SAAD, J.
The Michigan Supreme Court recently addressed the issue of whether citizens who pay taxes to support their local library are obliged by the Michigan Constitution to provide identical services or library privileges to citizens of another jurisdiction who do not pay any taxes or fees for these library services. Goldstone v. Bloomfield Twp. Pub. Library, 479 Mich. 554, 737 N.W.2d 476 (2007). In unambiguously answering this question in the negative, our Supreme Court interpreted our Constitution's library provisions and constitutional history to say quite the opposite. That is, our Supreme Court held that the framers of Michigan's Constitution clearly expressed their intent that citizens whose tax dollars support their local public library should not have to provide these library services for free to people who do not contribute to the financial upkeep of the library.
Yet defendant Michigan Department of Education (DOE), by promulgating the rules at issue here, attempts to force by regulation the very result our Supreme Court says is contrary to the framers' intent and the Constitution's provisions concerning local control of libraries. The DOE's position is particularly untenable because it rationalizes its administrative overreach on the ground that the legislation regarding state funding of libraries gives the DOE this power by implication, notwithstanding that the relevant legislation neither mentions nor hints at such an unprecedented and coercive objective.
For the reasons articulated herein, we agree with Herrick District Library, which challenges the authority of the DOE to promulgate these rules, and hold that the DOE has no authority, express or implied, to force this unprecedented result
Indeed, the powers of administrative agencies such as the DOE are limited to those expressly granted by the Legislature. And though an agency may have implied powers, our caselaw narrowly restricts such authority to that "`necessary to the due and efficient exercise of the powers expressly granted'" by the enabling statute. Ranke v. Corp. & Securities Comm., 317 Mich. 304, 309, 26 N.W.2d 898 (1947) quoting California Drive-in Restaurant Ass'n v. Clark, 22 Cal.2d 287, 302, 140 P.2d 657 (1943). The State Aid to Public Libraries Act (State Aid Act), MCL 397.551 et seq., does not expressly grant the DOE the power to promulgate new rules and regulations for the distribution of state aid to public libraries. Nor does the legislation provide that additional eligibility requirements are necessary for the State Aid Act's administration. Accordingly, the DOE lacks the authority to promulgate the rules at issue in this case. If the Legislature had intended that the DOE be able to write new eligibility requirements, it would have included authorizing language in the State Aid Act.
Further, we reiterate that these challenged rules expressly repudiate and violate the intent of the drafters of our state Constitution, as explained recently by the Supreme Court in Goldstone. Indeed, despite our Supreme Court's analysis of Michigan's Constitution and its rejection of the policy of providing the same services to all library patrons, regardless of their financial contribution to that library, this is exactly what the DOE seeks to accomplish by what it regards as its implied rulemaking authority. Because such a policy conflicts with our state Constitution as interpreted by Goldstone, it is indeed questionable whether even the Legislature would have the ability to enact such a statute. Thus, it strains credulity, at best, to suggest, as the DOE does, that an administrative agency has an implied power to do the same by issuing regulations. This effort by the DOE—which ignores the will of the drafters of our Constitution and the Michigan Supreme Court's recent interpretation of our state Constitution, illustrates why our courts have historically strictly constrained the implied authority of administrative agencies. Accordingly, we uphold the trial court's grant of summary disposition to plaintiff, the Herrick District Library.
Plaintiff, the Herrick District Library, is a public library located in Holland, Michigan. It was established pursuant to the District Library Establishment Act, MCL 397.171, et seq. Public libraries in Michigan provide services to individuals who live in one of two areas: (1) the library's jurisdictional service area and, if it chooses to create one, (2) the library's contractual service area. A jurisdictional service area encompasses the territory within a library's legal boundaries where the electors are authorized to vote on library millage and may be eligible to be library board members. A contractual service area is created by the library and a municipality outside the library's jurisdictional service area and provides residents of that municipality with some level of library services, typically for an agreed-upon fee. Michigan's Legislature has passed numerous statutes allowing these arrangements to promote the "establishment of a system in which communities with public libraries
Though jurisdictional and contractual service areas are similar because both expand library access, the two arrangements entail different responsibilities for the residents of each respective area. Residents of a library's jurisdictional service area are always a library's prime financial benefactors—they pay the taxes that provide their local library its essential funding. Individuals who live in contractual service areas have no such financial obligation—they simply pay an agreed-upon amount to secure specific services outlined in the agreement.
