Knier Powers Martin & Smith LLC v. City of Bay City ( 2024 )

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.
STATE OF MICHIGAN
COURT OF APPEALS
KNIER, POWERS, MARTIN, & SMITH, LLC, FOR PUBLICATION
August 8, 2024
Petitioner-Appellant, 9:00 a.m.
v No. 366114
Tax Tribunal
CITY OF BAY CITY, LC No. 22-001900-TT
Respondent-Appellee.
Before: MALDONADO, P.J., and K. F. KELLY and REDFORD, JJ.
REDFORD, J.
Petitioner-appellant, Knier, Powers, Martin, & Smith, LLC (KPMS), appeals as of right an
order of the Michigan Tax Tribunal (the Tribunal) denying KPMS summary disposition under
MCR 2.116(C)(10) (no genuine issue of material fact) and granting respondent-appellee, City of
Bay City (Bay City) summary disposition under MCR 2.116(I)(2) (summary disposition for party
opposing the motion). The Tribunal held that the taxable value of KPMS’s property increased
beyond the cap in MCL 211.271(2) because the installation of a new roof on a commercial building
was “new construction,” and, therefore, an “addition” as defined by MCL 211.34d(1)(b)(iii) and
Const 1963, art 9, § 3. Because we agree that the new roof for this commercial building was “new
construction,” we affirm.
I. FACTUAL BACKGROUND
The general facts are not disputed. KPMS owns real property consisting of an office
building in Bay City, Michigan. In 2021, KPMS hired a contractor to replace the roof on the
building. The roof replacement consisted of the installation of new shingles, a “60 MIL-EPDM”
membrane, and plywood to replace the underlying plywood. The cost of the project was $70,053.
Bay City sent KPMS notice that it assessed an increase in the taxable value of the property
for tax year 2022 after the installation of the new roof. In 2021, the property had a taxable value
of $161,262. In 2022, Bay City assessed the property at the taxable value of $181,283, which was
a $20,021 and 12.4152% increase in taxable value from 2021. The fair market value of the
property increased from $382,400 in 2021 to $444,600 in 2022. Although increases in taxable
value are generally limited to a “cap,” the lesser of 5% or the inflation rate, during the course of a
-1-
property owner’s ownership, Bay City determined that additional taxation was permitted because
the increased value arose from an “addition.” MCL 211.27a(2)(a).
KPMS contested the assessment of the property’s 2022 true cash and taxable values with
the Bay City Board of Review, which affirmed the assessment. KPMS appealed the Board of
Review’s decision to the Michigan Tax Tribunal. In the Tribunal, KPMS asserted that Bay City
increased the taxable value of the property beyond the cap in contravention Const 1963, art 9, § 3
and MCL 211.27a(2)(a). Additionally, KPMS asserted that Bay City overstated the cash value of
the property. Bay City answered the complaint, denying that KPMS was entitled to relief because
it properly and lawfully reassessed the property’s taxable value.
In an amended motion for summary disposition under MCR 2.116(C)(10), KPMS asserted
that Bay City erroneously assessed the property in contravention of Const 1963, art 9, § 3 and
MCL 211.27a(2)(a) because the assessment exceeded the cap in both provisions. KPMS argued
that Bay City could not exceed the “cap” because the roof replacement was not an “addition” as
defined by MCL 211.34d or the Michigan Constitution. In support of its argument, KPMS asserted
that reference to the dictionary definition of “additions” was necessary because the Michigan
Constitution did not define the term. In response, Bay City requested that the Tribunal grant it
summary disposition under MCR 2.116(I)(2), arguing that the cap in the Constitution and state
law did not apply because the new roof was an “addition” within the meaning of MCL
211.27a(2)(a) and MCL 211.34d(1)(b)(iii) because it was “new construction.” Bay City did not
respond to KPMS’s constitutional argument.
Without oral arguments, the Tribunal issued a proposed order denying KPMS’s motion for
summary disposition and granted Bay City partial summary disposition. The Tribunal declined to
apply a dictionary definition of the term “additions” because the term was defined by statute. The
Tribunal explained that the roof replacement was “new construction” as defined by MCL
211.34d(1)(b)(iii) because the new roof was property not in existence on the immediately
preceding tax day and not “replacement construction,” as narrowly defined by MCL
211.34d(1)(b)(v). The order did not address KPMS’s constitutional arguments.
