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7633-06 ORDINANCE NO. 7633-06 AN ORDINANCE OF THE CITY OF CLEARWATER, FLORIDA, CREATING CHAPTER 29, ARTICLE VI TAX DEFERRAL FOR RECREATIONAL AND COMMERCIAL WORKING WATERFRONT PROPERTIES; IMPLEMENTING CHAPTER 197.303 ET. SEQ., FLORIDA STATUTES (2005); ALLOWING FOR AD VALOREM TAX DEFERRALS FOR RECREATIONAL AND COMMERCIAL WATERFRONT PROPERTIES; PROVIDING DEFINITIONS; ESTABLISHING GUIDELINES FOR QUALIFICATION; PROVIDING FOR APPEALS; PROVIDING PENALTIES FOR WILLFULLY FILING INCORRECT INFORMATION; PROVIDING FOR DISTRIBUTION OF PAYMENTS; PROVIDING AN EFFECTIVE DATE. WHEREAS, Chapter 197, Florida Statutes, regulates tax collections, sales and liens of real property within the State of Florida WHEREAS, the City of Clearwater (City) is empowered under Chapter 197.303 - 197.3047, Florida Statues (2005), to enact ordinances to allow for ad valorem tax deferrals for recreational and commercial working waterfront properties. WHEREAS, the Florida Committee on Community Affairs (Committee) in their Report on Working Waterfronts Number 2005-122 (Report) found that a diversified waterfront industry, both commercial and recreational, is an important component of the economy in the State of Florida. WHEREAS, the Committee found in their Report that each year, public boat ramps create 25,000 jobs statewide and generate $128 million in state and local tax revenue. WHEREAS, the Florida Legislature echoed these findings in Florida Statute Section 342.07(1) stating that access from recreational and commercial waterfront properties is vital to maintaining or enhancing the $14 billion economic impact of boating in the state. WHEREAS, the Florida Legislature recognized that a means of ingress and egress to the navigable waterways of the state is crucial for engaging in commerce and transportation of goods and people. WHEREAS, the Committee found an increase in the purchasing of traditional working waterfront property and converting them to private and residential use. 1 Ordinance No. 7633-06 WHEREAS, the Committee found that this conversion of traditional working waterfront property to private and residential use serves to both reduce the number of traditional working waterfront properties available for traditional public use as well as increase the value of nearby working waterfront properties. WHEREAS, the Committee found that this increase in property value results in higher property taxes, causing the working waterfront property to decrease in profitability, increasing the pressure to convert the property to a private or residential use. WHEREAS, the Committee found that the public has lost access to recreational working waterfronts because of the development for private marina and residential uses. WHEREAS, the Committee found that there exist several impediments to developing new recreational or commercial access to state waterways, including the cost to develop and government approval of such developments. WHEREAS, the Committee found that the loss of commercial and recreational waterfront properties may have long-term negative effects on both the state and local economies. WHEREAS, the Report endorsed a means of alleviating the economic pressure on the recreational and commercial waterfront properties by creating a Deferred Property Tax Program. NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CLEARWATER: Section 1. That Chapter 29, Article VI is hereby created to read as follows: Article VI. Tax Deferral for Recreational and Commercial Working Waterfront Properties. Section 29.100 Purpose. The purpose of this Article is to implement 99197.303 - 197.3047, Florida Statutes (2005) by allowing ad valorem tax deferrals for recreational and commercial working waterfront properties, as defined herein, if the owners are engaging in the operation, rehabilitation, or renovation of such properties in accordance with guidelines established in this Article. Section 29.101 Applicability. 2 Ordinance No. 7633-06 Any property owner who is engaged in the operation, rehabilitation, or renovation of a recreational or commercial working waterfront property, as herein defined, except for those properties located within the Downtown Clearwater Community Redevelopment Area, may elect to defer payment of ad valorem taxes levied by the City of Clearwater, in accordance with this Article. The deferrals do not apply, however, to taxes or non-ad valorem assessments defined in F.S. 197.3632(1 )(d) levied for the payment of bonds or to taxes authorized by a vote of the electors pursuant to s. 9(b) or Section 12, Article VII of the State Constitution. Section 29.102 Definitions. The following words, terms, and phrases, when used in this article, shall have the meanings ascribed to them in this Article, except as where the context clearly indicates a different meaning: Boat Construction Facility means facilities where marine vessels are constructed and/or housed with direct access to navigable waters of the state Commercial Fishing Facility means all docks, piers, processing houses or other facilities, which receive commercial fishery products from ships. Dock means an accessory structure, not offered for sale or rent, including a pier, wharf, loading platform, tie poles, or boat lift constructed on pilings over open water or upon a system of flotation, for the purpose of launching, mooring and receiving marine vessels. Dry Marina means a licensed commercial facility, which provides public dry storage for vessels on a leased basis. Lift means an apparatus used to lift and move marine vessels with direct access to navigable waters of the state. Non-ad valorem assessment means those assessments that are not based upon the millage and which can become a lien against a homestead as permitted in section 4 Art. X of the State Constitution. Recreational and Commercial Working Waterfront means a parcel or parcels of real property that provide access for water-dependent commercial activities including hotels and motels as defined in 9509.242(1), Florida Statutes (2005) or provide access for the public to the navigable waters of the state. Recreational and commercial working waterfronts require direct access to or a location on, over, or adjacent to a navigable body of water. The term includes water-dependent facilities that are open to the public and offer public access