Case Name: CITY OF PARKER, etc., et al., Appellants, v. STATE of Florida, etc., et al., Appellees
Court: Florida Supreme Court
Jurisdiction: Florida
Decision Date: 2008-09-18
Citations: 992 So. 2d 171
Docket Number: No. SC07-1400
Parties: CITY OF PARKER, etc., et al., Appellants, v. STATE of Florida, etc., et al., Appellees.
Judges: WELLS, ANSTEAD, PARIENTE, JJ., and CANTERO, Senior Justice, concur.
Reporter: Southern Reporter, Second Series
Volume: 992
Pages: 171–190

Head Matter:
CITY OF PARKER, etc., et al., Appellants, v. STATE of Florida, etc., et al., Appellees.
No. SC07-1400.
Supreme Court of Florida.
Sept. 18, 2008.
Randall W. Hanna, Mark G. Lawson, Theresa B. Proctor, Christopher B. Roe, and Frederick J. Springer of Bryant Miller Olive, P.A., Tallahassee, FL, Michael S. Davis of Bryant Miller Olive, P.A., Tampa, FL, and Timothy J. Sloan of Harmon and Sloan, Panama City, FL, for Appellant.
Terrell K. Arline, Bay County Attorney, Panama City, FL, and William A. Lewis, Chief Assistant State Attorney, Fourteenth Judicial Circuit, Panama City, FL, for Appellees.

Opinion:
PER CURIAM.
We have before us an appeal from a circuit court's final judgment invalidating tax-increment-financed bonds proposed for issuance by City of Parker ("Parker") pursuant to part III of chapter 163, Florida Statutes (2006), referred to as the Community Redevelopment Act. Partially reversing the circuit court, we validate the proposed bonds.
I. FACTUAL AND PROCEDURAL BACKGROUND
On December 18, 2006, Parker adopted Resolution 06-254. This resolution identified the Parker redevelopment area, stated that the area contains blighted conditions, and included a finding of a need for a community redevelopment agency. Then, on December 19, 2006, Parker adopted Ordinance 06-311, Resolution 06-255, and Ordinance 06-312. Ordinance 06-311 established the City of Parker Community Redevelopment Agency, while Resolution 06-255 approved the redevelopment plan for the area, finding the redevelopment plan in conformity with Parker's comprehensive plan. Ordinance 06-312 created the Community Redevelopment Trust Fund and authorized the use of tax increment financing to fund the trust, stating that "[t]here shall be paid into the Fund each year by each of the 'taxing authorities' . a sum equal to ninety-five percent (95%) of the incremental increase in ad valorem taxes levied each year by that taxing authority." Parker, Fla., Ordinance 06-312, § 4 (Dec. 6, 2006).
On February 8, 2007, Parker enacted Ordinance 07-313 (the bond ordinance). This bond ordinance authorizes Parker to issue bonds not exceeding $40,995,891 for the purpose of financing capital projects identified in the redevelopment area, including "pedestrian, parking and transportation improvements, roadway, access to St. Andrews Bay and East Bay and street-scape and public plaza improvements, electrical utility improvements, water/fire service improvements and wastewater system improvements." Parker, Fla., Ordinance 07-313, art. I, § 1.01 (Feb. 8, 2007).
Absent Parker's approval of supplemental ordinances, the tax increment revenues deposited into the trust fund are the only source of revenues pledged to repay the bonds. See Ordinance 07-313, art. I, § 1.01. However, the bond ordinance emphasizes that government taxing power is not pledged. Specifically, section 4.01 provides that the bonds are not "general obligations or indebtedness of [Parker] as 'bonds' within the meaning of any constitu tional or statutory provision." Ordinance 07-313, art. IV, § 4.01. Rather, the bonds are special obligations "payable solely from and secured by a lien upon and pledge of the Pledged Funds." Id. Section 4.01 then explains that no bondholder "shall ever have the right to compel the exercise of the ad valorem taxing power of the State, Bay County, or any other governmental entity." Id.
