter or by general law.
In any school district which extends into two or more counties, property taxes at the highest rate available in the county which contains the greatest part of the area of the district may be imposed and collected for school purposes throughout the district.
Art. IX §7 | INCOME TAX
Art. IX §8 | SALES AND USE TAXES
Beginning May 1, 1994, the sales tax shall be imposed on retailers at an additional rate of 2% of their gross taxable sales of tangible personal property not exempt by law and the use tax at an additional rate of 2%. The proceeds of the sales and use taxes imposed at the additional rate of 2% shall be deposited in the state school aid fund established in section 11 of this article. The allocation of sales tax revenue required or authorized by sections 9 and 10 of this article does not apply to the revenue from the sales tax imposed at the additional rate of 2%.
No sales tax or use tax shall be charged or collected from and after January 1, 1975 on the sale or use of prescription drugs for human use, or on the sale or use of food for human consumption except in the case of prepared food intended for immediate consumption as defined by law. This provision shall not apply to alcoholic beverages.
Art. IX §9 | USE OF SPECIFIC TAXES ON FUELS FOR TRANSPORTATION PURPOSES; AUTHORIZATION OF INDEBTEDNESS AND ISSUANCE OF OBLIGATIONS
Not less than 90 percent of the specific taxes, except general sales and use taxes and regulatory fees, imposed directly or indirectly on fuels sold or used to propel motor vehicles upon highways and on registered motor vehicles shall, after the payment of necessary collection expenses, be used exclusively for the transportation purposes of planning, administering, constructing, reconstructing, financing, and maintaining state, county, city, and village roads, streets, and bridges designed primarily for the use of motor vehicles using tires, and reasonable appurtenances to those state, county, city, and village roads, streets, and bridges.
The balance, if any, of the specific taxes, except general sales and use taxes and regulatory fees, imposed directly or indirectly on fuels sold or used to propel motor vehicles upon highways and on registered motor vehicles, after the payment of necessary collection expenses; 100 percent of the specific taxes, except general sales and use taxes and regulatory fees, imposed directly or indirectly on fuels sold or used to propel aircraft and on registered aircraft, after the payment of necessary collection expenses; and not more than 25 percent of the general sales taxes, imposed directly or indirectly on fuels sold to propel motor vehicles upon highways, on the sale of motor vehicles, and on the sale of the parts and accessories of motor vehicles, after the payment of necessary collection expenses; shall be used exclusively for the transportation purposes of comprehensive transportation purposes as defined by law.
The legislature may authorize the incurrence of indebtedness and the issuance of obligations pledging the taxes allocated or authorized to be allocated by this section, which obligations shall not be construed to be evidences of state indebtedness under this constitution.
Art. IX §10 | SALES TAX; DISTRIBUTION TO LOCAL GOVERNMENTS
Art. IX §11 | STATE SCHOOL AID FUND; SOURCE; DISTRIBUTION; GUARANTEE TO LOCAL SCHOOL DISTRICT
Art. IX §12 | EVIDENCE OF STATE INDEBTEDNESS
Art. IX §13 | PUBLIC BODIES, BORROWING POWER
Art. IX §14 | STATE BORROWING; SHORT TERM
Art. IX §15 | LONG TERM BORROWING BY STATE
Art. IX §16 | STATE LOANS TO SCHOOL DISTRICTS
Amount of loans.
If the minimum amount which would otherwise be necessary for a school district to levy in any year to pay principal and interest on its qualified bonds, including any necessary allowances for estimated tax delinquencies, exceeds 13 mills on each dollar of its assessed valuation as finally equalized, or such lower millage as the legislature may prescribe, then the school district may elect to borrow all or any part of the excess from the state. In that event the state shall lend the excess amount to the school district for the payment of principal and interest. If for any reason any school district will be or is unable to pay the principal and interest on its qualified bonds when due, then the school district shall borrow and the state shall lend to it an amount sufficient to enable the school district to make the payment.Qualified bonds.
The term “qualified bonds” means general obligation bonds of school districts issued for capital expenditures, including refunding bonds, issued prior to May 4, 1955, or issued thereafter and qualified as provided by law pursuant to Section 27 or Section 28 of Article X of the Constitution of 1908 or pursuant to this section.Repayment of loans, tax levy by school district.
