Opinion ID: 1723495
Heading Depth: 1
Heading Rank: 5

Heading: use of state's credit

Text: The State Attorney next argues that the bond issuance violates the Florida Constitution by lending the state's credit to a private entity. A similar issue was addressed in State v. Florida Development Finance Corp., 650 So.2d 14 (Fla.1995). There, the Legislature had established the Florida Development Finance Corporation (FDFC) to stimulate the state's economic environment primarily through the financing of small businesses. Id. at 15. Thus, the intended beneficiary of any bond issuance was private enterprise. Nevertheless, this Court found that the proposed bonds did not pledge the public credit or taxing power since the authorizing statute, the bond resolution, and the guaranty agreement all put the bondholders on notice that FDFC's obligation is limited to several specifically defined revenue sources. Id. at 18. Thus, this Court concluded that the bondholders could not compel a levy of taxes to satisfy the bond obligations. Id. Accordingly, since the bonds did not pledge public credit, it was immaterial that the primary beneficiaries of the bond issuance were private entities. Id. at 19. In this case, section 376.3075(4), the service contract, and the Corporation's Master Resolution all unambiguously put potential bondholders on notice that the bonds do not constitute a debt or obligation of the state, and the only revenue source for the bonds is an annual appropriation by the Legislature. Therefore, since the bonds are not supported by pledge of a tax revenue source, they are not payable from any such source and no bondholder could initiate judicial action to levy taxes in satisfaction of the debt represented by the bonds. See State v. Miami Beach Redevelopment Agency, 392 So.2d 875, 898 (Fla.1980) (upholding constitutionality of bonds where bondholder would have no recourse to compel by judicial action the levying of ad valorem taxation if bond obligations were unmet). The same reasoning undercuts the State Attorney's third argument, that the bond issuance violates article VII, section 11(d) [3] of the Florida Constitution because the bonds are obligations of the state payable from tax revenues. Moreover, since we conclude that the Corporation is not a state agency, [4] its bonds are not state bonds and the limitations of article VII, section 11(d) are inapplicable. Likewise, the State Attorney's contention that reimbursing cleanup costs does not come within the meaning of state fixed capital outlay projects as contemplated in article VII, section 11(d) is unconvincing since the Corporation is not a state agency. Even were we to find that the Corporation is a state agency, we would conclude that the restoration of contaminated lands and water for protection and conservation is a capital project. This would be commensurate with the public purpose served by the Florida Hurricane Catastrophe Fund Finance Corporation: enabling insurers to pay the claims of policyholders to assure that policyholders are able to pay the cost of construction, reconstruction, repair, restoration, and other costs associated with damage to property of policyholders from a hurricane. § 215.555(6)(a) 2., Fla. Stat. (Supp.1996) (emphasis added). Accordingly, we affirm the trial court's final judgment of bond validation. It is so ordered. KOGAN, C.J., and OVERTON, SHAW, GRIMES, HARDING, WELLS and ANSTEAD, JJ., concur.