After receiving notice of Parker's intention to issue the bonds, Bay County filed for declaratory and injunctive relief seeking to enjoin Parker from enforcing its CRA resolutions and ordinances. Thereafter, Parker filed a complaint seeking validation of the bond issuance. The circuit court subsequently consolidated the declaratory action into the validation proceeding and accepted Bay County's pleading in the declaratory action as the County's answer to the validation complaint. In the validation proceeding, the State required strict proof of the matters alleged but did not otherwise object.
After conducting a hearing as well as viewing the redevelopment area, the circuit court entered the final judgment denying validation of the bond issuance. The circuit court concluded that the bonds could not be validated as a matter of law because Parker does not levy ad valorem taxes. The trial court found that "[r]ead-ing all of the provisions of Chapter 163, Part III, Florida Statutes (The Community Redevelopment Act) together, in pan materia, supports the conclusion that a municipality must itself levy ad valorem taxes before it may utilize [tax increment financing] to fund bonds for a CRA." However, the circuit court found without merit Bay County's challenges to Parker's finding of blight, to Parker's finding of conformity, and to the constitutionality of tax increment financing.
II. DISCUSSION
Parker appeals the circuit court's conclusion that Parker cannot issue these tax-increment-financed bonds because Parker does not levy ad valorem taxes. On cross-appeal, Bay County contests the circuit court's conclusions regarding Parker's finding of blight, Parker's finding that the redevelopment plan conforms with the comprehensive plan, and the constitutionality of tax increment financing without a referendum.
A trial court must make three determinations during a bond validation proceeding: (1) whether the public body has the authority to issue the subject bonds; (2) whether the purpose of the obligation is legal; and (3) whether the authorization of the obligation complies with the requirements of law. City of Gainesville v. State, 863 So.2d 138, 143 (Fla.2003). On appeal, this Court reviews the "trial court's findings of fact for substantial competent evidence and its conclusions of law de novo." Id. (citing City of Boca Raton v. State, 595 So.2d 25, 31 (Fla.1992); Panama City Beach Cmty. Redev. Agency v. State, 831 So.2d 662, 665 (Fla.2002)).
As explained below, we reverse the circuit court's conclusion that Parker cannot issue the proposed bonds because Parker does not levy ad valorem taxes. However, we affirm the circuit court's conclusions regarding the finding of blight, the finding of conformity, and the constitutionality of tax increment financing. We address each issue in turn.
A. Parker Does Not Levy Ad Valorem Taxes
Parker argues that the plain language of the Community Redevelopment Act does not require it to levy ad valorem taxes in order to issue the proposed tax-increment-financed bonds. We agree.
"Statutory interpretation is a question of law subject to de novo review." BellSouth Telecomm., Inc. v. Meeks, 863 So.2d 287, 289 (Fla.2003). "When the statute is clear and unambiguous, courts will not look behind the statute's plain language for legislative intent or resort to rules of statutory construction to ascertain intent." Daniels v. Fla. Dep't of Health, 898 So.2d 61, 64 (Fla.2005).
Here, the statute is clear and unambiguous. Section 163.358, Florida Statutes (2006), of the Community Redevelopment Act provides that "[e]ach county and municipality has all powers necessary or convenient to carry out and effectuate the purposes and provisions of this part." (Emphasis added.) One of the "provisions of this part" is section 163.387, Florida Statutes (2006), authorizing the use of tax increment financing to fund community redevelopment. Section 163.358 does not limit the exercise of power to carry out this provision of the Community Redevelopment Act only to those counties and municipalities that levy ad valorem taxes.
In addition to the general statement in section 163.358, the Community Redevelopment Act lists the discrete steps a county or municipality must undertake to employ tax increment financing under the Act, and no step requires that Parker levy ad valorem taxes. Specifically, section 163.356(1), Florida Statutes (2006), provides in part:
Upon a finding of necessity . and upon a further finding that there is a need for a community redevelopment agency to function in the county or municipality to carry out the community redevelopment purposes of this part, any county or municipality may create a public body corporate and politic to be known as a "community redevelopment agency."
