Florida Dept. of Revenue v. Howard, SC03-2270.

• Decision Date: 28 November 2005
• Docket Number: No. SC03-2270.,SC03-2270.
• Citation: 916 So.2d 640
• Parties: FLORIDA DEPARTMENT OF REVENUE, Appellant, v. Joseph C. HOWARD, et al., Appellees.
• Court: Florida Supreme Court

Page 640

916 So.2d 640

FLORIDA DEPARTMENT OF REVENUE, Appellant, v. Joseph C. HOWARD, et al., Appellees.

No. SC03-2270.

Supreme Court of Florida.

June 30, 2005.

Rehearing Denied November 28, 2005.

Charles J. Crist, Jr., Attorney General, Christopher M. Kise, Solicitor General, Louis F. Hubener, Chief Deputy Solicitor General, and Nicholas Bykowsky, Assistant Attorney General, Tallahassee, FL, for Appellant.

Evan J. Langbein of Langbein and Langbein, P.A., Miami, FL, Robert A. Ginsburg, Miami-Dade County Attorney, Thomas W. Logue, Assistant County Attorney, Miami, FL and Gaylord A. Wood, Jr., of Wood and Stuart, P.A., Fort Lauderdale, FL, for Appellees.

Larry E. Levy and Loren E. Levy of the Levy Law Firm, on behalf of Property Appraisers' Association of Florida, Inc., Tallahassee, FL, for Amicus Curiae.

ANSTEAD, J.

We have on appeal a decision of a district court of appeal declaring invalid a state statute. Fla. Dep't of Revenue v. Howard, 859 So.2d 619 (Fla. 1st DCA 2003). We have jurisdiction. See art. V, § 3(b)(1), Fla. Const. For the reasons set out below, we reverse the decision of the First District Court of Appeal and uphold the constitutionality of section 193.016, Florida Statutes (2001), requiring a property appraiser to consider the results of an appeal before a value adjustment board (VAB) in the prior year in determining the current just value of tangible personal property.

PROCEEDINGS TO DATE

The appellees include taxpayers who own real estate in Broward and Miami-Dade counties. The taxpayers sued the Department of Revenue and the county property appraisers and sought a declaratory judgment in the circuit court contending that section 193.016 violated the tax assessment provisions of the Florida Constitution by interfering with the property appraiser's discretion to determine just value, and by favoring tangible personal property owners who may have received a reduced assessment from an administrative VAB in the previous tax year.

Section 193.016 provides:

Property appraiser's assessment; effect of determinations by value adjustment board. — If the property appraiser's assessment of the same items of tangible personal property in the previous year was adjusted by the value adjustment board and the decision of the board to reduce the assessment was not successfully appealed by the property appraiser, the property appraiser shall consider the reduced values determined by the value adjustment board in assessing those items of tangible personal property. If the property appraiser adjusts upward the reduced values previously determined by the value adjustment board, the property appraiser shall assert additional basic and underlying facts not properly considered by the value adjustment board as the basis for the increased valuation notwithstanding the prior adjustment by the board.

§ 193.016, Fla. Stat. (2001). The trial court concluded that the requirement in section 193.016 that the appraiser "shall consider" the reduced assessment by the VAB in the prior year did not interfere with the appraiser's authority and discretion to determine just value in accord with article VII, section 4 of the Florida Constitution. Howard, 859 So.2d at 620-21. However, the trial court concluded that the provision of the statute requiring the property appraiser to "assert additional basic and underlying facts not properly considered by the value adjustment board" in order to avoid the effect of the VAB's ruling did impede the appraiser's discretion in determining just value in violation of article VII, section 4. Id.

On appeal, the First District, in a two-to-one decision, concluded that the statute was unconstitutional in its entirety because it created a separate valuation methodology for a special class of property in violation of article VII, section 4. Id. at 621.

ANALYSIS

The Department of Revenue contends that the First District erred in concluding that section 193.016 violates the just valuation provisions of article VII, section 4. While we review decisions striking state statutes de novo, we are obligated to accord legislative acts a presumption of constitutionality and to construe challenged legislation to effect a constitutional outcome whenever possible. See Eastern Air Lines, Inc. v. Dep't of Revenue, 455 So.2d 311, 314 (Fla.1984); Chatlos v. Overstreet, 124 So.2d 1, 2 (Fla.1960). We do so here.

