Opinion ID: 1788426
Heading Depth: 1
Heading Rank: 4

Heading: Constitutional History and the Broad Interpretation of Municipal Purpose

Text: Consistent with this Court's virtually unbroken precedent and case law, the First District below concluded that municipal purpose should continue to be given a broad definition. While I will also attempt to briefly review our constitutional and case law history, I would suggest that Chief Judge Wolf's opinion flawlessly and comprehensively speaks for itself in its interpretation of the term municipal purpose as previously construed by this Court. There is a particular passage in that opinion that gets right to the heart of the issue: Appellant has not cited any case which supports the proposition that when property is owned and used by a municipality the term municipal purpose as used in Article VII, Section 3(a), Florida Constitution, should be narrowly construed. [ Sebring Airport Authority v.] McIntyre, [783 So.2d 238 (Fla.2001)] and other cases cited for adopting a narrow interpretation involve situations where municipal property is being leased or utilized by a private entity. In Williams v. Jones, 326 So.2d 425, 432 (Fla.1975), a case where a municipality leased municipal property, the court stated that one person operating a commercial establishment for profit should not have an advantage over another commercial establishment also operating for purely proprietary purposes just because one is located on governmental property. The same policy considerations do not apply where the property is being owned and operated by the municipality itself, in which case the focus of the municipality is the provision of service to its citizens. See, e.g. City of Boca Raton v. Gidman, 440 So.2d 1277 (Fla.1983). In fact, we are unaware of any public policy reason when property is owned and operated by a municipality that the term municipal purpose should not be given its generally accepted meaning in accordance with Article VIII, Section 2(b), Florida Constitution. The Fifth District's opinion in [ Greater Orlando Aviation Authority v.] Crotty , 775 So.2d [978,] 978 [(Fla. 5th DCA 2000)], and the opinion of this court in Page v. Fernandina Beach, 714 So.2d 1070 (Fla. 1st DCA 1998), support such a uniform construction. The Crotty court noted, [T]he constitution exempts from taxation property owned by a municipality and used exclusively by it for municipal or public purposes. The term municipal purpose has been defined as encompassing all activities essential to the health, morals, protection and welfare of the municipality. State v. City of Jacksonville, 50 So.2d 532, 535 (Fla.1951). Municipal functions are those created or granted for the special benefit and advantage of the urban community embraced within the corporate boundaries. Chardkoff Junk Company v. City of Tampa, 102 Fla. 501, 135 So. 457 (1931). See also State ex rel. Harper v. McDavid, 145 Fla. 605, 200 So. 100 (1941); City of Winter Park [v. Montesi], 448 So.2d [1242,] 1244 [(Fla. 5th DCA 1984)]. Our courts have ruled that municipal functions include functions which specifically and peculiarly promote the comfort, convenience, safety and happiness of the citizens of the municipality rather than the welfare of the general public. Crotty, 775 So.2d at 980-981 (emphasis in original). Dep't of Revenue v. City of Gainesville, 859 So.2d 595, 598-99 (Fla. 1st DCA 2003) (footnotes omitted). This passage focuses on the broad authority granted to municipalities to utilize property owned and used by the municipality to serve its citizens in a broad variety of ways, while still enjoying the constitutional tax exemption that was placed in the constitution to encourage that very activity. Obviously, such a tax exemption has served as an incentive to cities to serve their citizens. With today's decision, that incentive and the services that go with it have been placed at risk. The Constitution of 1885 provided that property owned by corporations shall be subject to taxation unless ... used exclusively for religious, scientific, municipal, educational, literary or charitable purposes.  Art. XVI, § 16, Fla. Const. of 1885 (emphasis added). Under this Court's case law, the term municipal purpose has been consistently interpreted broadly to permit cities wide latitude in using municipal property to serve municipal residents, while still enjoying a constitutional tax exemption. For example, in State v. City of Tallahassee, 142 Fla. 476, 195 So. 402 (1940), this Court held that a city's construction of an office building for rent was such a municipal purpose contemplated by the constitutional tax exemption. Id. at 403. In fact, in the same opinion this Court noted that the construction of [a]irports, golf courses, school buildings, and other structures would be proper municipal purposes. Id. Subsequently, again construing this provision broadly, this Court held that holding a proprietary interest in a community recreational asset and business stimulant, like a speedway, served a municipal purpose because it contributed to the economic well-being of the community, thereby rendering even the lessees' interest in the property exempt from ad valorem taxation under the 1885 constitutional language. Daytona Beach Racing & Recreational Facilities Dist. v. Paul, 179 So.2d 349, 354 (Fla.1965); see also State v. Daytona Beach Racing & Recreational Facilities Dist., 89 So.2d 34, 37 (Fla.1956) (noting that this Court has on numerous cases approved as a public purpose the development of recreational facilities). In fact, it was this case and