KPMS filed exceptions to the proposed order. Relevant to the issues on appeal, KPMS
asserted that the Tribunal ignored its constitutional argument and that reference to a dictionary
definition was necessary for interpretation of the term “additions” in Const 1963, art 9, § 3 because
the Legislature could not define the term as used in the Michigan Constitution. Bay City responded
to the exceptions, asserting that it agreed with the Tribunal’s holding and that KPMS failed to
demonstrate error in the Tribunal’s analysis. The Tribunal issued an opinion rejecting KPMS’s
exceptions and adopting the reasoning from the proposed order. The order was labeled a “Partial
Final Opinion and Judgment.” However, the order did not dismiss the case because further
proceedings in the Tribunal were necessary to address the true cash value of the roof replacement.
This appeal followed.
II. APPELLATE JURISDICTION
As a preliminary matter, Bay City argues that the April 24, 2023 order denying KPMS
summary disposition and granting it summary disposition was not appealable as of right because
the order was not a final order under MCR 7.203(A)(1). We agree that the order is not a final
-2-
order appealable as of right, but note that MCL 205.753 rather than MCR 7.203(A)(1) guides our
analysis. Regardless, we exercise our discretion and treat the appeal as leave granted.
Whether we have jurisdiction to hear an appeal is an issue we review de novo. Wickings v
Arctic Enterprises, Inc, 244 Mich App 125, 132-133; 624 NW2d 197 (2000). Likewise, the
construction and application of a court rule is a legal issue we review de novo. Id. MCR
7.203(A)(1) only applies to appeals from a circuit court or the Court of Claims. MCR 7.203(A)(1)
(providing that a “final judgment or final order of the circuit court, or court of claims, as defined
in MCR 7.202(6)” is appealable as of right). For cases originating in the Tribunal, MCL
205.753(2) provides that an “[a]ppeal from the final order or decision of the tribunal may be taken
by filing an appeal in accordance with the Michigan court rules after the entry of the order or
decision appealed from or after denial of a motion for rehearing timely filed.” Under MCL
205.753(3), “An order, ruling, or decision before the final decision of the tribunal is not reviewable
unless leave to appeal is granted by the court of appeals.”
A final order is the first order that “disposes of all the claims and adjudicates the rights and
liabilities of all the parties . . . .” MCL 7.202(6)(a)(i). KPMS appeals as of right the April order
denying it summary disposition and granting Bay City partial summary disposition. Labeled a
“Partial Final Opinion and Judgment,” the April order explained that further proceedings in the
Tribunal were necessary to address the true cash value of the roof replacement. Despite indicating
that further proceedings were necessary, the order included language expressly stating that a party
that disagreed “with the final decision in this case” may file a claim of appeal in this Court. After
this order was issued, the parties participated in a telephone status conference in which they
advised the Tribunal that KPMS would no longer contest the true cash value of the roof
replacement. The Tribunal entered an order on July 3, 2023, adopting the April 24, 2023 order as
a final order and dismissed the case. KPMS alleged that it did not receive notice of the July order
and did not file an appeal of that order within 21 days. See MCR 7.204(A)(1).
Although the Tribunal designated the April order a “partial final order,” the order is not
final because it did not dispose of all claims in the case. See MCR 7.202(6)(a)(i). Instead, it left
open the issue of the true value of the roof replacement for future proceedings. The July order
adopting the April order as the final order was the order that disposed of the case. Accordingly,
KPMS was not entitled to an appeal as of right from the April order and missed its opportunity to
file an appeal as of right from the July order. See MCR 7.204(A)(1). However, this Court may
exercise its discretion to treat the appeal as leave granted. Wardell v Hincka, 297 Mich App 127,
133 n 1; 822 NW2d 278 (2012). In the interest of judicial economy, we exercise our discretion
and treat the appeal as leave granted.
