Jackson-Shaw Company, etc., Appellant, vs

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In its suit for declaratory and injunctive relief, Jackson-Shaw contested the lawfulness of this agreement on several grounds. Id. at 695-96.3 Among other arguments, Jackson-Shaw contended that the transaction violated the prohibition in article VII, section 10 of the Florida Constitution, against a government entity becoming a joint owner with, or giving, lending, or using its credit to aid, a corporation. Id. at 695. After a bench trial, the district court entered judgment in favor of the JAA. Id. at 696, 739. The district court determined that the agreement did not violate the prohibition against joint ownership because the relationship between the JAA and Majestic was not a joint venture as defined under Florida law. Id. at 727-31. The district court also determined that the JAA was not pledging its credit through the transaction and that the transaction served a public purpose. Id. at 731-35.


On appeal to the Eleventh Circuit, Jackson-Shaw again raised the claims that the agreement violated article VII, section 10 of the Florida Constitution. Jackson- Shaw Co. v. Jacksonville Aviation Auth. (Jackson-Shaw II), 508 F.3d 653, 654 (11th Cir. 2007). The Eleventh Circuit determined that resolution of the issues depended on unsettled state law and noted that this Court had only considered the












3. After initiating the lawsuit, Jackson-Shaw made an offer to lease twenty- five acres of Woodwings East and proposed a rolling option for future leases. Id. at 707. The JAA, through counsel, wrote that it was unable to respond to the proposal because of the instant litigation. Id.







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question of whether the lease of public lands to a private developer was unconstitutional in two prior cases, neither of which dealt with a lease similar to the one in this case. Id. at 654, 657-58. Accordingly, the Eleventh Circuit certified the following questions to this Court:








1. Is the JAA a "joint owner" prohibited by article VII, section 10 of the Florida Constitution by virtue of its obligations under the Agreement?








2. Is the JAA impermissibly pledging its "credit" under article VII, section 10 of the Florida Constitution by virtue of its obligations under the Agreement?



Id. at 658.


ANALYSIS




The parties agree that the certified questions arise from undisputed facts.


These questions also require this Court to interpret the Florida Constitution. The interpretation of the Florida Constitution is a question of law. See Crist v. Fla.


Ass'n of Criminal Def. Lawyers, Inc., 978 So. 2d 134, 139 (Fla. 2008). Because the certified questions involve pure questions of law that arise from undisputed facts, they are subject to de novo review. Macola v. Gov't Employees Ins. Co., 953 So. 2d 451, 454 (Fla. 2006).




First, we set out the relevant constitutional provision and its history. Then we discuss similar cases interpreting this provision and the provision which immediately preceded it. Next, we address whether the JAA has become a joint







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owner with Majestic. Finally, we address whether the JAA has given, lent, or used its credit to aid Majestic.


Article VII, Section 10 of the Florida Constitution






Article VII, section 10 of the Florida Constitution, which is entitled "Pledging credit," provides in pertinent part:


Neither the state nor any county, school district, municipality, special district, or agency of any of them, shall become a joint owner with, or stockholder of, or give, lend or use its taxing power or credit to aid any corporation, association, partnership or person . . . .


Art. VII, § 10, Fla. Const. (1968).4


Article IX, section 10 of the 1885 Florida Constitution preceded Florida's current prohibition. This predecessor provision provided:



The credit of the State shall not be pledged or loaned to any individual, company, corporation or association; nor shall the State become a joint owner or stockholder in any company, association or corporation. The Legislature shall not authorize any county, city, borough, township or incorporated district to become a stock holder in any company, association or corporation, or to obtain or appropriate money for, or to loan its credit to, any corporation, association, institution or individual.


Art. IX, § 10, Fla. Const. (1885).


Before the predecessor provision was adopted, the Florida Constitution contained a prohibition against the State using public money for private business;












4. The subsections contained in the remainder of this provision are inapplicable to this case.







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however, the Florida Constitution did not prohibit the Legislature from authorizing local governments to provide public money to private business. Joseph W. Little, The Historical Development of Constitutional Restraints on the Power of Florida Governmental Bodies to Borrow Money, 20 Stetson L. Rev. 647, 655-57 (1991); see also art. XIII, § 10, Fla. Const. (1865) ("The General Assembly shall not pledge the faith and credit of the State to raise funds in the aid of any corporation whatever."); art. XIII, § 10, Fla. Const. (1861) (same); art. XIII, § 13, Fla. Const. (1838) (same). Without a prohibition against local government financing private business, public financing of private business became commonplace. Little, supra, at 656. For example, local governments underwrote railroad expansions by subscribing to stock in railroad companies. Id.; see also Brautigam v. White, 64 So. 2d 781, 784 (Fla. 1953).


As explained by this Court in Bailey v. City of Tampa, 111 So. 119 (Fla. 1926), the prevalence of public financing of private business resulted in the adoption of the prohibition contained in the 1885 Florida Constitution:


Section 10 of article 9 of our organic law was first adopted in 1875 as an amendment to section 7 of article 13 of the Constitution of



1868. The reason for this amendment was that, during the years immediately preceding its adoption, the state and many of its counties, cities, and towns had by legislative enactment become stockholders or bondholders in, and had in other ways loaned their credit to, and had become interested in the organization and operation of, railroads, banks, and other commercial institutions. Many of these institutions were poorly managed, and either failed or became heavily involved, and, as a result, the state, counties, and cities interested in them







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became responsible for their debts and other obligations. These obligations fell ultimately on the taxpayers. Hence the amendment, the essence of which was to restrict the activities and functions of the state, county, and municipality to that of government, and forbid their engaging directly or indirectly in commercial enterprises for profit.



