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If you would like more information about our programs, please email us at info@heartofthelakes.org
If you would like more information about our programs, please email us at info@heartofthelakes.org
Court of Appeals Decision
On July 14, 2015, the Court of Appeals issued an unpublished (therefore not
precedential) decision in Great Lakes Guardians vs. Sims Township.
The Court of Appeals declined to address Sims Township's and the
Michigan Township Association’s claim that the Michigan Tax Tribunal was wrong
when it found that GLG, a nonprofit conservation organization, was holding
property for conservation purposes open to all residents of the state for
educational and recreational purposes under MCL 211.7o(5) of the General
Property Tax Act.
Instead, the Court of Appeals restricted their decision to upholding the Tax Tribunal’s determination that GLG was not eligible for tax exemption because its bylaws/articles of incorporation did not meet the statutory test found in 211.7o(5)(b). The Court also denied GLG’s request for costs attorneys fees.
Heart of the Lakes filed an amicus brief in the case, and we believe the Court of Appeals reached the correct result.
Simplified Recap
After being denied a property tax exemption by Sims Township Assessor and Board of Review, GLG took their case to the Tax Tribunal. The Tax Tribunal determined that GLG met the standards of 211.7o(5), 7o(5)(a)and 7o(5)(c), but their bylaws/articles of incorporation did not satisfy the requirements of 7o(b).
GLG then took its case to the Court of Appeals to argue that their organizational documents did indeed meet statute requirements. Sims Township, and ultimately the Michigan Townships Association (MTA) in an amicus brief, took that opportunity to argue that the Tax Tribunal erred when it found that GLG met all the the other statutory requirements in 211.7o(5), requirements that go to the core of defining what it means to be a qualified conservation organization, what it means to hold land for conservation purposes, and how high the bar has to be set to meet the test of “open to all residents of this state for educational or recreational use.” In other words, Sims Twsp/MTA sought case law that would set a bar much higher than the Tax Tribunal opinion.
Heart of the Lakes' Role
Those were the issues that drew Heart of the Lakes into the case with our own amicus brief to defend the interests of the state’s land conservancies and to counter these additional arguments made by Sims Twsp/MTA. On those issues, we believe the Tax Tribunal got them right (although we stayed out of the question of whether GLG’s bylaws/articles of incorporation satisfied statute requirements). By declining to address them, the Court of Appeals allows the Tax Tribunal’s findings for GLG on those statutory provisions to stand. Which means, and assuming GLG starts the process over with amended bylaws and articles of incorporation and is denied property tax exemption at the Township level again , GLG could go back to the Tax Tribunal and get a favorable opinion on property tax exemption from the Tribunal for tax years going forward. And it is our hope that GLG goes that route instead of trying to pursue the case to the Michigan Supreme Court.
What It Means
If GLG does go back to the Tax Tribunal with amended bylaws/articles of incorp, Sims Township would not necessarily be silenced. The Township could appeal any such decision on the grounds of their original arguments—that GLG still does not qualify under the other statutory provisions of 211.7o(5). The Court of Appeals, in its decision, wrote:
On cross-appeal, respondent (Sims Twp) contends that the Tribunal erred in finding that petitioner met the requirements of MCL 211.7o(5) and (5)(a). Specifically, respondent maintains that the Tribunal should not have found that petitioner’s property was open to all residents of the state for educational or recreational use as required by MCL 211.7o(5), and should not have found that petitioner was holding the real property for conservation purposes under MCL 211.7o(5)(a).
Since we conclude that the Tribunal correctly determined that petitioner was not entitled to the exemption based on MCL 211.7o(5)(b), we need not address whether petitioner would also have failed to qualify for an exemption under MCL 211.7o(5) or (5)(a).
In essence, the status quo remains. The Court of Appeals did not affirm the Tax Tribunal's findings on these other key points, they simply didn’t take them up because they concurred with the denial under 7o(5)(b). Their decision does not establish case law such as that sought by Sims Twsp/MTA. Nor does it establish case law as we would wish it. In fact, there is no case law established for MCL 211.7o(5) since it was signed into law 11 years ago.
No doubt, local governments will continue to argue for the highest bar possible when it comes to property tax exemption. And perhaps that gives us cause to pursue other avenues besides the courts to reach some understanding with MTA and other local government associations.
What Can We Take Away From This Case?
1. A reminder that those seeking property tax exemption carry the burden of proving they qualify for tax exemption.
2. Articles of incorporation and bylaws need to match the statutory requirements if pursuing property tax exemption under MCL 211.7o(5), something we’ve emphasized for years now.
3. A recognition by the Court that trade lands, even with some conservation value, would not qualify for tax exemption under 211.7o(5)
4. There is still no case law that puts any specific definitions or limitations to what it means to "hold land for conservation purposes" or "open to all residents of this state for educational or recreational use” under this particular section of the General Property Tax Act. We will continue to argue, as we did in our amicus brief, that the plain language of Section 211.7o(5) of the General Property Tax Act requires little if any interpretation.
5. Although not at issue in GLG vs. Sims Township, there is still no test case of whether a land conservancy can also pursue property tax exemption under 211.7o(1), the standard for property tax exemption before 7o(5) was adopted into law. We would argue that it can.
Thank you!
