Crapo v. Gainesville Area Chamber of Commerce, Inc.

• Decision Date: 02 May 2019
• Docket Number: No. 1D17-0452,1D17-0452
• Citation: 274 So.3d 453
• Parties: Edward A. CRAPO, as Alachua County Property Appraiser, and John Power, as Alachua County Tax Collector, Appellants, v. GAINESVILLE AREA CHAMBER OF COMMERCE, INC., a Florida Not for Profit Corporation, Appellee.
• Court: Florida District Court of Appeals

274 So.3d 453

Edward A. CRAPO, as Alachua County Property Appraiser, and John Power, as Alachua County Tax Collector, Appellants,

v.GAINESVILLE AREA CHAMBER OF COMMERCE, INC., a Florida Not for Profit Corporation, Appellee.

No. 1D17-0452

District Court of Appeal of Florida, First District.

May 2, 2019

Rehearing Denied June 17, 2019

John C. Dent, Jr., and Jennifer A. McClain of Dent & McClain, Chartered, Sarasota, for Appellant Edward A. Crapo, and Robert C. Swain, Senior Assistant County Attorney, Gainesville, for Appellant John Power.

Paul A. Donnelly and Jung Yoon of Donnelly & Gross, Gainesville, for Appellee.

Bilbrey, J.

The Property Appraiser and Tax Collector for Alachua County (hereafter, Alachua County) challenge a final summary judgment holding real property owned by the Gainesville Area Chamber of Commerce to be exempt from ad valorem taxation. We affirm.

Prior to 2014, the Gainesville Area Chamber of Commerce was granted an exemption from ad valorem taxation. However, in 2014, the Chamber was denied that exemption. It challenged that denial before the Value Adjustment Board, but the Board denied relief. The Chamber then sought relief in the circuit court. Finding the activities of the Chamber to serve a "charitable purpose," the circuit court held the Chamber was entitled to an exemption. Alachua County now challenges that holding.

Unless expressly exempted, all real property in the state is subject to taxation. See § 196.001(1), Fla. Stat. (2014). However, Article VII, section 3(a), of the Florida Constitution provides:

Such portions of property as are used predominantly for educational, literary, scientific, religious or charitable purposes may be exempted by general law from taxation.

(Emphasis added).

The term "charitable purposes" is not defined in the Constitution. But the term is defined in section 196.012(7), Florida Statutes (2014), as providing

a function or service which is of such a community service that its discontinuance could legally result in the allocation of public funds for the continuance of the function or service. It is not necessary that public funds be allocated for such function or service but only that any such allocation would be legal.

This statute is clear and unambiguous, and therefore, we do not engage in any statutory construction. See State v. Jett , 626 So.2d 691, 693 (Fla. 1993) ("It is a settled rule of statutory construction that unambiguous language is not subject to judicial construction, however wise it may seem to alter the plain language."). The question presented in this appeal is therefore a simple one: do the activities of the Gainesville Chamber of Commerce qualify as "charitable purposes" as the Florida Legislature has defined that term in section 196.012(7) ?

Alachua County has not challenged the findings of fact made by the circuit court that

[t]he Chamber is the delegated local provider of economic development and related functions and services which grow the tax base, create jobs and promote the prosperity and general welfare of the Gainesville-Alachua County are. It was established in Alachua County for the express purpose of improving the quality of life in Alachua County through the creation of jobs, increased capital investment, increased local competitiveness for business development, and general economic activity.

(Internal quotation marks omitted).

The trial court also found that the "Chamber does not use its property for a profit-making purpose. All income generated by the Chamber is used for charitable purpose."

Given these activities, the Chamber performs a community service such that a discontinuance of such service "could legally result in the allocation of public funds for the continuance of the function or service." § 196.012(7). As the trial court further found, "there is no doubt that economic development serves a public purpose for which public funds can be allocated." The Department of Economic Opportunity, created by section 20.60, Florida Statutes, is but one example of such a public service. The purpose of this publically-funded department is to "create, expand, and retain business in this state, to recruit business from around the world, and to facilitate other job-creating efforts." § 20.60(4)(a).

While not challenging the constitutionality of section 196.012(7), Alachua County argues that despite its unambiguous language, a tax exemption for "charitable purposes" should be limited to "benevolent" purposes, such as providing material assistance to the needy. As the promotion of business and economic development is not traditionally understood as a charitable activity, property used for business and economic development should not be entitled to a tax exemption under the charitable purposes provision of the state constitution, Alachua County argues.