III. DISCUSSION
A. STANDARD OF REVIEW
In the absence of fraud, we review the Tribunal’s decision for misapplication of the law or
adoption of a wrong principle. Mich Bell Tel Co v Dep’t of Treasury, 445 Mich 470, 476; 518
NW2d 808 (1994); see also Const 1963, art 6, § 28. The proper interpretation and application of
a statute is a question of law we review de novo. Anderson v Myers, 268 Mich App 713, 714; 709
NW2d 171 (2005). We review questions of constitutional construction de novo. Hunter v Hunter,
-3-
484 Mich 247, 257; 771 NW2d 694 (2009). Likewise, we review a Tribunal’s decision to grant
or deny a motion for summary disposition de novo. Paris Meadows, LLC v Kentwood, 287 Mich
App 136, 141; 783 NW2d 133 (2010).
B. “ADDITIONS” UNDER MCL 211.34d(1)(b)
KPMS contends that the trial court erred when it held that the new roof was an “addition”
for purposes of MCL 211.27a because it was “new construction” as defined by MCL
211.34d(1)(b)(iii). In support of this argument, KPMS argues that the roof was not “new
construction” because the building had a roof both before and after the roof replacement. Bay City
contends that the trial court correctly held that the new roof was “new construction” under the
plain language of the statute because the new, more valuable roof was not in existence on the
immediately preceding tax day. We agree with Bay City.
The overall goal of statutory interpretation is to give effect to the intent of the Legislature.
Dep’t of Environmental Qual v Worth Twp, 491 Mich 227, 237; 814 NW2d 646 (2012). To
effectuate this goal, we “seek to discern the ordinary meaning of the language in the context of the
statute as a whole.” TOMRA of North America, Inc v Dep’t of Treasury, 505 Mich 333, 344; 952
NW2d 384 (2020) (TOMRA). Such language must be enforced as written, “giving effect to every
word, phrase, and clause.” Perkovic v Zurich Ins Co, 500 Mich 44, 49; 893 NW2d 322 (2017).
Under the General Property Tax Act (GPTA), “all property, real and personal, within the
jurisdiction of this state, not expressly exempted, shall be subject to taxation.” MCL 211.1. The
taxable value of property for a given year is calculated, in relevant part, as follows:
(2) Except as otherwise provided in subsection (3), 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(2)
(emphasis added).]
MCL 211.27a(11)(a) provides that the term “additions” is defined in § 34d. As relevant to this
appeal, “additions” is defined as follows:
(b) For taxes levied after 1994, “additions” means, except as provided in
subdivision (c), all of the following:
* * *
(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
-4-
equipment or furnishings, subject to the provisions set forth in section 27(2)(a) to
(q). 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.
* * *
(v) Replacement construction. As used in this subparagraph, “replacement
construction” means construction that replaced property damaged or destroyed by
accident or act of God and that occurred after the immediately preceding tax day to
the extent the construction’s true cash value does not exceed the true cash value of
property that was damaged or destroyed by accident or act of God in the
immediately preceding 3 years. [MCL 211.34d(1)(b)(iii), (v).]
The Tribunal and parties all agree that the roof was not “replacement construction” as
defined by MCL 211.34d(1)(b)(iii) because the roof was not replaced as a result of an accident or
act of God. This leaves the question of whether the roof was “property not in existence on the
immediately preceding tax day.” MCL 211.34d(1)(b)(iii). The answer is, the new roof falls within
this statutory language.
KPMS first argues that “property” as used in this statute only refers to “real property,”
which KPMS narrowly defines as the land and the building which sits upon that land.
Consequently, KPMS argues that a roof is not “property” for purposes of the statute. This narrow
interpretation of the term “property” reads additional language into the statute that does not
comport with the statutory text.
First, KPMS’s proposed definition of “real property” as only the land and the building
which sits upon that land conflicts with the definition of “real property” provided in the statutory
scheme. Under the GPTA, real property includes “[a]ll land within this state, all buildings and
fixtures on the land, and all appurtenances to the land, except as expressly exempted by law.”
MCL 211.2(1)(a). Clearly, this definition encompasses more than land and buildings that sit upon
that land alone.