Accordingly, residents of a contractual service area typically have different—and often less comprehensive—library privileges than those who live in the library's jurisdictional service area. Because they pay taxes to fund the library, residents in the jurisdictional service area are entitled to full library services. Individuals residing in the contractual service area may receive full library services or partial library services, depending on the level of services specified in the contract. In brief, residents in the jurisdictional service area pay taxes for their library, and people in the contractual service area pay for specific services according to the contract.
Like many other libraries in Michigan, Herrick serves individuals living in its jurisdictional area and maintains outside-service contracts with outlying municipalities. In some cases, Herrick offers different library services to residents of the contractual service areas than those provided to residents of its district.
To offer its patrons additional library services, Herrick belongs to the Lakeland Library Cooperative, a network of libraries in Western Michigan that agree to share books, periodicals and other media. As a member of a library cooperative, Herrick is eligible for state funding under the State Aid Act and has received state aid for some time.
The state-aid program is managed by defendant Library of Michigan, a subsidiary agency of the DOE.
Two rules—3(d) and 31(1)(b)—were particularly controversial. Mich. Admin. Code, R. 397.03(d) and 397.31(1)(b). Together, they require that, in order to receive state aid, a public library must provide equal library services to each individual within the library's "legal service area population." Rule 3(d) defines "legal service area population" as "the total population residing within an area designated for and served by a public library, including the jurisdictional area and any contractual service area." Mich. Admin. Code, R. 397.03(d). In other words, under the changed rules, libraries must provide the same services to every individual they serve, regardless of whether that individual resides in the library's jurisdictional area or a contractual service area outside the library's jurisdiction.
These State Aid Rules, if upheld, would change the long-established framework for state aid and outside-service contracts. Herrick's current outside-service contracts—which provide different library privileges depending on where an individual resides—are clearly valid under the current statutory framework and existing caselaw. But the DOE's rules would render such arrangements unacceptable for purposes of distributing state aid. Concerned that the new rules would deprive it of all state funding, Herrick filed a complaint against the Library of Michigan, HAL, and the DOE and sought a declaratory judgment in October 2009. It alleged that the State Aid Rules would deprive Herrick of all state funding if it refused to offer identical services to both residents of its district and residents of its contractual service areas. Herrick asked the trial court to hold that defendants do not have authority to promulgate the State Aid Rules and that the rules violate Michigan law.
The trial court ruled that defendants did not have the authority to promulgate the State Aid Rules because defendants did not have a clear and express statutory mandate to do so. The court rejected defendants' contention that the power of an administrative agency to promulgate administrative rules may be derived by inference from a statute or statutes governing an agency.
Defendants assert that administrative agencies can infer rulemaking authority from the express authorities granted to them by statute. Specifically, they say that an agency has an implied power to adopt rules that are necessary to exercise the power expressly granted to the agency. Thus, while defendants acknowledge that the State Aid Act does not grant them express rulemaking authority, they suggest it gives them implied rulemaking authority.
Plaintiff counters that the Legislature must expressly grant rulemaking authority to administrative agencies—"a doubtful power does not exist"—and that agencies cannot extend their powers by inference. Mason Co. Civil Research Council v. Mason
It is "one of the axioms of modern government[]" that a Legislature "may delegate to an administrative body the power to make rules and decide particular cases...." West Virginia ex rel. Dyer v. Sims, 341 U.S. 22, 30, 71 S.Ct. 557, 95 L.Ed. 713 (1951). If it were unable to delegate certain tasks to subsidiary state organizations, the Legislature would be consumed in endless rounds of debate on minutiae.