The dissent agrees with Alachua County, but in its analysis, undertakes judicial construction of an unambiguous statute. See Mendenhall v. State , 48 So.3d 740 (Fla. 2010) (holding courts should not construct an unambiguous statute). Further, the dissent has overlooked the plain meaning of section 196.012(7) to impose what it believes should be the meaning of "charitable purposes" under the statute: to provide relief to the needy. While relief to the needy is a laudable charitable purpose, the statute is not so limited. Creating an ambiguity where one did not previously exist would exceed our authority. As the Florida Supreme Court explained in Velez v. Miami-Dade County Police Department , 934 So.2d 1162, 1164-65 (Fla. 2006) :

[W]e are without power to construe an unambiguous statute in a way which would extend, modify, or limit, its express terms or its reasonable and obvious implications. To do so would be an abrogation of legislative power.

(Quotation marks and citations omitted).

The dissent relies on the Florida Constitution explaining that the "plain meaning of the word ‘charitable’ as used in the Florida Constitution is controlling, and the statute must be construed as limited to that meaning." (Dissent at pp. 460–61). As noted, Article VII, section 3(a) of the Florida Constitution does indeed provide that the Legislature is to enact laws exempting from taxation property used "predominantly for education, literary, scientific, religious or charitable purposes ...." However, as also noted, the Constitution does not define the term "charitable." Therefore, the "plain meaning" on which the dissent relies is not actually provided by our Constitution. Instead, the dissent tries to invoke a well-established canon of construction to reach its conclusion.

The dissent asserts that the Chamber, which argues for affirmance of the lower court's ruling under review, improperly equates "charitable purposes" with "public purposes." But this ignores the fact that it was the Legislature which first equated charitable purpose, for determining tax exemption, with public purpose. The Legislature plainly stated in section 196.012(7) that a charitable purpose is an activity for which "public funds" could be legally allocated.

In conclusion, the function of the Chamber mirrors some of the functions already undertaken by the State, and thus, the Chamber performs a function the discontinuance of which could result in the legal allocation of public funds. Therefore, the Chamber is entitled to an exemption from ad valorem taxation pursuant to the application of the unambiguous terms of section 196.012(7). The trial court's judgment granting such an exemption is AFFIRMED .

Roberts, J., concurs; Kelsey, J., dissents with opinion.

Kelsey, J., dissenting.

The Alachua County Property Appraiser challenges the lower tribunal's decision granting the Gainesville Area Chamber of Commerce a charitable exemption from ad valorem property tax under section 196.012(7), Florida Statutes (2014), which provides as follows:

"Charitable purpose" means a function or service which is of such a community service that its discontinuance could legally result in the allocation of public funds for the continuance of the function or service. It is not necessary that public funds be allocated for such function or service but only that any such allocation would be legal.

Id.

Although the majority holds that this statute requires no interpretation, the operative phrase is ambiguous: "of such a community service that its discontinuance could legally result in the allocation of public funds for the continuance of the function or service." As the Chamber's argument illustrates, it is possible to interpret this language so broadly that every legal expenditure of public funds would become a "charitable" purpose. To equate "public" purpose with "charitable" purpose is to ignore the limited constitutional grant of exemption authority. Further, such an interpretation would eliminate any separate charitable exemption, contrary to well-settled rules of construction requiring us to give effect to every statute and portion thereof. See Hechtman v. Nations Title Ins. of N.Y., 840 So.2d 993, 996 (Fla. 2003) ("It is an elementary principle of statutory construction that significance and effect must be given to every word, phrase, sentence, and part of the statute if possible, and words in a statute should not be construed as mere surplusage."). Because the Chamber's and the majority's interpretation of the statute renders the existence of a charitable exemption superfluous, and exceeds the Florida Constitution's limited grant of authority to enact tax exemptions, we must reverse.

I. Governing Rules of Construction.

We construe the Florida Constitution and Florida Statutes de novo. Garcia v. Andonie , 101 So.3d 339, 343 (Fla. 2012). All property is subject to taxation unless expressly exempted. § 196.001(1), Fla. Stat.; Capital City Country Club, Inc. v. Tucker, 613 So.2d 448, 452 (Fla. 1993). The constitution's limited grant of tax exemption authority is "the touchstone against which the Legislature's enactments are to be judicially measured." Sebring Airport Auth. v....