Title: Funding Sources Information Matriix - December 12, 1996
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 Material Information
Title: Funding Sources Information Matriix - December 12, 1996
Physical Description: Book
Language: English
 Subjects
Spatial Coverage: North America -- United States of America -- Florida
 Notes
Abstract: Jake Varn Collection - Funding Sources Information Matriix - December 12, 1996 (JDV Box 70)
General Note: Box 24, Folder 3 ( Water Supply Development and Funding - 1996-1997 ), Item 35
Funding: Digitized by the Legal Technology Institute in the Levin College of Law at the University of Florida.
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Bibliographic ID: WL00004633
Volume ID: VID00001
Source Institution: Levin College of Law, University of Florida
Holding Location: Levin College of Law, University of Florida
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FuiMbin; Sources Information Matrix

Dece~ ber 12, 1996

Option &c Typei Ani spit iise R ecipinta:. AIo unt:: ..: e ; .Gsuid : g-..-:. Requirements : Impediments Actions to Pros and Cons Funding Sources
Opt.:ion .:iI : : C t: nq osi:e:s Imple~ ..i :

Federal Funds DCA Small non- Up to 750,000 Line and tank Assistance to Population and NA Supplemental
HUD CDBG Grant entitlement cities based on replacement & low income income surveys Funds
& counties population installation areas

Special Assessments Local Govt. All cities Up to full cost All construction, Available to all Cost must be Public dislike of Apportionment Full costs can be Property Taxes
and counties of project land, planning, etc. cities & apportioned to taxes study and recovered. May be repaid
counties benefit received, adopted by over several yrs.
ordinance Property taxes are
difficult to raise and
relate to benefits

Impact Fees Local Govt. All cities and Up to All construction, User pays for Detailed cost Market values Proportionate Allows new construction Fees Assessed for new
counties who proportionate full land planning, etc. growth studies must be for service study, collections to pay its way, but must projects
experience cost of replacing impacting the made to from new find other revenue to pay
growtbhnew used capacity. system determine construction and for existing residents and
construction proportionate implementing commercial
amounts ordinance

Advalorem & Franchise Local Govt. All Cities and Up to each revenue All construction, Public right-of- Only that Only to the Only that they Pro-Can be spent on Property taxes & large
Fees Counties cap land, planning, & way used to monies be spent extent that the are budgeted by whatever they want utility company such
operating expenses benefit public on a lawful revenues are city or county within the law as BellSouth, Gulf
services purpose available and commission Con-Property taxes are Power or Cablevision
within statutory likely to go up and/or
limits other services will have
to be cut.

local Option Local Gov. Those cities and Up to each Counties under Local resources Only that it is Only to the Counties under jl goods that is the Local Taxes
Sales Tax counties where Jurisdiction's 50K= used for local spent on extent that the 50K population purpose of the monies -
(Infrastructure surtax the county has allotted share of All construction, public benefit allowable uses revenues are by Ordinance for infrastructure.
and small county imposed this tax proceeds =1.3 land, planning. & available and unless the
surtax) billion statewide operating expenses within statutory money is bonded.
total limits
Counties over Counties over
50R = 30K population
construction, by county
engineering, referendum
planning, and land
fost (no operating
costs)
A:lwatersuppct cknarartwpd(cn)










WATER SUPPLY FUNDING OPTIONS


DESCRIPTION


WHO IMPOSES


WHO PAYS


LEGAL LIMITS


r T r T


Involuntary levies imposed
to raise revenues to be used
for the good of the citizens.


State can impose, by
general law, any tax
except ad valorem
tax or personal
income tax.

Cities, counties and
special districts can
impose ad valorem
taxes authorized by
general or special
law,


Depends upon how
legislature structures
the levy. Some taxes,
such as corporate
income taxes, are
imposed directly upon
business. Other taxes,
such as sales tax, are
collected by business
from the individual
consumer. Still other
taxes, such as the
gross receipts tax, are
imposed on and the
responsibility of
business, but can be
separately shown on
utility bill sent to the
consumer.


Requires general law
authorization (except ad valorem
taxes).

If constitutionally-imposed state
tax or fee, requires 2/3 vote of
voters.

Federal and state constitutional
limits apply, including equal
protection (rational basis test
usually applicable), due process,
commerce clause.

Federal law can preempt a
particular state law taxing scheme.
However, there are no obvious
federal laws that would preempt
taxation related to water supply.