Second, review of the statutory scheme shows that the Legislature intended to include both
real and personal property in the term “property” as used in MCL 211.34d(1)(b)(iii). Throughout
the GPTA, the Legislature specifically refers to “real property” or “personal property” when it
intends to single out those two categories of property and more generally refers to “property” when
it intends to incorporate both types of property. Review of MCL 211.34d alone unquestionably
demonstrates this intent. In the two subparagraphs preceding MCL 211.34d(1)(b)(iii), the
Legislature further defines “additions” as “omitted real property,” MCL 211.34d(1)(b)(i), and
“omitted personal property,” MCL 211.34d(1)(b)(ii). Read in context of the whole statute, it is
clear that the Legislature did not only intend to refer to real property when it used the more general
term “property” in MCL 211.34d(1)(b)(iii), just one subparagraph after MCL 211.34d(1)(b)(i) and
MCL 211.34d(1)(b)(ii). See TOMRA, 505 Mich at 344. Accordingly, the Legislature’s use of the
more general term “property” in MCL 211.34d(1)(b)(iii) contemplates both personal and real
property in the definition of “new construction.” KPMS’s argument that a roof was not
-5-
contemplated within the statutory term “property” because it is not land or a building is without
merit. The new roof was “property” as contemplated by the statute.
Next, KPMS argues that the roof replacement was not new construction because a roof
existed on the property both before and after the roof replacement project. In support of its
argument, KPMS argues that under the Tribunal’s definition, every repair or replacement of worn
materials, such as carpets or light fixtures, would be a basis for increasing a property’s taxable
value. Bay City argues that the Legislature intended to broadly define “new construction” for
purposes of taxation to include maintenance, replacements, and repairs that would result in an
increase in a property’s taxable value beyond any “capped” taxable value increase. We agree with
Bay City.
Review of the plain language of MCL 211.34d(1)(b)(iii) and its surrounding statutory text
shows that “new construction” includes the new, more valuable roof that replaced an old roof. A
comparison of the two categories of “construction”—new and replacement—in its definition of
“additions” indicates the Legislature’s intent to broadly define “new construction.” As previously
noted, the new roof is not “replacement construction” for purposes of the statute. “Replacement
construction” is narrowly defined as “construction that replaced property damaged or destroyed
by accident or act of God . . . .” MCL 211.34d(1)(b)(v). The Legislature included a carveout in
“replacement construction” for construction completed within three years of the accident or act of
God that is “substantially the same materials.” Such construction is “equal to the taxable value
of the property in the year immediately preceding the year in which the property was damaged or
destroyed . . . .” MCL 211.34d(1)(b)(v).
“New construction” expressly excludes the narrowly defined “replacement construction”
from its definition. If the Legislature wanted to exclude more typical repair, replacement, and
maintenance from its definition of “new construction,” it would have carved out more than
“construction that replaced property damaged or destroyed by accident or act of God.” Likewise,
MCL 211.34d(1)(b)(iii) does not include the same carveout for new construction made of
substantially the same materials found in “replacement construction.” The inclusion of this
language in MCL 211.34d(1)(b)(v) but not MCL 211.34d(1)(b)(iii) supports that the Legislature
intended to include replacements, like the new roof, in “new construction.” With the exclusion of
“replacement construction,” the statute widely defines “new construction” as “property not in
existence on the immediately preceding tax day.” The roof meets this definition. It was an entirely
new roof that was not in existence on the immediately preceding tax day.
KPMS further argues that this interpretation of “new construction” would too widely
include every minor repair, such as new carpets or lighting fixtures. This argument is without
merit. First, this argument ignores that in order for an addition to be included in an assessment, it
must affect the property’s taxable value. MCL 211.34d(1)(b)(iii) explains that “the value of new
construction is the true cash value of the new construction multiplied by 0.50.” MCL
211.34d(1)(b)(iii). True cash value is synonymous with fair market value. Meadowlanes Ltd
Dividend Housing Ass’n v Holland, 437 Mich 473, 484 n 17; 473 NW2d 636 (1991). Plainly, this
statute is aimed at additions that enhance the value of the property. Many minor repairs do not
meet this condition. Accordingly, value added by new construction only includes additions that
actually increase the selling price of the property.
-6-
Second, this argument ignores that the Legislature enacted a specific carveout for such
repairs in residential property. MCL 211.34d(1)(b)(iii) includes within its definition of “new
construction” “the physical addition of equipment or furnishings, subject to the provisions set forth
in section 27(2)(a) to (q).” MCL 211.27(2) provides in relevant part:
The assessor shall not consider the increase in true cash value that is a result
of expenditures for normal repairs, replacement, and maintenance in determining
the true cash value of property for assessment purposes until the property is sold.
