IN THE SUPREME COURT OF FLORIDA 2 ND DCA CASE NO. 07-1411 FSC CASE NO. 08-540 ROB TURNER, as Hillsborough County Property Appraiser Appellant, vs. FLORIDA STATE FAIR AUTHORITY Appellee. APPEAL FROM THE DISTRICT COURT OF APPEAL OF FLORIDA, SECOND DISTRICT AMENDED BRIEF ON JURISDICTION WILLIAM D. SHEPHERD, ESQUIRE Florida Bar No. 938289 Hillsborough County Property Appraiser's Office 15 th Floor, County Center 601 E. Kennedy Boulevard Tampa, FL 33602 Telephone: (813) 276-8815 Facsimile: (813) 276-2710 Attorney for TURNER
TABLE OF CONTENTS STATEMENT OF THE CASE AND FACTS.1 SUMMARY OF ARGUMENT 2 ARGUMENT 3 CONCLUSION....9 CERTIFICATE OF SERVICE....10 CERTIFICATE OF FONT..10 APPENDIX.. 11
TABLE OF AUTHORITIES CASES PAGE (s) City of Gainesville v. Crapo, 953 So. 2d 557 (Fla. 1 st DCA 2007)....2, 5 Fla. Dept. of Rev. v. City of Gainesville, 918 So. 2d 250 (Fla. 2005),....4, 5, 6 Franks v. Davis, 145 So. 2d 228 (Fla. 1962).....9 Greater Orlando Aviation Authority v. Crotty, 775 So. 2d 978 (Fla. 5 th DCA 2000), rev. denied 790 So. 2d 1103 (Fla. 2001)...2, 4, 9 Sebring Airport Authority v. McIntyre, 783 So. 2d 238 (Fla. 2001)..5, 8 STATUTES F.S. 616.260...3 F.S. 196.199..2, 3, 8
STATEMENT OF THE CASE AND THE FACTS For the 2004 and 2005 tax years, Rob Turner, as Hillsborough County Property Appraiser found that portions of property owned by the Florida State Fair Authority ( Fair Authority ) used by for-profit entities were not entitled to immunity or exempt status and thus subject to property taxation. The portion of property involved in this case is used by Roadmaster Driver s School, a truck driving school. (R. 9, 20-35, 505) The other portion of property is the subject of a companion case and is used by Clear Channel as a location for the Ford Amphitheater, an entertainment venue. (R. 9-10, 2004 Complaint, paragraph 16). (The remainder of the Florida State Fair Authority s property was granted an exemption.) The Fair Authority unsuccessfully challenged Turner s decisions before the Value Adjustment Board and subsequently filed suits in circuit court arguing was that its property was either immune from taxation or exempt from taxation. (R. 6-42, 504-533.) Turner and the Fair Authority filed motions for partial summary judgment on the issue of immunity. The court ruled in favor of the Fair Authority on the immunity issue and held that therefore the exemption issue was moot. (R. 487) Turner appealed. Although the issue before the Second District Court was the issue of immunity, the court declined to decide that issue. Instead, the court looked 1
to Florida Statute 196.199, albeit only one subsection of that statute, which states in pertinent part, [p]roperty owned by an municipality, agency, authority, or other public body corporate of the state which becomes subject to a leasehold interest or other possessory interest of a nongovernmental lessee shall be subject to ad valorem taxation. F.S. 196.199(4) (emphasis added.) Reviewing the agreement between the Fair Authority and Roadmaster, the court found it was a license, not a lease, and therefore no leasehold or other posessory interest existed. Thus the court held that s. 196.199(4) was not applicable and therefore the property was not subject to taxation. SUMMARY OF THE ARGUMENT The Second District Court of Appeal decision in this case holds that government property used by a for-profit entity for profit-making purposes is not taxable, so long as the for-profit entity is not operating on the subject property via a lease. That decision expressly and directly conflicts with Greater Orlando Aviation Authority v. Crotty, 775 So. 2d 978 (Fla. 5 th DCA 2000), rev. denied, 790 So. 2d 1103 (Fla. 2001) and City of Gainesville v. Crapo, 953 So. 2d 557 (Fla. 1 st DCA 2007), rev. denied (Fla. Nov. 26, 2007). In each of those cases, government property not subject to a lease, yet used by a for-profit entity for profit-making purposes, was held to be taxable. 2
Additionally, the decision in this case finds that the default position for government property is that the property is not taxable, unless some statutory provision is applicable. That conclusion is in conflict with a myriad of decisions holding that government property is taxable in the absence of immunity or a constitutionally based exemption. ARGUMENT The Second District Court of Appeal s decision in this matter directly conflicts with the decisions in Greater Orlando Aviation Authority v. Crotty and City of Gainesville v. Crapo, in that the Second District Court of Appeal held that government property, not under a lease, but still used by a private for-profit entity for profit-making purposes, was not subject to ad valorem taxation. The Second District Court of Appeal declined to rule on the trial court s holding that the Fair Authority is an immune entity, instead looking to the Fair Authority s enabling act, which states in relevant part, The property of the authority shall be subject to the provisions of s. 196.199. s. 616.260. Therefore, the court looked to s. 196.199, but erroneously only to subsection (4). Florida Statute 196.199 includes other provisions, including s.196.199(1)(c) which states in relevant part, All property of the several political subdivisions and municipalities of this state or of entities created by general or special law which is used for governmental, municipal, or public purposes shall be exempt from ad valorem taxation.. 3