(Emphasis added.) And section 163.387(l)(a) provides:
After approval of a community redevelopment plan, there may be established for each community redevelopment agency . a redevelopment trust fund. Funds allocated to and deposited into this fund shall be used by the agency to finance or refinance any community redevelopment it undertakes pursuant to the approved community redevelopment plan. No community redevelopment agency may receive or spend any increment revenues pursuant to this section unless and until the governing body has, by ordinance, created the trust fund and provided for the funding of the redevelopment trust fund until the time certain set forth in the community redevelopment plan.... Such ordinance may be adopted only after the governing body has approved a community redevelopment plan. The annual funding of the redevelopment trust fund shall be in an amount not less than that increment in the income, proceeds, revenues, and funds of each taxing authority derived from or held in connection with the undertaking and carrying out of community redevelopment under this part.
Moreover, "governing body" is defined in section 163.340(3), Florida Statutes (2006), as "the council, commission, or other legislative body charged with governing the county or municipality." Finally, "taxing authority" is defined in section 163.340(24) as "a public body that levies or is authorized to levy an ad valorem tax on real property located in a community redevelopment area."
Read together, these sections of the Act explain that a county or municipality must make the requisite findings of necessity and blight, create a community redevelopment agency, adopt a community redevelopment plan, and establish a rede velopment trust fund in order to utilize tax increment financing for community redevelopment. And taxing authorities are required to fund the trust fund. The Act never mentions that the municipality must itself levy ad valorem taxes in order to proceed with any of the steps described above.
The trial court used section 163.387(l)(b) to support its conclusion that Parker must levy taxes to utilize tax increment financing. Section 163.387(l)(b) states:
For any governing body that has not authorized by June 5, 2006, a study to consider whether a finding of necessity resolution . should be adopted, has not adopted a finding of necessity resolution . by March 31, 2007, has not adopted a community redevelopment plan by June 7, 2007, and was not authorized to exercise community redevelopment powers pursuant to a delegation of authority . by a county that has adopted a home rule charter, the amount of tax increment to be contributed by any taxing authority shall be limited as follows:
a. If a taxing authority imposes a millage rate that exceeds the millage rate imposed by the governing body that created the trust fund, the amount of tax increment to be contributed by the taxing authority imposing the higher millage rate shall be calculated using the millage rate imposed by the governing body that created the trust fund.
This section, which calls for millage parity between taxing authorities and the governing body that set up the trust fund, would effectively relieve a taxing authority from making increment contributions to the trust fund if the governing body creating the trust fund did not levy ad valorem taxes because the governing body's millage rate would be zero. However, in this case, the parties agree that Parker acted before the above statute would preclude such financing. In other words, Parker met the statutory deadlines listed above. Therefore, section 163.387(l)(b) simply does not apply to this case.
In light of the above, we find that the Community Redevelopment Act does not require Parker to levy ad valorem taxes in order to issue the proposed tax-increment-financed bonds.
B. Blight
On cross-appeal, Bay County argues that the trial court applied an incorrect standard when analyzing Parker's finding of blighted conditions in the redevelopment area. In addition, Bay County argues that this legislative finding is not supported by competent, substantial evidence. We disagree with Bay County.
"Under Florida case law, the trial court [examines] legislative findings to determine whether they [are] 'patently erroneous.' " Panama City Beach Comty. Redev. Agency, 831 So.2d at 667. "Indeed, legislative determinations are entitled to a presumption of correctness and should be upheld if supported by competent, substantial evidence in the record." Id. And when reviewing a trial court's final order in a validation proceeding, this Court reviews "the trial court's findings of fact for substantial competent evidence and its conclusions of law de novo." City of Gainesville, 863 So.2d at 143.
Contrary to Bay County's argument, we find that the trial court applied the correct statutory standard for blight when reviewing Parker's legislative finding of blighted conditions. For instance, when discussing Parker's finding of blight, the trial court included the following statement that accurately summarizes the applicable statutory standard:
The evidence presented in this matter supports the correctly articulated City Council findings that (1) there were a substantial number of deteriorated, or deteriorating structures, in which conditions, as indicated by government-maintained statistics or other studies, were leading to economic distress or endangering life or property within the community redevelopment area, and (2) nine of the other fourteen factors in the statutory definition were supported by the evidence before the council members.
