Opinion ID: 1957190
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Heading: the constitutionality of section 192.042, florida statutes

Text: Having held that Sunset Harbour waived any objection to the affirmative defense asserted by Robbins, we now address the constitutionality of section 192.042. Robbins argues that section 192.042(1) is unconstitutional because article VII, section 4 of the Florida Constitution requires all property and structures to be assessed at fair market value, regardless of whether the structures are substantially completed. He argues that section 192.042(1) creates an unconstitutional fifth exception to the just valuation requirement in article VII, section 4. In Culbertson v. Seacoast Towers East, Inc., 212 So.2d 646 (Fla.1968), we rejected the claim that the predecessor substantially complete statute constituted an exception to the just valuation [4] requirement. We recognized that the statute did not create an exception to the constitutional requirement that property be assessed at its fair market value but, instead, determined the time at which property improvements should be assessed (i.e., when they are substantially complete). Id. The same reasoning applies to this case. We begin our analysis by restating the appropriate standard of review. We then address the state of the substantial completion statute after Culbertson. Finally, we discuss the legislative method for achieving a just valuation.
This Court's review of the district court's decision is de novo. See Florida Fish & Wildlife Conservation Comm'n v. Caribbean Conservation Corp., Inc., 789 So.2d 1053, 1054 (Fla. 1st DCA 2001) (holding that whether a state statute is constitutional is a pure question of law subject to de novo review), approved, 838 So.2d 492 (Fla.2003). Statutes come before this Court clothed with a presumption of constitutionality. Dep't of Legal Affairs v. Sanford-Orlando Kennel Club, Inc., 434 So.2d 879, 881 (Fla.1983). Therefore, it is a fundamental rule of statutory construction that, if at all possible, a statute should be construed to be constitutional. See Van Bibber v. Hartford Accident & Indem. Ins. Co., 439 So.2d 880, 883 (Fla.1983). In fact, this Court is bound to resolve all doubts as to the validity of [the] statute in favor of its constitutionality, provided the statute may be given a fair construction that is consistent with the federal and state constitutions as well as with the legislative intent. State v. Stalder, 630 So.2d 1072, 1076 (Fla.1994) (quoting State v. Elder, 382 So.2d 687, 690 (Fla.1980)). In interpreting constitutional provisions, [t]he fundamental object to be sought in construing a constitutional provision is to ascertain the intent of the framers and the provision must be construed or interpreted in such manner as to fulfill the intent of the people, never to defeat it. Gray v. Bryant, 125 So.2d 846, 852 (Fla.1960).
In 1968 this Court upheld the constitutionality of section 193.11, [5] the predecessor to section 192.042, [6] under the 1885 version of the constitution. See Culbertson v. Seacoast Towers East, Inc., 212 So.2d 646 (Fla.1968). The Court stated: The statute constitutes only a temporary postponement of valuation and assessment of incomplete improvements on real property provided the prescribed conditions are met on the annual assessment date. The requirement is simply that the separate classification of such property shall bear some reasonable relationship to the legislative power to prescribe regulations to secure a just evaluation of property. Factors analogous to those here involved have in numerous instances been made the basis for special statutory treatment. Id. at 647. We find no basis to believe the 1968 revisions to the just valuation provision were intended by the drafters or the public to invalidate the substantial completion statute. Although Culbertson was decided prior to the 1968 constitutional amendments, both the 1968 and 1885 constitutions mandate a just valuation for all property. See art. IX, § 1, Fla. Const. (1885); art. VII, § 4, Fla. Const. (1968). Article VII, section 4 of the Florida Constitution states: By general law regulations shall be prescribed which shall secure a just valuation of all property for ad valorem taxation, provided: (a) Agricultural land, land producing high water recharge to Florida's aquifers, or land used exclusively for noncommercial recreational purposes may be classified by general law and assessed solely on the basis of character or use. (b) Pursuant to general law tangible personal property held for sale as stock in trade and livestock may be valued for taxation at a specified percentage of its value, may be classified for tax purposes, or may be exempted from taxation. (c) All persons entitled to a homestead exemption under Section 6 of this Article shall have their homestead assessed at just value as of January 1 of the year following the effective date of this amendment. This assessment shall change only as provided herein. . . . . (d) The legislature may, by general law, for assessment purposes and subject to the provisions of this subsection, allow counties and municipalities to authorize by ordinance that historic property may be assessed solely on the basis of character or use. Such character or use assessment shall apply only to the jurisdiction adopting the ordinance. The requirements for eligible properties must be specified by general law. (e) A county may, in the manner prescribed by general law, provide for a reduction in the assessed value of homestead property to the extent of any increase in the assessed value of that property which results from the construction or reconstruction of the property for the purpose of providing living quarters for one or more natural or adoptive grandparents or parents of the owner of the property or of the owner's spouse if at least one of the grandparents or parents for whom the living quarters are provided is 62 years of age or older. Such a reduction may not exceed the lesser of the following: Article VII, section 4 of the 1968 Constitution replaced article IX, section 1 of the 1885 Constitution, which stated: The Legislature shall provide for a uniform and equal rate of taxation ... and shall prescribe such regulations as shall secure a just valuation of all property, both real and personal, excepting such property as may be exempted by law for municipal, educational, literary, scientific, religious or charitable purposes. The phrase just valuation has been construed by this Court to mean fair market value. See Mazourek v. Wal-Mart Stores, Inc., 831 So.2d 85, 88 (Fla.2002) (citing Valencia Center, Inc. v. Bystrom, 543 So.2d 214, 216 (Fla.1989)); see also Walter v. Schuler, 176 