Case Title: CITY OF GUYMON v. BUTLER

Citation: 

Docket Number: 98766

State: oklahoma

Court: Oklahoma Supreme Court

Date: 2004-05-25T00:00:00Z

Document:
CITY OF GUYMON v. BUTLER  CITY OF GUYMON v. BUTLER 2004 OK 37 92 P.3d 80 Case Number: 98766 Decided: 05/25/2004 THE SUPREME COURT OF THE STATE OF OKLAHOMA THE CITY OF GUYMON, a municipal Corporation; and GUYMON INDUSTRIAL AUTHORITY, a public trust, Plaintiffs/Appellees, v. CHARLES BUTLER, Chairman, ART TWOMBLY, Member, and JOE MAYER, Former Member, Texas County Excise Board; TEXAS COUNTY EXCISE BOARD; THYRA GROUNDS, Texas County Assessor; RITA WISE, Texas County Treasurer; and BOARD OF COUNTY COMMISSIONERS, TEXAS COUNTY, OKLAHOMA, Defendants/Appellants. On Appeal from the District Court of Texas County, Greg A. Zigler, District Judge ¶0 The City of Guymon, and the Guymon Industrial Authority, plaintiffs/appellees, sought a writ of mandamus ordering the appellants, Board of County Commissioners of Texas County, et al., to perform their duties pursuant to the Local Development Act ( AFFIRMED. Larry L. Field, Larry L. Field P.C., Guymon, Oklahoma, for Appellants. David K. Petty, David K. Petty, P.C., Guymon, Oklahoma, James D. Batchelor, Leslie V. Batchelor, Batchelor and Powers, P.C., Oklahoma City, Oklahoma, for Appellees. WINCHESTER, J. ¶1 The issue is whether the appellants I. PROCEDURE ¶2 On May 31, 2002, the City sued the County, asking for a peremptory writ of mandamus ordering the County to assess, collect, and disburse to the City ad valorem taxes for Increment District No. 1, City of Guymon, in the amount of $448,589.53. The district court issued the writ on the same day. On June 17, 2002, the County moved to stay or vacate the writ and to grant the County summary judgment. The court ordered that the peremptory writ of mandamus continue in effect and that $448,589.53 be held in escrow until further order of the court. After hearings conducted on July 23, 24, and August 6, 2002, the court entered judgment on December 13, 2002, in favor of the City in the amount of $307,962.53. It further ordered the County to comply with II. THE LOCAL DEVELOPMENT ACT ¶3 The City of Guymon established Tax Increment District No. 1 pursuant to the Local Development Act to generate revenue for financial assistance to Seaboard Corporation in its construction of a pork processing facility in the City of Guymon. The additional ad valorem tax generated by the new processing plant is committed to repayment of a $4.5 million bond issue. ¶4 The Legislature stated the purpose of the Local Development Act in ¶5 How tax increment financing is used by a city is described in the Oklahoma City Urban Renewal Authority case: "Tax increment financing utilizing ad valorem taxes assumes that the assessed property value of the area will increase because of the development project and that, absent the project, property values would not rise. The financing plan is intended to create economically productive property where none presently exists by providing inducements for private commercial development. It allows the capture of local taxes generated by a new development instead of allocating the tax increments to the taxing entities." Oklahoma City Urban Renewal Authority III. FACTS AND CONCLUSIONS OF THE DISTRICT COURT ¶6 The district court made the following conclusions based on its findings of fact. The Guymon-Seaboard Economic Development Project and Increment District No. 1, City of Guymon, were adopted by the City to reverse the serious conditions of economic stagnation and decline existing in the City of Guymon and Texas County in the early 1990's. The project area was within a state-designated enterprise zone, which established its need for development and investment and eligibility for assistance using the tools of the Local Development Act. ¶7 Undisputed evidence established that the Guymon-Seaboard Economic Development Agreement has benefited the City and the County in direct positive impact by Seaboard's provision of health insurance benefits to all eligible employees, and annual payments of $175,000.00 for the benefit of the Guymon Independent School District for 25 years or until the termination of Increment District No. 1. The indirect positive impact included creation of 5,000 new jobs in Texas County, doubling of the ad valorem tax base of the County, more than doubling the tax base of the school district, more than 1,000 new residential units, county population increase of about 4,000, fifty percent reduction in the unemployment rate, and about fifty percent increase in per capita income. ¶8 The district court concluded that the Project Plan and Increment District were adopted and approved in compliance with the Local Development Act and the Constitution of the State of