Smith v. American Airlines, Inc., 80438
| Decision Date | 13 October 1992 |
| Docket Number | No. 80438,80438 |
| Citation | 606 So.2d 618 |
| Parties | 17 Fla. L. Weekly S617 Jim SMITH, etc., Appellant, v. AMERICAN AIRLINES, INC., et al., Appellees. |
| Court | Florida Supreme Court |
Robert A. Butterworth, Atty. Gen. and Louis F. Hubener, Asst. Atty. Gen., Tallahassee, for appellant.
Barry Richard, Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, Tallahassee, for appellees American Airlines, Inc., Delta Airlines, Inc., Flagship Airlines, Inc., Northwest Airlines, Inc., United Air Lines, Inc. and USAIR, Inc.
John R. LaCapra, Coral Gables, and Cass D. Vickers and Robert S. Goldman, Messer, Vickers, Caparello, Madsen, Lewis, Goldman & Metz, P.A., Tallahassee, for appellees Florida Ports Council, Inc., Panama City Port Authority, Port Everglades Authority, Gatx Terminals Corp. and Hvide Shipping, Inc.
S. LaRue Williams, Kinsey Vincent Pyle, P.A., Daytona Beach, amicus curiae, for Terence M. Brown.
Jim Smith, acting in his official capacity as Secretary of State, appeals a circuit court's order finding the ballot summary for Proposition 7, scheduled to appear on the November 1992 general election ballot, to be fatally defective. The First District Court of Appeal certified that this case presents a question of great public importance requiring immediate resolution by this Court in light of the upcoming election. We have jurisdiction under article V, section 3(b)(5) of the Florida Constitution.
Article XI, section 6 of the Florida Constitution creates the Taxation and Budget Reform Commission, whose mandate is to review the revenue needs and expenditure processes of the state, recommend statutory changes, and propose revisions to the constitution. In May, 1992, the Commission filed a proposed amendment, Proposition 7, which seeks to add a subsection to article VII, section 3 of the Florida Constitution. The text of the amendment provides as follows:
(e) Effective January 1, 1993, leaseholds and other possessory interests created after November 5, 1968, in property of the United States, of the state or any of its political subdivisions, municipalities, authorities, districts, agencies or other public bodies corporate of the state, shall be taxed as real property for ad valorem tax purposes. All such leasehold interests created prior to November 5, 1968, including renewal options and extensions thereof provided in the initial lease, shall be taxed as intangible personal property.
The Commission also prepared a ballot summary for Proposition 7, as required by section 101.161, Florida Statutes (1991). The summary provides as follows:
Subjects leaseholds in government owned property entered into since 1968 to ad valorem taxation. All leaseholds in government owned property entered into prior to 1968, and subsequent renewal options and extensions provided in the initial lease, shall be taxed as intangible personal property.
Appellees filed a complaint in the circuit court alleging in relevant part that the ballot summary was defective in that it failed to comply with section 101.161 and that the provisions of Proposition 7 violate the right to equal protection of the laws. 1 The circuit court ruled that the ballot summary was defective and therefore found it unnecessary to address the equal protection claim. In reaching its conclusion, the circuit court found four categories of defects: (1) the summary does not explain that the tax rate on post-1968 leaseholds will be shifted from the intangible rate to the much higher real property rate and fails to give notice that the taxing power is shifted from state to local government; (2) the summary is misleading, in that it implies that pre-1968 leaseholds are to be taxed as intangible personal property for the first time and fails to inform the voter that the purpose of the special treatment for pre-1968 leaseholds is to exempt a select class of taxpayers from the newly imposed and substantially higher real property rate; (3) by using the terms "since 1968" and "prior to 1968," the summary gives the misleading impression that leaseholds created during 1968 are not taxed at all and fails to inform the voter of the amendment's effect on leases entered into during that year; and (4) the amendment itself is unclear as to whether the amendment affects the historic tax exemptions on property used for public purposes. The circuit court's final judgment enjoined the Secretary of State from placing Proposition 7 on the November 1992 general election ballot.
Section 101.161(1) provides, in relevant part:
Whenever a constitutional amendment or other public measure is submitted to the vote of the people, the substance of such amendment or other public measure shall be printed in clear and unambiguous language on the ballot.... The substance of the amendment or other public measure shall be an explanatory statement, not exceeding 75 words in length, of the chief purpose of the measure.
Thus, the statute requires that the ballot summary for a proposed constitutional amendment "state in clear and unambiguous language the chief purpose of the measure." Askew v. Firestone, 421 So.2d 151, 155 (Fla.1982). The summary must give voters sufficient notice of what they are asked to decide to enable them to intelligently cast their ballots. Id. However, the summary is not required to explain every detail or ramification of the proposed amendment. Advisory Opinion to the Attorney General--Limited Political Terms in Certain Elective Offices, 592 So.2d 225, 228 (Fla.1991); Carroll v. Firestone, 497 So.2d 1204, 1206 (Fla.1986).
The chief purpose of Proposition 7 is to subject leaseholds in government-owned property to ad valorem taxation at the real property tax rate for leases entered into since November 5, 1968, and at the intangible personal property tax rate for leases entered into before November 5, 1968. However, the ballot summary specifies only that post-1968 government leaseholds will be subject to ad valorem taxation and makes no reference to taxation as real property. "Ad valorem" is defined by section 192.001, Florida Statutes (1991), as "a tax based upon assessed value of property." The statutory definition of ad valorem is consistent with its general dictionary definition, "imposed at a rate percent of value," Webster's Ninth New Collegiate Dictionary 58 (1988); "of a property tax: levied according to assessed value," Webster's Third New International Dictionary 30 (1976). Thus, the term "ad valorem" tells the voter nothing about the actual change to be effected because it applies to both real and personal property.
Leaseholds in government-owned property used for residential and commercial purposes are currently subject to ad valorem taxation as intangible personal property. Sec. 196.199(2)(b), Fla.Stat. (1991). Effective January 1, 1993, the intangible tax rate will be raised to its constitutional maximum of two mills on the dollar. Art. VII, Sec. 2, Fla. Const.; ch. 92-319, Laws of Fla. Yet, Proposition 7 would subject such leaseholds to ad valorem taxation as real property at a rate of up to a constitutional maximum of thirty mills. Art. VII, Sec. 9(b), Fla. Const. By failing to refer to taxation as real property, the ballot summary does not advise the voter that the taxes on post-1968 leaseholds of government-owned property could increase as much as fifteen times the current rate.
In support of the ballot summary, appellant argues that it is common knowledge that ad valorem taxes include taxes on real property. 2 Therefore, because the second sentence of the summary specifically informs voters that pre-1968 leases will be taxed as intangible personal property, appellant suggests that the only logical conclusion to be drawn is that post-1968 leases will be taxed at a different rate than pre-1968 leases--obviously...
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