For the purpose of implementing this subsection, the assessor shall not increase the
construction quality classification or reduce the effective age for depreciation
purposes, except if the appraisal of the property was erroneous before
nonconsideration of the normal repair, replacement, or maintenance, and shall not
assign an economic condition factor to the property that differs from the economic
condition factor assigned to similar properties as defined by appraisal procedures
applied in the jurisdiction. The increase in value attributable to the items included
in subdivisions (a) to (q) that is known to the assessor and excluded from true cash
value must be indicated on the assessment roll. This subsection applies only to
residential property. The following repairs are considered normal maintenance if
they are not part of a structural addition or completion:
* * *
(b) Repairing or replacing siding, roof, porches, steps, sidewalks, or drives.
[MCL 211.27(2)(b) (emphasis added).]
As indicated by this statute, the taxable value of residential property will not be increased by the
assessor for “the increase in true cash value that is a result of expenditures for normal repairs,
replacement, and maintenance.” MCL 211.27(2). MCL 211.27(2)(b) expressly cites roof
replacements on residential property as normal repairs, replacements, and maintenance. This
carveout, directly cross-referenced in MCL 211.34d(1)(b)(iii), further supports that the new roof
on KPMS’s commercial building is “new construction.” If normal repairs, replacement, and
maintenance on nonresidential property were not “new construction” for purposes of MCL
211.34d(1)(b)(iii), MCL 211.27(2) would be rendered a nullity. See Perkovic, 500 Mich at 49.
KPMS finally argues that citation to MCL 211.27(2) does not support the inclusion of
ordinary repairs in the definition of “new construction” because that statute only addresses the true
cash value and not the taxable value of property. This argument is without merit. MCL
211.34d(1)(b)(iii) expressly states that “[f]or 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.” Therefore, MCL 211.27(2)’s reference to the “true cash value” without
express reference to the taxable value does not render MCL 211.27(2) irrelevant to MCL
211.34d(1)(b)(iii).
For these reasons, KPMS’s interpretation of “new construction” is contrary to the plain
language of the statute. KPMS added a new roof on commercial property. The new roof was
property not in existence on the immediately preceding tax day. Consequently, the Tribunal did
-7-
not err when it held that KPMS’s new roof was an “addition” because it was “new construction”
under MCL 211.34d(1)(b)(iii).
C. “ADDITIONS” UNDER THE MICHIGAN CONSTITUTION
KPMS next argues that the Tribunal erred by failing to consider its constitutional argument
that the roof replacement did not fall within the meaning of “additions” in Const 1963, art 9, § 3.
KPMS argues that “additions” is not defined for purposes of the constitutional provision and that
this Court should adopt the dictionary definition of the term. Bay City argues that consideration
of a constitutional issue was not within the Tribunal’s jurisdiction and, even if it was, “additions”
as used in the Michigan Constitution has a technical legal definition. Bay City argues that KPMS’s
new roof fits within that definition. We agree that the Tribunal could have considered KPMS’s
constitutional argument. However, we conclude that the new roof fell within the definition of
“additions” in Const 1963, art 9, § 3.
We first address the Tribunal’s jurisdiction to consider this issue. The Tribunal does not
have “jurisdiction over constitutional questions and does not possess authority to hold statutes
invalid.” Meadowbrook Village Assoc v Auburn Hills, 226 Mich App 594, 596; 574 NW2d 924(1997). Instead, constitutional questions and the authority to hold statutes invalid are within the
jurisdiction of the circuit court. Id. at 596-597. Tax Tribunals may, however, “consider claims
that an assessment is arbitrary or without foundation even if couched in constitutional terms.” Id.
at 597. Although couched in constitutional terms, KPMS’s claim in the Tribunal did not involve
the validity of a statute. Instead, KPMS asked whether Bay City’s assessment was founded within
the meaning of “additions” in Const 1963, art 9, § 3. Accordingly, the Tribunal could have
addressed KPMS’s constitutional question. Nevertheless, there is no merit in KPMS’s substantive
argument.
“When interpreting constitutional provisions, our primary objective is to realize the intent
of the people by whom and for whom the constitution was ratified.” Toll Northville LTD v Twp
of Northville, 480 Mich 6, 11; 743 NW2d 902 (2008) (quotation marks and citation omitted).