Id. at 120. Thus, as the language of the provision reflected, its purpose was to prohibit state and local governments from becoming stockholders in or loaning their credit to any corporation, association, institution, or individual and to "counter debauching the State's credit and the reckless speculation resulting therefrom." Brautigam, 64 So. 2d at 784. The provision was designed "to protect public monies" and "to keep the State out of private business; to insulate State funds against loans to individual corporations or associations and to withhold the State's credit from entanglement in private enterprise." Dade County, Bd. of Pub.


Instruction v. Mich. Mut. Liab. Co., 174 So. 2d 3, 5-6 (Fla. 1965).




Although the 1968 Florida Constitution added limiting constructions and exceptions to the broad prohibition contained in the 1885 Florida Constitution,5 the general language in the prohibition against public entities becoming joint owners












5. Subsections (a) through (d) provide that article VII, section 10 does not prohibit laws authorizing the investment of public trust funds, the investment of other public funds in obligations of the United States, the issuance of bonds to finance local airports or port facilities, the issuance of bonds for industrial or manufacturing plants if the interest is exempt from income taxes and bonds are payable solely from revenues therefrom, and the joint ownership with or pledge of taxing power or credit to any private entity for the ownership, construction, and operation of electrical energy generating or transmission facilities. Art. VII, § 10(a)-(d), Fla. Const. (amended 1974).







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with or pledging their credit to private entities was not substantially altered. Thus, like the 1885 provision before it, the 1968 prohibition "acts to protect public funds and resources from being exploited in assisting or promoting private ventures when the public would be at most only incidentally benefitted." Bannon v. Port of Palm Beach Dist., 246 So. 2d 737, 741 (Fla. 1971).



Prior Cases


The four cases where the challenged arrangements most closely resemble the agreement in this case are cases in which the challenged arrangement was a lease or temporary conveyance of land from a public entity to a private entity without the issuance of bonds.


First, in Bailey, this Court addressed whether a contract between the City of Tampa and the Tampa Board of Trade violated the constitutional prohibition in article IX, section 10 of the 1885 Florida Constitution. 111 So. at 119. In the challenged contract, the city agreed to convey a parcel of land to the board. Id.


The board agreed to erect a building on the land within three years of entering into the contract. Id. The building's plan had to be approved by the city, and if the building was not constructed within three years, the board had to reconvey the property to the city upon demand. Id. The board agreed to pay the entire expense and cost of the building, a portion of which was to be turned over for the city's use at the time of completion. Id. at 119-20. Furthermore, the board agreed to







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reconvey the land and improvements to the city within thirty-five years, free from any lien or indebtedness, upon the retiring of bonds, notes, or mortgages. Id. at




119. The board would retain the right to use the land and improvements as was necessary to carry out its purpose and consistent with the public interest. Id. This Court determined that this contract did not violate the constitutional prohibition, reasoning that the contract "reveals no authorization on the part of the city of Tampa to become a stockholder in the Tampa board of trade, or to obtain or appropriate money for it, or to loan it or any other corporation, association, institution, or individual its credit." Id. at 120. We explained that whether the contract was wise as a matter of policy was in the discretion of the city's officers and electors to determine. Id.


Second, in Raney v. City of Lakeland, 88 So. 2d 148 (Fla. 1956), this Court addressed whether a ninety-nine-year lease of publicly-owned land by a municipality to a nonprofit corporation violated article IX, section 10 of the 1885 Florida Constitution. Id. at 149-50. In the challenged arrangement, the City of Lakeland agreed to lease land to the Garden Club of Lakeland, Inc., for an annual rental of $1 and other considerations. Id. at 149. The land had been originally purchased by the city some years earlier for off-street parking of motor vehicles, but it had never been used to any extent. Id. The lease provided that the club could not use the land for private gain and that the club would establish and







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maintain a public library on horticulture and maintain a service for the dissemination of educational information on horticulture for the benefit of the public. Id. The club agreed to construct, at its expense, a building for the library within two years of entering into the lease. Id. The lease included clauses protecting the city with public liability insurance, covenants against assignment and subletting, and cancellation upon breach of any covenant. Id. The improvements would revert to the city with the land at the end of the lease term.


Id. The lease also stated that the city did not have a present or anticipated need for the land and that it was executed to permit enlargement of the program and facilities of the club for furtherance of its work in behalf of the general welfare. Id. at 150. This Court found that the lease was valid. Id. We noted that "the beautification of a modern city by extensive and well-conceived planting of trees, flowers and shrubs is a proper function of municipal government." Id. at 151.


This Court also observed that the club was not a private corporation for profit and that "[i]f it were, [the] lease could not stand." Id. We further noted that as in Bailey, the lease at issue imposed no obligation on the city. Id. We ultimately determined that the lease served a useful public purpose at no profit to the club. Id. at 152.

Third, in Bannon, this Court addressed whether a long-term lease and development plan between the Port of Palm Beach District and Peanut Island
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