IN THE CIRCUIT COURT OF THE FIFTH JUDICIAL CIRCUIT IN AND FOR CITRUS COUNTY, FLORIDA

Transcription

1 IN THE CIRCUIT COURT OF THE FIFTH JUDICIAL CIRCUIT IN AND FOR CITRUS COUNTY, FLORIDA DUKE ENERGY FLORIDA, INC., d/b/a DUKE ENERGY, a Florida corporation; and SEMINOLE ELECTRIC COOPERATIVE, INC., a Florida corporation, CASE NO.: GENERAL CIVIL DIVISION Plaintiffs, vs. GEOFFREY N.D. GREENE, as Property Appraiser of Citrus County, Florida; JANICE A. WARREN, as Tax Collector Of Citrus County, Florida; and MARSHALL C. STRANBURG, as Executive Director of the State of Florida Department of Revenue, Defendants. COMPLAINT Plaintiffs, DUKE ENERGY FLORIDA, INC., a Florida corporation, doing business as DUKE ENERGY (hereinafter "Duke Energy Florida"), and SEMINOLE ELECTRIC COOPERATIVE, INC., a Florida corporation (hereinafter "Seminole"), by and through undersigned counsel, sue GEOFFREY N.D. GREENE, as Property Appraiser of Citrus County, Florida (hereinafter the "Property Appraiser"), JANICE A. WARREN, as Tax Collector of Citrus County, Florida (hereinafter the "Tax Collector"), and MARSHALL C. STRANBURG, as Executive Director of the State of Florida Department of Revenue, and allege: INTRODUCTION 1. This is an action brought by Plaintiffs pursuant to Section , Florida Statutes, contesting illegal ad valorem tax assessments made by the Property Appraiser for the Page 1 of 11

2 tax year 2013, to enforce compliance with Florida law, including without limitation Sections and , Florida Statutes, and for refund of ad valorem taxes paid under protest to the Tax Collector in excess of amounts lawfully due. 2. At all times relevant hereto, Duke Energy Florida owned four coal-fired electric generation units in an energy complex located in Citrus County, Florida (hereinafter the "Crystal River Energy Complex"). Plaintiffs and eight tax-exempt municipalities and agencies collectively owned a non-operating nuclear-powered generating unit that is also a part of the Crystal River Energy Complex (hereinafter "CR 3"). Duke Energy Florida holds a majority ownership interest in CR 3, while Plaintiff Seminole and the municipalities and agencies hold minority ownership interests in CR CR 3 began service in In late 2009, during an outage to replace the steam generators at CR 3, Duke Energy Florida discovered structural damage in the form of a delamination within the concrete of the outer wall of the containment building, which resulted in an extension of the outage. Additional delaminations were discovered in early CR 3 has been offline since late On June 27, 2011, Duke Energy Florida filed with the Florida Public Service Commission a preliminary repair estimate for CR 3 of between $900 million and $1.3 billion, with a return to service sometime in In March, 2012, Duke Energy Florida commissioned an independent review team to review and assess the CR 3 repair plan. The independent review team estimated a range for the cost of the repair and the time to complete the repair from $1.49 billion over 35 months to $3.43 billion over 96 months. 7. On February 5, 2013, Duke Energy Florida announced its intention to retire CR 3. Page 2of11

3 Duke Energy Florida concluded that it did not have a high degree of confidence that repair could be successfully completed and licensed within estimated costs and schedule. 8. On February 20, 2013, Duke Energy Florida submitted a written certification to the United States Nuclear Regulatory Commission certifying that Duke Energy Florida had determined to permanently cease operation of CR 3 and all fuel had been permanently removed from the reactor vessel. Upon the docketing of such certification, Duke Energy Florida's license (issued under 10 CFR 50) no longer authorized operation of the reactor or emplacement or retention of fuel into the reactor vessel. As a result, since February 20, 2013, CR3 could not legally be operated. 9. Since 2011, government agencies have adopted more stringent em1ss10ns requirements applicable to oil and coal-fired electric generation units and to sources of visible haze. 10. Two of the four coal-fired generating units (hereinafter "CR 1" and "CR 2") that comprise a part of the Crystal River Energy Complex were constructed in the 1960s and have not been retrofitted with state of the art pollution control facilities. 11. As of January 1, 2013, CR 1 and CR 2 could have been prematurely retired within several years because of the substantial cost of the pollution control facilities required to bring both 1960s-vintage coal-fired units into compliance with the impending emission requirements, as well as their advanced age. At this time, compliance alternatives for CR 1 and CR 2 are under evaluation. 12. In 1967, the Florida Legislature, desiring to encourage the installation of pollution control facilities to improve the quality of the air and waters and benefit the citizens of the State of Florida, passed Section Section (1) provides that every pollution control Page 3of11