F.S. 196.199(1)(c). This statutory section, which addresses non-leased property, was ignored. The court also failed to address Article VII, Section 3(a) of the Florida Constitution, which addresses the taxability of property owned by a municipality and used exclusively by it for municipal or public purposes, and the test under that provision, as set forth by this court in Fla. Dept. of Rev. v. City of Gainesville, 918 So. 2d 250 (Fla. 2005). Although the taxable status of government property has become a regular topic for this Court and the Courts of Appeal, those cases deal either with leased property or property used by the government entity itself. The sole exceptions appear to be Greater Orlando Aviation Authority v. Crotty, 775 So. 2d 978 (Fla. 5 th DCA 2000), rev. denied, 790 So. 2d 1103 (Fla. 2001) and City of Gainesville v. Crapo, 953 So. 2d 557 (Fla. 1 st DCA 2007), rev. denied (Fla. Nov. 26, 2007). The Second District Court s holding in this case directly conflicts with both those decisions. In Greater Orlando Aviation Authority, the property was a hotel, which was owned by the Authority and managed by the Hyatt Corporation. The Fifth District Court of Appeal found the agreement between the authority and Hyatt to be a management agreement, not a lease. As such, the Fifth District Court of Appeal did not apply the governmental-governmental/governmental-proprietary use test for leased 4
property, as set forth by this court in Sebring Airport Auth. v. McIntyre, 783 So. 2d 238 (Fla. 2001). 1 Instead, the Fifth District Court of Appeal applied the municipal or public purpose test for property owned and used by a municipality, as later detailed in Fla. Dept. of Rev. v. City of Gainesville, 918 So. 2d 250 (Fla. 2005). In doing so, the court looked beyond the Authority s enabling act which authorized construction of the hotel and deemed the exercise of authority under the act constituted the performance of essential municipal functions. The court looked directly to the use of the property and finding that a hotel did not serve a municipal purpose, held the property taxable. In City of Gainesville v. Crapo, 953 So. 2d 557 (Fla. 1 st DCA 2007), the court analyzed a portion of property owned in fee simple by the city, but upon which, a private timber company, which retained the rights to timber on the property, was conducting a for-profit timber operation. Id at 565. There was no lease in place between the parties. In finding the property taxable, the First District Court of Appeal held, Because the Deerhaven Property was actually in use for private purposes on both assessment days, the trial court correctly concluded that it was not tax exempt under article VII, section 3(a). 1 In Sebring, this court struck down a section of s. 196.012(6) which purported to grant an exemption to property used, by a lessee, licensee, or management company for various uses. 5
Id at 566. In the case at bar, the Second District Court of Appeal similarly found the agreement between the Fair Authority and Roadmaster Driver s School, Inc. was not a lease. However, as opposed to applying the municipal or public purpose test and Article VII, Section 3(a) of the Florida Constitution, the Second District Court simply found that the property was not leased and therefore was not taxable. There was no analysis of the property s use. The decision fails to apply the governmental-governmental analysis applied by this court to government property leased to nongovernmental entities, but also fails to apply the municipal or public purpose test set forth by this court for property owned and used by a government agency. In some manner of speaking the analysis has logic if the governmentalgovernmental test only applies to leased property, then it would not apply to property under a license agreement. However, if the municipal or public purpose test only applies to property both owned and used exclusively by a municipality, then that test does not apply either because the subject property is used as a truck driving school by a private for-profit corporation. However, that logic would clearly conflict with this court s analysis in Florida Dept. of Rev. v. City of Gainesville, 918 So. 2d 250 (Fla. 2005), wherein this court explored the two types of governmental exemptions under 6