others like it, extending the benefit of the constitutional tax break to private entities, that eventually led to a revision of these tax provisions. Subsequently, article VII, section 3(a) of the 1968 Constitution was revised to prevent private entities from continuing to enjoy a constitutional tax exemption when municipalities leased property to them. The majority appears to acknowledge the purpose of the 1968 revisions to address these seemingly unfair tax breaks for private entities. See Majority op. at 260-61 (Thus, although the framers of article VII, section 3(a) sought to limit the holding in Daytona Beach Racing, they did so by requiring both ownership and exclusive use of the property by the municipality rather than by narrowing the definition of municipal purpose. ) (emphasis added). Of course, the majority's acknowledgment is based on our own case law. See Volusia County v. Daytona Beach Racing & Recreational Facilities Dist., 341 So.2d 498, 501 (Fla.1976) (Perceiving decisions [such as Daytona Beach Racing ] as creating inequities in the tax structure, the draftsmen of the Constitution of 1968 limited the municipal purpose exemption to `property owned by a municipality and used exclusively by it for municipal or public purposes.'); Bonnie Roberts, Ad Valorem Taxation of Leasehold Interests in Governmentally Owned Property, 6 Fla. St. U.L.Rev. 1085, 1091-92 (1978) (stating that Daytona Beach Racing dealt a substantial blow to the legislature's attempt to tax leasehold interests, and that the drafters of the 1968 Constitution attempted to deal with the problem by limiting the constitutional grounds on which an exemption could be based). No one has ever suggested that the 1968 amendment was intended to take away the exemption from municipalities that both owned the land and used it for the benefit of local residents. Hence, the focus of the 1968 revision was on the leasing of municipal property to private parties, rather than on the use of municipal property by the municipality itself, the issue before us today. Clearly, the broad exemption of municipal property owned by municipalities and used by them for public purposes, and not leased to private entities, remained in place in our constitution after 1968. [14] Thus, given both the substantial case law interpreting this phrase as broadly inclusive, and the narrow focus of the amendments of the Constitution in 1968 concerning private entities enjoying tax breaks, it seems evident that the term municipal purpose should continue to be broadly construed when it is applied to municipal property owned and used by a municipality to serve its citizens. Indeed, that is precisely what this Court did in 1979 in rejecting a claim that property owned by a municipality to meet future undesignated needs was not entitled to a constitutional tax exemption. In City of Sarasota v. Mikos, 374 So.2d 458 (Fla. 1979), Justice Overton declared for a unanimous Court: A reading of section 3(a) of article VII clearly establishes that it is a self-executing provision and therefore does not require statutory implementation. The change in the language of chapter 196 is irrelevant because although a statute may grant additional exemptions, it may not repeal the exemptions granted municipalities by the constitution. In our view, the city's holding of vacant land to meet the future needs of the public and to preserve natural open spaces is not a private use. We do not believe municipalities are required to dedicate land for a particular purpose, construct buildings, or otherwise be active on their land in order to maintain the tax exempt status of the property. Neither the constitution nor common sense requires there be an active use of such property. We hold that vacant land held by a municipality is presumed to be in use for a public purpose if it is not actually in use for a private purpose on tax assessment day.... We recognize that property owned by a municipality is not exempt from taxation if it is used for a private purpose. See Panama City v. Pledger, 140 Fla. 629, 192 So. 470 (1939) (land leased to a private corporation is not in use for a public purpose); City of Bartow v. Roden, 286 So.2d 228 (Fla. 2d DCA 1973) (land leased to a private enterprise for nonaeronautical activities is not in use for public purpose); Illinois Grain Corp. v. Schleman, 144 So.2d 329 (Fla. 2d DCA 1962) (land leased to a private corporation is not in use for a public purpose). None of these cases even imply that unimproved vacant land owned by a municipality falls within the category of land held for a private purpose. If the contentions of the property appraiser were adopted, the tax burden of county residents would be reduced at the expense of city taxpayers. This result is contrary to the purpose of our present constitution which provides that each local governmental entity shall have the same basic taxing authority, shall pay its own way, and shall not receive benefits at the expense of another local governmental unit. Id. at 460-61. In essence, our Mikos opinion approved of a rebuttable presumption in favor of an article VII tax exemption for municipally owned property not being used for a private purpose, even when the property was not in current use. Today's majority, and its new and explicit requirement of basic, necessary, or indispensable, simply cannot be reconciled with our holding in Mikos giving deference to a municipality's legislative judgment as to what constitutes a municipal or public purpose unless the property is actually in use for a private purpose. Id. at 461.