This labor-saving compact, however, comes with great risks. Administrative agencies frequently exercise judicial, executive, and legislative powers.
Accordingly, our cases carefully limit the powers of administrative agencies to ensure that they do not abuse or make baseless expansions of the limited powers delegated to them by the Legislature. Therefore, being creations of the Legislature, they are only allowed the powers that the Legislature chooses to delegate to them through statute. York, 438 Mich. at 767, 475 N.W.2d 346. Administrative agencies have no common-law powers. McKibbin v. Mich. Corp. & Sec. Comm., 369 Mich. 69, 82, 119 N.W.2d 557 (1963). The "legislature, within limits defined in the law, may confer authority on an administrative officer or board to make rules as to details, to find facts, and to exercise some discretion, in the administration of a statute." Argo Oil Corp. v. Atwood, 274 Mich. 47, 52, 264 N.W. 285 (1935). The agency's authority to adopt rules (if it has any such authority) is usually found "`in the statute creating the agency and vesting it with certain powers.'" Clonlara, Inc. v. State Bd. of Ed., 442 Mich. 230, 237, 501 N.W.2d 88 (1993), quoting Bienenfeld, Michigan Administrative Law (2d ed.), ch. 4, pp. 18-19.
The powers of administrative agencies are thus inherently limited. Their authority must hew to the line drawn by the Legislature. Our Supreme Court has repeatedly stressed the importance of this limitation on administrative agencies, stating that "`[t]he power and authority to be exercised by boards or commissions must be conferred by clear and unmistakable language, since a doubtful power does not exist.'" Mason, 343 Mich. at 326-327, 72 N.W.2d 292 (citation omitted).
The general rule in Michigan, then, is that the power and authority of an agency must be conferred by clear and unmistakable statutory language. And if a statute does explicitly grant an agency a power, that power is subject to "strict interpretation." Mason, 343 Mich. at 326, 72 N.W.2d 292. An administrative agency that acts outside its statutory boundaries usurps the role of the legislature. This type of administrative overreach of course conflicts with our federal and state constitutions, which specifically indicate that "in the actual administration of the government Congress or the Legislature should exercise the legislative power...." J.W. Hampton, 276 U.S. at 406, 48 S.Ct. 348. As such, the role of an administrative agency terminates wherever the Legislature chooses to end it. See York, 438 Mich. at 767, 475 N.W.2d 346.
Defendants would argue that, Coffman, Ghidotti, and Clonlara are united by their suggestion that administrative agencies always possess implied rulemaking power. Yet the statements on implied rulemaking power from these cases share one other common aspect—they are all dicta.
Defendants cite one case to support their position that an agency may have implied rulemaking power conferred by statute: Ranke. In Ranke, the Michigan Corporation and Securities Commission suspended the plaintiff's real-estate brokerage license. Ranke, 317 Mich. at 306-307, 26 N.W.2d 898. Ranke challenged the suspension, arguing that the securities commission did not have the power to make rules and regulations regarding the suspension of real-estate licenses. Id. at 308, 26 N.W.2d 898.
The enabling statute, however, enumerated "conditions under which licenses [could] be cancelled or revoked" by the commission, including "[a]ny other conduct whether of the same or a different character than hereinbefore specified, which constitutes dishonest or unfair dealing." Id. at 308-309, 26 N.W.2d 898. The Court explained that the language of the statute
In other words, the securities commission had the implied authority to define other conduct that constituted "dishonest or unfair dealing." Id. The power of classifying certain behavior as "dishonest and unfair dealing" was a necessary element of the "due and efficient exercise of the powers expressly granted" to the securities commission by the enabling statute. Id. at 309, 26 N.W.2d 898. While affirming the securities commission's limited implied powers, the Court relied on a rule created by the California Supreme Court:
Accordingly, there is authority that Michigan administrative agencies can infer a degree of rulemaking authority from an enabling statute. But an administrative agency may do so only when that implied authority is "necessary to the due and efficient exercise of the powers expressly granted" by the enabling statute. Ranke, 317 Mich. at 309, 26 N.W.2d 898. This standard is a carefully crafted compromise that allows the Legislature to delegate some degree of authority to administrative agencies, but ensures that the an agency does not expand its powers beyond those that the Legislature intended.