After a school district has received loans from the state, each year thereafter it shall levy for debt service, exclusive of levies for nonqualified bonds, not less than 13 mills or such lower millage as the legislature may prescribe, until the amount loaned has been repaid, and any tax collections therefrom in any year over and above the minimum requirements for principal and interest on qualified bonds shall be used toward the repayment of state loans. In any year when such levy would produce an amount in excess of the requirements and the amount due to the state, the levy may be reduced by the amount of the excess.Bonds, state loans, repayment.
Subject to the foregoing provisions, the legislature shall have the power to prescribe and to limit the procedure, terms and conditions for the qualification of bonds, for obtaining and making state loans, and for the repayment of loans.Power to tax unlimited.
The power to tax for the payment of principal and interest on bonds hereafter issued which are the general obligations of any school district, including refunding bonds, and for repayment of any state loans made to school districts, shall be without limitation as to rate or amount.Rights and obligations to remain unimpaired.
All rights acquired under Sections 27 and 28 of Article X of the Constitution of 1908, by holders of bonds heretofore issued, and all obligations assumed by the state or any school district under these sections, shall remain unimpaired.Art. IX §17 | PAYMENTS FROM STATE TREASURY
Art. IX §18 | STATE CREDIT
Investment of public funds.
This section shall not be construed to prohibit the investment of public funds until needed for current requirements or the investment of funds accumulated to provide retirement or pension benefits for public officials and employees, as provided by law.Art. IX §19 | SUBSCRIPTION TO OR INTEREST IN STOCK BY STATE PROHIBITED; EXCEPTIONS
(b) Endowment funds created for charitable or educational purposes may be invested as provided by law governing the investment of funds held in trust by trustees.
(c) Funds held as permanent funds or endowment funds other than those described in subdivision (b) may be invested as provided by law.
Art. IX §20 | DEPOSIT OF STATE MONEY IN CERTAIN FINANCIAL INSTITUTIONS; REQUIREMENTS
Art. IX §21 | ACCOUNTING FOR PUBLIC MONEYS
Accounting and auditing for local governments.
The legislature shall provide by law for the maintenance of uniform accounting systems by units of local government and the auditing of county accounts by competent state authority and other units of government as provided by law.Art. IX §22 | EXAMINATION AND ADJUSTMENT OF CLAIMS AGAINST STATE
Art. IX §23 | FINANCIAL RECORDS; STATEMENT OF REVENUES AND EXPENDITURES
Art. IX §24 | PUBLIC PENSION PLANS AND RETIREMENT SYSTEMS, OBLIGATION
Financial benefits, annual funding.
Financial benefits arising on account of service rendered in each fiscal year shall be funded during that year and such funding shall not be used for financing unfunded accrued liabilities.Art. IX §25 | VOTER APPROVAL OF INCREASED LOCAL TAXES; PROHIBITIONS; EMERGENCY CONDITIONS; REPAYMENT OF BONDED INDEBTEDNESS GUARANTEED; IMPLEMENTATION OF SECTION
Art. IX §26 | LIMITATION ON TAXES; REVENUE LIMIT; REFUNDING OR TRANSFERRING EXCESS REVENUES; EXCEPTIONS TO REVENUE LIMITATION; ADJUSTMENT OF STATE REVENUE AND SPENDING LIMITS
For any fiscal year in the event that Total State Revenues exceed the revenue limit established in this section by 1% or more, the excess revenues shall be refunded pro rata based on the liability reported on the Michigan income tax and single business tax (or its successor tax or taxes) annual returns filed following the close of such fiscal year. If the excess is less than 1%, this excess may be transferred to the State Budget Stabilization Fund.
The revenue limitation established in this section shall not apply to taxes imposed for the payment of principal and interest on bonds, approved by the voters and authorized under Section 15 of this Article, and loans to school districts authorized under Section 16 of this Article.
If responsibility for funding a program or programs is transferred from one level of government to another, as a consequence of constitutional amendment, the state revenue and spending limits may be adjusted to accommodate such change, provided that the total revenue authorized for collection by both state and local governments does not exceed that amount which would have been authorized without such change.