by vessels to the waters of the state or that are support facilities for recreational, commercial, research, or governmental vessels. These facilities include docks, 3 Ordinance No. 7633-06 wharfs, lifts, wet and dry marinas, boat ramps, boat hauling and repair facilities, commercial fishing facilities, boat construction facilities, and other support structures over the water. Seaports are excluded from the definition. Vessel means every type of watercraft, barge or airboat, other than a seaplane that can be used for transportation on the water Wet Marina means a licensed commercial facility, which provides public moorings for vessels on a leased basis. Section 29.103 Tax Deferral for Recreational and Commercial Working Waterfront Properties. (1) Beginning with the taxes assessed in 2007, any property owner who is engaged in the operation, rehabilitation, or renovation of a recreational or commercial working waterfront property, as herein defined, except for those properties located within the Downtown Clearwater Community Redevelopment Area, may elect to defer payment of 100% of ad valorem taxes levied by the City of Clearwater (except for taxes authorized by a vote of the electors pursuant to s. 9(b) or Section 12, Article VII of the State Constitution) by filing an annual application for tax deferral with the County Tax Collector on of before January 31 following the year in which the taxes are assessed. The applicant has the burden to affirmatively demonstrate compliance with the requirements of this Article. (2) All taxes permitted by this Article to be deferred shall be deferred for a period not to exceed 10 years during which time the use and ownership of the property must remain that of a recreational and commercial working waterfront. (3) All deferrals granted under this Article shall remain in effect regardless of any change in the authority of the County Tax Collector or the City of Clearwater to grant the deferral. Section 29.104. Application for Tax Deferral (1) Application form The application for deferral must be made annually upon a form prescribed by the State of Florida Department of Revenue (lithe Department") and furnished by the County Tax Collector as provided by Florida Statues Section 197.303 - 197.3047. The applicant must sign the application form upon oath before an officer authorized by the state to administer oaths. The application form must provide notice to the applicant of the manner in which interest is computed, consistent with the methodology outlined in this Article. Each application form 4 Ordinance No. 7633-06 must contain an explanation, consistent with this Article, for the conditions to be met for approval and the conditions under which deferred taxes and interest become due, payable, and delinquent. Each application must clearly state that all deferrals pursuant to this Article become a lien on the applicant's property and shall attach as of the date and in the same manner and be collected as other liens for taxes. The applicant must submit the following information: a. Each application must contain a list of, and the current value of, all outstanding liens on the applicant's property. b. Each applicant shall furnish proof of fire and extended coverage insurance in an amount that is in excess of the sum of all outstanding liens and deferred taxes and interest with a loss payable clause to the county tax collector. c. The tax collector may require the applicant to submit any other evidence and documentation deemed necessary by the tax collector in considering the application. (2) Determination of the Tax Collector The tax collector shall consider and render his or her findings, determinations, and decision on each annual application for tax deferral for recreational and commercial working waterfronts within 45 days after the date the application is filed. The tax collector shall exercise reasonable discretion based upon applicable information available under this Article. The determination and findings of the tax collector are not quasi-judicial and are subject exclusively to review by the value adjustment board. A tax collector who finds that the applicant is entitled to the tax deferral shall approve the application and file the application in the permanent records. A tax collector who finds that the applicant is not entitled to the deferral shall send notice of disapproval within 45 days after the date the application is filed, stating reasons for the disapproval to the applicant. The notice shall be sent by personal delivery or registered mail to the mailing address given by the applicant in the manner in which the original notice thereof was served upon the applicant and must be filed among the permanent records of the tax collector's office. The original notice of disapproval sent to the applicant shall advise the applicant of the right to appeal the decision of the tax collector to the value adjustment board and inform the applicant of the procedure for filing such .an appeal. (3) Appeal of Decision An appeal of the decision of the tax collector to the value adjustment board must be in writing on a form prescribed by the Department and furnished by the tax collector. The appeal must be filed with the value adjustment board within 20 days after applicant's receipt of the notice of disapproval, and the board must approve or disapprove the appeal within 30 days after receipt. The value adjustment board shall review the application and the evidence presented to the 5 Ordinance No. 7633-06 tax collector upon which the applicant based his or her claim for tax deferral and, at the election of the applicant, shall hear the applicant in person, or by agent on the applicant's behalf, on his or her right to the tax deferral. The value adjustment board shall reverse the decision of the tax collector and grant a tax deferral to the applicant, if in its judgment, the applicant is entitled to the tax deferral or shall affirm the decision of the tax collector. Action by the value adjustment board is final unless the applicant or tax collector or other lien holder, within 15 days after the date of the disapproval of the application by the board, files in the circuit court of the county in which the property is located a de novo proceeding for a declaratory judgment or other appropriate proceeding. Section 29.105 Denial of Tax Deferral. A