So.2d 81, 85-86 (Fla.1965) (fair market value legally synonymous with just valuation). Robbins relies on Interlachen Lakes Estates, Inc. v. Snyder, 304 So.2d 433 (Fla. 1973), to support his argument that the 1968 constitutional amendments, enumerating specific instances where property may be valued according to different valuation standards, affect the holding in Culbertson. This argument is without merit. In Interlachen, this Court held that section 195.062(1), Florida Statutes (1971), violated article VII, section 4 of the 1968 Florida Constitution. Section 195.062(1) provided that platted lands unsold as lots shall be valued for tax assessment purposes on the same basis as any unplatted acreage of similar character until 60 percent of such lands included in one plat shall have been sold as individual lots. Interlachen, 304 So.2d at 434. The Court stated, It is true that the constitutional provision allows the Legislature to prescribe regulations for the purpose of securing a just valuation of all property, but such regulations must apply to all property and not to any one particular class. Id. The Court held that the statute created a classification based on ownership, effectively giving a subdivision developer a tax break by treating his unsold lots as unplatted for tax valuation purposes. Id. at 435. The Court pointed out in Interlachen that the statute taxed similar property differently, depending on who owned it. If the lot had been sold, the land was taxed; if it had not been sold, the land was not taxed. The Court also noted its concern that assessment standards and criteria might be manipulated to favor certain taxpayers over others. Unlike section 192.042(1), the statute at issue in Interlachen did not permit a just valuation of all property. For this reason, Interlachen is distinguishable from Culbertson and the case currently before us. The Fourth and Fifth District Courts of Appeal have recognized this fact. Indeed, they have relied on Culbertson to uphold the constitutionality of the same statute at issue in this case. In 1983, the Fourth District Court of Appeal held that section 192.042 did not violate article VII, section 4 of the 1968 constitution. See Markham v. Yankee Clipper Hotel, Inc., 427 So.2d 383 (Fla. 4th DCA 1983). The Fifth District followed suit in its 1988 decision in Hausman v. Bayrock Inv. Co., 530 So.2d 938 (Fla. 5th DCA 1988). The court stated: We think the validity of the statute is settled by [ Culbertson ] and [ Markham ]. Id. at 939 (citations omitted). We agree.
While the Florida Constitution requires that [b]y general law regulations shall be prescribed which shall secure a just valuation of all property, art. VII, § 4, Fla. Const., the framers of the constitution delegated to the Legislature the responsibility for deciding the specifics of how that just valuation would be secured. See Collier County v. State, 733 So.2d 1012, 1019 (Fla.1999) (the constitution requires the Legislature to enact the general law regarding the collection of ad valorem taxes, and the Legislature has established a specific statutory scheme for the timing of the valuation and assessment). One of these determinations, of course, was when the various types of property would be assessed. The Legislature fulfilled its constitutional obligation in section 192.042, which states in part: All property shall be assessed according to its just value as follows: (1) Real property, on January 1 of each year. Improvements or portions not substantially completed on January 1 shall have no value placed thereon. Substantially completed shall mean that the improvement or some self-sufficient unit within it can be used for the purpose for which it was constructed. § 192.042, Fla. Stat. (1997). This statute reflects the Legislature's intent to delay valuation of improvements to property until such time as these improvements are substantially completed. In upholding the constitutionality of a predecessor statute to section 192.042(1), this Court noted the timing decision contemplated by the statutory scheme. See Culbertson, 212 So.2d at 647. We believe in this case, as we did in Culbertson, that [t]he statute constitutes only a temporary postponement of valuation and assessment of incomplete improvements on real property provided the prescribed conditions are met on the annual assessment date. Id.; see also Yankee Clipper, 427 So.2d at 385 (The legislature's determination that an incomplete structure, unusable for the purposes intended upon its completion, should not be assessed in that condition is a matter of perception.). As this Court stated in Collier County v. State, 733 So.2d 1012 (Fla. 1999): The constitution requires the Legislature to enact the general law regarding the collection of ad valorem taxes, and the Legislature has established a specific statutory scheme for the timing of the valuation and assessment. Section 192.042(1) makes clear that partial year assessments are not authorized for improvements to real property substantially completed after January 1, which shall have no value placed thereon. There is no ambiguity in the statute. It appears that any benefit to taxpayers was specifically contemplated by the legislative scheme.... If there is a windfall created by the current statutory scheme, as the County claims, the County's redress lies with the Legislature. While we do not know why the Legislature has declined to act, as observed by the trial court in this case: We clearly have able and competent legislators who are obligated to do the right thing. To achieve the relief sought, the counties must persuade the Legislature to provide the cure, not the courts. Id. at 1019. The substantial completion statute implements the provisions of article VII, section 4 in such a way as to provide predictability in the assessment rolls which serve as the basis for revenue projections in the local government budget-making process. The statute prescribes reasonable guidelines for valuation of incomplete improvements for property tax purposes, which infuse uniformity and certainty into ad valorem taxation. The absence of a substantial completion statute would only promote uncertainty and encourage litigation. In essence, we previously upheld the constitutionality of the substantial completion statute against a constitutional challenge in Culbertson v. Seacoast Towers East, Inc., 212 So.2d 646 (Fla.1968). We do the same here. While the constitution requires a just valuation of all property, the Legislature is given the responsibility for deciding the specifics of how that just valuation is secured. We hold that section 192.042 is a reasonable and, therefore, constitutional implementation of article VII, section 4 of the Florida Constitution.