Collier County v. State

• Decision Date: 06 May 1999
• Docket Number: No. 93,802.,93,802.
• Citation: 733 So. 2d 1012
• Parties: COLLIER COUNTY, Florida, etc., Appellant, v. STATE of Florida, et al., Appellees.
• Court: Florida Supreme Court

733 So.2d 1012

COLLIER COUNTY, Florida, etc., Appellant, v.STATE of Florida, et al., Appellees.

No. 93,802.

Supreme Court of Florida.

May 6, 1999.

C. Allen Watts of Cobb, Cole & Bell, Daytona Beach, Florida, for Appellant.

Joseph P. D'Alessandro, State Attorney, and Michael J. Provost, Assistant State Attorney, Twentieth Judicial Circuit, Naples, Florida, and Douglas L. Stowell of Stowell, Anton & Kraemer, Tallahassee, Florida, for Appellees.

Daniel D. Eckert, Volusia County Attorney, and Joseph A. Morrissey and Mark A. Watts, Assistant County Attorneys, Clearwater, Florida, for The Florida Association of County Attorneys, Inc., Amicus Curiae.

PARIENTE, J.

We have on appeal the final judgment of the trial court refusing to validate revenue certificates authorized by county ordinance.We have jurisdiction.Seeart. V, § 3(b)(2), Fla. Const.¹ Collier County filed a complaint for validation of revenue certificates, which the County intended to issue pursuant to Ordinance 98-25, entitled "Interim Governmental Services Fee Ordinance"(ordinance).Because the revenue certificates were to be repaid from the collection of a fee authorized by the ordinance, the trial court's decision whether to validate the revenue certificates focused on the validity of the fee.

After a hearing, the trial court denied the complaint for validation, concluding that the fee was actually an unauthorized tax.We affirm the final judgment of the trial court for two reasons.First, we agree that the "Interim Governmental Services Fee" is not a valid special assessment or fee, but an impermissible tax.Second, we conclude that the ordinance conflicts with the ad valorem taxation scheme enacted by the Legislature.

An overview of the extent of the local government's authority to levy taxes is essential to a proper understanding of the issues in this case and to provide the backdrop for the reasons the County passed the ordinance.The power of state and local governments to levy taxes is governed by the constitution.Article VII, section 1(a), Florida Constitution, provides that:

No tax shall be levied except in pursuance of law.No state ad valorem taxes shall be levied upon real estate or tangible personal property.All other forms of taxation shall be preempted to the state except as provided by general law.

Article VII, section 9(a) further provides that:

Counties, school districts, and municipalities shall, and special districts may, be authorized by law to levy ad valorem taxes[²] and may be authorized by general law to levy other taxes, for their respective purposes, except ad valorem taxes on intangible personal property and taxes prohibited by the constitution.

Thus, the constitutionmandates that the state pass general laws authorizing local governments to levy ad valorem taxes on real estate and tangible personal property, subject to the millage rate limitations of article VII, section 9(b).³All other forms of taxation are preempted to the state, unless authorized by general law.The constitution further allowsthe Legislature to authorize counties to levy other taxes.Therefore, local governments have no other authority to levy taxes, other than ad valorem taxes, except as provided by general law.The County does, however, possess authority to impose special assessments and user fees.See generallyart. VIII, § 1(f), Fla. Const.;§ 125.01(1)(r), Fla. Stat.(1997);State v. City of Port Orange,650 So.2d 1(Fla.1994);Speer v. Olson,367 So.2d 207(Fla.1978).

The County does not contend that the additional revenue it seeks to collect pursuant to its ordinance is specifically authorized by general law.Accordingly, if the "Interim Governmental Services Fee" constitutes a tax, rather than a special assessment or a valid fee, the assessment is unconstitutional.

The County passed the ordinance in question because it contends that the general law governing ad valorem taxation creates a "windfall" for certain property owners.Chapter 192, Florida Statutes(1997), entitled "Taxation: General Provisions," implements, in part, the mandate of article VII, section 9(a) that the Legislature authorize counties to levy ad valorem taxes.Chapter 192 includes provisions requiring all property to be assessed, except inventories, seesection 192.011, and, as pertinent here, provisions regarding the date that "[a]ll property shall be assessed according to its just value."§ 192.042.