tax deferral shall not be granted if: (a) The total amount of deferred taxes, non-ad valorem assessments, and interest plus the total amount of all other unsatisfied liens on the property exceeds 85 percent of the assessed value of the property; or (b) The primary financing on the property is for an amount that exceeds 70 percent of the assessed value of the property; or (c) The applicant fails to provide fire and extended coverage insurance in an amount that is in excess of the sum of all outstanding liens and deferred taxes and interest with a loss payable clause to the county tax collector. Section 29.106 Approved Applications. (1) For approved applications, the date of receipt by the tax collector of the applications for tax deferral shall be used in calculating taxes due and payable net of discounts for early payment. (2) The tax collector shall notify the property appraiser in writing for those parcels for which taxes have been deferred (3) The property appraiser shall promptly notify the tax collector of changes in ownership or use of property that have been granted a tax deferral. Section 29.107 Deferred Payment Certificates. (1) The tax collector shall notify the City of Clearwater of the amount of taxes deferred which would otherwise have been collected for the City. The County shall then, at the time of the tax certificate sale held pursuant to Florida Statute 6 Ordinance No. 7633-06 Section 197.432, strike each certificate off to the County. Certificates issued pursuant to this section are exempt from the public sale of tax certificates. (2) The certificates so held by the County shall bear interest at a rate equal to the semiannually compounded rate of one half of one percent added to the average yield maturity of the long term fixed income portion of the Florida Retirement Savings investments as of the end of the quarter preceding the date of the sale of the deferred tax certificate. However, the interest rate may not exceed 9.5 percent. Section 29.108 Termination of Tax Deferral for Change in Use or Ownership of Property. (1) If there is a change in use or ownership of the tax-deferred property such that the owner is no longer entitled to claim the property as a recreational or commercial working waterfront facility, or there is a change in the legal or beneficial ownership of the property, or the owner fails to maintain the required fire and extended insurance coverage, the total amount of deferred taxes and interest for all previous years becomes due and payable November 1 of the year in which the change in use or ownership occurs or on the date failure to maintain insurance occurs, and is delinquent on April 1 of the year following the year in which the change in use or ownership or failure to maintain insurance occurs. (2) Whenever the property appraiser discovers that there has been a change in the use or ownership of the property that has been granted a tax deferral, the property appraiser shall notify the tax collector in writing of the date such change occurs, and the tax collector shall collect any taxes and interest due or delinquent. (3) During any year in which the total amount of deferred taxes, interest, and all other unsatisfied liens on the property exceeds 85 percent of the assessed value of the property, the tax collector shall immediately notify the owner of the property on which taxes and interest have been deferred that the portion of taxes and interest which exceeds 85 percent of the assessed value of the property is due and payable within 30 days after receipt of the notice. Failure to pay the amount due shall cause the total amount of deferred taxes and interest to become delinquent. (4) If deferred taxes become delinquent, on or before June 1 following the date the taxes become delinquent, the tax collector shall sell a tax certificate for the delinquent taxes and interest in the manner provided by F.S. 197.432. Section 29.109 Prepayment of Deferred Taxes. 7 Ordinance No. 7633-06 All or part of the deferred taxes and accrued interest may be paid at any time by: 1 . The owner of the property 2. The next of kin of the owner, heir of the owner, or any person having or claiming a legal or equitable interest in the property, if the owner makes no objection within 30 days after the tax collector notifies the owner of the fact that such payment has been tendered. Any partial payment pursuant to this section shall be applied first to the accrued interest. Section 29.110. Penalties. (1) The following penalties shall be imposed on any person who willfully files information required under this Article or F.S. 197.303-197.3047 which is incorrect: (a) The person shall pay the total amount of taxes and interest deferred, which amount shall immediately become due; (b) The person shall be disqualified from filing a tax deferral application for the next 3 years; and (c) The person shall pay a penalty of 25 percent of the total amount of taxes and interest deferred. (2) Any person against whom the penalties prescribed in this section have been imposed may appeal the penalties imposed to the value adjustment board within 30 days after the penalties are imposed. Section 29.111 Distribution of payments. When any deferred taxes or interest is collected, the tax collector shall maintain a record of the payment, setting forth a description of the property and the amount of taxes or interest collected for the property. The tax collector shall distribute payments received in accordance with the procedures for distributing ad valorem taxes or redemption moneys as prescribed in Chapter 197 Florida Statutes. Section 29.112 Construction. 8 Ordinance No. 7633-06 Neither this Article nor Sections 197.303- 197.3047 prevent the collection of personal property taxes that become a lien against tax-deferred property, defer payment of special assessments to benefited property other than those specifically allowed to be deferred, or affect any provision of any mortgage or other instrument relating to property requiring a person to pay ad valorem taxes or non-ad valorem assessments. Section 2. This ordinance shall take effect immediately upon adoption. PASSED ON FIRST READING .Tlmp 1, ?OOn PASSED ON SECOND AND FINAL READING AND ADOPTED lImp 1 r;, ?OOn 4~ I/-~~ Frtfnk V. Hibbard ( Mayor Approved as to form: Attest: )~ Pamela K. Akin City Attorney 9 Ordinance No. 7633-06