Art. IX §27 | EXCEEDING REVENUE LIMIT; CONDITIONS
(2) the request is specific as to the nature of the emergency, the dollar amount of the emergency, and the method by which the emergency will be funded; and
(3) the legislature thereafter declares an emergency in accordance with the specific of the governor’s request by a two-thirds vote of the members elected to and serving in each house. The emergency must be declared in accordance with this section prior to incurring any of the expenses which constitute the emergency request. The revenue limit may be exceeded only during the fiscal year for which the emergency is declared. In no event shall any part of the amount representing a refund under Section 26 of this Article be the subject of an emergency request.
Art. IX §28 | LIMITATION ON EXPENSES OF STATE GOVERNMENT
Art. IX §29 | STATE FINANCING OF ACTIVITIES OR SERVICES REQUIRED OF LOCAL GOVERNMENT BY STATE LAW
Art. IX §30 | REDUCTION OF STATE SPENDING PAID TO UNITS OF LOCAL GOVERNMENT
Art. IX §31 | LEVYING TAX OR INCREASING RATE OF EXISTING TAX; MAXIMUM TAX RATE ON NEW BASE; INCREASE IN ASSESSED VALUATION OF PROPERTY; EXCEPTIONS TO LIMITATIONS
The limitations of this section shall not apply to taxes imposed for the payment of principal and interest on bonds or other evidence of indebtedness or for the payment of assessments on contract obligations in anticipation of which bonds are issued which were authorized prior to the effective date of this amendment.
Art. IX §32 | SUIT TO ENFORCE SECTIONS 25 TO 31
Art. IX §33 | DEFINITIONS APPLICABLE TO SECTIONS 25 TO 32
“Total State Revenues” includes all general and special revenues, excluding federal aid, as defined in the budget message of the governor for fiscal year 1978-1979. Total State Revenues shall exclude the amount of any credits based on actual tax liabilities or the imputed tax components of rental payments, but shall include the amount of any credits not related to actual tax liabilities.
“Personal Income of Michigan” is the total income received by persons in Michigan from all sources, as defined and officially reported by the United States Department of Commerce or its successor agency.
“Local Government” means any political subdivision of the state, including, but not restricted to, school districts, cities, villages, townships, charter townships, counties, charter counties, authorities created by the state, and authorities created by other units of local government.
“General Price Level” means the Consumer Price Index for the United States as defined and officially reported by the United States Department of Labor or its successor agency.
Art. IX §34 | IMPLEMENTATION OF SECTIONS 25 TO 33
Art. IX §35 | MICHIGAN NATURAL RESOURCES TRUST FUND
(2) Until the Michigan state parks endowment fund reaches an accumulated principal of $800,000,000.00, the amount accumulated in the trust fund in any state fiscal year shall not exceed $500,000,000.00, exclusive of interest and earnings and money authorized for expenditure pursuant to this section. This amount is the accumulated principal limit. The accumulated principal of the trust fund shall not be expended. However, the interest and earnings of the trust fund shall be expended for the following:
(b) Development, renovation, and redevelopment of public recreation facilities.
(c) Administration of the trust fund, which may include payments in lieu of taxes on state owned land purchased through the trust fund.
(4) After the Michigan state parks endowment fund reaches an accumulated principal of $800,000,000.00, the accumulated principal limit for the trust fund as provided for in subsection (2) no longer applies and the revenues from bonuses, rentals, delayed rentals, and royalties described in subsection (1) shall be deposited into the trust fund. From these revenues each year the legislature may provide, in addition to the expenditure of interest and earnings authorized by this section, that a portion, not to exceed 50 percent, may be expended during subsequent state fiscal years for the purposes of this section.
(5) Not less than 25 percent of the money made available for expenditure from the trust fund from any state fiscal year shall be expended for acquisition of land and rights in land for recreational uses or protection of the land because of its environmental importance or its scenic beauty, and not less than 25 percent of the money made available for expenditure from the trust fund from any state fiscal year shall be expended for development, renovation, and redevelopment of public recreation facilities.
(6) The legislature shall provide by law for the establishment of a trust fund board within the department of natural resources. The trust fund board shall recommend the projects to be funded. The board shall submit its recommendations to the governor who shall submit the board’s recommendations to the legislature in an appropriations bill.
(7) The legislature shall provide by law for the implementation of this section.
Art. IX §35a | MICHIGAN STATE PARKS ENDOWMENT FUND
(2) The accumulated principal of the endowment fund shall not exceed $800,000,000.00, which amount shall be annually adjusted pursuant to the rate of inflation beginning when the endowment fund reaches $800,000,000.00. This annually adjusted figure is the accumulated principal limit of the endowment fund.