4 facility shall be deemed to have value for purposes of assessment for ad valorem property taxes no greater than its market value as salvage. 13. As of January 1, 2013, there were significant pollution control facilities present at the Crystal River Energy Complex. 14. Plaintiffs timely filed tangible personal property tax returns for the tax year 2013, as required by law. 15. In deriving the assessments of Plaintiffs' tangible personal property located in Citrus County as of January 1, 2013, the Property Appraiser has, among other errors, failed to properly consider the condition of CR 3, the imposition of more stringent emissions requirements applicable to CR 1 and CR 2, and the market value of the pollution control facilities as salvage. 16. The Property Appraiser assigned excessive values to parcels of Plaintiffs' real property located in Citrus County as of January 1, As a result, the Property Appraiser has made an illegal and excessive valuation of Plaintiffs' property. THE PARTIES 18. Duke Energy Florida is a Florida corporation authorized to transact business in the State of Florida, with its principal place of business in St. Petersburg, Florida. At all times material hereto, Duke Energy Florida has been engaged in the generation, transmission, and distribution of electricity to customers in 38 Florida counties, including Citrus County. Prior to a name change effective April 29, 2013, Duke Energy Florida was named Florida Power Corporation and did business as Progress Energy Florida, Inc. 19. Seminole is a Florida corporation authorized to transact business in the State of Florida, with its principal place of business in Tampa, Florida. At all times material hereto, Page 4of11

5 Seminole was a generation and transmission cooperative engaged in the generation and transmission of electricity to its ten member-owner distribution cooperatives, who in turn distributed electricity to customers throughout the State of Florida, including customers in Citrus County. 20. The Property Appraiser is and has been the Property Appraiser of Citrus County, Florida, at all times material hereto, and is the official charged by law with rendering assessments of real and tangible personal property for ad valorem tax purposes in Citrus County. The Property Appraiser is a named defendant pursuant to Section (2), Florida Statutes. 21. The Tax Collector is and has been the Tax Collector of Citrus County, Florida, at all times material hereto, and is the official charged by law with collecting ad valorem taxes levied on property assessed by the Property Appraiser. The Tax Collector is a named defendant pursuant to Section (3), Florida Statutes. 22. Defendant Stranburg is the Executive Director of the State of Florida Department of Revenue and is the official charged by law with the overall supervision of the assessment and collection of ad valorem taxes throughout the State of Florida. JURISDICTION AND VENUE 23. On November 21, 2013, Duke Energy Florida paid to the Tax Collector $21,753,848.01, which is not less than the amount of taxes Plaintiffs admit in good faith to be owing. The tax receipts reflecting payment are attached hereto as Composite Exhibit A, as required by Section (3), Florida Statutes. occurred. 24. All conditions precedent to the filing of this action have been fulfilled or have 25. This Court has jurisdiction pursuant to Sections (1) and (2)(e), Page 5of11

6 Florida Statutes, and Article V, Section 20(c)(3), of the Florida Constitution. Venue is proper in this Court pursuant to Section (1) because the property at issue is located in Citrus County, Florida. GENERAL ALLEGATIONS 26. As of January 1, 2013, and at all times material hereto, Duke Energy Florida was the operator of certain real and tangible personal property which was used in the generation, transmission, and distribution of electricity, including generating plants and transmission and distribution facilities located in Citrus County, Florida. Duke Energy Florida was sole owner of most of such property. Plaintiffs and eight tax-exempt municipalities and agencies owned CR Plaintiffs, individually or collectively, are owners of the following property located in Citrus County, Florida which the Property Appraiser has assessed as tangible personal property and assigned the taxable values indicated: PARCEL ID TAXABLE VALUE PER PROPERTY APPRAISER OOEOOS T025 $5,951, OOEOOS T026 $398, El 7S33TOOO $21,151, El 7S33TOOO $7, 125, El 7S33TOOO $4,663, El 7S33TOOO $592,571, El 7S33TOOO $2,353,860, Duke Energy Florida is the owner of the following property located in Citrus County, Florida which the Property Appraiser has assessed as real property and assigned the taxable values indicated: PARCEL ID TAXABLE VALUE PER PROPERTY APPRAISER 16El 7S $432,835, El 7S $10,829, Page 6of11

7 29. True and correct copies of the 2013 Notices of Proposed Property Taxes and Proposed or Adopted Non-Ad Valorem Assessments (hereinafter the "Notices") issued by the Property Appraiser for the parcels listed above are attached hereto as Composite Exhibit B. 30. True and correct copies of the tax bills issued by the Tax Collector to Plaintiffs for the tax year 2013 are attached hereto as Composite Exhibit C. 31. As of January 1, 2013, and at all times material hereto, Duke Energy Florida owned an undivided percent interest in CR 3. Seminole owned an undivided percent interest in CR 3. Eight municipalities and agencies thereof, whose interests are exempt from ad valorem taxes, owned undivided interests in the remaining percent of CR On account of their ownership interests, Plaintiffs are real parties in interest with respect to the ad valorem taxation of the property situated in Citrus County, Florida which is the subject of the assessments. Duke Energy Florida also is responsible for the entire tax payment with respect to assessments of CR 3. SUBSTANTIVE ALLEGATIONS 33. The Property Appraiser determined values for Plaintiffs' assessable property substantially in excess of just value, and thus made assessments that are illegal and void. 34. Article VII, Section 4, of the Florida Constitution and Section , Florida Statutes, generally require that property be assigned its just valuation as of January 1 of each year for ad valorem tax purposes. 35. Rule 12D-1.002(2), Florida Administrative Code, defines "just value" and "just valuation" as the price at which a property, if offered for sale in the open market, with a reasonable time for the seller to find a purchaser, would transfer for cash or its equivalent, under prevailing market conditions between parties who have knowledge of the uses to which the Page 7of11