Toward this purpose, “we apply the plain meaning of terms used in the constitution unless technical
legal terms were employed.” Id. “[I]f a constitutional phrase is a technical legal term or a phrase
of art in the law, the phrase will be given the meaning that those sophisticated in the law understood
at the time of enactment unless it is clear from the constitutional language that some other meaning
was intended.” WPW Acquisition Co v City of Troy, 466 Mich 117, 123; 643 NW2d 564 (2002)
(quotation marks and citation omitted).
Const 1963, art 9, § 3, as amended by Proposal A, states, in relevant part, as follows:
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
-8-
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. [Emphasis added.]
The emphasized language was part of the text added to this constitutional provision by the
ratification of Proposal A in 1994. WPW Acquisition Co, 466 Mich at 119. As described by our
Supreme Court:
This language operates 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.” [Id.
at 121-122.]
KPMS’s argument that citation to a lay dictionary is necessary to define “additions” is
foreclosed by our Supreme Court’s decision in WPW Acquisition Co. The Court explained that
when Proposal A was ratified, “additions” was a technical legal term with a particularized
meaning. Id. at 123. At that time, the GPTA defined “additions” as “all increases in value caused
by new construction or a physical addition of equipment or furnishings, and the value of property
that was exempt from taxes or not included on the assessment unit’s immediately preceding year’s
assessment role.” Id. at 122, citing MCL 211.34d(1)(a), as amended by 1993 PA 145. Because
“additions” already has a particular legal meaning, we decline to consider whether the new roof
meets a lay definition of the term “additions.” Notably, the current definition of “new
construction” tracks the language in the technical definition of “additions” at the time Proposal A
was adopted. Accordingly, the roof is “new construction” such that it meets the technical
definition of “additions” in Const 1963, art 9, § 3.
As a corollary to KPMS’s constitutional argument, KPMS argues that MCL
211.34d(1)(b)(iii) conflicts with Const 1963, art 9, § 3 to the extent that it contemplates a new roof
within the constitutional meaning of “additions.” KPMS argues that this definition impermissibly
expanded the meaning of “additions.” This argument is without merit because the current
definition of “new construction” tracks the definition of “additions” at the time Proposal A was
adopted.
The Legislature is not empowered to define “additions” more expansively than its meaning
at the time Proposal A was ratified. WPW Acquisition Co, 466 Mich at 124. This principle was
explained by our Supreme Court when it considered the constitutionality of former MCL
211.34d(1)(b)(vii), which included an increase in the value of property because of increased
occupancy by tenants in its definition of “additions.” Id. at 119. The Court held that the statutory
provision was unconstitutional because it was inconsistent with the meaning of the term
“additions” when Proposal A was adopted. Id. As previously explained, “additions” is a technical
legal term that, at the time Proposal A was passed, meant: “all increases in value caused by new
construction or a physical addition of equipment or furnishings, and the value of property that was
exempt from taxes or not included on the assessment unit’s immediately preceding year’s
assessment role.” Id. at 122, citing MCL 211.34d(1)(a), as amended by 1993 PA 145. Plain from
-9-
this definition, the Court explained that the language did not include any increases in occupancy
by tenants in a building. WPW Acquisition Co, 466 Mich at 122.
MCL 211.34d(1)(b)(iii) is unlike the former MCL 211.34d(1)(b)(vii). It does not expand
the definition of “additions.” Instead, as previously noted, “new construction” as defined by MCL
211.34d(1)(b)(iii) tracks the pre-Proposal A definition of “additions.” It incorporates the same
language. Accordingly, the statutory definition of “new construction” does not impermissibly
expand the definition of “additions” in contravention of Const 1963, art 9, § 3.
IV. CONCLUSION
Because the new roof was “new construction,” it was an “addition” as defined by MCL
211.34d(1)(b)(iii) and Const 1963, art 9, § 3. The Tribunal did not err in granting Bay City
summary disposition on the basis that Bay City correctly assessed the property’s taxable value
beyond the cap in MCL 211.27a(2)(a) and Const 1963, art 9, § 3. For these reasons, KPMS is not
entitled to relief.
Affirmed.
/s/ James Robert Redford
/s/ Allie Greenleaf Maldonado
/s/ Kirsten Frank Kelly
-10-