Defendants argue that the rulemaking authority to promulgate the State Aid Rules may be inferred from two sections of the State Aid Act, MCL 397.567 and MCL 397.573.
The State Aid Act is also dissimilar from the law at issue in Ranke, in which the Court held that an administrative agency had an implied rulemaking power. The Ranke statute necessarily required the Michigan Corporation and Securities Commission to define "other conduct" constituting "dishonest and unfair dealing." Id. at 308-309, 26 N.W.2d 898. The State Aid Act, however, leaves no opening for the DOE—nowhere does it stipulate that the DOE can determine "other" eligibility requirements for state aid. Instead, it lists only one eligibility requirement in MCL 397.567, which mandates that libraries seeking state aid must meet the DOE's certification requirements for personnel. If the Legislature had intended the DOE to be able to write new eligibility requirements, it would have included some language to that effect in the State Aid Act. Wolverine, 233 Mich.App. at 247, 590 N.W.2d 586 (noting that the express mention of one thing in a statute implies the exclusion of other similar things). Accordingly, the DOE does not have express or implied rulemaking authority to promulgate the State Aid Rules at issue in this case.
The substance and purpose of the State Aid Rules that DOE seeks to issue and enforce is an equally compelling reason to reject defendant's position. In effect, the DOE's rules force any library receiving state funds to provide equal privileges to each person it serves. The DOE claims the implied authority to do so from the State Aid Act, passed by the Legislature. But the Legislature enacted the State Aid Act pursuant to article 8, § 9 of our state Constitution, which gives the Legislature an obligation to promote the establishment of public libraries. Goldstone, 479 Mich. at 563, 737 N.W.2d 476. Moreover, importantly and dispositively, the drafters of article 8, § 9 sought to ensure that local public libraries would not be required to make the same services available to individuals outside their jurisdiction as they provide to residents within their jurisdiction. Indeed, the drafters used article 8, § 9 to prevent the Legislature from exercising exactly the power DOE now seeks to gain through implication. Id. at 559-560, 737 N.W.2d 476. As such, the State Aid Rules conflict with the intent of the state Constitution and are an attempt by the DOE to exercise a power never granted to it by the Legislature.
For more than a century, the Michigan Constitution has sought to promote library construction throughout the state. Goldstone, 479 Mich. at 559-560, 737 N.W.2d 476. To this end, the 1908 Constitution required that every community maintain a library. Const. 1908, art. 11, § 14. This policy was unrealistic and unsuccessful. See Goldstone, 479 Mich. at 566, 737 N.W.2d 476. In 1962, at the time delegates met to draft the current constitution, only 7 percent of cities and townships in Michigan maintained a public library. Id. More than one million Michigan residents had no access to a public library. Id. at 566 n. 11, 737 N.W.2d 476.
Recognizing the failure of this "1908" approach, the Committee on Education at
The committee's desire to promote local control of libraries was echoed by the convention delegates, who were determined to avoid a constitutional provision that mandated that each individual library provide equal privileges to each Michigan resident—the very policy that the DOE advocates here by implication. Delegate Karl Leibrand, himself a trustee of Bay City's public library, stressed the need for libraries to offer different services to different citizens. Id. at 834. It would be an "undue burden" to require a library to offer the same services to a "tourist or traveling salesman" as it would to a permanent resident of the town in which the library was located. Id. Delegate Vera Andrus noted that this concern reflected the will of the people: "One of the first problems that came up was, people said, `We don't want to have to pay for our library and then have other people use it.' We don't mean that by this language [the proposed draft of article 8, § 9]." Id. at 835 (emphasis added).