Oklahoma. ¶9 Additional facts are discussed relative to pertinent propositions of error. IV. CONSTITUTIONAL ISSUES ¶10 The County has raised three issues concerning whether the City's utilization of the Local Development Act violates Oklahoma's Constitution. This Court held the Local Development Act to be facially constitutional in Oklahoma City Urban Renewal Authority v. Medical Technology & Research Authority of Oklahoma, ¶11 "Generally, the provisions of a Constitution are construed using the usual rules of statutory construction." Cowart v. Piper Aircraft Corp., ¶12 A new constitutional provision that contains some of the same subject matter will suspend inconsistent former provisions whether or not those provisions are specifically mentioned. In re Initiative Petition No. 259, ¶13 With these rules of construction in mind, we examine three constitutional provisions that the County asserts conflicts with the Local Development Act. A. Is the Project a Private Rather than a Public Project? ¶14 The basis of the County's arguments in its propositions I and VII are that the City is attempting to levy and collect taxes to pay for the construction of a private enterprise in violation of Article 10, § 14 of the Constitution, ¶15 In § 6C of Article 10, subsection A mentions "incentives, exemptions and other forms of relief from taxation for historic preservation, reinvestment, or enterprise areas that are exhibiting economic stagnation or decline." Subsection B authorizes cities, towns or counties to specifically use local taxes and local fees for assistance in developmental financing. Subsection C provides that any city, town or county may by agreement jointly plan, finance or carry out a development plan with any other public or private entity. ¶16 The Court held in Burkhardt v. City of Enid, ¶17 A review of § 6C reveals it allows incentives, exemptions, and tax relief for private entities if the project itself has a public purpose. The Guymon-Seaboard Economic Development Project Plan and Increment District served public purposes by increasing the tax base, bringing new jobs to the City of Guymon and Texas County, elevating the median family income, bringing more children into the school district, and stimulating additional businesses within the Guymon Industrial Park. ¶18 The record reflects that the Guymon Industrial Authority owned the property in the Increment District, and the trial court so concluded. Since the Authority owned the property at the time the improvements were made and the project costs were incurred, then the property in fact constituted "public works and public buildings," because the Authority is a public trust. It subsequently sold the property to Seaboard. ¶19 Sublett v. City of Tulsa, ¶20 The Court held that the acquisition of land in proximity to the Port of Catoosa was necessary to the successful development of the port and fell within the legal definition and requirements of a public use or purpose. The Court continued that taxes levied under the proposed ordinance would be expended for a public purpose within the meaning and intent of our Constitution, and that such an expenditure was neither a pledge of the state's credit, nor an appropriation of money in aid of private enterprise or for a private purpose. The Court concluded that the acquisition of land and the development for industrial purposes by the port authority with aid of funds derived from the proposed bond issue would not violate Okla.Const. Art. 10, §§ 14, 15 and 17. Sublett, B. Has the City Forced the County to Surrender its Power of Taxation or to Bind the County to a Debt in Violation of Okla.Const. Art. 10, §§ 5, 26? ¶21 For propositions VI and VIII, the County argues that in violation of §§ 5 and 26 of the Constitution, the City's ordinances in creating the Guymon-Seaboard Economic Development Project Plan and Increment District force the County to accept a smaller amount of taxes and that this results in the County's surrender of its power of taxation and in essence, a debt for the County that cannot be repaid within a year. The County observes that all of this has been accomplished without a vote of the people. Based on the rules of construction set out above, if the City enacted its ordinances in compliance with Article 10, § 6C, then its actions do not violate the Constitution. Section 6C is more recent than either §§ 5 or 26, and as a more recent pronouncement of the people, its provisions control. ¶22 The issue here is that which Oklahoma City Urban Renewal did not decide: whether the creation of the tax increment district requires permission of all taxing entities. Oklahoma City Urban Renewal, ¶23 Subsection C provides that any "city, town or county" may "plan, finance and carry out the development or