Article VII, section 4 of the Florida Constitution mandates the Legislature to prescribe regulations that "shall secure a just valuation of all property for ad valorem taxation." This Court has held that, under this mandate for just valuation, the just valuation of all property, except for the different classes of property actually listed in section 4, must be measured under uniform objective standards. See Valencia Ctr., Inc. v. Bystrom, 543 So.2d 214, 216 (Fla.1989); Interlachen Lakes Estates, Inc. v. Snyder, 304 So.2d 433, 434-35 (Fla.1973).

We have also held that while the Legislature could establish just valuation criteria to be applied in determining the just value of property for tax purposes, it could not arbitrarily classify some property for favored tax treatment. See Bystrom, 543 So.2d at 216; Snyder, 304 So.2d at 434-35. Logically, of course, such classification could lead to other property carrying a disproportionate share of the tax burden. See Bystrom, 543 So.2d at 216; Williams v. Jones, 326 So.2d 425, 430 (Fla.1975). Accordingly, while the Legislature has the power to set criteria for taxation purposes to ensure an equitable distribution of the tax burden, it cannot establish criteria that favor certain taxpayers over others. Williams, 326 So.2d at 432; Snyder, 304 So.2d at 435.

In furtherance of the mandate of article VII, section 4, that all property be assessed at just value, the Legislature has enacted section 193.011, Florida Statutes (2001), which lists eight factors the property appraiser must consider in determining just valuation. Section 193.011 provides:

Factors to consider in deriving just valuation.—In arriving at just valuation as required under s. 4, Art. VII of the State Constitution, the property appraiser shall take into consideration the following factors:

(1) The present cash value of the property, which is the amount a willing purchaser would pay a willing seller, exclusive of reasonable fees and costs of purchase, in cash or the immediate equivalent thereof in a transaction at arm's length;

(2) The highest and best use to which the property can be expected to be put in the immediate future and the present use of the property, taking into consideration any applicable judicial limitation, local or state land use regulation, or historic preservation ordinance, and considering any moratorium imposed by executive order, law, ordinance, regulation, resolution, or proclamation adopted by any governmental body or agency or the Governor when the moratorium or judicial limitation prohibits or restricts the development or improvement of property as otherwise authorized by applicable law. The applicable governmental body or agency or the Governor shall notify the property appraiser in writing of any executive order, ordinance, regulation, resolution, or proclamation it adopts imposing any such limitation, regulation, or moratorium;

(3) The location of said property;

(4) The quantity or size of said property;

(5) The cost of said property and the present replacement value of any improvements thereon;

(6) The condition of said property;

(7) The income from said property; and

(8) The net proceeds of the sale of the property, as received by the seller, after deduction of all of the usual and reasonable fees and costs of the sale, including the costs and expenses of financing, and allowance for unconventional or atypical terms of financing arrangements. When the net proceeds of the sale of any property are utilized, directly or indirectly, in the determination of just valuation of realty of the sold parcel or any other parcel under the provisions of this section, the property appraiser, for the purposes of such determination, shall exclude any portion of such net proceeds attributable to payments for household furnishings or other items of personal property.

Under Florida's Constitution and this Court's case law the particular method of valuation and the weight to be given the factors set out in section 193.011 are left to the discretion of the appraiser. See Bystrom, 543 So.2d at 216-17. The "[d]etermination of just value inherently and necessarily requires the exercise of appraisal judgment and broad discretion by Florida property appraisers." Dep't of Revenue v. Ford, 438 So.2d 798, 802 (Fla.1983) (quoting trial court's judgment). Thus, "[t]he property appraiser's determination of assessment value [is] an exercise of administrative discretion within the officer's field of expertise." Mazourek v. Wal-Mart Stores, Inc., 831 So.2d 85, 89 (Fla.2002) (quoting Blake v. Xerox Corp., 447 So.2d 1348, 1350 (Fla.1984)).

The Department contends that section 193.016 does not violate article VII, section 4's provisions, because the statute merely adds, in essence, a "ninth factor" to section 193.011—the VAB's reduced assessment in the prior year—for the property appraiser to consider along with those other factors set out in section 193.011, when assessing tangible personal property. The Department further argues that the second sentence in section 193.016 simply requires the appraiser to explain his or her actions if he or she decides to assess the value of the property at a higher value than that recently lawfully determined by the VAB.

On the other hand, the taxpayers argue that section 193.016 creates an arbitrary and select classification for tangible personal property that has received a reduced valuation in administrative proceedings, and the section's mandate is more than simply an additional neutral factor for consideration because it usurps the appraiser's...