Bill targets military tax issue

For the second time in three years, state legislators outside of the Florida Keys have filed bills that would preempt a court case seeking to determine if military residential and commercial properties in Key West are taxable or not.

It’s action that’s very familiar to the Monroe County property appraiser and those following tax issues regarding military properties in Key West.

Private housing company Balfour Beatty and the Navy formed a partnership called Southeast Housing to oversee the military properties at Trumbo Point, Sigsbee Park, Truman Annex and the Navy hospital on South Roosevelt Boulevard.

The latest state Senate bill and House companion bill are almost identical to those filed during the 2013 legislative session, after Southeast Housing filed a lawsuit challenging $11 million in back taxes and penalties the property appraiser ordered the company to pay.

That legislation was vetoed by Gov. Rick Scott because it didn’t go far enough to protect private companies that partner with the military on housing projects. Scott was opposed to an amendment legislators placed on the bill that made the exemption only valid on properties that house active-duty military.

Circuit Court Judge David Audlin ruled in favor of Southeast Housing last April, but attorneys for county property pppraiser Scott Russell sent the case to the 3rd District Court of Appeal. Both sides made oral arguments before the appeals court in September and are now awaiting a ruling.

However, Sen. Tom Lee, R-Brandon, and House Rep. Jay Trumbull, R-Panama City, are not waiting on the court to rule.

They filed bills, House Bill 361 and Senate Bill 686, this session that would give a blanket property tax exemption to all properties in which a privately owned company forms a partnership with the military to provide housing, even if the properties house civilians.

Lee and Trumbull did not return repeated phone messages seeking comment Wednesday.

The bills would make the exemption retroactive to January 2007, the date the Monroe County Property Appraiser’s Office used to start calculating the back taxes owed by Southeast Housing. The property appraiser ruled in 2007 the properties were tax exempt, but later changed the ruling and taxed the properties after Balfour Beatty, a for-profit company, took ownership of the buildings and other tangible property.

Russell called the most recent bills “inappropriate” because the case is still being litigated.

“We are willing to let this work itself through the court system,” Russell said. “This ruling affects not only other areas of the state, but the country … Balfour Beatty is a for-profit company.”

Florida Keys State Rep. Holly Raschein, R- Key Largo, is aware of the bills and has “some very serious concerns,” she said.

“This year’s version (the House bill) was sponsored by a freshman legislator who holds the same Panama City seat as the previous sponsor of this bill, so our two districts just aren’t on the same page on this issue,” Raschein said. “The best-case scenario would be for the 3rd DCA to rule … There are also two other counties with litigation pending.”

The House bill is scheduled to be taken up by the House Finance and Tax Committee this week. If it makes it out of that committee, it would come to the Veteran and Military Affairs subcommittee next, on which Raschein sits. There is an additional committee stop before making it to the House floor, Raschein said.

“So we are still very early on in the process and there will be plenty of time to have a robust debate on this bill,” Raschein said. “I want to support efforts to provide excellent housing options for our military families but not at the expense of funding our schools and emergency services and not on the backs on Monroe County taxpayers.”

Local property taxes, froom which the military is exempt, pay for the maintaining of local roads and bridges and for fire, police and school services.

Balfour Beatty spokeswoman Kathleen Grim decline to comment about the proposed legislation, citing the ongoing litigation.

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