The trial court also correctly concluded that there is competent, substantial evidence to support Parker's legislative finding of blight. When adopting Resolution 06-254, Parker had before it a Findings of Necessity Report that listed multiple areas of deterioration in the redevelopment area. The report also contained a windshield survey analysis, which pinpointed locations of deteriorated or deteriorating structures, displayed pictures of those structures, and described the deterioration. Moreover, the Findings of Necessity Report specifically stated that "these deteriorated structures, functions and conditions are such they 'are leading to economic distress or endanger life or property.' " Finally, Bay County does not dispute that Parker properly found, based on the Findings of Necessity Study, nine of the fourteen statutory factors in support of blight.
Accordingly, the trial court applied the correct statutory standard in upholding Parker's finding of blight, a legislative finding supported by substantial, competent evidence.
C. Conformity of Redevelopment Plan
Next, Bay County argues that there is no competent, substantial evidence to support Parker's legislative finding that the redevelopment plan conforms to Parker's comprehensive plan. This claim is without merit.
The record contains competent, substantial evidence in support of Parker's finding. Specifically, Parker's comprehensive plan accommodates prospective community redevelopment plans by providing that "[r]edevelopment programs and funding should be explored and a plan established to address the City's redevelopment needs should they occur during the next planning period." Furthermore, the redevelopment plan contains numerous references to the comprehensive plan that demonstrate the planners' conscious effort to conform to the comprehensive plan. Finally, Parker's consultant, the firm that prepared the comprehensive plan, expressed the opinion that Parker's redevelopment plan conforms to Parker's comprehensive plan.
Given the substantial, competent evidence supporting Parker's legislative finding that its redevelopment plan conforms to its comprehensive plan, we affirm the trial court determination on this issue.
D. Constitutionality of Tax Increment Financing
Lastly, Bay County argues that the proposed tax-increment-financed bonds violate the referendum requirement of article VII, section 12 of the Florida Constitution. "The determination of a statute's constitutionality and the interpretation of a constitutional provision are both questions of law reviewed de novo by this Court." Fla. Dep't of Revenue v. City of Gainesville, 918 So.2d 250, 256 (Fla.2005). As explained below, we conclude that the proposed bonds do not violate article VII, section 12.
In State v. Miami Beach Redevelopment Agency, 392 So.2d 875 (Fla.1980), this Court held that it was permissible for a local government to use the tax increment as one of the sources of debt service on outstanding bonds where the taxing power had been disclaimed and no lien could attach until the funds were deposited into the trust account. In other words, we held that tax increment financing does not run afoul of the referendum requirement of article VII, section 12 so long as ad valo-rem taxing power is not pledged. In so holding, this Court stated the following:
[T]here is nothing in the constitution to prevent a county or city from using ad valorem tax revenues where they are required to compute and set aside a prescribed amount, when available, for a discreet [sic] purpose. The purpose of the constitutional limitation is unaffected by the legal commitment; the taxing power of the governmental units is unimpaired. What is critical to the constitutionality of the bonds is that, after the sale of bonds, a bondholder would have no right, if the redevelopment trust fund were insufficient to meet the bond obligations and the available resources of the county or city were insufficient to allow for the promised contributions, to compel by judicial action the levy of ad valorem taxation. Under the statute authorizing this bond financing the governing bodies are not obliged nor can they be compelled to levy any ad valorem taxes in any year. The only obligation is to appropriate a sum equal to any tax increment generated in a particular year from the ordinary, general levy of ad valorem taxes otherwise made in the city and county that year. Issuance of these bonds without approval of the vot ers of Dade County and the City of Miami Beach, consequently, does not transgress article VII, section 12.
Id. at 898-99.
In State v. School Board of Sarasota County, 561 So.2d 549 (Fla.1990), this Court reiterated the holding in Miami Beach as follows:
In State v. Miami Beach Redevelopment Agency, 392 So.2d 875 (Fla.1980), we interpreted the words "payable from ad valorem taxation" in article VII, section 12 and held that a referendum is not required when there is no direct pledge of the ad valorem taxing power. We noted that although contributions may come from ad valorem tax revenues: "What is critical to the constitutionality of the bonds is that, after the sale of the bonds, a bondholder would have no right, if [funds] were insufficient to meet the bond obligations . to compel by judicial action the levy of ad valorem taxation.... [T]he governing bodies are not obliged nor can they be compelled to levy any ad valorem taxes in any year." Id. at 898-99. The agreements here, as in Miami Beach, although supported in part by ad valorem revenues, expressly provide that neither the bondholders nor anyone else can compel use of the ad valorem taxing power to service the bonds.