(3) Money available for expenditure from the endowment fund as provided in this section shall be expended for all of the following:
(b) Operations and maintenance at Michigan State Parks.
(c) Acquisition of land or rights in land for Michigan State Parks.
(d) Administration of the endowment fund.
(5) Money in the endowment fund shall be expended as follows:
(b) Once the accumulated principal in the endowment fund reaches $800,000,000.00, only the interest and earnings of the endowment fund in excess of the amount necessary to maintain the endowment fund’s accumulated principal limit may be made available for expenditure.
(7) The legislature shall provide by law for implementation of this section.
Footnotes
Compiler’s Note:
This section was originally added to the Constitution by S.J.R. E as section 36, Eff. Dec. 24, 1994, but was compiled as § 36[1] to distinguish it from another section 36 added to Article 9, Eff. Apr. 30, 1994, which pertained to a tax on tobacco products. When this section (§ 36[1]) was amended by S.J.R. T, Eff. Sept. 21, 2002, it was renumbered as section 35a.Art. IX §36 | TAX ON TOBACCO PRODUCTS; DEDICATION OF PROCEEDS
Art. IX §37 | MICHIGAN VETERANS' TRUST FUND
All money in the fund established by 1946 (1st Ex Sess) PA 9 shall be transferred to the Michigan veterans’ trust fund. The trust fund may additionally receive appropriations, money, or other things of value. The state treasurer shall direct investment of the fund as provided by law, and credit interest and earnings of the fund to the fund. Except for the state treasurer’s actions authorized under this section, an expenditure or transfer of a trust fund asset, interest, or earnings may be made only upon the authorization of a majority of the members of the Michigan veterans’ trust fund board of trustees.
Art. IX §38 | MICHIGAN VETERANS' TRUST FUND BOARD OF TRUSTEES; ESTABLISHMENT
Art. IX §39 | MICHIGAN VETERANS' TRUST FUND BOARD OF TRUSTEES; ADMINISTRATION OF TRUST FUND
Art. IX §40 | MICHIGAN CONSERVATION AND RECREATION LEGACY FUND
The forest recreation account is established as an account within the legacy fund. The forest recreation account shall consist of revenue derived from concessions, leases, contracts, and fees from recreational activities on state forestlands and other revenues as authorized by law. Money in the forest recreation account shall be expended only for the following:
(b) Grants to state colleges and universities to implement programs funded by the forest recreation account.
(c) The administration of the forest recreation account. The game and fish protection account is established as an account within the legacy fund. The game and fish protection account shall consist of revenue derived from hunting and fishing licenses, passbooks, permits, fees, concessions, leases, contracts, and activities; damages paid for the illegal taking of game and fish; revenue derived from fees, licenses, and permits related to game, game areas, and game fish; and other revenues as authorized by law. Money in the game and fish protection account shall be expended only for the following:
(b) The acquisition of land and rights in land that support wildlife and fisheries programs.
(d) The enforcement and administration of the wildlife and fisheries laws of the state, including the necessary equipment and apparatus incident to the operation and enforcement of wildlife and fisheries laws.
(e) The protection, propagation, distribution, and control of wildlife and fish.
(f) Grants to state colleges and universities to implement programs funded by the game and fish protection account.
(g) The administration of the game and fish protection account, which may include payments in lieu of taxes on state owned land that has been or will be purchased through the game and fish protection fund or account.
The off-road vehicle account is established as an account within the legacy fund. The offroad vehicle account shall consist of revenue derived from fees imposed upon the use or registration of off-road vehicles and other revenues as authorized by law. Money in the off-road vehicle account shall be expended only for the following:
(b) The administration and enforcement of state regulations related to off-road vehicles.
(c) The leasing of land for use by off-road vehicles.
(d) The acquisition of easements, permits, or other agreements for the use of land for off-road vehicle trails, routes, or areas.
(e) The restoration of any of the natural resources of the state on public land that are damaged due to off-road vehicle use.
(f) Safety education programs related to the operation of off-road vehicles.
(g) Other uses as provided by law as long as the uses are consistent with the development, improvement, operation, promotion, and maintenance of the state’s off-road vehicle programs.