Special thanks to Dan Cline, Steve Kelley and John Erb for their legal analysis and guidance, and to Jeff Jocks, Olson, Bzdok & Howard, P.C., for preparing the Heart of the Lakes’ brief. And thank you to Michigan’s land conservancies whose foresight in establishing Heart of the Lakes and whose ongoing support ensures we are able to take on issues that impact the entire community. The case history, briefs, opinions and other documents can be found at the Michigan Court's Case Search under this docket number: 320856
Instead, the Court of Appeals restricted their decision to upholding the Tax Tribunal’s determination that GLG was not eligible for tax exemption because its bylaws/articles of incorporation did not meet the statutory test found in 211.7o(5)(b). The Court also denied GLG’s request for costs attorneys fees.
Heart of the Lakes filed an amicus brief in the case, and we believe the Court of Appeals reached the correct result.
Simplified Recap
After being denied a property tax exemption by Sims Township Assessor and Board of Review, GLG took their case to the Tax Tribunal. The Tax Tribunal determined that GLG met the standards of 211.7o(5), 7o(5)(a)and 7o(5)(c), but their bylaws/articles of incorporation did not satisfy the requirements of 7o(b).
GLG then took its case to the Court of Appeals to argue that their organizational documents did indeed meet statute requirements. Sims Township, and ultimately the Michigan Townships Association (MTA) in an amicus brief, took that opportunity to argue that the Tax Tribunal erred when it found that GLG met all the the other statutory requirements in 211.7o(5), requirements that go to the core of defining what it means to be a qualified conservation organization, what it means to hold land for conservation purposes, and how high the bar has to be set to meet the test of “open to all residents of this state for educational or recreational use.” In other words, Sims Twsp/MTA sought case law that would set a bar much higher than the Tax Tribunal opinion.
Heart of the Lakes' Role
Those were the issues that drew Heart of the Lakes into the case with our own amicus brief to defend the interests of the state’s land conservancies and to counter these additional arguments made by Sims Twsp/MTA. On those issues, we believe the Tax Tribunal got them right (although we stayed out of the question of whether GLG’s bylaws/articles of incorporation satisfied statute requirements). By declining to address them, the Court of Appeals allows the Tax Tribunal’s findings for GLG on those statutory provisions to stand. Which means, and assuming GLG starts the process over with amended bylaws and articles of incorporation and is denied property tax exemption at the Township level again , GLG could go back to the Tax Tribunal and get a favorable opinion on property tax exemption from the Tribunal for tax years going forward. And it is our hope that GLG goes that route instead of trying to pursue the case to the Michigan Supreme Court.
What It Means
If GLG does go back to the Tax Tribunal with amended bylaws/articles of incorp, Sims Township would not necessarily be silenced. The Township could appeal any such decision on the grounds of their original arguments—that GLG still does not qualify under the other statutory provisions of 211.7o(5). The Court of Appeals, in its decision, wrote:
On cross-appeal, respondent (Sims Twp) contends that the Tribunal erred in finding that petitioner met the requirements of MCL 211.7o(5) and (5)(a). Specifically, respondent maintains that the Tribunal should not have found that petitioner’s property was open to all residents of the state for educational or recreational use as required by MCL 211.7o(5), and should not have found that petitioner was holding the real property for conservation purposes under MCL 211.7o(5)(a).
Since we conclude that the Tribunal correctly determined that petitioner was not entitled to the exemption based on MCL 211.7o(5)(b), we need not address whether petitioner would also have failed to qualify for an exemption under MCL 211.7o(5) or (5)(a).
In essence, the status quo remains. The Court of Appeals did not affirm the Tax Tribunal's findings on these other key points, they simply didn’t take them up because they concurred with the denial under 7o(5)(b). Their decision does not establish case law such as that sought by Sims Twsp/MTA. Nor does it establish case law as we would wish it. In fact, there is no case law established for MCL 211.7o(5) since it was signed into law 11 years ago.
No doubt, local governments will continue to argue for the highest bar possible when it comes to property tax exemption. And perhaps that gives us cause to pursue other avenues besides the courts to reach some understanding with MTA and other local government associations.
What Can We Take Away From This Case?
1. A reminder that those seeking property tax exemption carry the burden of proving they qualify for tax exemption.
2. Articles of incorporation and bylaws need to match the statutory requirements if pursuing property tax exemption under MCL 211.7o(5), something we’ve emphasized for years now.
3. A recognition by the Court that trade lands, even with some conservation value, would not qualify for tax exemption under 211.7o(5)
4. There is still no case law that puts any specific definitions or limitations to what it means to "hold land for conservation purposes" or "open to all residents of this state for educational or recreational use” under this particular section of the General Property Tax Act. We will continue to argue, as we did in our amicus brief, that the plain language of Section 211.7o(5) of the General Property Tax Act requires little if any interpretation.
5. Although not at issue in GLG vs. Sims Township, there is still no test case of whether a land conservancy can also pursue property tax exemption under 211.7o(1), the standard for property tax exemption before 7o(5) was adopted into law. We would argue that it can.
Thank you!
Special thanks to Dan Cline, Steve Kelley and John Erb for their legal analysis and guidance, and to Jeff Jocks, Olson, Bzdok & Howard, P.C., for preparing the Heart of the Lakes’ brief. And thank you to Michigan’s land conservancies whose foresight in establishing Heart of the Lakes and whose ongoing support ensures we are able to take on issues that impact the entire community. The case history, briefs, opinions and other documents can be found at the Michigan Court's Case Search under this docket number: 320856