Section 3(a) and the appropriate tests for each constitutional basis. Seemingly, the Second District Court of Appeal decision has created a third category of government property a category which appears to be nontaxable, regardless of the actual utilization of the property. In fact, this may be the only appellate decision regarding taxability of government property that completely avoids any reference to Article VII, Section 3(a) of the Florida Constitution or to either the governmental-governmental test or the municipal or public purpose test. The end result is that the Second District Court of Appeal found that property owned by a governmental authority and used for profit-making purposes was exempt from taxation. That holding conflicts with every single Florida decision regarding governmental exemptions, regardless of whether the property was used for profit-making purposes by the government agency, leased to a for-profit entity, or under some other agreement with a private for-profit entity, like the hotel management agreement in Greater Orlando Aviation Authority v. Crotty or the retained rights agreement like the one in City of Gainesville v. Crapo. This decision creates a crater-sized loophole for government property used by for-profit entities for profit-making purposes. Overnight, leases 7
between government agencies and their lessees will be converted to licenses, resulting in nontaxability of the property. The Second District Court of Appeal holds that in the absence of a statutory provision, government property is exempt, in direct conflict with numerous appellate decisions. The Second District Court of Appeal decision states: Because Roadmaster does not have a lease or other possessory interest in the subject parcel, section 196.199(4) is not applicable. Therefore, the parcel in question is not subject to ad valorem taxation, regardless of whether the Authority is immune from taxation or the property is merely exempt. The opinion seems not to care whether the property is immune or exempt; its only concern is whether a statutory provision [s. 196.199(4)] applies to the property. And, the opinion suggests that in the absence of some statutory provision, the property is not taxable. However, just the opposite is true: Unless immune or exempt, the Florida Constitution mandates that all property is taxable. The Legislature is without authority to grant an exemption from taxes where the exemption has no constitutional basis. The Sebring Airport Authority v. McIntyre, 783 So. 2d 238, 247 (Fla. 2001). We must further note that the constitutional mandate of just valuation is made applicable to all property, excepting only such specified classes as may be exempt. Under established rules of construction, the specification of permissible 8
exemptions will exclude others: expressio unius est exclusio alterius. Franks v. Davis, 145 So. 2d 228, 231 (Fla. 1962) The Second District Court of Appeal found that the property was not subject to taxation without stating that the property was exempt or immune although case law holds there are only two options for government property: immunity or exemption. In Greater Orlando Aviation Authority v. Crotty, 775 So. 2d 978 (Fla. 5 th DCA 2000), rev. denied, 790 So. 2d 1103 (Fla. 2001) the court held: Article VII, section 4 of the Florida Constitution provides in part: By general law regulations shall be prescribed which shall secure a just valuation of all property for ad valorem taxation. Two categories of government property, however, are not subject to taxation. First, there is government property that is immune to taxation, and, second, there is government property that is exempt from taxation. Id at 980. The Second District Court s decision is in conflict with all of the above-referenced opinions. CONCLUSION The Second District Court s opinion conflicts with the First and Fifth District Court s decisions and leaves future litigants with the question of 9
what happens when government property is used by a non-lessee private entity for profit-making purposes. The opinion also suggests a third method of nontaxability exists something other than immunity and exemption, which conflicts with numerous appellate decisions. Turner respectfully requests this court take jurisdiction over this matter and review the Second District Court of Appeal decision. CERTIFICATE OF SERVICE I HEREBY CERTIFY that a copy of the foregoing has been furnished via U.S. Mail to Gordon Schiff, Esquire, 1211 N. Westshore Blvd Suite 401. Tampa, FL 33607 to Raymond T. (Tom) Elligett, Jr. 3003 W. Azeele Street Suite 100, Tampa, Florida this day of March, 2008. WILLIAM D. SHEPHERD, ESQUIRE Florida Bar No. 938289 CERTIFICATE OF FONT SIZE I hereby certify that 14 point Times New Roman was used in typing this brief. WILLIAM D. SHEPHERD, ESQUIRE Florida Bar No. 938289 Hillsborough County Property Appraiser's Office 15 th Floor, County Center 601 E. Kennedy Boulevard Tampa, FL 33602 Telephone: (813) 276-8815 Facsimile: (813) 276-2710 Attorney for TURNER 10
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