redevelopment of areas determined by the governing body of such city, town, or county to be unproductive, undeveloped, underdeveloped or blighted." In this case, the City of Guymon took this step through its ordinances. Subsection C continues that "The authority of the county shall be limited to the unincorporated areas of such county. . . ." An agreement is necessary for any joint development plan. One commentator observed: "[T]he political subdivision establishing the increment district is the ultimate decision-maker in capturing ad valorem tax revenue resulting from new investment. The other taxing entities do not contract or even resolve to accept deprivation of ad valorem tax revenue. These other entities may comment and may cause an implementing city, town, or county to change its plan, but such change is a result of the public opinion and perception such entities may inspire, and is not due to any decision-making authority set out in the law. These entities do have approval power of any use of any other local taxes or fees." We agree. Title ¶24 Both the City and the County, the parties to this action, were represented fully by their designated parties on the Review Committee that unanimously approved the Project Plan. Without the project itself, there would be no tax increment, and no new tax revenues generated in the area designated as Tax District No. 1. The trial court properly found that the consent of the affected tax entities is not required for the approval of a project plan or the establishment of an increment district. V. STATUTORY ISSUES ¶25 Proposition II argues that the desired investment, development and economic growth would likely have occurred even without the tax increment district. The County cites "It is the intent of the Legislature that the provisions of this act be used in accordance with the following guidelines . . . "2. That the tools of this act not be used in areas where investment, development and economic growth would have occurred anyway and that the governing body take care to exclude areas that do not meet this criteria. . . ." ¶26 The County argues a factual question that the trial court found against them. The court specifically found that the economic growth and investment experienced by Guymon and Texas County since 1993 would not have occurred without the measures taken under the Act. The County fails to show how the trial court abused its discretion. We therefore affirm the trial court's decision. ¶27 For proposition III, the County asserts that ¶28 Proposition IV contends that the County was entitled to a written agreement with the City before the tax increment district became effective. We have already addressed this argument above. Consent of the affected tax entities is not required for the approval of a project plan or the establishment of an increment district. If consent is not required, clearly no written agreement is required. ¶29 Proposition V maintains that the City failed to heed the advice of the Oklahoma State Bond Advisor. Title VI. MOTION FOR NEW TRIAL ¶30 In a two sentence argument, the County claims error for the trial court to deny its motion for a new trial. This Court has found against the County on every proposition of error, therefore the trial court did not err in denying the County's motion. VII. MOTION FOR STAY ¶31 The County contends that the trial court committed reversible error in denying its motion to stay execution of its writ of mandamus. We disagree. The record before us establishes that the City showed irreparable harm would have resulted if the trial court stayed the execution of the writ. CONCLUSION ¶32 Based on the record before us, we determine that each of the County's contentions lacks merit. We hold that the City's creation of the Guymon-Seaboard Economic Development Project Plan and Increment District complied with provisions of the Constitution of Oklahoma and The Local Development Act. The trial court did not err in denying the County's motions for new trial, and stay. Neither did the court err in granting the City a writ of mandamus against the County. ¶33 Finally, all motions for leave of court to appear amicus curiae are denied. The County's motion for oral argument is denied. The City's motion to strike the County's reply brief because the County injected a new issue not raised in its motion for new trial or petition in error, is granted in part. The Article 10, § 6B argument (section III of the reply) and supporting attachments have not been considered as they are violations of Okla.Sup.Ct.R. 1.11(i). They are hereby stricken. THE JUDGMENT OF THE TRIAL COURT IS AFFIRMED. CONCUR: WATT, C.J., HODGES, LAVENDER, HARGRAVE, KAUGER, BOUDREAU, WINCHESTER, EDMONDSON, JJ. CONCURS IN PART; DISSENTS IN PART: OPALA, V.C.J. FOOT