Provides the greatest degree of
flexibility re use of proceeds.

Revenues can be spent for any
valid "public purpose," a test
which has been broadly defined
by the courts.


Constituent resistance to
imposition of new taxes.

Political resistance to taxes.

If levied by the State, subject to
the revenue cap in Article VII,
Section 1.


beifk l4e+ricjc Fl-BA


LEVY


I. Taxes


PROS


CONS


_________ .1 a I ___________________













DESCRIPTION


WHO IMPOSES


WHO PAYS


LEGAL LIMITS


r r T I I


Repeal exemption from 6%
state sales tax on water,
including metered, bottled
and well water.


_ __ _ I


State can impose
under existing sales
tax administrative
scheme. State could
delegate power to
local government or
water management
districts, but unless
state collected on
their behalf, this
would require new
tax collection
mechanisms.


End consumer of
water would pay,
including residential,
commercial,
agricultural and
industrial users,
unless the legislature
created exemptions
for certain purchasers.


Fla. Stat. 212.08(4)(a)l. currently
exempts water from sales and use
tax, regardless of who buys it.


Estimated to produce $270
million annually on a statewide,
basis. :

Is a recurring revenue source.

Has a direct nexus with use of
monies.


__ _ __ _ J __ _ __ _ _ .L_ _ __ _ _


Taxing residential water
purchases/uses would be
somewhat regressive, as is any
sales tax on a necessity.

Collecting tax on water usage
where there is no arms-length
sales transaction would be
difficult, although it is done in
other sales/use tax situations.


LEVY


a.

Sales Tax
on Water


PROS


CONS














WHO PAYS LEGAL LIMITS PROS


Retain exemption from 6%
state sales tax, but allow
local governments (or water
management districts) to
vote to impose a local sales
tax on water.


See a. above.


T T


See a. above.

Also, if implemented
on a local option
basis, only those
within jurisdiction
opting to tax would
pay.


Tax base for local option sales
taxes typically track base for state
sales tax, so Fla. Stat.
212.08(4)(a)1. currently exempts
water from local option sales
taxes.


Could limit impact to areas
most in need of revenues for
water supply facilities.


___________ J. .1


Same as a. Also, may produce
substantially less revenues,
depending upon rate authorized.

If authorized rate is higher than
local sales tax rate otherwise
applied within the jurisdiction,
will be more difficult to
administer tax.

Local option taxes are by their
nature more difficult for sellers
to administer due to need to
attribute sale to a specific
jurisdiction.


b.

Local
Option
Sales Tax
on Water


I I


DESCRIPTION WHO IMPOSES


CONS


LEVY













WHO PAYS LEGAL LIMITS PROS


1 1 r


New gross receipts tax
imposed on privilege of
selling water, similar to
gross receipts tax now
imposed at Chapter 203,
Fla. Stat. on electric, gas
and telecommunications
utilities.


Legislature could
impose at statewide
level, as current
gross receipts tax is
imposed on electric,
gas and
telecommunications
utilities, or could
delegate option to
tax to local
government or
water management
districts.


Typically, gross
receipts tax is paid by
the utility, but can be
passed on to the end
consumer. In some
instances the tax can
be separately stated
on the customer's bill
so it appears as tax
and not as an increase
in the utility's rates.


No specific limits.


There is a direct and logical
link between the tax base and
the use of monies (although
such a linkage is not legally
required of a tax, as opposed to
a fee).

Creation of new tax structure
affords more flexibility to
promote social objectives (i.e.,
preferential tax treatment for
reuse, etc.)


Public opposition to new taxes.
Creation of new tax structure
creates new administrative
problems.

Water may already be subject to
municipal utility tax within city
or charter county where service
is provided.


d. Unlike impact fees, which Could be imposed Person using water. Same as c. Same as c. Same as c.
must meet specific legal by state or state
Impact requirements, the could delegate
Taxes Legislature could authorize power to impose to
imposition of impact taxes local governments
that are imposed on any or water
person or development that management
uses water. districts.


c.

Water
Utility
Tax


LEVY DESCRIPTION WHO IMPOSES


CONS














WHO PAYS LEGAL LIMITS PROS


e.

Ad Valorem


1~ I 1. T I


Property taxes are imposed
on the basis of the value of
the property taxed.


Cities, counties and
special districts
(including water
management
districts) can
impose.


Property owner.