8 property may be put, both seeking to maximize their gains and neither being in a position to take advantage of the exigencies of the other. 36. Section , Florida Statutes, establishes eight factors that every property appraiser must consider in deriving the just value of property. The Property Appraiser refused and failed to comply with Section , with the just valuation standard, and with other applicable law in deriving his 2013 assessments of Plaintiffs' property, resulting in grossly excessive valuations. 37. Specifically, but without limitation, the Property Appraiser's 2013 assessments are in excess of just value and otherwise illegal because: a. The Property Appraiser failed to properly consider the impact of pollution control regulations on the value of CR 1 and CR 2; b. The Property Appraiser failed to properly consider the exit of CR 3 from operation and the impact of such exit on the value of CR 3; c. The Property Appraiser failed to properly consider the adverse impact that the potential expiration of CR 3 's operating license would have on CR 3 's value; d. The Property Appraiser improperly denied Duke Energy Florida's returns of pollution control facilities, and refused to assess said pollution control facilities at no greater than their market value as salvage in rendering his 2013 assessments; I. Pursuant to Section , Florida Statutes pollution control facilities are to be valued separately for ad valorem tax purposes and are deemed to have value for purposes of assessment for ad valorem property taxes no greater than their market value as salvage; II. Due to the absence of an established market for pollution control Page 8of11

9 facilities, the cost of removing them, and the effects of contamination present after use, the just value of the pollution control facilities as of January 1, 2013 was de minimis, zero or negative; III. Duke Energy Florida timely filed returns of pollution control facilities with the Property Appraiser for the tax year 2013; IV. The Property Appraiser denied Duke Energy Florida's returns of pollution control facilities, refusing to assess the pollution control facilities at their market value as salvage in rendering his ad valorem tax assessments for tax year A true and correct copy of the Property Appraiser's letter of June 17, 2013, informing Duke Energy Florida of his refusal to apply Section is attached hereto as Exhibit D; V. The Property Appraiser' s 2013 assessed value of property includes a value assigned to pollution control facilities owned by Plaintiffs; VI. The taxable values appearing on the Notices and tax bills attribute taxable value to the pollution control facilities which is substantially in excess of the market value of such property as salvage. e. The Property Appraiser failed to assign a value of zero to Plaintiffs' real property and tangible personal property that should have no value placed thereon pursuant to Section , Florida Statutes. This property includes, without limitation, real property that was a part of CR 3 that could not be used for the purpose for which it was constructed. f. With respect to Plaintiffs' real property, the Property Appraiser refused and failed to comply with Section and with the just valuation standard in deriving his 2013 assessments. 38. The Property Appraiser's 2013 assessments are not entitled to any presumption of correctness because he failed to properly consider the factors for deriving just value set forth in Page 9of11

10 Section PRAYER FOR RELIEF WHEREFORE, Plaintiffs request that this Court grant the following relief: A. Take jurisdiction of this matter pursuant to Section (1 ); B. Set aside the 2013 assessments of Plaintiffs' property as being illegal and void; C. Establish the correct taxable value of Plaintiffs' property for 2013 ad valorem tax purposes; D. Order the Tax Collector to refund to Plaintiffs the difference between the taxes paid and the amount due based on the correct taxable value as established by this Court; E. Order the Property Appraiser to modify the records of the county to reflect the proper taxable values as determined by this Court; F. Award Plaintiffs their costs and disbursements; and G. Grant any such further relief as this Court deems appropriate. Respectfully submitted, LDMAN & HOLCOMB, LLP DATED: November &, 2013 n Fla. Bar No Primary: rgoldman@mgh-law.com Secondary: emotter@mgh-law.com 1705 Metropolitan Blvd., Suite 101 Tallahassee, Florida Tel. No. (850) Fax No. (850) Attorneys for Plaintiff Duke Energy Florida, Inc. Page 10of11

11 DATED: November~, 2013 f R.M~a d a. Bar. No rmora@allendell.com David D. Ferrentino Fla. Bar. No dferrentino@allendell.com 202 S. Rome Ave., Suite 100 Tampa, Florida Tel. No. (813) Fax No. (813) Attorneys for Plaintiff Seminole Electric Cooperative, Inc. Page 11 of 11