Id. at 552 (alterations in original); see also Strand v. Escambia County, No. SC06-1894, _ So.2d _, 2008 WL 4240151 (Fla. Sept. 18, 2008) (expressly declining to recede from Miami Beach).
In the present case, the proposed bonds conform to the tax increment financing mechanism we approved in Miami Beach. Parker's bond ordinance provides that no bondholder "shall ever have the right to compel the exercise of the ad valorem taxing power of the State, Bay County, or any other governmental entity." Ordinance 07-313, art. IV, § 4.01. The bond ordinance also explains that the bonds are "payable solely from and secured by a lien upon and pledge of the Pledged Funds." Id. Thus, Parker's proposed bonds do not pledge the taxing power of any government entity. The bondholders have no right, if the trust fund were insufficient to meet the bond obligations, to compel the levy of ad valorem taxation. Consequently, the proposed tax-increment-financed bonds are constitutional without a referendum.
III. CONCLUSION
For the foregoing reasons, we direct the circuit court to validate the tax-increment-financed bonds proposed for issuance by Parker pursuant to the Community Redevelopment Act. In so holding, we reverse the circuit court's conclusion that Parker cannot issue the proposed bonds because Parker does not levy ad valorem taxes. However, we affirm the circuit court's judgment in all other respects.
It is so ordered.
WELLS, ANSTEAD, PARIENTE, JJ., and CANTERO, Senior Justice, concur.
BELL, J., concurs in part and dissents in part with an opinion, in which QUINCE, C.J., concurs.
LEWIS, J., dissents with an opinion.
. We have jurisdiction. See art. V, § 3(b)(2), Fla. Const.
. Specifically, the bond ordinance defines "Pledged Revenues" as follows:
"Pledged Revenues" shall mean, initially, the Redevelopment Trust Fund Revenues and if and to the extent that the Issuer shall so provide by Supplemental Ordinance, (i) any Assessments that may be levied, or (ii) other legally available revenues of the Issuer if consented to by the Holders of the Bonds or the Bond Insurer on their behalf.
Ordinance 07-313, art. I, § 1.01.
. "Blighted area" is defined by section 163.340(8) as
an area in which there are a substantial number of deteriorated, or deteriorating structures, in which conditions, as indicated by government-maintained statistics or other studies, are leading to economic distress or endanger life or property, and in which two or more of the following factors are present:
(a) Predominance of defective or inadequate street layout, parking facilities, roadways, bridges, or public transportation facilities;
(b) Aggregate assessed values of real property in the area for ad valorem tax purposes have failed to show any appreciable increase over the 5 years prior to the finding of such conditions;
(c) Faulty lot layout in relation to size, adequacy, accessibility, or usefulness;
(d) Unsanitary or unsafe conditions;
(e) Deterioration of site or other improvements;
(f) Inadequate and outdated building density patterns;
(g) Falling lease rates per square foot of office, commercial, or industrial space compared to the remainder of the county or municipality;
(h) Tax or special assessment delinquency exceeding the fair value of the land;
(i) Residential and commercial vacancy rates higher in the area than in the remainder of the county or municipality;
(j) Incidence of crime in the area higher than in the remainder of the county or municipality;
(k) Fire and emergency medical service calls to the area proportionately higher than in the remainder of the county or municipality;
(Z) A greater number of violations of the Florida Building Code in the area than the number of violations recorded in the remainder of the county or municipality;
(m) Diversity of ownership or defective or unusual conditions of title which prevent the free alienability of land within the deteriorated or hazardous area; or
(n) Governmentally owned property with adverse environmental conditions caused by a public or private entity.
However, the term "blighted area" also means any area in which at least one of the factors identified in paragraphs (a) through (n) are present and all taxing authorities subject to s. 163.387(2)(a) agree, either by interlocal agreement or agreements with the agency or by resolution, that the area is blighted.