(i) The administration of the off-road vehicle account.
The recreation improvement account is established as an account within the legacy fund.
The recreation improvement account shall consist of all tax revenue derived from the sale of two percent of the gasoline sold in this state for consumption in internal combustion engines and other revenues as authorized by law. Money in the recreation improvement account shall be distributed as follows:
(b) Fourteen percent of the money shall be annually transferred to the snowmobile account to be used for the purposes of that account.
(c) The remainder of the money that is not transferred under this section shall be used, upon appropriation, for recreation projects, including grants to state colleges and universities to implement recreation projects, and for the administration of the recreation improvement account. Of the amount that is credited to recreational projects in a fiscal year, not less than twenty-five percent of any funds designated for projects intended for off-road vehicles shall be expended on projects to repair damages as a result of pollution, impairment, or destruction of air, water, or other natural resources, or the public trust, in air, water, or other natural resources, as a result of the use of off-road vehicles.
(b) Providing access to trails and areas for the use of snowmobiles.
(c) Providing basic snowmobile facilities.
(d) The administration and enforcement of state regulations related to snowmobiles.
(e) Safety education programs related to the operation of snowmobiles. Other uses as provided by law as long as the uses are consistent with the development, improvement, operation, promotion, and maintenance of the state’s snowmobile programs.
(g) Grants to state colleges and universities to implement programs funded by the snowmobile account.
(h) The administration of the snowmobile account, which may include payments in lieu of taxes on state owned land that has been or will be purchased through the recreational snowmobile trail improvement fund or snowmobile account.
The state park improvement account shall consist of revenue derived from concessions, leases, contracts, fees, and permits for activities in state parks and recreation areas; damages paid to the state for illegal activities in state parks and recreation areas; and other revenues as authorized by law. Money in the state park improvement account shall be expended only for the following:
(b) Grants to state colleges and universities to implement programs funded by the state park improvement account.
(c) The administration of the state park improvement account.
(b) The acquisition of property for the purpose of paragraph (a).
(c) Grants to local units of government and state colleges and universities for the provision of public access or moorage of watercraft and law enforcement or boating education to recreational watercraft operators.
(d) The acquisition and development of harbors and public access sites.
(e) The enforcement of laws related to the operation of watercraft and education related to the operation of watercraft. Not less than forty-nine percent of revenues from watercraft registration fees received by the waterways account shall be used for the purposes of this subdivision.
(f) The administration of programs funded by the waterways account.
(g) Other uses as provided by law as long as the uses are consistent with the development, improvement, operation, promotion, and maintenance of the state’s waterways programs.
(h) The administration of the waterways account, which may include payments in lieu of taxes on state owned land that has been or will be purchased through the Michigan state waterways fund or waterways account.
Art. IX §41 | MICHIGAN GAME AND FISH PROTECTION TRUST FUND
The Michigan game and fish protection trust fund may also receive gifts, grants, bequests, or assets from any source and may receive other revenues as authorized by law.
The assets of the Michigan game and fish protection trust fund shall be invested as provided by law. The interest and earnings from these investments shall be credited to the Michigan game and fish protection trust fund.
The accumulated interest and earnings of the Michigan game and fish protection trust fund and not more than $6,000,000.00 of the principal of the Michigan game and fish protection trust fund may be expended in any year for the purposes of the game and fish protection account of the Michigan conservation and recreation legacy fund established in section 40.
The legislature shall provide by law for the implementation of this section.
Art. IX §42 | MICHIGAN NONGAME FISH AND WILDLIFE TRUST FUND
The Michigan nongame fish and wildlife trust fund may also receive gifts, grants, bequests, or assets from any source and may receive other revenues as authorized by law.
The assets of the Michigan nongame fish and wildlife trust fund shall be invested as provided by law. The interest and earnings from these investments shall be credited to the Michigan nongame fish and wildlife trust fund.
The Michigan nongame fish and wildlife trust fund shall maintain a principal balance of not less than $6,000,000.00.
The interest and earnings of the Michigan nongame fish and wildlife trust fund and other revenues not retained on a permanent basis shall be expended only for the following:
(b) Grants to state colleges and universities to implement programs funded by the Michigan nongame fish and wildlife trust fund.
(c) The administration of the Michigan nongame fish and wildlife trust fund.
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