The final wording of article 8, § 9 reflects these concerns and enshrines local control of library resources and privileges in Michigan law. It states:
Delegate Alvin Bentley explained that the clause "adopted by the governing bodies thereof" was purposefully added by the Committee on Style and Drafting to expressly allow local regulation of library resources:
Further, responding to Delegate Leibrand's concerns that libraries would be required to provide equal privileges to nonresidents at no cost, Delegate Andrus pointed out that the draft of article 8, § 9 used the word "available" instead of "free." 1 Official Record, Constitutional Convention
The Constitution and this constitutional history underscores two points regarding public libraries. First, the best way to encourage communities to build and maintain libraries is to place public libraries under local control. Goldstone, 479 Mich. at 562, 737 N.W.2d 476. Second, local control of public libraries necessarily entails the possibility that, through service contracts or other mechanisms, libraries will offer different privileges to individuals depending on where they live and how much they pay for services. Id.
In Goldstone, our Supreme Court emphasized and endorsed both points. It rejected the claim of a non-resident plaintiff who, without paying for the service, sought equal privileges at another community's library. In other words, Goldstone held that a non-resident has no constitutional claim to gain library-subsidization rights from the taxpayers in another community. Id. at 569, 737 N.W.2d 476. And the Supreme Court reasoned that to hold otherwise creates no incentive for communities to build and maintain libraries. Id. at 564, 737 N.W.2d 476. Nor would communities have an incentive to "make improvements and new accessions" to existing libraries, as any additions would be "identically available to persons who had and who had not paid for them[.]" Id.
The message of Goldstone is clear: local control of libraries, and the different privileges it may entail, is not only constitutionally permissible, but clearly reflects the intent of the delegates who drafted the current Constitution. The drafters believed it to be the best way to provide access to a library to the greatest number of Michigan citizens. And as Goldstone notes, this policy has largely achieved its aims: In 2007, less than 1/5 of 1 percent of the state population lacked library access—an enormous improvement from the 1 million Michigan residents who had no access to public libraries in 1963.
Thus, the Legislature, which is presumed to know the meaning of our Constitution, explicitly afforded local public libraries a large degree of autonomy in their operations.
The DOE does not have an implied power to adopt rules to govern its distribution of state aid to public libraries. In Michigan, administrative agencies only possess the powers expressly granted to
Accordingly, the trial court properly awarded plaintiff the Herrick District Library, summary disposition, and we affirm.
METER, P.J., and WILDER, J., concurred with SAAD, J.
Similarly, in Ghidotti, the Legislature expressly delegated authority to an administrative agency, rendering the Court's comments on implied authority unnecessary. Ghidotti, 459 Mich. at 196-197, 202, 586 N.W.2d 883. The statute at issue gave the Friend of the Court Bureau license to develop a formula used to determine child-support and health-care obligations. Id. at 196-197, 586 N.W.2d 883. Thus, Ghidotti did not involve implied authority and the Court's comment that rulemaking power can be inferred from statutory authority granted to an administrative agency is dicta. Id. at 202, 586 N.W.2d 883.
As in this case, the Clonlara Court considered a set of compliance procedures published by the DOE. Clonlara, 442 Mich. at 233-234, 501 N.W.2d 88. However, Clonlara addressed whether those DOE procedures were promulgated in accordance with the Administrative Procedures Act. Id. The Court explicitly noted that neither party claimed an implied rulemaking authority. Id. at 237 n. 14, 501 N.W.2d 88. As in Coffman and Ghidotti, the Court's comments on implied rulemaking authority were unnecessary to the final outcome of the case.