Section 192.042(1) provides that real property is to be assessed on January 1 of each year and that "[i]mprovements or portions not substantially completed[⁴] on January 1shall have no value placed thereon."(Emphasis supplied.)Therefore, if improvements are not substantially completed by January 1, there will be no tax liability on the value of the improvements until the following fiscal year.Further, section 197.333 provides that all taxes are due and payable on November 1, but those taxes do not become delinquent until April 1 following the year in which they are assessed.As a result of the valuation scheme enacted by the Legislature, there can be a delay in payment of taxes on improvements of up to twenty-seven months after substantial completion.⁵

In addition, the Legislature requires the County's fiscal year to begin on October 1.See§ 129.04, Fla. Stat.(1997).However, because of the valuation scheme imposed by the Legislature, property improvements substantially completed after October 1 incur no ad valorem taxes on the improved value for the balance of the fiscal year.⁶

The County does not challenge the constitutionality of the statutory valuation scheme, but asserts that the statutory scheme is unfair because the County is required to provide services to the improved property without a corresponding payment of taxes on the improvements for up to twenty-seven months.The County described the situation in its ordinance:

Immediately upon the substantial completion and availability for lawful occupancy of any improvements to real property ... the County is required to provide full government services to the occupant or user of such property, for the duration of the fiscal year in progress at the time of such completion or acquisition, but the owner of such property is not required to pay ad valorem taxes with respect to such property for that fiscal year.

The purpose of the fee is to provide the equivalent of a partial year assessment of ad valorem taxes on improvements to property substantially completed after January 1 that would not otherwise be subject to ad valorem taxation at its new increased value.However, the County stresses that the assessment is not based on the value of the property, but rather on the increased cost of providing certain "growth-sensitive" services as a result of the improvement.

The County's methodology identified certain government services that the experts maintained are growth sensitive.According to the expert who testified at the hearing, these growth-sensitive County services experience an increase in demand corresponding to the improvement of property.Through a complicated set of calculations, the County arrived at a fee for the improvements to properties substantially completed after January 1"equivalent to the [pro rata] cost of governmental services otherwise funded by that portion of the County General Fund ... derived from ad valorem taxation."The County's methodology calls for the calculation of the fee to be based on the conversion of a per capita cost for increased services to a per home cost in the case of residential property, and a per employee cost to a per square foot cost in the case of nonresidential uses.

The fee is assessed only for the number of weeks between the time the improvements on the property are "substantially completed," and the next January 1 assessment.The ordinance provides that the fee will be collected by the uniform method for collection of non-ad valorem assessments established by section 197.3632, thus, as a special assessment on the ad valorem tax bill.A credit is given for the taxes that are payable and the value of the homestead exemption.

The government growth-sensitive services funded by the fee are: (1) the Office of the Sheriff; (2) elections; (3) code enforcement; (4)courts and related agencies; (5) animal control; (6) libraries; (7) parks and recreation; (8) public health; (9) medical examiner; (10) public works; and (11) support services.⁷The County admits that these are the exact services funded through the general revenue fund from ad valorem taxes that all property tax payers are required to support.

The trial court explained its reasoning in concluding that the proposed fee to fund the revenue certificates was in fact a tax, which the County is prohibited from imposing:

The purpose of the [Interim Governmental Services Fee] was to provide the equivalent of a partial year's assessment of ad valorem taxation on property which had been improved or put into service after January 1 of a given year.That improved property would not have been otherwise eligible for ad valorem taxation at its new value until the subsequent calendar year.As pointed out by the County, this situation created a windfall to certain citizens which was unfair to those taxpayers who did not receive the same advantage.It is axiomatic that the Government must provide all citizens of the County such general public services as police, courts, libraries, and fire protection.These basic services are provided whether the property is fully inhabited, vacant or under construction.Ad valorem taxpayers who are assessed at full value pay their proportionate share of these services based upon the millage rate established by the County.Those who are not assessed at full value obviously pay less than their proportionate share....It was the County's desire to recapture this lost revenue which created the impetus for the Fee.

. . . .

...[However] the Fee in this case is to be

...