Article VII imposes a number of
limits on property taxation,
including limits on the millage
rates, uniformity of the levy across
a taxing jurisdiction, and
exemption or immunity from tax
for certain properties and inability
to statutorily grant exemptions to
others under the rule of expression
unius est exclusion alterius (the
expression of the one precludes all
others).

Article III, Section 11 prohibits
special laws related to assessment
and collection of ad valorem
taxes, and, based on action taken
by 3/5 vote of legislature,
prohibits special laws related to
allocation of millage for water
management purpose.


The collection process is in
place.

Water management districts
already impose ad valorem
taxes.


a I I


Property taxes are among the
least popular taxes.

Flexibility regarding taxation of
certain properties is severely
restricted under Article VII.

Current preferential ad valorem
tax treatment afforded to
homestead and agricultural
lands may be viewed as unfair
by other property owners.

The constitutional millage cap
for all "water management
purposes" is set at 1 mill
(except for NW Fla., which is
.05 mills).

The statutory millage caps for
water management districts are:
NWFWMD .05 mills;
Suwannee .75 mills; St. Johns
.6 mills; SWFWMD 1 mill; and
SFWMD .80 mills.


LEVY DESCRIPTION WHO IMPOSES


CONS












WHO PAYS LEGAL LIMITS PROS


Special assessments are like
taxes in that they are
involuntary, but they are
unlike taxes in that they
must benefit the property
against which they are
imposed.


Special assessments
can be imposed by
the state, by cities or
counties under their
home rule powers,
or, if authorized by
law, by special
districts.

Water management
districts currently
have limited
authority to impose
special assessments.


Property owner.


Special assessments must meet a
2-part legal test:

1. provide a special benefit to the
property against which levied; and

2. be fairly apportioned.

While both are legislative
determinations in the first
instance, the Florida Supreme
Court has pending two cases in
which further guidance may be
provided with respect to how
special a special benefit must be
(can it be imposed countywide),
and how much deference will be
accorded a legislative
determination of benefit and fair
apportionment.


Collection process is already in
place under Fla. Stat. 197.

Special assessments become
liens upon property and are
therefore more easily enforced.:

Special assessments are in wide
use in Florida by not only cities
and counties, but by special
districts, resulting in familiarity
with the levy.


Must be applied fairly to all
who benefit, meaning that
unlike property taxes, special
assessments are imposed
without exemption for
homestead property, churches,
and other exempt properties.


Special
Assessments


LEVY DESCRIPTION WHO IMPOSES


CONS














WHO PAYS LEGAL LIMITS PROS


A "fee" can be imposed
pursuant to governmental
police powers, or pursuant
to government's ability to
function in a proprietary
capacity. Levies that are
taxes are often mislabelled
as fees:


_____________


* -f v I T


The state can
impose fees as a
result of its
sovereign status.

Cities and counties
can impose fees
pursuant to their
home rule powers.

Special districts can
impose fees if
granted that power
by the legislature or
by the city or county
that created them.


The regulated entity
or person.


Fees must be reasonable under the
circumstances, with more specific
limits applicable to different types
of fees.


A fee is often more palatable to
the public than a tax,
particularly if the fee is
voluntary and can be avoided
by altering one's behavior.


The legal limits on expenditure
of fee revenues are more
restrictive than on expenditure
of tax revenues.

If levied by the State, fees are
subject to the revenue cap in
Article VII, Section 1.


III. Fees


LEVY DESCRIPTION WHO IMPOSES


CONS












WHO PAYS LEGAL LIMITS PROS


I V r1 1


Regulatory fees are
mandatory and are imposed
pursuant to police powers.

A building permit, a
parking permit and an
occupational license are
typical regulatory fees.


The regulatory body
imposes the fee.

The state has
regulatory police
powers resulting
from its sovereign
status.

Cities and counties
have regulatory
powers as a result of
home rule.

Special districts,
including water
management
districts, have only
those powers
specifically granted
to them by law.


The regulated entity
or person.


The fee must further what is
primarily a regulatory purpose as
contrasted with a revenue-raising
purpose. The revenues generated
from the fee must be used to fund
the costs of regulation.


If water supply is to be heavily
regulated, imposition of fees
for access to water may be
appropriate to fund the
administrative costs of
regulating access to water.

However, it is unlikely that a
regulatory fee could be
imposed to fund extensive
capital costs associated with
water supply absent adherence
to standards applied to impact
fees.


_________________ 2 .2 2 5 2


a.

Regulatory
Fees


There are due process limits on
use of regulatory powers to
exact revenues from people,
including strict limits on use of
the monies.

Under existing case law in
Florida, it is sometimes difficult
to determine when a fee
arguably imposed to further a
regulatory purpose is really a
"tax" that is driven by a
revenue-raising purpose. For
the most part, this is not critical
when the legislature authorizes
imposition of a levy and simply
misnames it because the state
has the power to enact (or allow
local government to enact)
either a tax or a fee. However,
it is extremely important for
local governmental entities that
can rely upon their home rule
powers to enact fees, but are
preempted from enacting most
taxes.


LEVY DESCRIPTION WHO IMPOSES


CONS













WHO PAYS LEGAL LIMITS PROS


CONS


1 1 1 1 1 T1


Impact fees evolved under
government's police powers
and ability to regulate
development.

Fla. Stat. 163.3202(3)
describes an impact fee as a
land development
regulation that, if used,
must be included in the
land development code.

Notwithstanding their
regulatory function, the
Courts also have recognized
that impact fees can further
a proprietary purpose.


Cities, counties and
school boards
impose impact fees.


The property owner
pays as a condition of
developing his or her
property.


Impact fees must meet the "dual
rational nexus" test which requires
that the governmental entity
imposing them demonstrate:

(1) a reasonable connection
between the need for the new
capital facility and the growth
generated by the proposed
development; and

(2) a reasonable connection
between the expenditure of the
funds collected and the benefits
accruing to the new development.


Many local governments
already impose impact fees,
resulting in familiarity with
these levies.


Impact fees cannot be imposed
on existing development, but
are used to fund the capital
facilities attributable to new
development.


_______ .1. __________________ _________________ t _________________


b.

Impact Fees


LEVY DESCRIPTION WHO IMPOSES











LEVY DESCRIPTION WHO IMPOSES


PROS CONS


1 1 T


Proprietary charges and
user fees are charged in
exchange for a particular
governmental property,
facility or service which
benefits the party paying
the fee in a manner not
shared by other members of
society.

They are paid by choice, in
that the party paying the fee
has the option of not
utilizing the governmental
service and thereby
avoiding the charge.


The state, cities and
counties can impose
proprietary user
fees.

The water
management
districts could
impose them if
specifically
authorized by law to
do so.


The person using the
governmental
property, facility or
service.


The charge must be paid by choice
in that the person paying the fee
has the option of not utilizing the
governmental property, facility or
service and thereby avoiding the
charge.


Proprietary user or privilege
fees are voluntary and can be
avoided.

There is more flexibility in
setting a voluntary user fee as
the amount of the proprietary
charge or user fee need not be
limited by the regulatory
purpose or the burden imposed
by the user on the government
service, facility or property.


When the voluntary charge is
for an essential service that
cannot be secured from one
other than government, the
voluntary nature of the charge
is illusory.


I _________________________ ___________________________ I ________________________________________ I _____________________________________ I _____________________________________


c.

Proprietary
User Fees


WHO PAYS LEGAL LIMITS


!










WATER SUPPLY FUNDING OPTIONS


DESCRIPTION


WHO IMPOSES


WHO PAYS


LEGAL LIMITS


True utility fees are charges
for utility services sold by a
governmental entity acting
in a corporate or proprietary
fashion. Municipal electric
companies charge typical
utility fees.

Fla. Stat. 403.031(17)
suggests that stormwater
utilities are similar to water
and wastewater utilities;
however, the actual levy
authorized by Fla. Stat.
403.0893(3) more
resembles a special
assessment than a typical
utility fee, and it is
generally collected pursuant
to the methodology in Fla.
Stat. 197 for non-ad
valorem assessments.


Cities or counties
acting in a corporate
or proprietary
manner.


The person using the
service provided by
the utility.


If the "utility fee" is truly a
proprietary user fee and not a tax
or special assessment, case law
requires that it be voluntarily paid
for services received, and it must
be reasonable and non-
discriminatory, although it can
provide a profit to the utility.

Failure to pay the fee for one
utility service cannot result in
termination of another service,
unless the services are so
interlocked that neither can be
effective without the other.


True utility fees are voluntary
in the sense that they are paid
only by those who use the
utility service.

The amount of a utility fee
typically relates to the amount
of utility service used.


Persons who secure their water
through water utilities already
pay something for that service
today.

Persons with access to non-
utility water sources will not
pay utility fees.


TAL/17650-1


LEVY


Utility Fees


PROS


CONS




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